Meta & Snap's New AR Glasses, Perplexity's Ads, Google's Work Ethic

Ranjan Roy from Margins is back for our weekly discussion of the latest tech news. We cover 1) Alex's trip to the Balkans 2) China's influence in the region 3) Meta and Snap AR glasses battle 4) Are smart glasses stylish enough 5) Perplexity's plan to run ads 6) Eric Schmidt's disparaging remarks about Google 7) Is Google really behind on AI? 8) Will the U. S. government really break up big tech? --- 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?

  Meta and Snap have augmented reality glasses on the way. Perplexity is about to introduce advertising. Google's work ethic is under question from a former leader. And will the US government break the company up? All that and more coming up on a big technology podcast Friday edition, right after this. This episode is brought to you by Genesis. What does it actually take to put a Gentic AI to work across an entire enterprise? I recently spoke with Genesis chairman and CEO Tony Bates about why orchestration is emerging as a competitive advantage in customer experience and what companies need to get right in the AI era. Then I sat down with Adam Mitchell, head of enterprise business solutions at Voya Financial

• 0:41Alex Kantrowitz?

  to go inside a large scale agentic CX transformation, including the business decisions, trade offs, and lessons along the way. You can watch both conversations now on my YouTube channel today. It's never been more challenging to get frontier compute. How do you know where to look, who to trust, or how much to pay? Akash is an open cloud that provides easy access, flexibility, and peace of mind. That's how companies like Razor were able to cut their inference cost by 15 times. Visit akash.network slash Alex for a free consultation. That's akash.network slash Alex for a free consultation. Welcome to Big Technology Podcast Friday edition, where we break down the news in our

• 1:25Alex Kantrowitz?

  traditional cool headed and nuanced format. We have so much to talk about this week, including potential new AR glasses for Meta and Snap, a new business model for artificial intelligence, and of course Eric Schmidt's comments saying that Google is behind in the AI race because they're not showing up to the office. It's gonna be a fun addition. Joining me as always is Ron John Roy. Ron John, welcome. Great to see you.

• 1:48Speaker 01

  Good to see you again. Excited to hear about your travels.

• 1:51Alex Kantrowitz?

  Yes, so I think just to address it off the start, last week, we tried and failed to record an episode. So, and that's on me. I apologize, we didn't have a Friday episode for you. We attempted Friday, we attempted Saturday morning. I've been traveling in the Balkans and I expected to have decent internet, but alas, I could not find it. So here we are, we're gonna do a super episode today, covering some of the new stuff, some of the stuff that we were attempting to cover last week. And I'm just thrilled to be back and thank you, Ron John, for rolling it and rolling with it and good to see you again.

• 2:24Speaker 01

  So how have the travels been? I don't think I've ever been to the Balkans.

• 2:30Alex Kantrowitz?

  So I think the Balkans is one of the most underrated parts of the world. I do have a friend from Kosovo or a couple of friends from Kosovo. And I came here three years ago and this year we decided, my wife and I decided, you know what, let's go ahead and see some more of it. So we've been to Kosovo, Albania, Montenegro and North Macedonia. And I do think nobody knows about North Macedonia, but that country blew me away. It's so beautiful, beautiful lake, an amazing capital city. And I think, I mean, it's, yeah, it's just overall very, very, very beautiful place.

• 3:06Speaker 01

  When did North Macedonia become a country? Or what's this, do you know the story? If I'm putting you on the spot because

• 3:13Alex Kantrowitz?

  Yes.

• 3:13Speaker 01

  That's one of those countries that I still don't, it suddenly happened and I never quite, quite got the whole story.

• 3:21Alex Kantrowitz?

  So asking me to go through Balkans history is probably going to hurt my credibility with listeners. Let me tell you, one of the interesting things that I saw, and I figured it was worth bringing up, is that a lot of the roads here are really rough. And I'm going to apologize in advance to our friendly rental car folks for what we're going to return to you guys. But then some of the roads are absolutely beautiful. And it turns out that many of the roads in the Balkans are funded by China to the tune of tens of billions of dollars. And in fact, on the way over here, I did have some time to do some research. And this is from Balkans Research Agency.

• 4:01Alex Kantrowitz?

  China has been linked to 136 projects in this area of the world worth up to 32 billions of, 32 billion euros. And that's from 2009 to 2021. So it is very interesting to see the country's influence here. And I'm curious, Ranjan, from your perspective, I know that you have connections to Taiwan. What do you think the point is of China spending all this money and doing all this development in regions of the world like this one? They also have projects in Africa.

• 4:35Speaker 01

  Well, no, this is, the Belt and Road Initiative was launched in 2008. So this is interesting because I haven't heard that much about it recently. But again, this was this massive undertaking, launched in 2008 to invest in emerging economies all over the world and help them build infrastructure. So this is kind of amazing that you literally saw roads, because I know a lot of it was like ports and other types of critical infrastructure, but you actually saw that they're building roads in emerging economies. So that is kind of amazing. I do know that it slowed down the pace of development because of economic concerns

• 5:17Speaker 01

  in terms of like the amount of debt that was undertaken, or even a lot of the debt that was issued, people have complained that was a bit onerous in terms of what they were imposing upon these economies. But that's kind of amazing on the road reporting for the Belt and Road Initiative and actually seeing it in action.

