OpenAI’s Big Week, Did Google Kill The Web, AWS CEO Resigns

Ranjan Roy from Margins is back for our weekly discussion of the latest tech news. We cover 1) OpenAI's GPT-4o announcement 2) Is voice + video the right user interface? 3) Do we need smartglasses for this technology? 4) Was ChatGPT-4o too flirty? (yes) 5) OpenAI's potential iOS partnership with Apple 6) Siri improvements are coming 7) What AI + iphone could look like ahead of WWDC 8) Will AI features increase iPhone purchases 9) Listener feedback on the iPad 10) Ilya's out 11) Future of allignment at OpenAI 12) "I've resigned" resignation letters 13) Google IO announcements 14) What's left of the web after Google's AI overviews 15) How the latest AI updates change Google's business 16) AWS CEO Adam Selipsky resigns 17) Amazon's AI strategy --- 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/ Want a discount for Big Technology on Substack? Here’s 40% off for the first year: https://tinyurl.com/bigtechnology Questions? Feedback? Write to: [email protected] Learn more about your ad choices. Visit megaphone.fm/adchoices

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

• 0:00Alex Kantrowitz?

  OpenAI had a massive week with the release of a new model, a partnership with Apple, and the departure of its chief scientist. Did Google just kill the web? And the AWS CEO has resigned. All that and more coming up right after this. This episode is brought to you by Genesis. What does it actually take to put a Gentic AI to work across an entire enterprise? I recently spoke with Genesis chairman and CEO Tony Bates about why orchestration is emerging as a competitive advantage in customer experience and what companies need to get right in the AI era. Then I sat down with Adam Mitchell, head of enterprise business solutions at Voya Financial, to go inside a large-scale agentic CX transformation, including the business decisions, trade-offs,

• 0:44Alex 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. We have a massive week of AI news and news

• 1:25Alex Kantrowitz?

  across the tech world to talk about, including a resignation, big resignation inside Amazon, but also these massive new releases from OpenAI and Google. And we are just off of Big Technology's first live event with Box CEO Aaron Levy. So thanks to everybody who came out last night. The recording is going to be out on the feed next week, and it sounds great. And it was just such an energizing event and awesome to have so many of you there. Awesome to have you there, Ranjan. And speaking of which, let's introduce Ranjan Roy. He writes margins on Substack. Ranjan, welcome to the show.

• 1:57Speaker 01

  It was good to see you in person, Alex, and not just on the other side of a screen. And it was a fantastic event. And I'm glad this is going to be coming out before. So some of the things Aaron said that were very smart, I can now repeat them and sound smart myself.

• 2:13Alex Kantrowitz?

  Yeah, we'll tease them and then we'll talk a little bit more about what's coming because I thought that this show will talk more about the nuts and bolts of the announcements and sort of the implications for the companies. And then next week on Wednesday, Aaron and I will talk more broadly about the AI space in general. And we also have some questions and some fun segment where we read his tweets. It's really a great one. Let's begin talking about the big news that started the week. We won't talk too much on this, but OpenAI, of course, released GPT-4O and O stands for Omni. And this is according to TechCrunch, that refers to the model's ability to handle text, speech and video. It's going to roll out iteratively across the company's developer and consumer facing products over the next few weeks.

• 2:56Alex Kantrowitz?

  It can do things like you ask it a question and interrupt it. It will have real time responsiveness. And it also, this is kind of the thing that to me is most intriguing is it upgrades the vision qualities. So you can ask it what's going on in the software code by pointing a camera at something. You can say, what brand of shirt is this person wearing? You can even, and this is unbelievable, you can have it watch a live sports game with you and then explain the rules to you as you go. And I think this stuff where you like point the model, point your camera with a chat GPT baked in and get a chance to speak with it about what you're seeing really is going to be some fascinating technology that we're going to be able to work in and think through and help take this AI field to the next level.

• 3:40Alex Kantrowitz?

  The question is, when is it going to come out and how much does the reality mirror what we saw in the demos? Because I and many other people tried to use this the day after the event, not available, it's still not available to me later in the week. And, and we're going to see whether the promise actually meets, or the reality actually meets the promise that OpenAI delivered. So Rajan, I'm curious to start off, what was your reaction to these announcements? And do you think that there was an over promise here? Where do you think this is going to leave us?

