ChatGPT Gets Lazy, Elon Musk Blasts Advertisers and Releases The Cybertruck, Jack Ma Returns

Louise Matsakis is a reporter at Semafor covering AI. She joins us for our weekly discussion of the latest tech news. We cover: 1) ChatGPT getting lazy 2) The commoditization of AI companies 3) Anthropic’s unique board governance 4) Anthropic’s EA connections and the state of EA 5) Amazon’s Q chatbot 6) Elon Musk tells advertisers to F themselves 7) The drawbacks of brand safety puritanism 8) The Cybertruck is here. 9) Jack Ma appears in public for the first time in years. -- Enjoying Big Technology Podcast? Please rate us five stars ⭐⭐⭐⭐⭐ in your podcast app of choice. For weekly updates on the show, sign up for the pod newsletter on LinkedIn: https://www.linkedin.com/newsletters/6901970121829801984/ Questions? Feedback? Write to: [email protected] Learn more about your ad choices. Visit megaphone.fm/adchoices

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

• 0:00Alex Kantrowitz?

  Is ChatGPT getting lazier? We've got lingering concerns about the world's leading AI companies. Elon Musk tells advertisers to go F themselves and sets the Cybertruck free. Jack Ma is back and plenty more coming up right after this. This episode is brought to you by Genesis. What does it actually take to put Agentic AI to work across an entire enterprise? I recently spoke with Genesis chairman and CEO Tony Bates about why orchestration is emerging as a competitive advantage in customer experience and what companies need to get right in the AI era. Then I sat down with Adam Mitchell, head of enterprise business solutions at Voya Financial, to go inside a large-scale Agentic CX transformation, including the business decisions, trade-offs,

• 0:45Alex Kantrowitz?

  and lessons along the way. You can watch both conversations now on my YouTube channel today. It's never been more challenging to get frontier compute. How do you know where to look, who to trust, or how much to pay? Akash is an open cloud that provides easy access, flexibility, and peace of mind. That's how companies like Razer were able to cut their inference cost by 15 times. Visit akash.network/alex for a free consultation. That's akash.network/alex for a free consultation. Welcome to Big Technology Podcast Friday Edition, where we break down the news in our traditional cool-headed and nuanced format. Wow, what a week of news. It just continues here and we're going to break it all down.

• 1:29Alex Kantrowitz?

  Joining us today is a great reporter, Louise Matsakis of Semaphore, is here with us to talk, of course, about the week's news and some of her great reporting on the latest in the AI dramas and plenty more. Louise, welcome to the show.

• 1:41Speaker 01

  Hey, Alex. It's great to be here.

• 1:43Alex Kantrowitz?

  Great to have you. You're about to come out with a story talking about how ChatGPT might be getting lazier. Now, this is something that we all maybe feel spiritually, but what did your reporting show you on that front?

• 1:58Speaker 01

  Yeah, so over the last few weeks, a number of mostly professionals, I would say. So these are people who already pay for ChatGPT Plus, which is the $20 a month subscription, which gets you access to GPT-4, which is, you know, their most advanced model right now. And they're basically like, look, when I ask the chatbot to like produce 50 lines of code, or, you know, just to do tedious work, to maybe like, you know, put a list together of upcoming dates for me, it won't do it. Or in, I think, the cases that are the funniest, it will instead give people instructions on how to do it themselves. So it'll be like, hey, like, here's a template, you know, you can fill out the the other 50 lines or whatever,

• 2:39Speaker 01

  which is, I think, super interesting. And it's not clear to me exactly why this is happening. So a few OpenAI employees have said that this is part of, you know, the result of a known bug. So there is something going on here that, you know, OpenAI admits is a problem. But I think the reason that this is interesting is that it speaks to this wider, really unique issue with large language models, which is that they're a black box. You know, you you put something in and something comes out on the other end. And even the people who make these models don't really know what goes on in the middle. And that can be really frustrating for users.

• 3:18Speaker 01

  And I think what you're seeing now is as people try and bring ChatGPT into their workflows, this is really frustrating. You know, this happened a few months ago where people said, oh, you know, ChatGPT is getting dumber. It can't do the things that I used to ask it to do. But at that time, I felt like a lot of people who were saying that were like kids trying to get their homework done, or, you know, maybe people who are using this in an experimental way. But I think this is a bigger problem now for the company when you have these, you know, startup founders, tech executives who said, you know, I'm doing this workflow and I'm using this chatbot and it's not working anymore. And that's really frustrating.

• 3:58Alex Kantrowitz?

  Can I just say how amazing it is that a known bug within ChatGPT is making it tell people, nah, I'm good, when they ask it to do stuff. It just, it even makes me more in awe of this technology that it is sort of incorporated such a decidedly human trait in the way that it works.

• 4:18Speaker 01

  Totally. I, I heard people joking like, oh, you know, it's like hiring a bunch of really capable interns, but they're, they're lazy and avoid work in the exact same way as human interns would. So I totally agree. It's, it's remarkable. And I think it also speaks to how, you know, the reality is that OpenAI is making tons of tweaks all the time and they can't always predict what those tweaks are going to do to the models. And that's, you know, I think a problem for users. And we just also don't have a transparency system or transparency norms. You know, there's no release notes. There's no like, you know, hey, we made a big tweak today. Like you might see this, right? Like we have no established

• 5:02Speaker 01

  system for communicating with people about how these models are going to change over time or, or, you know, what the impact might be. And so I really want to see how that is going to develop over the next few years.

