Pod Insights Big Technology Podcast Gurman on Apple, OpenAI’s Deal Terms, Forbes vs. Perplexity About this episode Mark Gurman is Chief Correspondent at Bloomberg. He stops by Big Technology Poddcast for a brief recap of the week's Apple news, including its no-money deal with OpenAI. Ranjan Roy from Margins is also back for our weekly discussion of the latest tech news. We cover: 1) Alex's Visit to NVIDIA 2) The Gurman interview - which covers a) Apple + OpenAI b) The stock market reaction to WWDC c) Apple's Robotics future 3) Ranjan and Alex react to the Gurman interview 4) OpenAI's relative strength after this week 5) Apple's position after this week 6) Microsoft's position after this week 7) Forbes vs. Perplexity 8) A new era of IP fights? 9) Elon's pay package
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Transcript 11,762 words · 5 speakers
Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.
0:00 Alex Kantrowitz? Let's talk with Bloomberg's Mark Gurman about Apple's big week, including the economics of its deal with OpenAI. We'll also cover this new battle between perplexity and Forbes, and of course, Elon's pay package got approved. Ranjan and I are here, ready to take you through the week's news. All that and more is 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,
0:45 Alex Kantrowitz? 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 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.
1:21 Alex Kantrowitz? Welcome to Big Technology Podcast Friday Edition, where we break down the news in our traditional cool-headed and nuanced format. And boy, do we have a lot of news to break down for you this week. Not only Apple's WWDC, which we've covered in depth on the podcast feed, we'll touch on that briefly, but really the aftermath, what's happening to OpenAI after this? How do AI companies continue to go ahead and potentially train on copyrighted and use copyrighted material for that matter? Why is Elon going to get paid all this money? And plenty more. First of all, just want to welcome Ranjan back to the show. Ranjan, great to see you. I've been waiting to talk to you all week, man, so this is going to be fun.
1:56 Speaker 01 Yeah, I've been waiting for this. OpenAI, Apple, Elon, all of my favorite topics.
2:02 Alex Kantrowitz? All the stars in line. We'll be able to cover all the big stories this week. I've had a crazy week here in Silicon Valley. I've made visits, of course, to Apple for WWDC and to do the reaction immediately afterward on CNBC, but also got a chance to visit OpenAI, Anthropic. I visited WorldCoin, which was fun, Meta, Google, and then yesterday spent the entire day at Nvidia, really morning till evening. So it's definitely feels like a month or more of reporting baked into a week, and I can't wait to bring more of what I learned into the podcast as we move forward.
2:34 Speaker 01 I have to ask Alex, what is the mood at Nvidia right now? If you're actually at that office, all I can think about, I mean, how are people feeling, given what's happened with that stock, given what's happened with that company? Are people just running around celebrating? Is there champagne? Are their heads down and are they working?
2:53 Alex Kantrowitz? People were definitely heads down. It was great to speak with many of their leaders. And at the end of the day, we did go up, they have a couple of, like, they have a bar in each one of their buildings. And we walked up to, we saw both of them, of course, and we walked up to the first and Jensen was there hanging out. So company really feels like it's hitting its stride. Very, very interesting moment for them.
3:13 Speaker 01 Wait, does he wear a leather jacket in real life?
3:16 Alex Kantrowitz? Oh, he sure does.
3:16 Speaker 01 Just a stage prop?
3:17 Alex Kantrowitz? That is a real life thing.
3:19 Speaker 01 Okay, good. I'm glad to hear this. I'm very glad to hear this.
3:22 Alex Kantrowitz? But yeah, I walked away super impressed and I think we are going to bring more of their folks on the show because they are the company that underpins all this. Like, you can learn about where things are going when you speak with them because they're the ones that it's all built on top of. And then I also got a chance to interview Mark Gurman from Bloomberg, who scooped like the entire Apple event. I basically interviewed him on this portable mic that I use for the Aaron Levy event, sitting in the back of my car in the Google parking lot. So, folks, pardon the audio. We've done our best to clean it up. In this interview, it's brief, about 14 minutes or so, so Raja and I will be back on the other side. Gurman and I cover basically the implications of the Apple event, how the market is treated, and I think honestly, most interestingly,
4:07 Alex Kantrowitz? what the deal terms are with OpenAI to bring ChatGPT into the AI iPhone, quote unquote. And I'll admit, I expected a much bigger role for OpenAI, and it turns out, as you're going to hear from Gurman, That OpenAI isn't even being paid for this. So let's play that German interview and then Rontan and I will be here on the other side to react. Mark German, welcome to the show.
4:29 Speaker 02 Thanks for having me. Glad to be back. It's been a pretty busy week, lots of Apple stuff and I'm glad to talk about it for a little bit with you.
4:37 Alex Kantrowitz? Yeah, you must have had just a wild week. First of all, congrats on scooping like the entire event. You just reported about how OpenAI and Apple aren't going to exchange cash in their partnership, which I thought was fascinating to me. Like, these models are expensive to run. You run them across, you know, a number of iPhones. It's going to cost a lot of money, but OpenAI seems content to lose money in the short term with the promise, the future promise of potentially making money on revenue upsells. So what can you say about that?
5:09 Speaker 02 Yeah, so Apple's not paying OpenAI. The company believes that they're providing a tremendous service to, you know, Sam Altman and OpenAI by pushing their models to more people. They're exposing OpenAI to hundreds of millions of new customers and potential services subscribers that have never heard of OpenAI before the integration into the iPhone. And the second part is the more people that use these models, it actually improves the underlying models for OpenAI to benefit OpenAI, to benefit, you know, customers of the services even on non-Apple platforms. So Apple sees that as a fair trade. And of course, OpenAI is not going to pay Apple to put
5:49 Speaker 02 ChatGPT into the iPhone, right? They're getting a tremendous service, you know, as I said. And the other part of it is obviously OpenAI is, you know, putting the bill to Microsoft to pay for the Azure cloud-based component here. And over time, you know, there's revenue sharing possibilities. The paid subscription component here where a user can buy a paid subscription to ChatGPT on the iPhone that costs $20 per month for, you know, a single user license. I think that's a powerful way for OpenAI to make money. And obviously, it uses the Apple payment platform when you subscribe to ChatGPT on the iPhone. So Apple's going to get a cut there. So
6:29 Speaker 02 the initial version of this deal, it's a pretty cut and dry barter situation with each side providing something, but not paying cash to each other. Over time, Apple hopes to strike revenue share agreements with Google and Ropick and potentially others in a similar vein to the Google search deal they have on the iPhone that generates, you know, somewhere between eight and 15 billion a year for Apple. Over time, people are going to go to these chatbots in Siri and other parts of iOS to get information, moving away from Google search. And so the ultimate play here is actually a revenue share partnership with Google Gemini that replaces the Google search deal or augments the Google search deal. So both those companies are basically moving from search to AI, and that is their new agreement.