• 5:37Alex Kantrowitz?

  I mean, the influence of China and the US is like definitely impossible to escape here. You see these Belt and Road initiatives, projects that China has been undertaking. And then we walked into the library in Pristina, which is the capital of Kosovo. And the first thing you see when you walk in is the American wing. And you walk in there and there's like a section for great American authors and different books of the US and like literal books, like talking about democracy. And this is funded by the State Department.

• 6:07Speaker 01

  Soft power battles. It's still going. And I will say, during this time, I was able to look. Why I was confused about Macedonia is, I remember there was the country Macedonia, but then when everyone's, when you're saying North Macedonia, that's what confuses me. Apparently in 2019, they had to change the name. The country was founded in 2012 and in 2019, they had to change the name from Macedonia to North Macedonia, because apparently Greece objected to the name Macedonia and they finally had to give in. And this was brought to you by a quick perplexity search. And that is not a, this is not a sponsored segment for perplexity, but we are going

• 6:52Speaker 01

  to talk about perplexity ads in just a little bit.

• 6:54Alex Kantrowitz?

  Definitely. Yeah. And the North Macedonia thing also threw me for a loop. But I think basically they're trying to enter the EU and Greece is like, oh yeah, you want in? You can't use the name of our region Macedonia, so pick something else. I think that's unfair. I think they should be allowed to be called Macedonia, but definitely absolutely beautiful country. Okay, so speaking of great power struggles, or one power telling the other power what to do, Meta and Snapchat are about to do their new AR glasses. And I was sort of surprised seeing this story, it's from The Verge, that Snapchat is even continuing to build Spectacles. But the big news here, I think, is the Meta glasses, which are going

• 7:34Alex Kantrowitz?

  to be called Orion. And these are not just like the Ray-Bans where you can film and speak to AI, but they're actually going to be augmented reality glasses. And to me, this is simply just like the obvious next iteration of what the Metaverse is going to be. I think Meta sees a limit with the VR goggles, and they realize that if they're able to create an AR device, that might be something that has the potential to bring this Metaverse vision mainstream. Will it succeed? I don't know. I don't think this version will, but I'm curious to hear what you think about it.

• 8:11Speaker 01

  I think this, so I saw this headline too, and I think this is actually going to be one of the most interesting stories in the next year or two. And there's a couple of reasons for it. So first, glasses in general is something that I think has been an underrated story, because one, Snap was the one that launched Spectacles, I think like seven years ago, eight years ago. I remember it was pretty splashy when they launched it, and it looked kind of cool. And again, these were glasses that could basically record and post, not do anything else. And then meanwhile, I've talked to so many people who are obsessed with Meta's Ray-Bans. The, I mean, I will admit, I kind of want to buy them. I've come

• 8:54Speaker 01

  close to pulling the trigger a few times. And to Zuckerberg's credit, if a few years ago, you told people that I would be wearing a Facebook device on my face that is constantly able to record people, even without them knowing it. You would think that that kind of device would have just been completely panned. And yet I've seen so many people who I trust and respect proudly wearing them, talking about them, saying they're amazing. Even the the audio, I think it's bone conduction, so it's not directly in your ear. So for biking around, for running, for these kind of things, it's it's just a lot better than having something directly in your ear. So so glasses in general, they're battling.

• 9:39Speaker 01

  And Snap is behind the fact that Spectacles never launched. Then you start to think about the AR glasses, the Vision Pro, clear that it's not ready for mass adoption just yet, if it will be. So maybe glasses will be the form factor that really deliver augmented reality to the masses. And I have to think, to to me, the one major competitive advantage, if any, Snap has over Meta, is augmented reality. They're the OG. They're, I mean, they basically invented the entire field at the mass level with their lenses. They still, I think they're very smartly, I've been seeing at sports stadiums and the Olympics,

• 10:23Speaker 01

  they're really leaning into lenses in bigger situations, like on the Kiss Cam and stuff now. They'll have augmented reality lenses. Yeah, sponsored by Snap very clearly. So I think if the battle becomes layering augmented reality into the real world and everyday situations, kind of like Pokemon Go all the time, or whatever that it might look like, I think Snap is probably positioned better. They've always shown that they can deliver augmented reality in a fun, simplistic way, not some like immersive world, but just let me layer a bit of AR and make it fun and accessible. I think they have a chance here.

• 11:03Alex Kantrowitz?

  So I'll talk a bit about the Ray-Ban stories because I have a pair. First of all, I think you should definitely get them. I do have one.

• 11:10Speaker 01

  All right, I'm literally after this recording, I'm gonna.

• 11:13Alex Kantrowitz?

  I've had some really fun moments where I've been able to use them. I was wearing them in a triathlon that I did with my wife and a friend a couple of weeks ago and.

• 11:25Speaker 01

  Alex with the subtle triathlon flex here.

• 11:28Alex Kantrowitz?