• 5:16Alex Kantrowitz?

  Right. And it sort of brings us to an area which is like become more discussed since the OpenAI situation, which is that we seem to be heading towards this commoditization of all these bots. It was discussed at Dealbook with Andrew Rossork in the conference this week about how they all seem to be coming together and starting to mirror each other. And you're not going to have one chatbot that's extremely capable and one that's not. It's just the functionality seems to be colliding. What do you think about that?

• 5:45Speaker 01

  Totally. I think that right now, you know, especially enterprise customers have a lot of different options for the types of models that they want to use. And a lot of the companies that I've spoken to say, we're not going to commit to a single model. You know, it's too early. We want to see what works best for us. What's the most affordable for us, you know, where we get the best customer experience. So I think that when There's rumors flying about the chatbot getting lazier in that kind of environment. That's a bigger risk for an OpenAI, right? Because it used to be, oh, my God, ChatGPT is down. Like, what am I going to do? Am I going to have to write my own essay that's due tomorrow? Whereas now, I think it's a lot easier for people to say, OK, ChatGPT is not working for me. I'm going to try Meta's Llama 2.

• 6:30Speaker 01

  I'm going to try something from Amazon. I'm going to try a different open source model that's free, and I'm going to run it myself. So I think that's really exciting, but it also means that differentiating and ensuring that you kind of just have the basics of like good customer service, a good interface, reliability. Those boring things are going to become more important than just the capabilities.

• 6:53Alex Kantrowitz?

  Right, and maybe customizability as well, which is where these open source companies can get a heads up. But you really just kind of lead in perfectly to this story that I've written this week about Anthropic and their governance, because it does really seem that it is Anthropic's moment. They've raised $7 billion, including multiple billion-plus-dollar rounds since late September from Google and Amazon. They have a bot that works extremely well called Claude. They sell the underlying technology as a model. They've released an update in the middle of this OpenAI catastrophe. And they're so well positioned to be that number two or that alternative that people sub in if they don't like what's happening with OpenAI.

• 7:38Alex Kantrowitz?

  And then you start to look at the governance, and that's where things get interesting, because they're not a nonprofit. They're actually a public benefit corporation. But the people that choose the majority of its board will eventually, and this means within a few years, be people that are made up, people that make up this long-term benefit trust that Anthropic has set up. And the trust has five people on it, initially picked by Anthropic, but eventually they'll select replacements. And that trust, within four years, is going to be able to pick three of five Anthropic board members. Now, the board members are going to have this fiduciary duty, so it's not a nonprofit like

• 8:20Alex Kantrowitz?

  OpenAI, which you would imagine insulates them a little bit from the type of thing that happened at OpenAI. But it's just so fascinating that you have this company, which was set up by OpenAI expats, right? People who had left OpenAI. And they wanted to build a company more focused on safety. So of course, they're not going to go with the traditional for-profit board structure. But they build this long-term benefit trust. The trust, their mission is to make sure that the AI is developed safely. And the way that they live out their mission is by selecting people who would effectively channel it as members of a for-profit board. And it just puts Anthropic in this very fascinating position where it can be this

• 9:02Alex Kantrowitz?

  number two, it can be this opening, this second, or yeah, this opening or this hedge for companies that are trying to build away from OpenAI. But that being said, the governance is fascinating and it's not as clear-cut as a standard for-profit. You know, hearing that, I'm curious like what you think about Anthropic's position and should, you know, when people, when they're thinking about this company, you know, should Google and Amazon now kind of have their eyebrows raised, given that the structure is not the traditional for-profit structure. It does have some notes of that OpenAI structure, although perhaps a bit more stable.

• 9:39Speaker 01

  I think it's a really good point to make. And it's so interesting to me because when Sam Altman got fired, I looked back at how some of OpenAI's investors were talking about the structure and they loved it. You know, I think it was beneficial to them, you know, a few days before Altman's ouster. He, Brad Smith, the president of Microsoft, actually said that this nonprofit structure was what made OpenAI more trustworthy than a competitor like Meta, you know, that is profit-driven. So I think there's been sort of this rude awakening to what this sort of funky structure will mean. But I think unlike maybe Microsoft, which is OpenAI's biggest partner, you've seen

• 10:21Speaker 01

  Google and Amazon, which are, you know, the big investors in Anthropic, hedge a little bit. You know, Amazon is allowing other models onto AWS. They're developing their own, you know, their own infrastructure, their own AI technology. You know, and Google is also very much doing the same. So I think that by having Anthropic, you know, on their team, so to speak, they're, you know, able to sort of see what's going on and to have some. You know, interest in one of, you know, what is being referred to as the foundational models, you know, and Claude is considered one of them. But I think at the same time, you're not seeing that sort of overreliance, you know, to the same extent, at least, like,

• 11:04Speaker 01

  you're not seeing, you know, the CEO of Anthropic onstage next to the CEO of Google or the CEO of Amazon. Like, I think that that branding is not as clear, I guess. And I also do wonder, I think that this firing of Sam Altman did give an opportunity for Claude. You know, there was some reporting that more customers were going over to Anthropic, even if, you know, maybe the same governance vulnerabilities are there. But I think the real issue is that OpenAI is a household name, and that's going to be really hard for Anthropic to compete with. Like, you know, even, you know, companies that are in the tech space, sometimes I ask them, like, hey, like, are you using Claude? Like,