7:15 Alex Kantrowitz? And is this a potential liability for Google? Because they, I mean, Apple's starting with OpenAI first. Google, obviously, this is worth a ton of money for them because they're paying Apple 20 billion a year in that rev share with search. So what do you think about the implications for Google?
7:30 Speaker 02 Well, the implications for Google to me are quite clear. They need to strike a deal with Apple and get Gemini onto the iPhone and supplant OpenAI eventually as that default option, or both parties are going to be hurt here, right? Apple generates a good check and change from iPhone search, right? Taking a 40% cut or around there from Google's monetization of Google search in the Safari web browser. And then Google makes a ton of money monetizing searches from iPhone users. And so that partnership is going to have to be rewritten around chatbot, around Gemini, around artificial intelligence, because this is next gen search. This replaces
8:14 Speaker 02 search, you know, by all accounts. And so that's a deal that's going to have to get done. And it's so much more complex than a straight no cash OpenAI partnership. So that's why this one's going to take quite a bit longer. Google and Apple have been hashing this out already for probably four or five months. And it's probably going to take till the end of the year for them to have that renewed partnership around AI. And I would expect them to eventually become the default option on iOS, just like they are for search. So ultimately, I think the future of chatbots on the iPhone is Gemini rather than OpenAI.
8:49 Alex Kantrowitz? Yeah, that's fascinating. And I mean, it kind of is a bold move for Apple, right? Putting OpenAI in there first, like that is potentially disruptive to this huge amount of money they get from search. It's actually somewhat encouraging if you're thinking about whether Apple's willing to make big changes. I'm curious what you think about that and whether, you know, a lot of people are saying this is incremental. Did you view it as incremental or just risky enough to put Apple in place to really take advantage of this AI moment?
9:19 Speaker 02 Well, Apple had no choice but to include some sort of chatbot. They couldn't launch the new iOS and the new iPhone leaders here without one. It is such a fundamental part of the overall AI story in society right now. So launching without that chatbot, I think, would have been detrimental to the company. And so they've done that. ChatGPT from OpenAI, technology-wise, is the best. It would be a bad look for Apple to start with Google, their biggest rival across the tech ecosystem, right? Has been that way for two decades. And so OpenAI is that smaller player. And it was much easier to hash out because there's really no money involved.
9:56 Speaker 02 And OpenAI has a very strong API call-out system already, much stronger than the one that Google offers, much easier to integrate. So it all aligned for that OpenAI deal to be the one that gets done from the get-go. And you'll see future announcements on Gemini later in the year, I'd bet. In terms of how incremental Apple Intelligence is, I think the beauty of Apple Intelligence is how comprehensive it is, how broad it is, how much stuff there is, and how deeply integrated it is into Apple devices. This is just a ton of AI features just layered on top of the existing use cases for the iPhone already. So it's been integrated pretty well. And if you want sort of that classic AI system that people think of today with ChatGPT.
10:41 Speaker 02 That's available there, too. So I think they really left no stone unturned on this. Um, there is not a ton of innovation here in terms of Apple Intelligence. There's nothing we haven't seen before. There's no whiz-bang feature set. There's nothing particularly earth-shattering or groundbreaking, actually, in any shape or form. It's the fact that Apple has done it, has integrated it, and has made it comprehensive enough that makes it good enough. So they're not lagging, right? They're right there with everyone else now. But in rare fashion, Apple hasn't leapfrogged anyone, whereas that's the typical story. They come late to the party, and they come with a really nice gift. They leapfrog everyone. The Vision Pro, much more advanced than any VR headset on the market.
11:25 Speaker 02 The iPhone is much more advanced than any smartphone on the market. The iPod was more advanced than MP3 players prior to it. Same with the watch versus other smartwatches, the iPad versus tablets, uh, the MacBook Air versus, uh, subnotebooks at the time. AI is a rare case where Apple has shown up late and has done nothing new. But the fact that they've done it and they integrated it well, and they had a good story to tell, and it's comprehensive, I think that's good enough.
11:51 Alex Kantrowitz? Right. And so you mentioned that Apple Intelligence is from your Twitter. Apple Intelligence probably won't be bringing a super cycle to the iPhone 16 this fall, but if the company can start turning out engaging new features on a regular basis, it should bode well for the 17, 18, and 19 and beyond. Uh, but that being said, like, I think you also just kind of laid out the weakness here, which is that it didn't leapfrog anybody. And so that a compelling event to upgrade an iPhone, which Apple needs because revenues declined for five of the past six quarters, you know, might not be there. Like, the people I've spoken with have just been like, it's a cool set of features, but it doesn't make the iPhone 16, for instance, like, a must upgrade. So I'm curious, like, what you think about that. Like, if it's just catching up, then why does it bode well for some of these later models?
12:37 Speaker 02 Well, I think by the time the 17, 18, 19, 20 come out, uh, you're going to be in a place where the AI features are much more comprehensive. I mean, this is a long road ahead. I don't think this is something they're just tacking on to the, to the, to the 16 this year and moving on. I think there's a lot more to come, 2025, 2026, and beyond on these AI features. So I certainly think that's going to be tied to more new hardware in the future. Now. People are gonna have decisions to make when they buy new phones. Do you want an iPhone or an Android phone? And before today, the decision was easier perhaps to go for an Android phone because it had all those AI features that everyone's talking about. Apple has them too now.
13:18 Speaker 02 And then on top of that, if you're going to the Apple Store, carrier store to buy an iPhone later this year, and you're trying to choose between getting maybe a 14 or 13 or an SE or what have you versus buying an iPhone 16, that's one more reason to get the 16 is because it has the AI features that aren't supported by anything below a 15 Pro.
13:38 Alex Kantrowitz? That's a great point. Do you think they technically couldn't support the AI features on the earlier models? Or they just said, hey, listen, we're gonna probably sell more phones if we make them available just to the 15 Pro and up.
13:48 Speaker 02 Well, I think that the marketing factor is one component of it. Another component is a lot of this stuff is server side, and you don't want to crash the servers by having too many devices support it. And then I think the other component is indeed the chips. I think it's two components related to the chips. It's the Apple Neural Engine, which is sort of that AI processing unit inside of the phones, is more advanced than 15 Pro compared to the other models.