• 4:10Speaker 01

  All right, I am very excited by what OpenAI announced and I do not think they're overpromising because I've actually been using the voice interface with the ChatGPT iOS app for a while. In fact, one of my favorite things I discovered, and this is six to eight months ago, on the pre-GPT 4.0 versions, is on a long car ride, I'll ask, you know, with my five-year-old son in the back, "Tell me a story about..." and add his name and make it super personalized and give details about our house or his school, and it will give this like 10, 12-minute story. And, you know, he's completely amazed and immersed at the fact

• 4:54Speaker 01

  at how personalized it is. So already, the voice interface has been pretty advanced, and now actually having an LLM built specifically around multimodality and incorporating voice and corporate, like being built around voice, video, image recognition, I think is going to be able to deliver it. And the thing I'm most excited about is, I actually didn't want GPT-5. I thought getting another massive increase in compute power that could potentially solve unimaginable problems that of like such scale is not what I wanted. I want to see changes in UI. I actually think the biggest limitation with all products right now across Google, Perplexity,

• 5:38Speaker 01

  OpenAI, is it's just a chat-based interface, and that's limiting, and that only addresses specific use cases and moments. So this really, like really tackling the user interface side of things, to me, was more exciting than if they had launched some big new model that they said gets us closer to sentience and AGI, or whatever it would be. I think this is good.

• 6:02Alex Kantrowitz?

  But here's my big question is how are people going to interact with this thing? I mean, we've already seen that voice assistants haven't taken off in the way that we anticipated. And of course, this is due to limitation in technology, but also just terms of in terms of the user interface, right? People don't really love speaking to these things. And then there's the case of the video, right? And yes, like the video can look at you and tell you how you look, but it seems much more useful pointed out than pointed in. And what I mean by that is it seems like we might like really need smart glasses for this stuff to actually sing as opposed to using it on our phone. So you're obviously excited about the new formats, but I put to you, isn't there limitations there as well?

• 6:43Speaker 01

  No, I think voice as an interface, the limitation has always been the actual processing and quality and efficiency. And again, I've ranted many times and we're going to be addressing Siri and Apple in just a bit, but I actually have had Amazon Echoes in my house and Alexa is pretty good and we use it all the time and we would. Now we've switched over to the Apple Home Kit and Home Pods and now use it a little bit less and hopefully that's going to get better. But I actually think voice has worked and has been a natural medium or natural platform. It just couldn't do all those multi-step things. I don't know, do you remember the Alexa App Store?

• 7:25Speaker 01

  Like they're really trying this, like they're going to have every media company, this is when I was working in publishing, was gonna launch a new Alexa experience. The problem was the computing side and the processing side, not the interface. So I actually think this is going to completely revolutionize the way people interact with their phones. In fact, one of the things I've always found fascinating is like my mom in Bengali has the, which is what my parents speak, I speak a little bit, to type, it's a lot easier for her to just dictate to the phone. So, and actually my wife in Mandarin Chinese does this as well. They're already dictating all the time for messaging. It just transposes it into text.

• 8:08Speaker 01

  So people I think are very, very comfortable talking to their phones. To a machine and an AI already. So this is just going to take it to a whole new level.

• 8:18Alex Kantrowitz?

  Yeah. And as you're talking, it reminds me that I did have a viral tweet this week where I pulled out the clip of them talking through a chat GPT four O and having it translate English to Italian and Italian to English and just being this like very conversational and pretty accurate translator. Now, of course, people came out and nitpicked and they said, you know, the Italian accent was off or, you know, how are they going to get slang? And it's like, oh, come on, like this is very, very impressive stuff. Come on. Okay. So, so I do think, okay, maybe this form factor is gonna, is gonna work, especially if the technology is this step change like we think it's going to be. I mean, this idea of like it responding emotionally or with emotion as opposed to this flat, I can help you with that. I am an AI assistant type of,

• 9:01Alex Kantrowitz?

  you know, cadence is interesting. The fact that you can interrupt it is big because these things just tend to talk and talk and talk. And if it can actually stop process and then respond in real time, that's huge. And, and then there's also, and I'm curious what you think about this. There is personality in these things and and OpenAI basically put out this series of videos of its engineers speaking with chat GPT four O. And some people have called chat GPT four O as being a flirty voice, and I agree it's flirty. But I think it extended to the point where it was actually hitting on these engineers. Let's take a listen.

• 9:38Speaker 02

  I just need to know, do I look presentable, professional?

• 9:43Speaker 03

  Well, Rocky, you definitely have the I've been coding all night look down, which could actually work in your favor. Maybe just run a hand through your hair or lean into the mad genius vibe. Your enthusiasm is what's really going to shine through.

• 9:59Speaker 02

  I don't have a lot of time, so I'm just gonna throw this on. What do you think?

• 10:07Speaker 04

  Rocky, that's quite a statement piece. I mean, you'll definitely stand out.

• 10:13Alex Kantrowitz?

  Okay, so what do you think about this? Is this like gonna help the technology take off? Is it too flirty? It's very, it's a little strange, I have to say.

• 10:23Speaker 01

  All right. I think this is where, and I do not know the gender makeup of the engineering team at, or the product team at OpenAI, but I would think more women in the room might have helped this because I agree, I actually think this is terrible. I think like they should not focus on personality yet. First, focus on delivering experience that is not so dry and mundane and boring and AI voicy that it's unusable or annoying to use, but that idea, the interruption in solving that is really interesting because that creates a much more natural flow of conversation. But creating a voice that's hitting different inflections and trying to speak back to you,

• 11:05Speaker 01

  then obviously it gets weird because the ideas in the heads of the people who built it clearly are are realized in the tone of the voice and flirty. Certainly when I heard it too, and right there, it's a little weird and uncomfortable versus just try to get me the answer that I'm looking for and do the thing that I'm asking in a reasonable way is good enough for now.