• 11:47Speaker 01

  what other models are you using? And they look at me and they're like, what's that? You know, and I think that that speaks also to how Altman has just been more of a corporate, you know, actor, right? Like, he's extremely ambitious. He's sort of positioned the company in a very public way. And I think that a lot of the people who are at Anthropic, you know, are academics, sort of have this high-minded idea about what artificial intelligence should be and what it should do for the world. You know, a lot of them are former academics or, you know, have PhDs in things like philosophy. And while I think Anthropic has been really shrewd about getting sort of a front row seat at the regulatory table, you know, they

• 12:28Speaker 01

  were much smaller than Google or OpenAI, these other companies that were invited to these closed-door meetings at the White House or, you know, invited to testify before Congress. But I don't know if that's going to translate to profits.

• 12:42Alex Kantrowitz?

  Yeah, they're not just academics. So there are also plenty of effective altruists in that company. And we spoke about effective altruism at length on Wednesday, so we're not going to just continue to do it so deep here. But I would be remiss if I didn't point out the fact that these trustees on this long-term benefit trust, two of them that I found, at least two of them have direct ties to effective altruism. There's Zach Robinson, who's the interim CEO of Effective Ventures US, which is inherently tied with the effective altruism movement. And then Paul Cristiano, who's the founder of the Alignment Research Center, who's also a prolific writer on the EA forums.

• 13:23Alex Kantrowitz?

  You've done some reporting on this. You spoke with the CEO of Skype, who said that they're backing away a little bit from these EA ties. Let's just briefly touch on it. Is this something that folks should be concerned about? And how do you view what's happening to the EA movement right now?

• 13:41Speaker 01

  So I think the number one thing that is important for investors, consumers, everyone to realize about the impact that effective altruism and sort of like related movements like rationality are having on the development of artificial intelligence is just that it's a very specific view. Right? Like when you talk to these people, you know, there's totally variation in this community, which is thousands of people on multiple continents. But what I find is that they read the same texts, they read the same blogs, they all know the same people, they go to the same effective altruism conferences. There's nothing wrong with that. And I think there are plenty of good ideas that are circulating within these communities.

• 14:26Speaker 01

  But it's really important to remember that it's one perspective, it's one community. And I think that this technology is too important, it's too powerful. For only one viewpoint to be considered in how it's developed. And I think that eventually something has got to give. And I think that, you know, the good news is that you're seeing sort of at the government level, I think that the White House, you know, other lawmakers in other countries are seeing like, okay, we can't just listen to these people to decide how we're going to steer this, which is great. But I think that the risk for a company like Anthropic is that if they're not letting in these other perspectives, what are they missing? Right? What are they not seeing? What are the problems that they're not accounting for?

• 15:09Speaker 01

  And that's what I worry about when you have a board that is, you know, primarily consisted of people who read the same things, talk to the same people, have the same perspectives.

• 15:18Alex Kantrowitz?

  Yeah. And the philosophy, so by the way, for the, we did get a few people writing in after Wednesday's podcast, and I appreciate it. I've read it already, I'm going to respond. And we're definitely going to try to get somebody who's more aligned with effective altruist thinking on the show, just to talk it through in nuance. But, but yeah, it's, it's clearly like baked deeply within, within to Anthropic. And the thing is, and we talked about this on Wednesday, that there is a tendency to sort of act rashly if you're ascribing to this long-term thinking where, you know, the lives of people in an imagined future universe are, or future Earth are just as valuable as the lives of people today, even though you have no idea what the lives and

• 16:02Alex Kantrowitz?

  the society will look like in the future. And so, yes, it's one strain of thought, but it also, we've seen it in places like FTX, and potentially even with this OpenAI board, there's a tendency to, well, not a tendency, but there's definitely moments where the thinking can lead to what seems like rash action from the members. Does that sound right to you?

• 16:26Speaker 01

  Yeah, I think that that's definitely true. And what I think is positive that's coming from this moment is that people are realizing that this is a community that shares a lot of the same views and has, you know, its own perspective. Because what I think was happening before is that you saw people say, oh, well, like, this company is saying this and like this company is saying it. And, you know, that think tank, that research organization, like, oh, wow, like, they all agree. So like, therefore, there's clearly consensus about like, what matters the most with AI or like, what people should be worried about. Whereas I think now, people are saying, oh, wait, like, all of those institutions are like, people who all know each other and they all are being funded by the same handful of billionaires, right?

• 17:11Speaker 01

  Like, that's really important to know. It's really important for lawmakers to know. It's important for consumers to know. Doesn't mean that you can't agree with them or that they don't have good ideas, but, you know, knowing that the three policy papers you read are actually all funded by the same billionaire is important context for evaluating whether you want to believe those claims, right? Or like, whether those claims are like, you know, the totality of the thinking on this issue.

• 17:35Alex Kantrowitz?

  Yeah, I was going into some of these organizations on the Long Term Benefit Trust of Anthropic and digging into their financials. And they have murky statements, like, 70% of our funding is from one source. And it's like, come on, just name the source. Who's it really helping to keep that opaque?

• 17:52Speaker 01

  Right, right. And we should just say that in a lot of cases, it's Dustin Moskowitz, who is, you know, an early Facebook employee who is worth billions of dollars. And I think that he is sincerely funding these initiatives because, you know, he genuinely is worried about how AI is going to be developed. But I just think in other contexts, when we see a web of organizations that are being funded by the same person, we don't ignore that fact in evaluating what they're saying.