  I mean, it was a sprint triathlon. It was basically like a baby could do this triathlon. It really was not very long. But I did have those glasses. They were really fun to wear in the bike part of it and the run. And just like, that's not a place where you really want to have your phone out too often. But to use those glasses is great. We also did a hike a couple of days ago into like the mountains here in the Balkans and like it started to pour. It was like ridiculous. It was a true like ready to die moment, massive thunderstorm in the mountains and I just hit record and just like you can see the video of us just like walking through and

• 12:09Alex Kantrowitz?

  the thunder and lightning all around us and like again, not a point, you obviously want to keep your footing at that moment. So it's not a point where you want to take your phone out and that's where this stuff really works well. And the speaker, by the way, it's not bone conduction. It's a bunch of different speakers pointed like toward your ears from the brim of the glasses. So it's actually like a mini speaker. It doesn't go in your ear. And the sound quality is like absurdly good for the technical specifications I just laid out. So they are very cool.

• 12:40Speaker 01

  Is it weird if it is a storm and rainy and thundering to be where the guy wearing sunglasses? That's my only concern here. It's like, if I want to be recording, am I going to just put on sunglasses at odd times and just be that guy?

• 12:56Alex Kantrowitz?

  Well, they actually, so they are responsive to the sun. So when it's not that sunny out, they look like clear glasses and then when the sun comes out, they go. Sunglasses tint, but I will answer your question. It's always weird to wear them. Absolutely. I wore them onto an Internet Week panel and I think a lot of people were like cool glasses. It's very difficult to tell that they're actual Facebook glasses with cameras in them. And even though they have the light on, like I recorded the end of this session and people had no idea that I was recording. So the whole thing is a little bit odd and I don't wear glasses usually, except when I'm like looking at the screen and I'm writing.

• 13:41Alex Kantrowitz?

  It's definitely a thing that's gonna take getting used to and they're definitely like, even before we went on the hike this past weekend, I was like, am I gonna look like a tool if I wear these? And the consensus was, yes, I was going to. So I didn't wear them. And I only took them out mid-thunderstorm because I just like really wanted to get the shot. But I think over time, over time, they are going to become, I think, more accepted and more normal. And maybe not these AR glasses, though, because they, they look like a cross between, I mean, Zuck has shown some of the, the model already. They look like a cross between the Meta Ray-Ban Stories and a VR headset with like stuff on the side, like obviously need more computing. And people are really gonna tell you you're wearing

• 14:26Alex Kantrowitz?

  those. But that being said, they're gonna be less awkward to wear in public than the Vision Pro. I don't know if you've been in a public situation with somebody wearing the Vision Pro yet, but I have. And it just takes all of the attention in the room and not in a good way.

• 14:41Speaker 01

  Yeah, I think I was looking at the, the renderings of the Snap upcoming AR spectacles and they, they do, they don't look completely insane. They definitely look like, kind of like I was thinking, you know, like, Kanye Yeezys went for shoes versus regular sneakers. Like, they look a little crazy, but they don't look like a completely different form factor, or just like, you're actually a crazy person. You're just, maybe you're a little stylish. But actually, I think, I mean, the smartest thing Meta did in this, in this arena, was partner with Ray-Ban and make them look like the standard Wayfarers,

• 15:21Speaker 01

  because making them look okay and reasonable, so you're not in the, are you a tool or not a tool to wear these? I think is actually the most important consumer adoption question versus is the tech good?

• 15:37Alex Kantrowitz?

  Yeah, the reaction I've gotten has largely been, cool glasses, man? And not, what the hell are those? And I think that might be partially people being polite, or maybe these just look good on my face, which I think is probably most definitely the case. But, obviously.

• 15:56Alex Kantrowitz?

  But I do think it's an achievement to make a pair of smart glasses, quote unquote, that do look, do look good. Now, here's a, here's a question. Snapchat, so first of all, let's put this all in perspective. Snapchat's gonna make 10,000, less than 10,000 units of its new, of its new spectacles, and Meta is going to make even fewer of these Orion glasses. So obviously, you know, while I think they're pretty stoked at what's gonna happen with these Ray-Ban stories, like the current set of smart glasses, they understand there's gonna be an adoption curve for the AI glasses. With Snapchat, is it a wise move for that company to continue to invest in its product line,

• 16:40Alex Kantrowitz?

  given that they don't have the excess billions of cash to throw off in a way that Meta does? What do you think?

• 16:47Speaker 01

  I, I think absolutely, and here's why. I think the future of Snap is going to be something around Innovative AR membership subscription because one of the things that's like gone under the radar and we've talked about it here and there, but every quarter Snap Snapchat plus subscribers, three dollars a month, it's now at I think 11 million. It is the biggest consumer facing social media subscription service. I mean, X certainly has not landed it. Facebook had tried some stuff over the years. So I think coming up with these kind of like cooler experiences, having people pay for them in different ways because direct response advertising, they still have not cracked.

• 17:32Speaker 01

  And one of the biggest limitations for Snap always has been that it is not as like, you know, data extracting a platform as Meta. So that changes the way advertising works. People use it more for messaging and actually connecting with friends versus just seeing celebrities and whatever else on a feed. So I think this, I actually think is really important that they invest in stuff like this because this is where they've always been better. They've always been first. They've actually learned how to figure out even the subscription service, a lot of is around like fun little AI generative AI experiences.