14:17 Speaker 02 But perhaps the biggest portion of this has to do with the on-device RAM or memory. A lot of these AI features are designed to work best with eight gigabytes of RAM. That's why it works on all recent Macs, because all recent Macs had eight gigs of RAM at its base, plus the Apple Neural Engine. The iPads, all with M1 and above, have eight gigabytes of RAM, and the iPhone 15 Pro have eight gigs of RAM. So you can simplify it as a RAM issue.
14:46 Alex Kantrowitz? Right, and let's talk quickly about the Wall Street reaction. Kind of bananas, right? Down 2% pretty much day of WWDC, and I'm like doing the emergency pod from the side of Steve Jobs Theater and being like, well, it ran up 15% since they started talking about AI. So actually, going down 2% leaves you net 13, and I kind of thought it would hover there. But then we're recording on Wednesday, right? The two days following have just been absolutely bananas, like gains of 5% and 3% approximately afterwards. So what do you think is behind Wall Street's just like initial like whatever reaction? And then all of a sudden, right, adding, you know, hundreds of hundreds of billions to the market cap? I mean, it's crazy.
15:29 Speaker 02 Wall Street does not care what the Apple features are, if they work well, if they're impressive, if they're innovative. It's all triggered by automated trading based on the words artificial intelligence. Uh, so I think that's the big factor there. I don't think anyone on Wall Street, or I don't think many people on Wall Street necessarily uh, understand the features. I think it's just important to them that the features are there.
15:54 Alex Kantrowitz? But doesn't that lead then to a potential letdown if like the, let's say the, let's say it is algorithmic trading inspired, uh, you know, driving the stock up like Apple will have to meet that expectation in the market. And
16:07 Speaker 02 They are gonna meet the expectation because I think that their unique factor here is the, is the deep integration and the privacy. Right. And how comprehensive and broad their approach to AI is, right? And so I think at some point they will meet those expectations. Now, the question is, what is the expectations of consumers? Is it a chatbot? Is it open AI like functionality? Well, you have chat GPT built in, so you are getting that. You're not missing out on that. Is it deep integration? You are getting that. Is it daily use cases? You are getting that. So I think they are giving the market what it's demanding, despite the fact there's nothing new here. It was good enough for Apple to show up and wear the same outfit as everyone else.
16:47 Alex Kantrowitz? Yeah, it's really interesting. And it's like all the people who are deep in the technology, I would say myself included. And a lot of my audience were like, all right, well, that's somewhat disappointing. It was cool, but not a wow. And when people thought
16:58 Speaker 02 It doesn't matter. It doesn't matter. It doesn't
17:01 Alex Kantrowitz? I think that's the key takeaway, for sure.
17:03 Speaker 02 You just didn't have to come in any worse. You just couldn't come in any worse. You had to come in and you had to meet the expectations of the market. It's a little disappointing because Apple is known for coming in and
17:18 Speaker 02 eating expectations and bringing things to market that no one has ever seen before or heard before. The only thing you're getting different here is marketing and implementation. The same tech, maybe even a little bit inferior to everyone else, but it's in a really nice package.
17:33 Alex Kantrowitz? All right, and let me let me wrap with this question. In your report, you've been talking a lot about Apple's potential robotics and devices play plays and that this has sort of set them up to be able to start rolling their AI out in these type of devices. Can you give us like a preview of what might be what might be coming? I've been most excited about the AirPods with cameras. I think I'm misdirected. So why don't we end on that front?
17:55 Speaker 02 Yeah, so you know, AI is really necessary to power a new generation or a new class of platforms, one of those being robotics. And a lot of the AI work actually had its inception on the self driven car, and they're now repurposing that on robotics work. And I think AI is fancy on the phone. It works well on the phone. It'll be tremendous productivity wise on the Mac and potentially the iPad. But I think the real killer use cases are new types of devices you can build around large language models. Tabletop robots that can move like a person's head on a swivel, a humanoid robot that can do your dishes, AirPods that can have a better sense of the environment around it by using algorithms
18:38 Speaker 02 that are based in AI on the cloud mixed with cameras that have a better interpretation of where you are in space, enable slimmer form factors like augmented reality glasses. So I really think that's the next leap. This is going to take another decade for all of this to roll out, maybe longer. But this AI now provides a foundation for that to even be able to happen.
18:58 Alex Kantrowitz? Mark, you're the man. Thanks so much for joining. Congrats again on all the big scoops. I think a legendary run for you and we'll hope to speak with you again soon.
19:06 Speaker 02 Thanks, man.
19:08 Alex Kantrowitz? All right, Ron, John, what did you think?
19:10 Speaker 01 Well, first of all, I'm kind of fascinated by the idea of big technology podcasts taking place in cars like the Jerry Seinfeld comedians in Cars. I think that should be the new angle going forward.
19:22 Alex Kantrowitz? Much less glamorous. There was no air conditioning. I was sitting in the backseat and sweating. But I would do I will do what I need to do for the big technology audience. I'm here for you guys.
19:31 Speaker 01 This is for the audience. We're directly from Mark German. And I think he has obviously been leading in scoops with everything Apple for the last couple of years. And he got this one. For me, this is a very bad week for OpenAI. And now, the reason, and there's a few of them. First of all, so much hype around what this partnership meant with Apple. We had talked about this last week. Is OpenAI, is GPT-4O, are their models going to be at the device level for Apple? Is it going to be essentially kind of controlling this? And it was very clear that's not the case. Yes, they have distribution, as Mark's reporting said.
20:11 Speaker 01 And that was kind of the idea here is that now it will put OpenAI's ChatGPT in front of millions and hundreds of millions of customers. It will allow premium subscribers to access premium features. So maybe, I'm sure it will drive some level of conversion on that side. But the actual, I mean, from a compute standpoint, it's still unclear to me exactly who is paying for what. I would have to assume Apple is still going to be billed for the compute associated with any of these services. But this was supposed to be a bigger moment for OpenAI. Because at some point, and Apple said it, that they are going to be introducing other available models and services. This is just the first, and that's good.
20:54 Speaker 01 And we all know the power of default behavior. But, but OpenAI did not walk away from this as some, you know, like at a new level and stature within the entire industry in terms of getting that much more consumer-facing, you know, glamour within this. I think it actually was kind of a non-event for them. It's interesting, but it's not exciting to try to value this company at what it's claiming it's going to be worth.