• 18:21Alex Kantrowitz?

  Great, and yeah, I have asked Dustin to come on the show multiple times and no avail. So, but let's also turn to OpenAI because I'm curious to hear your thoughts about what's happening in the aftermath of the Altman coup and counter coup. You have a story this week saying that a number of OpenAI employees are looking for job opportunities elsewhere after this cataclysm. So, you know, 700 OpenAI employees signed this paper demanding Sam back. Sam is back, but some are now starting to explore working at other companies. What can you tell us about that?

• 19:02Speaker 01

  Yeah, I think first, the one caveat worth noting is just that like, these people make oodles of money and they are so in demand and so, you know, it's not hard to find opportunities elsewhere if you want them, right? But I think that what it demonstrates is just that this was really crazy, right? Like this was, I think, an unprecedented incident in many ways in Silicon Valley. And I think the number one issue is that we still just do not really know why Altman was fired, right? The only thing we know is that he was, you know, not consistently candid in his communications. I still have trouble saying that phrase, which is all that the board really has revealed so far.

• 19:43Speaker 01

  And I think that the board would say that they're still worried about that and that, you know, Altman coming back was not, you know, indication that their concerns were not valid. They believe that, you know, there's going to be an independent investigation. He lost his board seat, you know, his close ally, Greg Brockman, who is also back at the company, also lost his board seat. So, I think that the fact that these people stayed on, you know, during this like incredibly terrible, you know, intense five-day saga, you know, in which headlines were swirling constantly, in order to get these concessions, I think shows that these concerns were serious.

• 20:25Speaker 01

  And I think until we know more, it's difficult for really talented, really in-demand employees to necessarily bet. You know, the future of their career, particularly like we talked about earlier, when perhaps AI models are becoming more of a commodity and there's all these other great companies that, you know, you know that they're gonna exist, right? And that like the CEO is gonna be there at the end of the day. And maybe that's, you know, better peace of mind for, you know, you and your family and your future.

• 20:54Alex Kantrowitz?

  Right. Did you see Amazon, speaking of everybody building a chatbot, they have their own chatbot for business now called Q. They announced it this week at their big AWS Reinvent Conference in Vegas. It comes a year after Microsoft backed OpenAI, launched its ChatGPT chatbot. This is according to CNBC. And it has, it's an interesting name. They can't quite, can't quite determine where Amazon selected Q. They maybe from the James Bond movies, maybe from Star Trek, but it's really an enterprise chatbot. It plugs into applications like Jira and Salesforce and Slack. And it's, it seems very useful for business intelligence.

• 21:36Alex Kantrowitz?

  And, you know, my instinct on this one was that, ah, this is a boring chatbot. And, you know, of course, Amazon comes out with like the least exciting bot. And it's a very enterprise focused bot. But then I'm reminded of this belief that I have that we're gonna end up moving from these broad, large language models to more narrow, specific use case type bots. And this actually might be something that can be very successful and useful to people who are using it in a business context. Maybe not as big as ChatGPT, but definitely something with staying power. If you could, if it could, for instance, you know, help you speak to all your organization's data and figure out like where you need to get selling better or what's broken and create

• 22:18Alex Kantrowitz?

  a ticket right there or potentially, you know, aggregate some of the conversations within your organization happening on Slack and get a pulse right away. What's your perspective on Q?

• 22:30Speaker 01

  Well, first of all, maybe I just have like internet brain worms, but I couldn't believe that Amazon named this queue after we just endured, you know, years of like the QAnon conspiracy theory. But that aside, I think that you are spot on that, look, the reality is that Amazon is not an organization of a bunch of, you know, high-minded researchers who, you know, think that they're building, you know, superintelligence, right? Like, this is a company that the majority of its profit is coming from its cloud computing service. It's talking to the biggest companies in the world every day about how they're storing their data, how they're accessing it, you know, what tools can make their business better.

• 23:12Speaker 01

  And I think that Q is, you know, responding to those concerns, right? Like, they are trying to build something that will slot neatly into your existing AWS experience. And I totally agree that what people are going to need is something that's customized, something that's fast, something that integrates with the tools they already use. You know, it's kind of interesting that one of the first things that ChatGPT did was, or sorry, that OpenAI did with ChatGPT was those integrations, right? It was like, you're gonna use ChatGPT to like order from Instacart, or you're gonna like use ChatGPT to like buy things online, right? And it's kind of interesting that for now, that didn't really work, right? Like, no one, I don't know anybody that's using those integrations, where I think you're

• 23:57Speaker 01

  definitely gonna see enterprise customers using something like Q to integrate with the services that they're already using, right? I think we're a way off from something sensitive, like using Q to like do financial transactions or to access, you know, maybe potentially sensitive customer data, or, you know, things like health records. But there's no reason that you couldn't use something like this to say like, hey, like, what was our profit last quarter, you know, or like, how much did we make from this? Or like, you know, how many customers signed up today? Or, you know, these sort of like run-of-the-mill business questions. And I think that, yeah, it's boring, but it's gonna make more money, perhaps, at least

• 24:39Speaker 01

  in the short term, than, you know, trying to get superintelligence or make something that everybody, you know, uses both in their personal and professional lives.