• 18:13Speaker 01

  And I think you had said it, Snap is quietly like next to Chat GPT, but might have launched the biggest consumer generative AI service that no one is even talking about. So I think this is actually, it's, it's not just, you know, questionable. I think it's incredibly important that they're investing in things like this.

• 18:33Alex Kantrowitz?

  I'm with you. See it through. The technology is getting better. It's getting cheaper to make and you're right, they do have this, I won't call it an edge, but certainly a knack for making these products work. So it's going to be tough coming up against Meta because for all the science, this has always been the problem with Snapchat, right? For all the innovative work they do and all the science they can put into their products, Meta can clone this stuff in about a half second and they will. But you have to do it if you're Snap because you cannot basically continue to rely on a business model that hasn't worked very well, although

• 19:14Speaker 01

  Yeah.

• 19:14Alex Kantrowitz?

  one that seems to be improving.

• 19:17Speaker 01

  Agreed.

• 19:18Alex Kantrowitz?

  So, speaking of companies trying to do new business models, this is something you highlighted. Perplexity is thinking about rolling out cost per a million view, cost per a thousand view advertising. So, they're gonna do advertising, but I think notably, it's not gonna be search style advertising that looks at your intent, or maybe it will be, but it's not gonna be cost per click. It's gonna be cost per impression. What do you think? Is this the right way for Perplexity to go about trying to make money off of its business?

• 19:47Speaker 01

  It's a tough one, because on one side, trying to get cost per click advertising is always a lot riskier, because then you have to actually deliver the click to monetize, and that's tough. And they might come up with an idea around it, and it'll totally bomb versus CPM advertising or view-based advertising. All you have to do is just deliver the view, and do it reliably. I do think it's, so I think, I think it's smarter to start there. Advertisers will be curious, because if you think about it, I mean, everyone is talking about what does the next iteration of search look like? Like, and I now, and about a year

• 20:29Speaker 01

  and a half ago, I think we had talked about searching in a generative AI platform for like, you know, best shoes for, with a summer wedding or something like that. And I was like, that, I don't think that'll ever be the use case. I've started doing more product-oriented search in Perplexity, actually. And then that, basically, I still start with Reddit everywhere, but otherwise, I'll go to Perplexity. I'm not using Google Search for any kind of product and shopping-related search. So, so, once I'm in there, marketers being able to reach me in different ways makes a ton of sense. So, I think, whatever they do, and what exactly it looks like,

• 21:10Speaker 01

  I think we'll, I don't know, they need to be creative. They need to come up with something new. One thing I actually saw, it was Mike Malatso, his newsletter, which is really good on these kind of like marketing focused topics. He had written, you know, perplexity asks follow on questions? And how powerful it would be for marketers to be able to get into the follow on questions? That already it's a ton of insight around what are the follow on questions like? If you ask for what are the best pairs of shoes to wear for a summer wedding? Then the follow on questions would be like, you know, can I match this color of shoes with this color of suit? Or whatever else?

• 21:50Speaker 01

  But then being able to actually sponsor follow on questions would be something completely new, different, really focused on information that's valuable to a consumer. So I think they, whatever they do, they need to be creative rather than just sticking a display ad. That's like traditional in the current interface.

• 22:10Alex Kantrowitz?

  Yeah, it does look like they're going to do traditional display ads. And I wonder if this leads to a compounding of some of the problems? That they've already run into regarding copyright? Because I do think that generative AI companies that are content based, which is what perplexity is, are just going to hit very murky ethical grounds when it comes to, let's say, repurposing other companies' content and then slapping a display ad next to them, which is what most other content companies use to make money off of their stuff. And I just thought it was so interesting to read the lead in on this story on CNBC. So this is how CNBC describes perplexity.

• 22:50Alex Kantrowitz?

  It says perplexity AI, the artificial intelligence startup that has been embroiled in controversy due to accusations of plagiarizing content from media outlets, plans to start running ads on its search app in the fourth quarter. And it's going to be a cost per thousand search model. And it'll be more than $50 per thousand ads where like.

• 23:14Alex Kantrowitz?

  If you think about the typical cost per thousand display ad, it's around $3, right? So just think about the, you know, the controversy that might emerge the next time some publisher like Forbes Material shows up on perplexity, maybe not word for word, but summarized, whereas like the sources of this material are scrambling to make three bucks for every thousand views of this, and perplexity is now going to make 50. And I know it follows like the path of the internet from time immemorial that this is just how it goes, but I also think that like this seems like it's going on a path that's quite dangerous for perplexity. And I know we both like the product.

• 23:56Alex Kantrowitz?

  We're kind of perplexity heads here, but I do think that it is a risk and it's dangerous for the company to choose this as a way to make money off of its, off of its technology.