• 11:32Alex Kantrowitz?

  Ron, John, don't be silly. Of course you want me to have personality.

• 11:35Speaker 01

  That was the most awkward moment of big technology.

• 11:40Alex Kantrowitz?

  And just think about that at scale in AI.

• 11:44Alex Kantrowitz?

  So.

• 11:44Speaker 01

  You've just killed off GPT-4 Omni.

• 11:48Alex Kantrowitz?

  Well, finally had to take a swing that hit. So the one thing that is sort of being missed, I think there's a lot of talk about the use cases, which is appropriate, and talked about the personality of this bot. The one thing I think is being missed largely in the popular conversation is that this thing is much cheaper. And we're going to talk about this with Aaron. On Wednesday, but basically the OpenAI made the bot, first of all, free to everybody. So everybody is eventually going to get this 4.0, 4.0 ChatGPT. You won't have to pay the $20 a month for it. And for developers, they made it 50% less than the current ChatGPT 4 to use. And I think this is interesting because it shows kind of a key strategy. I'm thinking about writing this, you know, for my newsletter or maybe just putting this as one of a series of takeaways.

• 12:33Alex Kantrowitz?

  But OpenAI is taking this massive swing, right? It's really like get it, it's in get big fast mode. And I think that was kind of missed here, which is that they are making a big swing for users, even if it's going to cut into their profits or even make them unprofitable by making this available to everybody. I think they know that ChatGPT flatlined and they need to kick it up a gear. And so that's why we're seeing ChatGPT 4.0 free for everyone. And then for the, for developers, and Aaron's going to get at this, they want to make this technology so value efficient for developers that they almost can't help but put it in their products. I think it's a very interesting swing. I don't think it's being fully, fully appreciated, this strategy, but it is a strategy shift for them, or at least a, you know, this, this very clear strategic direction.

• 13:18Alex Kantrowitz?

  So I'm curious, you know, as the margins guy, what do you think about their decision to effectively forego margins for size?

• 13:25Speaker 01

  I think this is a confused decision and actually I don't think it's a good one. And I will say for the upcoming Aaron Levy episode, the entire conversation around the economics of AI were, was the most fascinating part of it, like really connecting the technology to the business and trying to think about what does this mean for startups or big tech companies? And I think this is a confused effort by OpenAI because on one side, their revenue stream around premium subscriptions and like at that consumer facing level has been the primary driver of revenue. At least from what we understand, we don't have a clear visibility because they're a private company.

• 14:10Speaker 01

  And giving it away for free will increase users, but then propensity to pay, is that really going to convert at any point at the consumer level? I don't know. And then on the other side. Bringing down the cost 50% is actually amazing and I'm personally excited to start developing even more and not having to worry about surprise bills showing up. But then you start moving towards Facebook, or sorry, Meta and Lama 3 and open source efforts where all you're paying for is the compute. You're never going to compete against that because that is free. So in a price war, I don't, I mean, the, the, open source is always going to win. And again, so this is very exciting overall for developers everywhere, for users everywhere.

• 14:55Speaker 01

  I don't think this is a good move for their business.

• 14:58Alex Kantrowitz?

  I mean, maybe it's something that they didn't even have a say in. Like, maybe it's just inevitably they know that price of this stuff is going down to zero. And I just wonder what it means for what OpenAI becomes.

• 15:09Speaker 01

  If that's the, if that is gonna happen, then actually going back to the idea of for Omni and like what was unique about it, then maybe all the value is accreted at the user interface layer. And, you know, the winner is going to be the one that has the best user experiences, which is kind of what happened on mobile as well. So if you think about it, maybe, okay, that would be the positive take from OpenAI's perspective if they're showing that they're recognizing the actual model value, like paying to call an API to a large language model is going towards zero, that they're going to have the coolest voice and visual and video experiences on top of that.

• 15:52Speaker 01

  And that's where they're going to eventually make money. Could be, it's a generous interpretation. It could be good for them, but I don't know. It's gonna, this whole conversation has made it real, you know, clear that it's gonna get harder and harder for these companies to really prove how they're going to make money, especially the AI only ones like OpenAI versus a Google or a Microsoft where this is just an add-on.

• 16:17Alex Kantrowitz?

  Right. And then the other side of this is that you and Aaron will address this next week is that basically like if intelligence, artificial intelligence becomes just so pervasive everywhere and it's just coded in to every single bit of computing, then the price doesn't have to be that high to make a lot of money.

• 16:35Alex Kantrowitz?

  But there's also other ways that they can make money and that is potentially licensing the technology to big technology companies and.