• 24:49Alex Kantrowitz?

  Q is here to save us, Louise. Q knows the truth.

• 24:52Speaker 01

  Not again.

• 24:53Alex Kantrowitz?

  Listen to Q.

• 24:55Speaker 01

  Oh, I can't do this again, Alex.

• 24:57Alex Kantrowitz?

  Q's finding these patterns that no one else is seeing. All you have to do is trust Q.

• 25:04Speaker 01

  Like, were these marketing people living under a rock? I just don't understand how that happened.

• 25:10Alex Kantrowitz?

  Maybe they knew exactly what they were doing.

• 25:12Speaker 01

  True.

• 25:12Alex Kantrowitz?

  Kind of fits. Louise Metzakis is here with us. She's a reporter at Semaphore. We're going to talk in the second half about Elon Musk telling advertisers to go F themselves. So stay tuned. We'll be back right after this. This episode is brought to you by Avpoint. Everyone's racing to roll out AI right now. Co-pilots, chatbots, agents doing real work. But here's the part nobody loves talking about. All that AI runs on your data. And most teams have no single way to see it, secure it, and prove it's under control. That's exactly what Avpoint does. For 25 years, they've been the trusted layer beneath the world's most demanding data, now extended across your entire AI estate.

• 25:54Alex Kantrowitz?

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• 26:39Alex Kantrowitz?

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• 27:21Alex Kantrowitz?

  the show notes. And we're back here on Big Technology Podcast with Louise Matsakis, a reporter at Semaphore. Let's talk about what might have been one of the more remarkable tech interviews, I don't know, of a decade. I haven't seen many like this. So Elon Musk is sitting up there at Dealbook with Andrew Ross Sorkin. You knew it was going to be good. And Sorkin immediately starts talking to Musk about this advertiser drawback boycott exodus after they didn't like some of the tweets that he was writing about Jewish people. And Andrew Ross Sorkin was like very like, I would say, tender in his line of questioning, talking not about

• 28:06Alex Kantrowitz?

  how Elon Musk needs to be liked, but he did need to be trusted. And Musk replied, and I guess typical Musk fashion, he goes, if someone's going to try to blackmail me with advertising, blackmail me with monies, go F yourself. Go F yourself. Is that clear? Basically telling these advertisers that he doesn't want to play games with them. They were wanted to advertise on the platform, or they didn't want to advertise there. I will probably sink Twitter's advertising business. Louise, what did you make of this moment?

• 28:42Speaker 01

  I mean, you have to laugh, right? I think that Sorkin, yeah, maybe was a little tender, but I think he also just did a great job of getting out of someone's way who was, you know, making controversy for themselves. You know, he was really measured and sort of not reacting.

• 29:00Alex Kantrowitz?

  Terrific job interviewing it, absolutely.

• 29:03Speaker 01

  Yeah, it was, you know, it was sort of a masterclass in how to do an interview with someone who was really volatile and difficult. Yeah, I guess I have to say that I think at this point, what would be helpful for the media, and you've already sort of seen this, is to Not let Elon get the shock value. Like, I think a lot of people were like, I saw a lot of people quote tweeting, you know, Lynda, the new CEO of X, saying, hey, like, what's your response? This is so ridiculous. Like, what are you gonna say? Like, like, how do you let him treat you and your customers like this? And while I think those are all valid questions, the reality is that we've seen again and again, for the most part,

• 29:46Speaker 01

  that he gets away with it, right? And, and I think that he carefully chose a CEO who was going to look the other way, or, you know, stand by him in other cases. And, you know, she put out an internal message to employees, saying like, yeah, we're gonna double down. Like, we're not gonna let anyone bully us, instead of trying to see what Musk said in the best light possible. I don't think that this is gonna result in, you know, a better situation financially for X. But I think that, in a paradox way, it's still furthered this very specific brand that Musk has cultivated. You know, you saw a lot

• 30:28Speaker 01

  of his loyalists saying, yeah, like, that's right. Like, he's telling it like it is. Like, like, screw Disney. Like, I don't care about these advertisers either. Like, I like that he's not gonna be blackmailed. Do I think that that is a legitimate narrative for what's happening here? Absolutely not. You know, he's long said things that are offensive, wrong, stupid. And that's just, you know, not the way you can behave when you run an advertising company. That's just, you know, a freshman in a marketing major could tell you that, right? But I don't know if this is going to move the needle, really, in terms of where Musk stands. I just, I think what I see again and again, is that,

• 31:10Speaker 01

  I don't know if you feel this way, Alex, but like, with Elon, people are like, This is finally going to be the thing that like some authority is gonna like

• 31:22Speaker 01

  get him now, right? Like this is going to be the thing that like he has to answer for. And again and again, that's just never been the case, right? So I think we need to stop waiting for that authority. It's like people can back away financially, they can cut their ties with him. And I think that, um, I guess we need to sort of investigate are companies doing that for their own benefit and what are their interests here? I think rather than using, okay, like these companies are quitting, like let's stick that on Elon, right? Or like that shows that he's wrong. I think that's the mistake that is being made with the story again. It's just like, yeah, like that'll get him, right? It's like, no, like, let's actually look at the interest here.

• 32:04Speaker 01

  Like, is this advertising effective? Like, what does this mean for companies like IBM or Disney that are that are pausing or canceling their advertising, right? Like, that's where I think the focus should be, even though, um, I was stunned, for sure.