• 24:07Speaker 01

  I disagree because the idea that just because a, so, well, I agree with the idea that they should not, they need to be a lot more careful. The Forbes examples that were pulled out where they took paywalled content and summarized it already, they need to just kind of clean up the act there and like really focus on making sure it's not repeating anything verbatim, making sure it's only publicly accessible information. But the idea that a media site, because like Forbes of all publishers, I mean, what they did to that site for years, it's improved over the last couple of years,

• 24:48Speaker 01

  but just the amount like Tabula and Outbrain style advertising or just, just really, you know, insulting the reader with the way the full page takeovers of like autoplay video. These kinds of things are what a lot of these publishers did to their own sites for so long. So coming up, if perplexity can deliver a genuinely valuable premium advertising format that doesn't exist now, I support it. Anything that can make advertising better on the web, because especially in publishing, it's gotten to just a complete hellscape over the last number of years. I think that's a good thing.

• 25:31Alex Kantrowitz?

  Here's my even hotter take, and that is that this really isn't going to matter in the broad scheme of things because perplexity isn't going anywhere fast. And I wrote about this last month, but In the whole scheme of like, Google's gonna lose out to generative AI search, and perplexity being its biggest challenger. And I, again, like, I like what they're doing, but it just hasn't caught on in the way that a lot of people are, have expected. And in the search I did in terms of trying to figure out where perplexity sits on the App Store. Given the amount of buzz, I was like, alright, maybe it's number like thirty or forty in terms of all apps on the App Store. Actually, it's number sixty, and not on all apps, just in productivity apps.

• 26:15Alex Kantrowitz?

  And here's what I have found ahead of perplexity on the App Store. Uh, six generative AI chatbot wrappers, a bunch of VPNs, and a printer app, all outrank perplexity. So, I guess my broader message here is, go ahead perplexity, take all you want, run the display ads you want. It's not gonna matter. You have lost to Google already, and we're just counting out the, the days until you fold.

• 26:42Speaker 01

  I, see, I, I agree, mass adoption's gonna take some time, and maybe that printer app is really good, but I have got-

• 26:50Alex Kantrowitz?

  That is for sure not the case. Okay, I'm sorry, go ahead.

• 26:52Speaker 01

  I have gotten to the point, like, when I see someone doing just a regular old fashioned Google search, it's kinda like in New York, when people were, you saw someone hailing a taxi and you're like, you could just call an Uber. I, uh, it, it's just, it's so much better. It's just so much better. That, when you're like, for certain informational things, if you, it's just light years ahead of traditional Google search and where that is right now, that I think, whether they are the ones that win, whether search GPT from OpenAI actually turns into a real thing. I think, whether Google's AI overviews end up being the thing,

• 27:34Speaker 01

  I think this way of searching is, is gonna be the future, and everyone's gonna be doing it pretty soon.

• 27:40Alex Kantrowitz?

  When you see people using Google, do you feel like you have a responsibility to tap them on the shoulder? And being like, as someone looking over your shoulder, watching what you're doing, I feel a responsibility to tell you that this is truly a mistake that you're making. And I couldn't in good conscience allow you to use old fashioned blue lung search, knowing there's something better out there.

• 28:00Speaker 01

  If you're listening, and I know the perplexity CEO was on here a few months ago. I think in terms of viral marketing, sending people to coffee shops around the country and just going up and tapping them on the shoulder and just, you know, giving them a little, little bit of a nudge, saying there's a better way. That's the idea.

• 28:20Alex Kantrowitz?

  Absolutely an amazing advertisement for perplexity. Where like, literally you have Ranjan walk into a coffee shop in a trench coat. See somebody Googling, taps them on the shoulder, opens up a flap to reveal a QR code, and it just says perplexity.

• 28:40Alex Kantrowitz?

  Can I interest you in something better?

• 28:42Speaker 01

  I think the big technology agency has just been launched.

• 28:47Alex Kantrowitz?

  Let's go. I do think we can make good ads for these, for these companies. Maybe if this podcast flops, you know, but our listeners won't let that happen. So listeners, keep us from having to launch an ad agency for flagging generative AI startups. Share this podcast with a friend, rate us five stars. We need your help not to end up becoming this agency. So thank you.

• 29:09Speaker 01

  Because we do have a strong work ethic.

• 29:12Alex Kantrowitz?

  We do, we do. I mean, folks, you should have seen what, what we were trying to go through to get you an episode last week. I promise.

• 29:20Speaker 01

  Unlike what Eric Schmidt has said about his old colleagues at Google.

• 29:26Alex Kantrowitz?

  That's right. So Eric Schmidt has talked about how Google is losing the AI battle because its employees are not showing up to the office. And then he walked it back. And Ranjan and I have some differing opinions on what this all means. And I think we're going to debate it a little bit 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,

• 30:10Alex Kantrowitz?

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• 30:52Alex Kantrowitz?

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• 31:36Alex Kantrowitz?

  Learn how to stop online threats before they become real-world attacks. The link's in the show notes.

• 31:45Alex Kantrowitz?