• 16:44Alex Kantrowitz?

  Let's talk about this report because you have been begging for Siri upgrades. So there's a couple of big pieces of news as Apple gets close to WWDC. Here's the first one from Bloomberg. Apple nears deal with OpenAI to put ChatGPT on iPhone. And this is a very interesting way that the story is phrased. Apple Inc. has closed in on an agreement with OpenAI to use the startup's technology on the iPhone. The two sites have been finalizing terms for a pact to use ChatGPT features in Apple's iOS 18, the next iPhone operating system. And like when people saw this report, I think they immediately went to aha, they're putting ChatGPT in Siri. But the report explicitly does not say Siri, right?

• 17:29Alex Kantrowitz?

  It says in the operating system. And that is very interesting to me where maybe the first bit of news that we're going to get from WWDC is that the actual iPhone operating system changes to interact with you from a generative AI perspective before we even get to Siri. How did you read this news, Ranjan?

• 17:48Speaker 01

  Yeah, I, well, first I read this news and had to almost question my life decisions because how excited I was by it. Because as a regular, like this was

• 17:59Alex Kantrowitz?

  Friday confession series.

• 18:00Speaker 01

  Unfortunately, the single most exciting piece of tech news I have had because regular listeners will know how painful and angry Siri makes me. So that part's good. I think what you just said there, I agree, is where it gets interesting because does this mean there's no more Siri? Or does Apple itself allow you at the actual device level to change the default voice interaction? Like I can select OpenAI. Maybe they start to even allow other, other voice assistant or LLM-driven chat assistants like on to at the device level. So I choose, maybe I even have to pay OpenAI via subscription.

• 18:44Speaker 01

  But basically they open up the device to allow every users to access and have choice around which LLM they're interacting with. And as you said, it could be both when I, you know, hold the Siri button and talk to my phone. Maybe it is in the when I'm searching for an app or searching for an answer at the actual search bar level, that becomes LLM-driven. So, so I think. I really hope they have something exciting.

• 19:12Alex Kantrowitz?

  I have a totally different interpretation of what this means. And now that might happen, by the way, because we also have this New York Times article saying that they are planning to upgrade Siri, and I think that will happen. If anything, if the Times came to Apple and Apple said, no, we're not going to upgrade Siri, like, Apple didn't comment for the article. If they weren't going to upgrade Siri, they would just, off the record, be like, your story's wrong, don't run it. And the Times would either not run it or adjust it. But here's what I think their partnership with ChatGPT, with OpenAI, might look like in the operating system. Now, we've heard so much about this agentic type of interface, right, where the AI becomes your agent, or the AI becomes your assistant. And I think what the iPhone is going to do is, you're going to swipe, this is a total guess, but

• 19:55Alex Kantrowitz?

  you're going to swipe, and this is just that one bit of OpenAI partnership. You're going to swipe left, once you get into your home screen. And instead of all these, like, little widgets you have on your phone, there's going to be a little rundown, in natural language, of what's happening in your life. This is what you have on your calendar. This is the weather. This is the, what you should be thinking about. You might be interested in this in the news. By the way, here are some new episodes on your podcast. So, like, it actually becomes an assistive-type technology on the phone, using the natural language of an OpenAI. And that's where I think, when we talk about the operating system, I think that is how it gets baked into the operating system. What do you think?

• 20:34Speaker 01

  Wait, that, okay, that is interesting to me, because, do you ever use iOS shortcuts?

• 20:41Alex Kantrowitz?

  No.

• 20:42Speaker 01

  Or Apple shortcuts? Okay, so there was a brief period I tried to use shortcuts. And basically, these are where you can kind of connect different apps. It's almost like Zapier, if this, then that, if people remember these, or use these tools where you connect different apps and different actions trigger other things in in a different app to create a little experience. Now, like, when Alex referred to, when you referred to agentic experiences, the idea that you have these kind of multi-step Large language model AI driven things that are happening. So you can imagine if your phone knows you're taking a flight on Wednesday night and the weather forecast says it's going to rain on Wednesday night, it will somehow in natural language, as you said, tell you

• 21:27Speaker 01

  be cautious. I've checked your flight status. It's still on time, but like make sure to bring an umbrella, whatever it is like all those pieces of information and things and ways you interact with your phone. It's crazy to think about how much can change and how many cool new ways to just function with the phone can happen if you connect them and have some intelligence behind that. So that is very interesting. If they promise that and don't actually have it ready for a year and don't upgrade Siri, I'll still walk away disappointed, but if they actually still promise that and I will, I'll find that pretty amazing.

• 22:05Alex Kantrowitz?

  Yeah. And what's clear is there is a bond that's developing between OpenAI and Apple. I mean, OpenAI released their ChatGPT desktop app this week and it's only on Apple on macOS to start, not on Windows, despite the fact that Microsoft gave them $10 billion to build this stuff and all the server processing.