• 32:17Alex Kantrowitz?

  Right. No, it was absolutely shocking. So I think there's a number of things to say here. First, I did think that Linda Iaccarino, the CEO of Twitter, should have come out with a statement afterwards saying something like, "Yeah, go F yourselves."

• 32:32Alex Kantrowitz?

  That would have been so great. I would have loved that.

• 32:36Alex Kantrowitz?

  Second, I think you're right that, um, there

• 32:42Alex Kantrowitz?

  there's a level of, do these ads work that matter most to advertisers? And Twitter's ad effectiveness has always been questionable, so the companies really had to live on brand advertising. And so it's much easier for a brand advertiser to pull out. Like, if Mark Zuckerberg said that, they would not leave. I can tell you that for a fact, because Facebook advertising works so well that basically Facebook is immune from anything that that the company does or the CEO says. And advertisers, well, to some, within some level of reason, and advertisers will still be there. It's much easier to cancel, uh, your Twitter spend. But, but I think going to the heart of the issue.

• 33:24Alex Kantrowitz?

  I think that there's some level of what Elon Musk did that people working in the business side of the news industry like have to appreciate in some way. And I'm not saying he was right, you know, obviously he apologized for his tweet. I'm not saying he was right for engaging the people that he did. But I do think that there is this, and we've talked about it on the show in the past, there's this brand safety puritanism that anyone who works in advertising now is just driven by this misguided idea of brand safety where they don't want to appear next to anything controversial, anything that's newsworthy, and that maybe more than anything is driving ad dollars away from the news industry.

• 34:06Alex Kantrowitz?

  Certainly, it's gonna, you know, you know, almost sink Twitter because there's gonna be this mass exodus. And, you know, there are things to say about the way that Elon acted and the way that and what precipitated this whole crisis. But it's also just like, you know, I think that anyone who's like celebrating advertisers just saying, well, we're out of here. You know, and trying to sort of dictate the nature of, of, you know, the discourse in the US. There's something a little bit, I would say, wrong about that. And, and I don't know. I mean, I'm not exactly celebrating what's happened with Musk, but I also feel like,

• 34:47Alex Kantrowitz?

  you know, there's something about what he said that should resonate with people trying to run media businesses. Maybe I'm misguided. What do you think?

• 34:55Speaker 01

  I couldn't agree with you more, and I am so glad that you brought this up because sort of the irony of, you know, the journalists that are celebrating, you know, these advertisers leaving Twitter is exactly what you said, is that it's part of this bigger industry that I think is really insidious, which is sort of like these organizations that exist to essentially warn companies that they're advertising in places that are not brand safe. And, you know, there's some nuance here. Like, I will totally acknowledge that it doesn't make sense for a kid's, you know, clothing company to be advertising on Pornhub, for sure. You know, like, there needs to be some, you know, like, You know, moderation here within reason.

• 35:39Speaker 01

  But we're at a point now where because of these sort of like brand safety analyses, which we should also say are often, you know, highly inaccurate, where they claim to be able to, you know, deduce the sentiment of a webpage using like, you know, these janky AI tools and like, oh, this is negative. So like, you don't want to have your advertising next to something negative or, you know, that has to do with a sensitive subject. I think that that's really bad, not just for reporters and people who are producing the content online, but also for the advertisers. Like, I think the best place for advertisers to be is where readers are the most engaged. And they're often engaged on serious, difficult, sensitive topics. And I think that there's nothing wrong for a company to be next to

• 36:23Speaker 01

  that content if it's handled with care, right? And if it's accurate, if it's not sensational. Like, you know, there's no reason that these companies cannot be on, you know, a New York Times story, or a CNN story, or, you know, big technology story. But a lot of times, they avoid it because I think that there's this sort of cottage industry that scares them. And I think a perfect example is what you saw happen with Jezebel, right? You know, basically, you know, and of course, again, I think that Jezebel was mismanaged by, you know, Geo Media. But what you saw in sort of their explanation for why they wanted to sunset the site, which I said, should say, has now been bought and is going to come back, is that we couldn't figure out how to sell it to advertisers because, you know,

• 37:08Speaker 01

  feminist content, content about abortion, content about, you know, these divisive issues that are really important to women, you know, we couldn't find someone who wanted to advertise there. And I think that when you have an ecosystem like that, what do you get? Particularly, let's look at women's media. What do you get? You get shopping content, right? You get consumerism. You get this stuff that's like, doesn't really resonate with the most important things in people's lives. And, and I think that Elon Musk is totally right to be frustrated by that. I just wish he was not the sort of mascot of this issue and that we had other, I think, people speaking up about it. And I think the problem is that a lot of reporters don't understand that this is happening because they don't understand the business model of their companies.

• 37:51Alex Kantrowitz?

  Yeah. And we saw layoffs this week at Vox, at Conde Nast, Vanity Fair. Washington Post seems to be gearing up for layoffs. I don't want to say it's directly related, but is it indirectly related? Absolutely.

• 38:06Alex Kantrowitz?

  So, speaking of Elon, the Cybertruck is finally out, right? I mean, let's talk about something that we can actually celebrate. This beautiful vehicle with glorious angles and tremendous pickup. I can't wait to drive it. Let's see, this is from CNBC. He says the, Musk says the Cybertruck's hard steel body was bulletproof and its windows are rockproof. It could tow 11,000 pounds. It can accelerate from zero to 60 miles per hour in 2.6 seconds. It has a super tough composite bed that's six feet long and four feet wide. And Musk says the vehicle's gonna change the look of the roads and the future finally looks like the future. What do you think, Louise?