  And we're back here on Big Technology Podcast Friday edition. We're recording. The wifi is strong. The vibes are good. It's a summer Friday, and that means it's time to talk about work ethic. Because at a Stanford talk a couple of weeks ago, former Google CEO Eric Schmidt was asked by a friend of the podcast and former guest, Professor Eric Brynjovsson, why OpenAI seems to have a lead on Google. And his response was none other than, "The people at my former company are just not working hard enough." And by the way, I don't even think he realized he was being recorded, but he said this, "Google decided that work-life balance and going home early and working from

• 32:29Alex Kantrowitz?

  home was more important than winning. And the reason startups work is because people work like hell. I'm sorry to be so blunt, but the fact of the matter is, if you all leave the university and go found a company, you're not going to let people work from home and only come in one day a week if you want to compete against other startups." And why is it losing the lead in AI to OpenAI and Anthropic? I asked Google CEO Sundar Pichai this. He didn't really give me a very sharp answer. Maybe you have a sharper, more objective explanation of what's going on there. So what's your perspective on Eric Schmidt's assertion that Google is losing the AI war because there's not enough butts in the seats in Mountain View?

• 33:13Speaker 01

  I think he's right. I honestly think he is correct about this. And here's the reason why. In the whole work from home, return to office debate, it's a nuanced one. However, I do think if you're a company that's culture has not been built from the ground up to be distributed, I think you have to be back in the office. I think there's some companies that really have figured out a way where everyone works in sync, even when they're distributed, it doesn't make a difference. And you know, they've figured it out. And it's people who are like work from

• 33:52Speaker 01

  distributed working native, let's call them, versus I think a Google, it's a, this is a company that was not built like that. And so, so already, when the company is not built like that, you just don't have the workflows and processes and tools and culture to actually deliver on it. But then you get into something as complex and just constantly changing as the generative AI wars right now. That's something where you need to be sitting together. Like, if you think sending a Slack message, waiting for an email, having to schedule a meeting versus just being next to each other as you're testing stuff and coming up with ideas, this is where people sitting around a table with a whiteboard, this is where I

• 34:37Speaker 01

  honestly think it's, the battle is won. And I think it's, you can see it in the way a lot of stuff has been launched. And again, Google is moving incredibly fast, and I think it's a good thing. And they're taking more risk than I ever would have imagined they would. And that's a good thing. But I still think that it's something that they need to push, and they are pushing. But I think overall, the teams that are more in sync will win. And I think it's just a natural thing that teams where people are side by side are more in sync. It doesn't have to be the case 100% of the time. But I think that's where, if you're betting, the probability is the teams that are sitting next to each other will win.

• 35:21Alex Kantrowitz?

  I fully disagree with this. And I think Eric Schmidt's answer is just so completely wrong. And it really goes to show how out of touch he is with that company.

• 35:34Alex Kantrowitz?

  Let me, let me make the argument. So I think the accurate answer here is yes, Google allowed OpenAI to take the early lead in generative AI because the company was so safety focused, its product pipeline was effectively paralyzed. They didn't wanna, they had the chatbot, they didn't want to release it because they were afraid of what it might do. And they didn't release it and then OpenAI released ChatGPT and took this lead in the eyes of the public. And then you would say that Google really isn't behind at all on the technology. That would be the argument, at least I would make if I was

• 36:18Alex Kantrowitz?

  someone in touch with, uh, trying to talk about the company's position. But the question is, how fast do you roll this stuff out? Do you roll it out 100% on day one and upend your search business? No, you have to be careful about it. But you can still do it and you do need to time it right. Meanwhile, Google's cloud business is growing. It hit $10 billion in a quarter for the first time last quarter, just because of its, its AI business is growing. And you think about it, they are benefiting just as much from generative AI as, as the others. They remember, we talked about how their stock was floundering, but it recently hit an all time high. It's outperformed Microsoft over the past year.

• 36:59Alex Kantrowitz?

  And I think it has nothing to do with the fact that people are not coming into the office. I think that's the, that is the answer that Schmidt should have given. And instead, talking about this, they're not working hard enough. Mumbo jumbo to me is just, that's what he should have apologized for. Not because he insulted the work ethic, and he might have a point there, but because he just has no idea why Google has performed the way it has. Because there are other factors at play here.

• 37:28Speaker 01

  All right, that, that's fair. I think that in, for, okay, for the question of Google specifically and what's

• 37:36Speaker 01

  Made or broken them over the last year. And again, there's, I think their comeback in the generative AI story has actually been pretty impressive and they're, they're still pushing hard and delivering. So, so I'm not taking anything away from them. I think more in just in the general, which type of work culture will win in this battle. I think as a more general statement, I think it's the, the teams that are sitting together. I was thinking about that statement again, though. Uh, in the, you know, the Olympics, did you see the commercial where Google had launched around Gemini writing? A little girl wanted to write a letter to her favorite athlete. So the dad asked Gemini to write it for them.

• 38:20Alex Kantrowitz?

  Yeah, Eric Schmidt should have let Gemini write his response for it. Would have done better.