21:23 Alex Kantrowitz? You used a fascinating phrase there, which was the power of default. And I think that's assuming that Apple, that OpenAI will be the default in the iPhone. And To me, the biggest thing that I got from that conversation with German is that's probably not going to happen, that Apple gets $20 billion from Google every year. And he, German thinks that this is going to turn into the new search. I'm less sure of that. I do think these chat GPT and generative AI experiences have different uses than search in some cases, but there's going to be some convergence there. And if Google found a way to be profitable enough that it's happy to pay Apple the 20, not happy, but it will pay Apple the $20 billion to be default search because it's figured
22:07 Alex Kantrowitz? out the business model on the other end, then I think there's a good chance that Google, and this is kind of what German was saying, which really stood out to me, OpenAI might just be holding the seat warm for Google because Google is better, has a much longer track record of making money from consumer services. And if it can pay Apple more for that default spot to be the chatbot on the quote unquote AI iPhone, then Google ends up being the one that takes that default position. What do you think?
22:35 Speaker 01 I'm going to make another call here. I think it's not going to be Gemini. It's not going to be OpenAI. I think Apple is going to buy one of the other players, maybe an Anthropic, maybe anyone who is at a slightly cheaper valuation, at a more reasonable valuation, making some analysis on whose technology could best integrate directly within to the Apple ecosystem. Because to me, this is something that I think in the long run, because it's not just about a chatbot, it's about the way these services are all integrated into the iPhone. This whole idea of Siri becoming an agent is going to be difficult and it's going to, I'm very curious to see how things end up and how successful it is, but there's no reason
23:20 Speaker 01 for Apple to not own this part of the value chain. Search was such a big thing that was non-core to their regular business and operating systems that they had just, they understood that it never made sense for them to try to take on that. But, but the way generative AI works, it's going to have to be more deeply integrated into everything within Apple. So they're going to have to own more of the value chain at some point. So I think this is definitely a, here's an option that works well, people feel comfortable with to start. And then we are going to move to owning more of this and soon it's just going to be Siri. It's not going to be, okay, maybe you should call a chat GPT on this one.
24:01 Alex Kantrowitz? So if Apple buys Anthropic, I'm just kind of doing the math here. It's going to pay Google and Amazon for the right to own it because they've both invested about billion, a billion plus dollars in this company. I do think you're right that there's going to be an AI research house that's going to be available on the cheap because I don't think they're all going to win. But I don't see it being Anthropic. The one that I would predict is Mistral. I think this French AI company that just raised, I think, $600 million this week.
24:34 Speaker 01 600 million.
24:35 Alex Kantrowitz? Right? They are, they are, I would say, technically adept enough. Like, they've pioneered some new techniques, uh, which I heard about this week. But they are technically adept enough to be a really attractive acquisition target for Apple, but small enough that they're probably not going to win. So I guess the real question is, is Apple going to try to like, sort of fake acquire them like Microsoft did to, uh, Inflection?
24:58 Speaker 01 Yeah, I, I think that's a good question because from an antitrust standpoint, would they find resistance of buying a major player, which actually makes Mistral make a little more sense. And from what I've understood, Mistral's innovation's really around speed and cost, um, relative to being able to do more. It's able to do equal amounts of things cheaper and faster, which makes even more sense for integrating a technology across an ecosystem like Apple. So, so I think from the Apple side, this is all very good and I think, uh, they're in a good position. But OpenAI, they need to make revenue because one thing I want to call out, there is this as a very positive thing.
25:40 Speaker 01 There is an information article being cited everywhere that OpenAI is on track for $3.4 billion of revenue. The really interesting part of this to me was the actual article said that OpenAI was at a $1.6 billion run rate in late 2023. There's a couple of flags that that raised for me is how is this information getting out now conveniently that this is the run rate as of six or seven months ago? And what it was six or seven months ago, I have to imagine the ecosystem is so different right now than even six or seven months ago. Google has basically launched its entire infrastructure since then. Microsoft has pushed heavily.
26:23 Speaker 01 There's endless other consumer options for chatbots and premium chatbots that.
26:29 Speaker 01 That information conveniently getting out there that's old and being extrapolated into some massive revenue growth to me felt a little off. And then you start to think OpenAI is gonna have to show some serious revenue growth. And I've never thought it's gonna be on the consumer ChatGPT plus side. I don't think they do, especially given they're giving away access to Model 4.0 for free now. So I think this raised so many more questions for me around how is OpenAI actually gonna make enough money to just, you know, fit into its valuation?
27:02 Alex Kantrowitz? Right. And so let me sort of make the argument that OpenAI would be making here, right? Which is that they launched 100 million people use ChatGPT within two months. Today, they haven't updated that number. The whisper number that people are sort of talking about behind closed doors is 200 million. So think about it this way. They created the innovation that sort of launched a multi-trillion dollar revolution. They can't get more than 100 or 200 million users on it. For them, even if they're not getting paid, like people are giving them shit for getting paid by exposure by Apple, like, right? It's like the true loser move. But for them, this is gonna introduce ChatGPT to so many more people.
27:45 Alex Kantrowitz? And there are different use cases for when you're on mobile and need something quick to when you're on desktop. And if you get introduced to the capabilities, then you might be interested in more. And the fact that they are gonna get to ride on Apple's operating system as the only choice is a deal that even if you're not getting paid, maybe you have to take.
28:02 Speaker 01 I think that sounds fine at this exact moment, but I do think, okay, if one, two years from now, it's still just ChatGPT as the only alternative, I think that was a great move by OpenAI. But I think if, pretty quickly, and I wish, I am curious if within the deal terms, there is some kind of exclusivity factor or time or exclusivity term? And whether it's like six to 12 months or something like that? But I still think. I cannot picture the amount of conversion to ChatGPT Plus unless they start really locking down the service and like pushing you into that into that funnel. I just don't see it being
28:45 Speaker 01 a massive moneymaker for them to the scale that it needs to be. To me, it's always been about the enterprise. It's been about actually like charging for the compute and usage of the models and these things. Obviously, this deal doesn't really reflect that.
29:02 Alex Kantrowitz? So this is kind of the point that you're making. I thought this was interesting. It's from Sam Lessin in one of his traditional screenshots, although the text is bigger, which, thank you, Sam. I can read your stuff now. Okay, he said, "Apple just put ChatGPT in a tiny, tiny box. If you didn't already realize it was over, you now can't ignore it. The deal is just terrible for OpenAI, really spells the end for ChatGPT. They just got appled. How? Well, it's one thing to be Google and have a super strong economy so you can pay Apple for search and distribution, but OpenAI can't possibly afford that shit because they don't have a business model that works. So what happens? Apple puts them in a teeny tiny box as an optional upsell sometimes, which they can charge at will
29:46 Alex Kantrowitz? and offer alongside anything else they want. You know what that does? That makes ChatGPT nothing more than a dumb content provider. And you know what quickly commoditizing content providers are worth? BuzzFeed." I mean, that to me is way over the top, but it sort of illustrates the point.