• 22:22Speaker 01

  Yeah. Where OpenAI fits into this whole big technology landscape is still so confusing because again, we don't know their financials. We know they're probably have made, they have revenue with ChatGPT plus and their actual like enterprise API services, but we have no idea. So it almost does feel like they're going to have to ally with one of the players much more closely and it's not going to be Microsoft now. And also Apple, at least as far as we know, I think there's been some chatter around their own model development, but is the one big technology player that at its core infrastructure does not have

• 23:06Speaker 01

  AI models and infrastructure that Google Cloud, AWS, you know, Microsoft, Meta, all these companies have. AI, consumer facing or enterprise ready AI at the core of what they do and Apple's the one that doesn't.

• 23:21Alex Kantrowitz?

  Right. And this is actually kind of a good time to bring up this listener email that I got. And we had a listener that listened to our iPad segment last week and I had said, oh, the iPad is just thinner, but they brought up this really good point, which is the iPad has this M4 chip. And they wrote, you failed to mention that they essentially released the most powerful computer they have to date. Not only that, they released their most powerful processor to date in a tablet, not on a computer. The iPad is really a beast when it comes to power. I think that's a great point. And I think Apple was going to have like this computing that they can, they can use and sort of put, put, put right on the problem. And that might be with the new chips. It might be with these servers that we're talking about. There's also going to be the opportunity to expand the hardware.

• 24:05Alex Kantrowitz?

  And, you know, for instance, the New York Times story about the improved Siri said that a new piece of hardware may inevitably like have more memory to allow a better version of Siri to operate on the phone.

• 24:18Alex Kantrowitz?

  And that's cool. And that could drive an upgrade cycle. My big thing on the upgrade cycle here is that we're probably not going to see an immediate iPhone upgrade cycle right away from Apple because this is 2017 technology, right? It's all built on the transformers. I got the ChatGPT app working on my iPhone. I have the Claude app working on my iPhone. I don't think I need a new iPhone to run Apple's next generation of AI. But over time, there could be like a truly like synced up hardware, software relationship inside Apple devices that allows this stuff to sing.

• 24:51Speaker 01

  I don't know. I think if you, if they introduce some completely different ways and form factors of actually using your phone, and it's only going to be available on the iPhone 17, I think is the next one, or 16, I'm going to buy one at least, I'm sure.

• 25:08Alex Kantrowitz?

  Yeah. I mean, they always, I guess they have that option to not make it available to current users, but that's somewhat user hostile. But.

• 25:15Speaker 01

  I mean, this is.

• 25:16Alex Kantrowitz?

  They do that sometimes.

• 25:17Speaker 01

  The most user friendly and user hostile somehow.

• 25:21Alex Kantrowitz?

  I know.

• 25:21Speaker 01

  At the same time, company in the world.

• 25:22Alex Kantrowitz?

  If I need to buy one more dongle to make this AI stuff work, I'm going to freaking throw the phone out the window.

• 25:28Speaker 01

  AI dongles, that's going to be the big revenue driver in their services line.

• 25:34Alex Kantrowitz?

  There was a great line in the Times article talking about how they've made this now a tent pole product, a project where they basically have allocated the resources and the top talent in the company to start working on this stuff. Whereas before they hadn't done it in like previous iterations of this style or this iteration of computing like voice computing in the home pod. So that's pretty bullish on the Apple front. I am eager to see what's going to happen there. I still don't know if they're going to let me into WWDC. So you try.

• 26:01Speaker 01

  Come on, we gotta get in, gotta get in. Tim, if you're listening.

• 26:05Alex Kantrowitz?

  Yep. And just on the note of reader feedback, we've gotten a lot of reader feedback over the past couple of weeks. And I just want to say how much I appreciate people writing in to the email address and like actually having a conversation, especially when things haven't been perfect. And again, like I'm learning from you. We were just on with Dwarkesh over on Wednesday and he talked about how he's learning from his listeners and we're learning from you as well. So thank you for doing that. And when you have, you know, it's a piece of constructive feedback, bringing it in via the email versus the rating is always good, although we always appreciate those five star ratings. So thank you for that. I almost missed this. Elias Sutskevers out, right? So the chief scientist of OpenAI is, has resigned.

• 26:48Alex Kantrowitz?

  He wrote on X, "After almost a decade, I have made the decision to leave OpenAI. The company's trajectory has been nothing short of miraculous, and I'm confident that OpenAI will build AGI, artificial general intelligence, that is both safe and beneficial. It was an honor and a privilege to have worked together and I will miss everybody dearly. So long and thanks for everything." Just kind of a hilarious thing to write in your, in your post. "I'm excited for what comes next, a project that is personally meaningful to me, about which I will share details in due time." And wait, it gets better. Right after he left, this guy Jan Leike, who was also in this super alignment, who was leading this super alignment group inside OpenAI, basically to ensure that the AI shares our

• 27:32Alex Kantrowitz?

  values, he just posted, "I resigned." And he's out too. And it led to like this kind Hilarious wave of I resign from OpenAI memes on Twitter. But but it is it is a big deal, I would say, for two reasons. One is because Ilya obviously was has been exceptionally talented and behind multiple breakthroughs. He is the guy that Elon Musk recruited from Google to start this thing in the first place. So it can't be good to lose him, right? At the very least, and it might hurt a lot. And then, secondly, these seem to be the people that were driving the alignment work within the company, which is, again, it's the fastest mover in all of the AI industry. And it is a little bit concerning, I guess, that they are out the door. So how did you look at this news?