• 38:49Alex Kantrowitz?

  I mean, you live in LA, it's a car-driving city. Do you expect to see the Cybertruck start to flood the roads out there? You know, how eager are you to drive one of these things?

• 38:59Speaker 01

  Oh, I will absolutely never get in one. Are you kidding me? No way. I will give it to Musk that it's fun. I appreciate that someone is like being inventive. I just like, my god, what if we let, you know, cool people who have imagination beyond sort of like a little boy, gave them the resources to build really cool hardware? Like, that's what I always think about. It's just that I think a lot of the, no offense, Alex, but a lot of the men who are given sort of like the capital to build fun things, I just think often it's pretty lame or like it's not as, I just like dream bigger. You know, it's like, oh, we got another gigantic clunky car that looks like it's out of a video game, right?

• 39:43Speaker 01

  Like, it's an impressive feat of engineering, but I bet it's gonna have a ton of problems. It's gonna be a collector's item, right? And there's nothing wrong with that. And I will say like, at least it made it to production, right? That was a question for a long time, whether this thing was actually gonna, gonna get out there. So, you know, hats off to that. But I also think in the last few years, you know, Musk has sort of damaged his public reputation and you're already seeing people move away from Tesla, right? Like, when I first moved to LA in 2020, there were so many Teslas, you know, on the west side here and, you know, Silicon Beach as they call it. And I'm seeing fewer and fewer of them, to be, you know, completely frank with you.

• 40:25Speaker 01

  I still think they're great cars in a lot of ways, but it's not really cool to be associated with Elon Musk anymore. And, you know, a Tesla on the road is sort of one thing, but... This Cybertruck barreling down the street, I just think everyone's gonna be like, whoa, who is that guy? You know, it's kind of giving the energy of the people who mod their cars. So I can't remember what they mod the exhaust or whatever. So it like makes a really, it's that's the same energy, right? It's like the silent version of that.

• 40:54Alex Kantrowitz?

  I'm taking the side of the Cybertruck. I can't, can't wait to drive this thing. I just spent the weekend, Thanksgiving weekend, driving the Rivian R1T pickup truck back and forth from New York to Boston and had absolute blast doing it. And I'm here for the electric pickup, absolutely. So welcome Cybertruck. Tesla, if you're listening, send me one. I'll get behind the wheel. So just for a weekend. Don't bribe me with the Cybertruck, but just let me test it.

• 41:25Speaker 01

  One word for you, Alex, Rivian. Can I get you a Rivian? Would you like to try a different, a different, you know, larger electric vehicle? There are options now. You know, I don't think you have to.

• 41:36Alex Kantrowitz?

  No, definitely. The Rivian, it really was great. It drove super smooth. It was just a fun car to drive. I enjoyed it. We're gonna have RJ Skirin, the CEO of Rivian on the show, probably in the new year. So folks can stay tuned for that. We'll talk with him about the company, its finances, its strategy, and what's coming next. Because it seems like they might have some stuff coming up next year on the new, new truck front. So, but that's what we are. We're moving, maybe we are moving towards electric finally. We'll see.

• 42:06Speaker 01

  I hope so. I don't think I'll get another gas car. I think it would be a really, a lot of things would have to go super wrong for that to happen. And so, you know, if the Cybertruck, you know, continues to make electric cooler, great. I'm all for that. But I will laugh at you, Alex, when I see you rolling by.

• 42:22Alex Kantrowitz?

  That would be a fair reaction. So, last story for us today, Jack Ma is back. He's been gone for, it seems like years after feuding with the Chinese Communist Party. I mean, he has not talked at all. And Alibaba has really sunk, maybe as a result, or alongside this. And they have 22,000, sorry, 22,000 Two hundred thousand people working at the company and Ma came on to this message board. And he said, every great company is born in a winter to the staff and the people willing to reform for the future. And the organizations willing to pay any price and sacrifice are the ones that are truly respected.

• 43:04Alex Kantrowitz?

  What's your, I mean, you're a very close China watcher. We haven't seen Ma in, it seems like years. What do you think about this return and what do you make of the significance?

• 43:15Speaker 01

  Yeah, I think it's been now three years since he's said anything. And this isn't really even a public statement, right? Like he made this internally to employees. But I think it was so noteworthy that it immediately leaked because, you know, any Alibaba employee probably like, you know, immediately texted their friends being like, Ma just said something on our internal Slack, like what is going on? I think it signals one thing in particular, which is that they are getting crushed by Pinduoduo, which is this competing e-commerce company that a lot of listeners might be familiar with because they own Temu, which has now for over a year been one of the most popular apps in the US.

• 43:58Speaker 01

  It's gaining a lot of traction in Europe as well. And it's kind of like Wish or Amazon. It's basically, you know, a discount e-commerce platform where you can sort of get commodities, like a spatula or like, you know, a costume for your dog or like, you know, have you ever ordered anything from there, Alex?

• 44:17Alex Kantrowitz?

  Yeah, we're true Temu heads over here, like it's a constant state of analysis.

• 44:22Speaker 01

  Yeah.

• 44:23Alex Kantrowitz?

  Not without its problems, but it is crushing right now.