• 38:24Speaker 01

  Well, no, no, but, but I remember thinking, cause like I saw someone, uh, someone had written like, you know, they, there needs to just be one person whose only job it is to review ads and be like, would a normal person, how would they respond to this? Like literally just the average guy just sits in a, in the office in the corner. And sometimes you just gotta go by and be like, hey, what do you think of this ad? Derek. And he's just like, no, no. I mean, but this is the kind of thing that I could actually see if people were in a room together, someone would be like, like you, they would see, physically see each other's reactions being uncomfortable. Like you would look around and people, cause

• 39:06Speaker 01

  even the first time I saw it, I'm like, oh, that's, this is a little weird. Like this is literally, everyone imagines a little girl's like a child's handwriting and backwards letters. And like, that's what makes it beautiful. And this is just weird. But I could see this is the kind of thing, if you're distributed, someone looks at it, you don't want to be the one to have to post the message or send the reply all email saying, hey, everyone, this is weird. But if you're all in person, you would see that reaction viscerally in a physical setting, even if it's unspoken. So I think that's the kind of thing that gets solved when people are sitting next to each other. And I don't know whether or

• 39:48Speaker 01

  not they were sitting next to each other and it still got through, which if that's the case, that's problematic. But, but yeah, I think that's one example for me that stood out that. Maybe people need to be next to each other and it's not working harder. It's just being having more common sense.

• 40:06Alex Kantrowitz?

  And I don't look, I don't know why I'm so in the can for Google in this episode, but I'm just gonna keep rolling with it. They did recently announce their new Pixel phone and you think about all the, you know, it's all going to this question of like, is Google really behind on AI? The Pixel really, I mean, think about this, if Apple made these announcements for its Apple Intelligence. Do you think this would have been a better announcement than Apple actually made for its Apple Intelligence launch? So they have this Google phone and has Gemini built in. It has this thing called Gemini Live, which is a voice assistant, which you can talk to similar as you can talk to GPT four O. It has an image creator.

• 40:50Alex Kantrowitz?

  You can take a picture of the fridge, it will give you a recipe. It has then these really cool photo features, best take, which basically allows you to take a bunch of pictures and then you kind of can tap through the people's facial expressions. And like compile the best take of everybody. It has a magic photo editor. You can change people's positioning in photos. You can reimagine pictures. You can change a scene like you can roof trees or remove a house or turn a road into a river. It has something called add me, which will put a person in a picture that like, if you don't have the person standing next to you, you could like, take a couple of shots and it will merge them. I mean, this type of stuff, if you think about it compared to the reputation that the company has.

• 41:37Alex Kantrowitz?

  It would just lead me to believe that they're they are they are winning in certain very important areas in AI that just have not been talked about enough.

• 41:46Speaker 01

  Yeah, I think I I think as we're talking, I'll say the Eric Schmidt statement was juicy because it like, it allows you to have. Yeah, no, no, but it's also, it allows you to move to the debate, not even talking about Google specifically, but just in general, work from home versus return to office, which is a. Fun, charged debate to get into, but I think specific to Google, I will say they're not losing. They're not, they're definitely not losing. They're, they're right in there in the, in the mix. And, and you're right, because we've certainly talked about Apple Intelligence and, and maybe Apple's strategy is

• 42:28Speaker 01

  to make our expectations so low that whatever they end up delivering in a couple of months is actually going to blow us away.

• 42:37Alex Kantrowitz?

  I doubt it, but we'll see. I will leave the possibility open to it. And I'm, I'm actually reading the, I've been reading for a while, the Steve Jobs book by Walter Isaacson. It's such a great book and I'm pretty sure the, I have a hot take column from when I'm back from this break. Uh, and that's going to be that Apple should, uh, make iOS an open system and not keep it closed to the iPhone. And that they're so reliant on services and so reliant on AI right now and less reliant on selling new phones, or at least increasingly less as they're trying to, um, diversify their business and grow services that Apple should just take iOS and say, if you want to build a phone with it, you can do it. I think that would be bold, pretty cool move.

• 43:22Speaker 01

  Well, so one thing that I am a iOS user, I'd used a Pixel for a couple of years, but my mother-in-law is in town from Taiwan and I was talking to her about ChatGPT. And she has an Android and she went to download it and downloads something that the logo is exactly the same. It says chatbot powered by ChatGPT and instantly tries to force a subscription that's expensive and weekly. And I'm like, I don't think that's ChatGPT. I know there's, I mean, I have subscribed to it myself. And then it looked, and it was a complete clone that tries to make itself look exactly like ChatGPT

• 44:05Speaker 01

  and tries and pushes you into a subscription instantly. And I was like shocked and just imagining how many people fall for it. But then also this is where iOS, the closed nature and anyone who's ever built an app and gone through the app approval, App Store approval process, it's quite annoying. But it was a reminder of the wild, wild west of Android, then Google Play and, uh, what's going on over there that made me for a moment, a little happy at Apple protecting me.

• 44:36Alex Kantrowitz?

  Yeah, no, I'm with you. I think I just think that it might be the right time for Apple to take iOS and make it available to device manufacturers to build devices with iOS.

• 44:47Speaker 01

  Oh, you're saying, okay, I see, I see. You're saying not open sourced iOS itself, but actually make it available just for other devices.

• 44:56Alex Kantrowitz?

  Yes.

• 44:57Speaker 01

  Oh, actually, I guess I would have just made the case even more for that with that little anecdote.

• 45:02Alex Kantrowitz?

  Exactly. I, I, it's, it seems like it would be the move, but more, more discussion for that on a later date.