• 28:13Speaker 01

  What do they know? I through all this, when all the Q star stuff came out, when the initial Sam Altman corporate intrigue was happening, I just want a clear idea. Like, if you know something about the potential end of humanity that's concrete, I would hope you would not just tweet, I resigned, and you would tell someone and say, maybe we should keep an eye on this. But I also think, to me, this just reminds me that OpenAI is just so fascinating as a company, because, again, it's been well over, or it's been a few months since they had completed their last funding, but eighty billion dollars or eighty six billion dollars, I think, was the valuation.

• 28:58Speaker 01

  This is a company where any other company that size, one of the most important members, founders, minds within the company leaving would seriously cause some issues in terms of everyone, you know, investors being a little concerned. And somehow that they keep moving on and skating by and firing and rehiring CEOs and and delivering great products. It is an interesting one.

• 29:25Alex Kantrowitz?

  Yeah, okay. We have to go to breaks. Let's go to break and come back right after this to talk about Google and the departure of the CEO of Amazon Web Services. Back right after this. This episode is brought to you by Avpoint. Everyone's racing to roll out AI right now. Copilots, 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. Your data, your cloud, and the agents acting on your behalf.

• 30:09Alex Kantrowitz?

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• 31:35Alex Kantrowitz?

  And we're back here on Big Technology Podcast Friday Editions. We're talking about all the week's massive news in AI and computing. And let's just talk about the Google news quickly. So, right after OpenAI had their event, Google had its I/O event, its developer event. And the big news, well, they had multiple big announcements. They have a similar voice multimodal capable product that they are releasing. The biggest news that caught most people's attention was, and they're also sorry, and they're also releasing a model with 2 trillion tokens, which Aaron will talk about, sorry, 2 million tokens, which Aaron will talk about next week. But the biggest news that everybody

• 32:16Alex Kantrowitz?

  was talking about was that they are taking their search generative experiences, which puts AI above the text of the search results and AI summary. And they're going to release that en masse, a version of it called AI overviews. And this is from Casey Newton. "This new approach is captured elegantly in a slogan that appeared several times during Tuesday's keynote. Let Google do the Googling for you. It's a phrase that identifies browsing the web, a task once considered entertaining enough that it was given the name surfing as a chore, something better left to a bot. It was hard to escape the feeling that the web as we know it is entering some kind of managed decline. To everybody who depended

• 32:59Alex Kantrowitz?

  even a little bit on web search to have their business discovered, or their blog post read, or their journalism funded, the arrival of AI search boots ill for the future. Google will now do the Googling for you, and everyone who benefited from humans doing the Googling will be very, will very soon need to come up with a Plan B." So I kind of looked at this and I was like, all right, is this, is this the end of the web? I mean, is that, this is basically the big question that people are asking after this event. What do you think, Rajan?

• 33:26Speaker 01

  Yeah, we've talked about this before, and I think, I still think the idea that this is a net bad is wrong. I think the, I think this is the end of the web as we know it from the last 20 years. I think everything is going to fundamentally change because... All the economics that drove the way the web developed are completely going to be shifted. However, I don't think that's a bad thing because I think a lot of the web has already been killed off and dead. And recipe websites and other spammy SEO driven things. The fact that publishers hacked what time is the Super Bowl famously a number of years ago to drive traffic to get display ad views. All of these things were always bad.

• 34:09Speaker 01

  And them going away and losing all economic incentives, I don't think is a bad thing. In Semaphore, they had a really good piece recognizing this where it was like, it said, "The culprit is technology and technology is disruptive. People forget that the beloved web, which some now look at wistfully in its twilight hours, was terrible for publishing initially. It killed classified ads and subscription models." So we already went through the web is destroying publishing. Now, once publishers figured out how to drive traffic with SEO, now this is going to kill traditional SEO. So I think, I don't know, I think this is overall a good thing. And also, we had debated, I remember, Gartner predicted by 2026 that search would drop 25%.

• 34:54Speaker 01

  I said, "Yes." You said, "No" on this. I think this is going to drive that decrease in search. And again, I see that in my own daily life. A lot, I don't know, maybe I'll say over 50% of what would have been a Google search is now on either Gemini, Perplexity, or ChatGPT.

• 35:13Alex Kantrowitz?

  I'm going to end up just using Google more often because the experience is going to be better.