• 44:26Speaker 01

  Yeah, I mean, the prices are a lot cheaper than Amazon in many cases. They have all these deals. They're really good at sort of like gamified e-commerce so that, you know, you'll get on there, you'll kind of be browsing and they'll like, give you a discount that you can't resist. And so PDD started as sort of like. It was really not cool and they were kind of like, it was really looked down upon. It was sort of like uneducated people in what China calls like, you know, third or fourth tier cities. So not your Shanghai. You know, it's like, you know, the grandma playing games on her phone and like ordering junk that she doesn't need. That was sort of the reputation that it had. But overnight, you know, since I think they were founded in 2018, so you know, much later than Alibaba.

• 45:09Speaker 01

  Suddenly they had, you know, 800 million users in China and now they have, you know, I think something like 100 million people have downloaded or at least 100 million times the app has, Timu has been downloaded in the US. So they're just gaining ground, you know, very, very fast abroad. Whereas I think, you know, even today, it's pretty niche to order anything from AliExpress, right? Which is the equivalent of, of Timu in the US and Alibaba's, you know, international platform. And the number that just really, really stood out to me was that in the third quarter, PDD's revenue grew 94% where, you know, year over year, whereas Alibaba's only grew 9%.

• 45:51Speaker 01

  So when you're looking at your competitor growing 10 times faster than you, you know, I totally get why Ma was just like, I cannot, you know, stay silent any longer. You know, we have to do something to catch up. And I think it's just a really good example of like, these companies that are not sexy often end up sort of smoking the competition over time. And I think you're seeing it again with Timu here in the US. Like a lot of people who I talked to who are using this app are, you know, like you Alex, but I hear a lot of people in like, not the coasts, right? It's like the people in Texas, you know, people in the Midwest who, you know, maybe they're seeing their paycheck shrink or they're, you know, being impacted by inflation.

• 46:31Speaker 01

  And it's really beneficial to them to have this, you know, fun, interactive site where they can order things for more cheaply than they can on Amazon and they don't have to pay $120 a year for Prime, right? And they get free shipping anyway. So yeah, I think it's really interesting and definitely something that I've been keeping an eye on. And, you know, the big question of course is just like, will this Chinese company end up in the crosshairs of, you know, regulators in Washington or not?

• 47:01Speaker 01

  It already is, but I think the benefit is that I think what you see again and again is just that lawmakers like brand names, right? Like, we saw all the trouble that Juul got into, right? Because dueling became a verb. But the irony of that is like now all the teens are smoking vapes from China, right? Like, these unregulated elf bars and stuff like that. But elf bar is not a name that any congressperson would know. And I think that for now, Timu isn't either, whereas TikTok is, right? Like, they all know what TikTok is. They all know it's Chinese. But if Timu can kind of just stay a little bit below the surface of a brand, as a brand, I think that that will help protect it.

• 47:44Alex Kantrowitz?

  And last question about Ma. Does his return signal any shift in the Chinese government policy towards its entrepreneurs? I mean, we just saw Xi Jinping coming to the US, speaking with Biden, clearly trying to get the Chinese economy on track. Does that mean, you know, they might be backing off this, you know, they just basically they crushed some of the more visible CEOs? Do you think there's a change coming on that front?

• 48:10Speaker 01

  I do think that, just because of the realities of the Chinese economy, that there's less room right now to, you know, overregulate or to clamp down. Like, they, you know, they need to sort of signal to entrepreneurs that, like, this is a good time to start a company here. You know, we're going to support you. And I think a good example of that is, you know, it's a good note to end on, is just that China was, you know, the first country to pass comprehensive AI regulations. And a lot of other countries now are looking to them to see how does that go? And I was struck that at first, there were these really rigorous, like, really intense rules. And I was like, I don't know how anyone is going to comply with that. But then, once you saw the finalized regulations, they were a lot

• 48:53Speaker 01

  softer. And I think that they were a lot more sort of pro-innovation. And that, to me, was, you know, another sign that there's definitely been a shift. And I'm not surprised that now is the time that Ma is speaking up. Besides, I think he's also very scared for his baby that he's built, you know, and that it's kind of become an old behemoth that's now struggling. But I think also, he was like, you know, I'm not gonna have the authorities knocking at my door for this.

• 49:16Alex Kantrowitz?

  Yeah. Fascinating stuff. Luis Mazzacca, thanks so much for joining.

• 49:20Speaker 01

  Thanks, Alex. It was great.

• 49:22Alex Kantrowitz?

  Great to have you on. By the way, can you shout out where people can find your work and the work of the Semaphore team?

• 49:29Speaker 01

  Yeah, you can read my work at semaphore.com. We are not spelled like the word Semaphore, but it's S-E-M-A-F-O-R. And you can get the newsletter that I write twice a week with Reid Albigotti in your inbox on our website.

• 49:46Alex Kantrowitz?

  Terrific. Well, it's been great having you on. We had Reid on a few weeks ago, actually right before the OpenAI news broke. So we had to go back to the Semaphore. Well, you guys are doing great work and it's always great to speak with you.

• 49:57Speaker 01

  Thanks, Alex. So are you. We're big fans here.

• 50:00Alex Kantrowitz?

  Okay, thank you so much. Thanks, everybody, for listening. We'll be back Wednesday with another one of our flagship interviews and then back next Friday to break down the week's news. We'll see you next time on Big Technology Podcast.

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