30:03 Speaker 01 That is savage. But but but I think Sam Lessin, why I like following him is uh sometimes I vehemently disagree with him, but this is one of those moments I he captured exactly what I'm saying here. And Apple has done this to startups over and over and over again. Even, you know, there's like during the WWDC, I kept seeing these threads like, here are the startups Apple just killed. And I mean, password managers and other like image creation on device, all these other things. This is what Apple does. And as he said, startups can get appled. And I think OpenAI is basically setting themselves up to get appled. And I'm get it just feels like they were so desperate for some big splashy
30:48 Speaker 01 partnership that they went for this because they wanted to be part of the Apple partnership. They knew it would drive interest, especially if people didn't really question it. But I don't know. I still think this does not look good for OpenAI.
31:02 Alex Kantrowitz? I want to get your reaction to this because this was another sort of tweet about this news. Max Wolf, who I used to work with at BuzzFeed, says, "This is the best argument yet that we're in a generative AI bubble."
31:14 Speaker 01 I don't quite understand that part of it in terms of the bubble side. I think to me, it shows, this is specifically an OpenAI story. I think it shows that like, it actually, on the flip side, I would say, how Apple demonstrated what their goals are for generative AI, and really making it solve genuine consumer problems. I think it was a pretty compelling vision. And I think people are buying into it a bit. Certainly, the stock market is coming around to that idea. But I think it showed, this, actually, I was excited about this because this is the first genuine, big generative AI show
31:56 Speaker 01 that really showed specific problems that can be solved and just understandable things, rather than OpenAI debuting Sora and saying that at some point, you might be able to create movies using generative AI, or even Google showing demos that aren't ready yet, like, and knowing that these products aren't ready yet and will be released over time. And I was a little disappointed that it's not all going to be available in September. It was supposed to be rolled out over a few months. But I think this actually almost shows that this is where generative AI is going in the true potential of it, rather than it's some kind of vague thing that people talk about in grandiose terms
32:38 Speaker 01 that's either going to kill us, transform all of business, allow for one-person billion-dollar companies, and the list goes on and on. This is more, you can find your flight and check the status of it just by asking Siri. And that's more compelling to me.
32:57 Alex Kantrowitz? I don't know, Ranjan. I almost feel like this is an Emperor's New Clothes situation where everyone's like, this is so great for Apple. And I wonder how much of that is driven by the stock market. And they're like, oh, all the investors are saying that it's gonna work out. And so it will work out. We also know that, as you mentioned, we have like a very long wait time before we start to see some of these demos come out. Why is that? Obviously, they're not fully baked yet. And then the idea that this is gonna drive this big super cycle for folks, I just don't think it's a big enough, like, my gut tells me it's not a big enough improvement to drive this upgrade as Apple has struggled to sell phones at the rate that it used to, as people hold on to their devices longer. What's wrong with that?
33:43 Speaker 01 Okay, well, that allows me to give you my larger thoughts on WWDC. I think that it is a big moment for Apple. And I don't think it's the stock market driving it. What I liked was, this was the most Apple-y vision of generative AI imaginable. It's, again, how do we make a difficult to understand technology that's niche and growing, accessible to everyone in the world? It's like, this is what they've always done well, and this is what they're selling. Again, I agree that, until I see, and as regular listeners know, I am the least enthusiastic fan of Siri in the world, I think. Yet I still use mostly
34:27 Speaker 01 Apple products. But, but this is, they told me they're gonna fix Siri. They told me that I'm gonna be able to actually execute complex actions just using Siri that span across different apps. And if that actually works, I'm gonna be incredibly excited, and I think it's gonna be very powerful for Apple. If I find out that Spotify is still not available via Siri, I'm gonna be pretty annoyed. And I think that the whole thing is gonna be all for naught.
34:57 Alex Kantrowitz? I'm so with you. I was like, on my phone today, like, this week while I was driving through the Bay Area. And I was like, we have all this AI, but I can't just... Kind of hit a button on my phone and say, I mean, maybe I can, but I've so given up on Siri. Play Spotify, you know, play this song from Spotify. It's annoying.
35:14 Speaker 01 Spotify now is the one resistant to being on Siri, or they have been. This is like one of my biggest pet peeves. So I've looked into this before. Apple, it actually opened up the API to allow for Spotify. At first it was blocked and when they launched Apple Music and pushed it very heavily. And but now Spotify is the one resistant to actually going on Siri, which I get because the whole battle over the 30% tax slash, you know, in-store fee. So, so I think, but now the whole thing becomes a lot more compelling for everyone. So no one's going to be resistant to being on Siri. Ideally, because if this works like it's supposed to, every app is going to build in actions
35:56 Speaker 01 directly. And that's actually one of the most exciting parts because this is what shortcuts kind of foretold. It was that there's already developer actions that can be built into apps that could connect to Siri, like this command will allow for this specific app action. Now that's going to become a more core part of how people think about building apps. Like you can imagine apps where the app itself you barely use, like no one actually presses the app. The entire thing is a bunch of Siri actions that allow for different things to happen. And which I'm basically describing the rabbit R1 vision of a large action model.
36:32 Alex Kantrowitz? Yeah, that worked out. I was thinking large action model the whole time I was watching the keynote. But sorry, go ahead.
36:37 Speaker 01 Imagine if they just said it, they're like, Apple has invented a new type of model. It's called the large action model.
36:45 Alex Kantrowitz? Voiced by Scarlett Johansson and enhanced with the stories of Forbes. The large action model is an original Apple feature. Okay. The last thing I want to say here is that I stand by what I said on Monday, right after the event, which is that it is catch up and an interesting set of features with a strategy, which is personalized AI. But there's a story I also read this week that has sort of put this week in context for me. And I'm curious what you think about it. Last year at this time. Of course, we were talking about the Vision Pro. It was it was pretty hyped, and this is Kevin Ruze in the New York Times. He says, "Today, I barely use the Vision Pro at all. Every few weeks, I strap it onto my head to do some focus writing or watch a movie in bed
37:28 Alex Kantrowitz? while my wife sleeps. Otherwise, it sits on a shelf collecting dust. Apple hasn't released sales figures, but analyst estimates suggest that the device has been a flop, selling fewer units than expected. Social media isn't buzzing with videos of enthusiastic Vision bros wearing their headsets, oh, yeah, wearing their headsets in public as it was in the days after the device's release. Some early adopters returned their Vision Pros for refunds, and lightly-used headsets are selling for as little as $2,500 on retail websites." My perspective on VR, it is an enterprise thing. AI right now, at the core, is an enterprise thing. Do you think that in a year from now, we could be looking back and saying, oh, same trajectory for both big releases?