• 45:10Speaker 01

  And it would help them on, it would help them on the antitrust front as well, probably, or, or not. Yeah, no, no, because it no longer ties the two together. It no longer ties the operating system and the, the device. Okay.

• 45:24Alex Kantrowitz?

  And they, they would make good money on it. Okay, I want to end on this in terms of the antitrust situation because we do have some news that the Justice Department has been thinking about asking for a full breakup of Google. Now, this was in the antitrust case, and the fact that this is going to be on the table as a remedy for the government in its case where the US has, the US judge has ruled that Google is a monopoly, is pretty interesting to me. Now, look, I think it would be a massive overkill for them to try to break Google up because you could simply just prohibit this deal that they have with Apple,

• 46:07Alex Kantrowitz?

  and you've sort of washed your hands of the problem that you found them guilty as a monopolist for. But I'm curious what you think. Do you think there's any plausible chance of the US government breaking up Google? And we'll end on this.

• 46:20Speaker 01

  I think there's still a chance of separating out business units. I, I think one of the big tech companies is going to be the first, whether it's AWS and amazon.com, whether it's YouTube from Google's proper search business, or Android from Google, or, I don't know. We used to talk about Instagram from Facebook, but maybe like WhatsApp from the meta ecosystem. Someone is going to be. The example for what actual big tech breaking up or spinning out looks like. And I think, I think it could be this, it could be like Android from Google.

• 47:01Speaker 01

  But basically, maybe it's Apple Music from Apple or something random like that. Like, just to, just to start or Apple Services business from the rest of the Apple ecosystem. But I think some, one of the big tech companies will be the first. And then it'll, because there has to be some kind of threat and enforcement to prevent the like tying that happens, which creates more monopolistic behavior. Because honestly, if you just look at Apple and like, or I mean, all these companies, but how they use the overall size and market power of each different business unit to, to strengthen the other one. Or Amazon can lose money on its entire e-commerce business because it's funded from profits from AWS.

• 47:45Speaker 01

  So yeah, I think, I think it will happen. And this could be the one, especially if they're talking about it concretely. We don't even know what it looks like. It sounds so crazy and like impossible because it hasn't happened in so long, but.

• 48:01Alex Kantrowitz?

  Yeah, I just don't see how it solves the problem. Like, the problem was basically Google paying Apple for the default position in search. So for your answer to then be, yes, now we're going to break the company up? Like, what? You know, just prohibit the deal.

• 48:17Speaker 01

  No, no, but that's just one part of the entire lawsuit. I mean, that was like the kind of figurehead of what is illegal and what's no longer going to be allowed. But yeah, I think it's the, all of these, even there's the, still the outstanding massive lawsuit from, uh, against Amazon. I think at some point, again, one of these, there will be some action taken against one of the companies. And I mean, and even if we're going to end on politics just a little bit. I mean, I think clearly who wins and whether it's Kamala Harris or Donald Trump and which Kamala Harris, like, and how, whether she continues the Biden approach towards antitrust

• 49:02Speaker 01

  or whether she moves back more towards the Obama approach. I think that's going to determine just how intense this enforcement is.

• 49:11Alex Kantrowitz?

  Yeah, look, and I just hear breakup big technology and I get nervous because

• 49:15Speaker 01

  They're talking about us.

• 49:16Alex Kantrowitz?

  If someone tries to sever our podcast and our ad agency because they're just too good, that will, that will really, you know, keep me up at night. So.

• 49:25Speaker 01

  I think the big technology podcast market power is definitely concerning and Lina Khan, if you want to come after us, we're not afraid.

• 49:35Alex Kantrowitz?

  Yeah, look, if Lina Khan decides to come after big technology, I'm just going to continue this operation from the Balkans and that will be that.

• 49:42Speaker 01

  Actually, yeah. He's not coming back.

• 49:46Alex Kantrowitz?

  Signing off from Tirana, Albania. It's been a great speaking with you again, Rajan. We made it. The Wi-Fi held. God bless.

• 49:53Speaker 01

  The Wi-Fi held. Are you back in New York next week?

• 49:56Alex Kantrowitz?

  No, I'll be, I'll be broadcasting our next few weeks from Germany and then back in New York mid-September. And we're going to do a studio show, folks. I think this is the plan. So when we're finally reunited in the same city, we'll actually get together and, and talk in person and record it and then share it all with you. And I'm very excited about that. So this has been fun. It's good to be back on the horse.

• 50:20Speaker 01

  It's good to be back and let's do it again next week.

• 50:23Alex Kantrowitz?

  We'll do it again next week. All right, everybody. On Wednesday, I have an interview with Eric Markowitz. He's an investor, long-term focused investor who got a diagnosis that he was likely to die within a few months and lived to tell the tale. And he's going to come on and talk about it. And if you haven't caught it yet, my interview with Fire Festival founder Billy McFarland is up on the feed. So I do encourage you to go check that out. That was a fun one. All right. Thanks, everybody. Thanks, Rajan. Thank you to the Wi-Fi here in Tirana and to the fine folks in Albania. We'll see you next time on Big Technology Podcast.

• 51:33Speaker 02

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