• 35:18Speaker 01

  Yeah, no, Google's going to be well positioned, but it's going to hit their business hard until someone figures out that monetization model. Because clicking out to the other website is how they've made their money. And when people don't want to see 10 search ads, and also... Let's not forget, Google almost essentially killed search by degrading it so much over the last few years that overall, I think this is a good disruption.

• 35:43Alex Kantrowitz?

  So there are some, there still are some good websites out there. And I do want to take a moment to thank Techmeme for showcasing Big Technology Podcast on its homepage. And Techmeme is my go-to site for finding out what's happening in the tech world. I used it a ton this week to figure out what was going on in the news. And you can find out what's happening as it's happening. I think you'll find great value from it as well. So you can find it at techmeme.com. Sums up the week's headlines, and it definitely helped me organize this week's show. So I hope Techmeme and like some of these good websites do continue to stay functional. I also wonder like how much the the behavior change is actually going to take place. So first of all, this stuff

• 36:26Alex Kantrowitz?

  is going to roll out and people are like, oh, it's going to kill the web, but it's only going to roll out on a percentage of searches. It's not going to roll out on every search, even if it rolls out broadly, because like we've talked about in the past, it's just a, it's a calculation in terms of when do you want a Gen AI answer? And when do you want the 10 blue links? I think people missed that. I think also, the data shows you a very different story in terms of where a search is heading. Because if you think about it, since Bing's chat came out, we've had a year plus to see if this is more appealing to people than Google Search. And it currently, this is according to Wall Street Journal, it has 3.6% of the global search market. 3.6%. So I think that businesses,

• 37:09Alex Kantrowitz?

  the business practices are sticky and the consumer behavior is sticky. And you know, this is, I think it's easy to overreact, looking at one of these demos and saying it's the end of the web. And maybe it's a different era of the web. But I also think that we do have more runway here before we kind Close the curtains and say, thanks for coming, everybody. Or like Ilya, like Ilya said, what did he say? Thanks for the good times.

• 37:33Speaker 01

  Thanks for the good. I mean, honestly, I think Techmeme is a good example of a good website that you go to and has a very specific value of even like adding context to headlines, curating tweets for you. I mean, I go there all the time for that specific reason. And yes, if Gemini somehow, when users ask what's going on in tech today, if it scrapes and re-does and repurposes all Techmeme homepage content, that's a problem. And these are the kind of things that, those are the things that need to be solved. How to prevent good websites from being regurgitated. But the bad websites, I think it's time to get rid of.

• 38:15Alex Kantrowitz?

  Right. And then there's the business model, the business model question, right? And this is back to Casey Newton. They'll show fewer ads on webpages, more and more lucrative ads on search engine result page and, oh, and scoop up the affiliate fees. This is the important part. Scoop up the affiliate fees that used to go to all the websites publishing best laptop lists. Once they have a working agent, they'll take various fees for being your travel agent, personal shopper, et cetera.

• 38:43Alex Kantrowitz?

  Anyone who thinks this is a slam dunk for Google's business is totally misguided. I don't think Casey is. I think he's just outlining the, the, the business.

• 38:49Speaker 01

  Potential.

• 38:50Alex Kantrowitz?

  Here. But it is labor intensive to build those integrations and it has to work really well. And I don't think necessarily people are going to just trust search generative experiences or whatever it is, the AI overviews in terms of buying products and travel. It will be help, it will help, it will be assistive, but it's not the end. And so what you're going to end up having is less clicks on ads, much more computing power that's needed to produce, produce the results and an unclear, I mean, or, or at least even a more expensive way to plug into the monetization side on the backend. They might figure it out. They might end up making even more money because of it. But I think these business questions are really going to start to pop up in a way that they, they haven't been yet.

• 39:34Alex Kantrowitz?

  Even if this AI overview rolls out in a limited way, it could potentially like, I mean, we look at this in the stock markets, just we look at the margins, we look at the comparison, the last quarter, and this is what's going to happen. And it's going to, it's going to be challenging for them.

• 39:49Speaker 01

  No, it will. I mean, this is a complete disruption of their business model that is potentially the most profitable business model in history, or one of them. So this is, they're definitely gonna have to come up with a new monetization model, and no one has done it yet or figured it out. The perplexity CEO on this podcast had talked about their ideas. Everyone's trying to figure out, and we're just getting started on this.

• 40:14Alex Kantrowitz?

  As we wrap up this segment, let's just go quickly. I won't ask for numbers or anything like that, but are you, do you feel better about OpenAI this, at the end of this week than you did at the beginning?

• 40:25Speaker 01

  Worse. I feel, I felt almost better when the, I watched the, the launch event, and I'm, as a user, even more excited. But actually, as we've been talking today, I realize just how confused I am about what direction they are heading in terms of their business. And I really don't think they have a clear path.

• 40:49Alex Kantrowitz?

  And Google, better or worse?