38:14 Speaker 01 Well, first, I don't think this was catch-up for Apple. I think this was like the Apple-ification of AI for them. I think they, again, presented a pretty compelling vision in a very Apple way.
38:27 Alex Kantrowitz? But you don't agree with German that like where he said that the Vision Pro drove the format forward, the iPhone drove the format forward, all these Apple devices, even the AirPods drove the format forward, but we didn't see it necessarily with these personalized AI things. It felt like a Google event.
38:46 Speaker 01 No, no, no. See, that's what I think. I think it very much drove the vision forward. I think, I think, or the technology forward. I think this is the genuine use, like all the talk now, agentic AI, all the hype around generative AI that people don't really feel and see in their day-to-day lives. That's what this can potentially do. I think that I really think that this is what made it so interesting versus if it was, and again, I agree that a lot of this Does feel a bit like the things Google has sold, but has not delivered on. And I think I have more faith that Apple on this specific consumer facing utility vision of generative AI
39:31 Speaker 01 is they're the ones, if anyone can do it, they're much better positioned to.
39:35 Alex Kantrowitz? Where does this leave Microsoft? Let's close with this, this closes segment with this. Where does this leave Microsoft? Because Microsoft, of course, has been providing, effectively providing the service for OpenAI, but funding it. And now OpenAI is giving away the ChatGPT on Apple devices, although it is giving it away to everybody for free on the web as well, baked in there. There's a ChatGPT Mac app. There's no ChatGPT Windows app. Is, is Microsoft in this weird position to kind of be like footing the bill as OpenAI enhances Apple's products? Meanwhile, they have this recall function where it's sort of falls along as you use the, use your computer and tells you, and has, is basically this built in memory for you.
40:17 Alex Kantrowitz? And that's delayed because I think of privacy concerns. So where does this leave Microsoft?
40:23 Speaker 01 Well, yes, the, the Microsoft recall function was recalled. I saw that tweet a few times and I, I just had to go with it. But I think Microsoft, I, they, the rollout of recall in their most recent, like, here is our next phase of generative AI, I think was very poor. If we remember, we were all Bing boys a year and a half ago. Like, Microsoft was commanding the lead in terms of exciting people around this, both on the consumer and enterprise side. And I'm not sure what they're thinking or doing right now. However, again, Microsoft, if they're, what they will win at potentially, what the only thing that they're going to really win at is the enterprise.
41:06 Speaker 01 And I don't think their position on that side has been hurt at all. Every Office 365 subscriber, every Azure customer is going to lean towards Microsoft products and generative AI products. And none of, this doesn't change any of that.
41:22 Alex Kantrowitz? Let's do one of our favorite little segments here, which is beginning of the week, end of the week. So how, how did you, do you feel better or worse about Apple today than you did at the beginning of the week?
41:36 Speaker 01 I think better. I think that uh this was, I actually like this because it was not over the top wow, this is life changing. It was solid and good. And I think that actually has a, that is what's needed in generative AI right now, rather than over the top futuristic visions.
41:53 Alex Kantrowitz? Yeah, I'll go, I'll go with better despite like the line of questioning I've had today. I think that going into the event, I felt we needed to see Apple question some of the fundamentals. We needed it to say, can we put Gen AI in our operating system? Check. Can we do things that we don't usually do, working with an outside partner like OpenAI? Check. I think the ChatGPT integration, you know, despite the fact that it might not be a great deal for OpenAI, although there's a chance it will be, will be absolutely good for Apple. Uh, and it articulated a vision, you know, again, it didn't fully blow me away, but there's something to be said about, I think MG's headline, and we used the headline on Wednesday, Apple doesn't overreact to the AI revolution. So it seems right online. I'm definitely better on Apple, although maybe not as bullish as you are. Okay, OpenAI,
42:38 Alex Kantrowitz? better or worse today than at the beginning of the week?
42:41 Speaker 01 I think much worse is uh, is clear from everything I've been saying.
42:47 Alex Kantrowitz? I'm neutral. I think that OpenAI is just in the hit business. Like, we're, we're gonna see probably agents, reasoning, GPT-5, and video generation, and maybe 3D generation, and maybe robotics come from them. And it's just becoming clear that they are like, not just a ChatGPT company, and they still have the leading model. So I'm neutral on them. And maybe this is even a boost. Okay, let's talk about this Forbes perplexity thing. It's very interesting. So, do you want to set it up? You've been following it. And you also are the one that introduced perplexity to us. So talk about what's happening here.
43:26 Speaker 01 So Perplexity has a feature called Pages, as their CEO would explain, that basically is like a presentation of a topic that's much, it's almost Wikipedia-like and it's very, very structured versus more kind of like quick summary type, the way or answering specific questions. It really is an information tool. Forbes had realized that there's a story about Eric Schmidt and his new startup or investment on drones. And basically, it's a hard paywalled story. So the only way to access and read it is if you're a subscriber. And it published it, some of the words verbatim.
44:09 Speaker 01 It took, I mean, it really rewrote the story and summarized it very nicely. And this is a hard paywalled story. It even took the artwork from the original story. And it uses a kind of a preview image, no different than like Google News or whatever else. But it's still kind of prominent and big. So it really is this perfect case study of how hard paywall journalism that takes deep research and true journalistic work can be quickly summarized and taken by a system like Perplexity.
44:43 Alex Kantrowitz? Yeah. And not only that, this is from Randall Lane. So first of all, I should just shout out my conflicts here. I used to play softball. I mean, I used to be a Forbes contributor and I played softball on the Forbes softball team. So I know Randall Lane, who's the editor in chief there. And John Pachkowski, who was the editor on this tech story, was also my editor at BuzzFeed. So those are my conflicts. I'm shouting them out. But anyway, this was interesting from him. He said, "Perplexity sent this knockoff story to its subscribers via a mobile push. It created an AI-generated podcast using the same reporting without any credit to Forbes. And that became a YouTube video that outranks all of Forbes' content on this topic within Google search," which is pretty
45:26 Alex Kantrowitz? egregious. Perplexity hit back, right? First of all, Arvind Srinivas, who's been on the show, so there's another connection to this one. He said that Perplexity was the number two referral source for Forbes. And also, it looks like the company went to Semaphore and said that it is working on revenue share deals with high-quality publishers. And this is from Reed. I have also lost count of the times reputable publications simply refuse to credit my and others' work. And any local news reporter can tell you what it feels like to be a victim of parachute journalism when a national outlet swoops in, rips off your reporting and pretends to own the story. For decades, media outlets have tacitly gone along with this kind of quote-unquote plagiarism,
46:09 Alex Kantrowitz? mainly because as long as the aggregated article included a link, it would send traffic back to the original publication. And so effectively implicit in that argument is, is this any different? What do you think?
46:21 Speaker 01 Yeah, this to me is such an interesting story, and I think there's two parts of it is. First, and to me, I want to be clear, the paywall part of it is what makes it extra juicy and interesting. It's because it's one thing even Semaphore and Reid Albergati, how he kind of stated, like people aggregating other news stories is, I'll get to that. But this is something that no one should technically have access to unless they pay for it. This is not publicly on the internet. And I'm actually surprised that perplexity would scrape and use paywalled content like that, not even metered paywall, because to me, there is something to say about like,
47:03 Speaker 01 anyone in the, it's a much easier case claim to make that anyone in the world can read this story. And our systems have scraped it and used it and ingested it and are putting, outputting something around it and, you know, using fair use or whatever. But again, the fact that this is, no one other than a Forbes subscriber can technically read this, makes this extra interesting. But on the flip side, I actually agree with this. And I will say, it's a little rich coming, because Forbes has actually gotten a lot better recently. But like, for years, they were the model of pure aggregation rewriting. I mean, this is stuff that Business Insider kind of was like the OG in this in terms of like,
47:49 Speaker 01 Aggregating and rewrite, not rewriting, but you know, quickly summarizing and taking stories as their own. Like this has been a regular model in journalism for a long time. So the idea that this is something completely new to the news business model, I don't think is the case. But then the third thing, it was interesting on the referral traffic because Arvind, he had cited another tweet that I think it used either com score or simple reach data to say that it was the number two referral source for Forbes. What was interesting for me is Forbes, they said it was maybe 3% of their total audience.
48:27 Alex Kantrowitz? Referral traffic is 3% of their audience.
48:29 Speaker 01 Oh, sorry, referral traffic overall. But did they, I thought they had, or I think they had an even smaller number for perplexity.
48:36 Alex Kantrowitz? It's like the 45th.
48:37 Speaker 01 And to me, this is the kind of moment that if you really want to get behind this story.
48:41 Speaker 01 Yeah, show us, I know it's proprietary info, but that becomes a lot more powerful if you show me 41, 2, and 3, and 1, 2, and 3. And I think, like, make clear that you have genuine data rather than you're just saying this because at least the, whether it's com score or simple reach, that was something that was at least public and someone had pulled from a report directly.
49:04 Alex Kantrowitz? Yeah. And I was kind of, so I obviously publish big technology. It's my, it's my property. I've been aggregated. I've been ripped off by AI in the past. And so I know how it feels. And I was kind of thinking like, well, what would the trade off be here for me? And on one hand, like, yeah, I mean, if I worked for months on a story and it got ripped off like this, I would be pissed. I think that the indignation from Forbes is righteous. On the other side of things, I think perplexity has a way to fix this, which is with a product tweak. And that is that if I had a hard pay well story, I worked really hard on it, and perplexity, let's say, took a little bit less. So gave the
49:47 Alex Kantrowitz? summary and showed that I was the publication that did this, and then prominently linked back. That's good marketing for a publication, right? I think that's good marketing. I think basically they're doing the distribution for you. That's how I would have reacted if I was perplexity as opposed to like, we might pay publishers sometime in the future. I would have simply said, this is a good point. It's our duty to send more traffic back to the original source. So we'll slim down some of these summaries. We're not going to rewrite stories and we'll prominently link and the economic value that Forbes will get will be significant from that.
50:21 Speaker 01 Yeah, I completely agree with that. I think in the thing that's been the most interesting about this to me is we've talked about this before that like, is this the death of the web? And I think this is actually like, going to be probably remembered as like, you know, a central early case around this that has a lot of nuance and complexity to it because to me, this is a perfect example. Like, if this is allowed, then there's no incentive to economic incentive to continue creating more deep content. And then even if as of today, everything that's happened in the past can be summarized and reused by like via
51:04 Speaker 01 an AI system like perplexity, then why there's going to be no more new information. And I've been thinking about that a lot in terms of like, what will those incentives be? And like, would perplexity at some point have to create a newsroom or, you know, whatever else like, start creating the content if no one else is? And I think that's going to be one of the more interesting parts of this because the more they create disincentivize any kind of content creation, the more they hurt themselves, but only about new things. Anything in the past will be fine.
51:39 Alex Kantrowitz? Right. And it's interesting that we're looking at Forbes and not the New York Times. And the New York Times has been so litigious that like, people wouldn't dare, you know, do that to them because they'll get sued. And maybe that's actually the path forward because they're going to have to preserve their economic gains.
51:56 Speaker 01 Well, do you think from like a pure tactical standpoint, New York Times just sues you. Forbes is definitely kind of taking a, taking it to the streets, to town square.
52:09 Speaker 01 Burn the bridges, like, I don't know, like, but then in doing so, even that whole thing around referral track, like, they're creating a lot of potential, I don't know, legal complication if they do choose to sue. Which do you think is the more effective path to try to remedy this kind of thing?
52:28 Alex Kantrowitz? Lawsuits, but it costs money.
52:32 Alex Kantrowitz? Like, I couldn't potentially bring a lawsuit. Like, I'm just at the mercy of tech platforms. I mean, Forbes is much bigger, but it's a, The Times has a massive legal department, so they can do it. It's harder for Forbes.
52:44 Speaker 01 Yeah, but we have the big technology audience to stand up for us if we.
52:49 Alex Kantrowitz? Exactly. We know that you guys will, and gals, will, will rise up and help us fight big AI if needed. But so far, so far, it's been pretty fine. All right, there's one more part of this that I want to talk about, which is that it does seem that as opposed to like aggregation and, you know, snippets in search or whatever, social media, instant articles, like, this AI thing is sparking a much more intense fight over intellectual property than anything else I've seen before in the history of the internet. And I like said on a recent podcast, that the user gets what the user wants. But I might be rethinking that because it does seem that, that this has sort of gone to a new level
53:31 Alex Kantrowitz? where this generative stuff will take remix and then effectively copy, you know, whether it's a Forbes article or Scarlett Johansson's voice, or a New York Times perspective. And it's a lot, it's actually much harder for the folks doing this to get away with it than I thought. What do you, what do you think is the case there? Is that a right observation? And if so, why?
53:53 Speaker 01 No, I think this is an overall good thing because we are at a point where for the first, let's call it like, you know, like, late 90s to the late 2000s, there's just tech wasn't an adulterated good. And anything that happened, everyone celebrated, no one questioned what the negative potential implications are. Now we've clearly made that a central part of the conversation. And I think it's good. I think this is simply rather than people on the other side, the publishers in this case, just assuming everything will work out and it could only be good for them. There's at least a heated and litigious discussion around what the future of this could look like. And I think that's a good thing. I think this is a there.