• 40:52Speaker 01

  Uh, Google, I would say better, because the big question has always been, is Sundar gonna show the leadership that they recognize the disruption of traditional search as a business model, and do something aggressive around rethinking search? And if they didn't do anything, and we all started using perplexity more, and ChatGPT more to replace search, Google would be gone. So I think they at least this week showed very much so that they fully recognize what they're up against, and they're working on it. And they are positioned well to capture value somewhere. So I think, I think better. What about you, OpenAI?

• 41:30Alex Kantrowitz?

  I'm the opposite. I'm better on OpenAI and worse on Google. I do think, you know, OpenAI didn't ship GPT-5, and I'm still waiting for that. But I think that, like, these products are gonna get uptake, for sure. And I like this strategy of going big, getting big fast for them, and trying to get their stuff in everybody's hands. And for Google, to me, it really like, you know, it was very nice demos, but it punctuated this idea of they're gonna really have trouble in terms of making money here. And they might get stuck in this kind of in the muck in between. I mean, the stock's doing well, so can at least take that.

• 42:03Speaker 01

  Was it just the flirty chatbot from OpenAI? It was just the flirty chatbot.

• 42:09Alex Kantrowitz?

  It was the flirty chatbot, actually. If I'm being honest, I admitted it was, I got totally drawn in by OpenAI's chatbot. By the way, folks, do not type in flirty chatbot or flirty OpenAI on X. The search results are not anything you want to look at. So I regret doing that. I really regret it. It was just, it was a terrible start to my morning.

• 42:33Speaker 01

  There's a lot of Twitter searches nowadays that I instantly regret that were seemingly innocuous that end in just stuff that I have to slam my laptop screen down.

• 42:44Alex Kantrowitz?

  Listen, people do not use Twitter in a public place, unless you don't mind. But still don't do it. There are other people around. Okay, very quickly, the CEO of Amazon Web Services, Adam Stlebski, has stepped down. It's effective June 3rd. Matt Garman, the SVP of AWS Sales, Marketing and Global Services at Amazon, had Amazon as coming in to replace him. Here's the financials. It grew 17% year over year in the first quarter. In 2024, it beat Wall Street expectations. It also sort of got, it was $25 billion. It's profitable, extremely profitable. 17% of Amazon's revenue. In the most recent quarter,

• 43:24Alex Kantrowitz?

  62% of its operating income. And it was, it also broke this kind of slide or kind of stuck in the mud feeling that it had for a while. This is kind of the interesting context. So Kate Rooney from CNBC, you know, did some reporting and kind of gave a jaw dropping report. She said that he is a wartime, the new one is a wartime CEO. The old one was a peacetime CEO. They feel that they're lagging behind Google and Microsoft in AI. And they say that Amazon is tethered to the success of Anthropic, you know, which has also teamed up with Google, and this is the real jaw dropper. All of this has caught

• 44:05Alex Kantrowitz?

  the attention of Amazon founder and former CEO Jeff Bezos. And her source tells her that the former CEO is very involved in the company's AI efforts. This is a big deal. What's your reaction?

• 44:18Speaker 01

  The most interesting part of this for me is the business is going great at AWS. The numbers you just gave, it's growing, it's strong, it's from a pure revenue standpoint, earning standpoint and growth standpoint, it's good, but it is also clear that we have not talked about Amazon relative to AI in weeks or months. I can't, I actually can't even remember what the last big announcement is. And it is interesting to me, though, that that was enough to take out the division CEO who has actually done an incredible job for, for AWS. The fact that not having flashy demos and excitement, exciting announcements,

• 45:00Speaker 01

  it can actually do that. I think it's, it's going to be interesting whether that was the right decision or whether they should have just kind of kept their heads down, focused and not worried. Cause I know for a brief period, Amazon was kind of sending the message that they were the neutral infrastructure to build AI on that you could, from the beginning before Microsoft did, or definitely before Google did, you could, you know, build on all different types of models on their infrastructure. And that was their positioning and they kind of owned it for like a very, very short period. And now I don't even begin to pretend I know what their positioning is in the space.

• 45:40Alex Kantrowitz?

  Absolutely. Yeah. I mean, it seemed like the bring your own model idea was good for infrastructure, but then on the infrastructure side, it seems like Nvidia has really won on that. And Google Cloud is actually advancing more on these AI efforts. All right. We're out of time, but thank you everybody for listening. Thank you, Ranjan, for being here. We're going to see you in the Q and A section of Wednesday's show and then back here with us again on Friday. Thanks for joining, Ranjan.

• 46:02Speaker 01

  Everyone, make sure to listen to the Aaron Levy episode. That was a very, very good one.

• 46:07Alex Kantrowitz?

  We, we had a great time. It really, it was one of the most fun events I've been a part of. So very happy about it. And I'm so stoked that the audio recording worked and we'll be able to bring it to you on Wednesday. All right, everybody. Thank you for listening and we'll see you next time on Big Technology Podcast.

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