54:36 Speaker 01 This is a nuanced thing that again perplexity provides me an immense amount of value in a lot of ways. I love the app right now. Watching the NBA playoffs, I've actually been using perplexity to look up different players. And I mean, it's just like something I have on and it's quickly gets me information now. So it's very valuable, but without some underlying content somewhere perplexity doesn't provide value. So something's going to have to be figured out.
55:06 Alex Kantrowitz? Yep. All right. We have one more story we want to cover this week, which is Elon Musk's pay package. So let's take a quick break and do that right after this. This episode is brought to you by App Point. 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 App Point 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. It's how
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57:15 Alex Kantrowitz? And we're back here on Big Technology Podcast Friday Edition, breaking down the week's news. All right, there's one more big story. Ron, John, why don't you talk us through what happened with Elon's pay package? I'm sure that you're celebrating the fact that he's getting this money. So let's hear why.
57:31 Speaker 01 It's been Elon. There's been things that have been, he's been doing recently that I actually think are positive. But this brought me back to classic Elon and just the absurdity of Tesla, the stock. So I'm sure readers, most of our readers know there was this pay package debate. It was a 2018 pay package that a judge had invalidated and said was like illegally constructed because it was essentially Elon had publicly said he was negotiating with himself in deposition. So this package 56, it was worth $56 billion when the stock was at the highest, $46 billion right now. It's one of the largest corporate pay deals in history.
58:15 Speaker 01 It allowed him 304 million, it gives him options to buy 304 million Tesla shares, which would be 12% of outstanding shares. And what makes this so, it's just crazy to watch. I was watching these videos of the shareholders meeting. People are cheering him, this going through.
58:33 Speaker 01 Meanwhile, this is so insanely dilutive for shareholders. And Elon already owns a significant chunk of the company. So this is only giving him more ownership. And he himself has said like, he wants to own 25%. Otherwise, he does not feel he has the incentive to work or do whatever. You know, make Tesla as successful as it has been. So you get into this point where people are celebrating being diluted, which other than GameStop shareholders, normally the typical investor does not do. Then you have Elon, who has been threatening if he did not get this would, you know, not say exactly what he would do, but very strongly hinting that he would move away from Tesla.
59:18 Speaker 01 He's already said he's going to be diverting. And it's been reported diverting resources to XAI, even though the future of Tesla is dependent on AI to at least achieve this valuation. And then the interesting thing to me about the scale of this is it's such a perfect representation of the stock versus the company. Because Elon has created an incredibly valuable, rich shareholder base. So it's, you know, up to, it was, I think it hit a trillion at one point. Like the stock price appreciation since the implementation of this package has been astronomical. The company has grown, but it's grown nowhere near that valuation.
1:00:01 Speaker 01 And this stock, this pay package, the company itself has generated around $20 billion in cash flow since its existence. It's been around, the net income since it's been in existence has also been significantly less. So I think I'd read somewhere that this is more than their net income generated since inception. Meanwhile, you have like a Ford Motor Company generates $6 billion cash a year. And their CEO, I'm sure is making, I think, probably in like the tens of millions probably. But, but it's so outsized relative to the actual economic impact of the company. So it's, it's a tough one because you get why, without Elon shareholders, understand that Tesla will collapse, the stock will,
1:00:46 Speaker 01 because the entire stock value is based around these grandiose promises and the personality of Elon. But it's also a reminder that the stock price is based around the personality of Elon.
1:01:01 Alex Kantrowitz? Right, but okay, let me ask you this, because this has been the counterpoint. Elon had this approved. He met the numbers that a lot of people were skeptical about. The courts threw it out. The shareholders again voted to reinstate it. So what's the problem here?
1:01:19 Speaker 01 No, I think it's a reminder of the like, this was done without any true board oversight. The largest, one of the largest pay packages in history, when he's essentially negotiating with himself in his own words. I think, again, the stock price appreciation, and they did hit some of the profit targets as well. So I definitely concede that, but like, it's such a perfect case study on, yes, certain things can be met and make sense. But the way these things are done in terms of precedent, especially legally, should not be allowed. And again, shareholders, they can create a new pay package for him if they want to. They can give him more of the company.
1:02:03 Speaker 01 It's just that this specific pay package, the way it was done, and only looking at it in that kind of, at that time period, in the actual manner in which it was executed, it, it really is something that a judge in Delaware has deemed to be illegal.
1:02:21 Alex Kantrowitz? Well, look, that being said, doesn't Tesla still win here? Like, they're gonna get a more engaged Elon? It seems like the shareholders wanted this. So I guess, where's the loss? Is it just, I mean, if you think about it, you can think about broadly, but like, when it comes to Tesla in particular, and that's what we should be focused on, because it's a Tesla issue, doesn't Tesla win? Even if it's an unusual situation?
1:02:44 Speaker 01 I think, we will see, as shares continue to decline and margins continue to decline, we'll see if it's the right decision. But I, I agree that shareholders did vote it through. It's a bad legal precedent, and I think that was the concern of the judge, especially because Delaware is supposed to be the most, not even strict, it's the most business friendly state in the country. That's why it's, it, it exists, you know, like, every company is incorporated there. But, and that's why Tesla also already just moved to Texas. But I, I think we will, it's one of those cases that we will see play out over a much longer timeframe.
1:03:22 Alex Kantrowitz? Well, Tesla is down 2.36% today. So I guess that gives you kind of an answer of like how this has really helped the business. Doesn't seem like the market really appreciates it. But have no worries, because there's a headline in Fortune that says Kathy Wood's ARK Invest predicts Tesla's stock will surge 1,350% over the next five years.
1:03:44 Speaker 01 Elon talking about robots, Kathy Wood saying $30 trillion valuation. This was a fun week. This one's good.
1:03:52 Alex Kantrowitz? Great speaking with you, Ron John. Very big week in tech, so I'm glad we were able to recap it. Thanks to Mark Gurman for coming and sharing his thoughts on Apple and OpenAI and WWDC. We'll be back next Friday with a new show, breaking down the news. And in the meantime, I'm pretty sure next week's Wednesday episode is going to be a conversation with Peter Diamandis. We're going to talk about AI hype. We're going to talk about longevity. It really is going to be a fun, and his relationship with Elon, actually. So it should be a fun one. All right. Thank you, Ron John. Great speaking with you as always. See you next week. All right, everybody. We'll see you next week on Big Technology Podcast.
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