N.Y.C. Says Airbn-bye + How Far Would You Go for a GPU? + The A.I. Songs of the Summer

Are New York City’s new rules for short-term rentals like Airbnb effectively a ban? And will they accomplish what proponents want them to? Then, The New York Times tech reporter Erin Griffith on Silicon Valley’s mad dash for GPUs. And finally, we take stock of the A. I. songs of the summer and discuss YouTube and Universal Music Group’s plan to make synthetic voices profitable.

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

• 0:00Speaker 00

  Support for this podcast comes from Dell Technologies. It's time to put AI to work. Is your business ready? The challenge isn't getting started with AI. It's scaling beyond pilots while maintaining control of your data, governance, infrastructure, and costs. Dell AI Factory provides the integrated foundation you need to scale AI securely and efficiently with one trusted partner. Dell, AI on your terms. From idea to impact. Learn more at dell.com/yourwaytoAI. That's dell.com/yourwaytoAI.

• 0:34Kevin Roose?

  Casey, happy Burning Man week.

• 0:36Casey Newton?

  Happy Burning Man week to you. Now, of course, if you don't live in the Bay Area, you might not know this, but starting this Sunday, it is the best week to be in the Bay Area because you can get a restaurant reservation anywhere.

• 0:45Kevin Roose?

  Correct, or parking, anywhere you want. The city empties out because all of the tech people go to the desert in Nevada to drop acid and dance.

• 0:53Casey Newton?

  I'm going to rent a car and just drive around parking in different locations in the city just because I can. That's the plan for this week for me.

• 0:59Kevin Roose?

  Have you ever been to Burning Man?

• 1:01Casey Newton?

  You know, I haven't. And for the following two reasons. I don't like to be hot and I don't like going outside. And Burning Man is basically the most concentrated version of those two things. So what I've always said is if they would do it like at a hotel with air conditioning, I'm very interested. Have you? Do you go?

• 1:15Kevin Roose?

  I did, I went once.

• 1:16Casey Newton?

  That's right, because you were going to, you wrote about the rich people there.

• 1:19Kevin Roose?

  Yes, I went once and it was a horrible experience.

• 1:23Kevin Roose?

  I will say the most memorable moments of this, this was now like a decade ago that I went to Burning Man. There's a shower tent that is like a giant, like picture, like, you know, a wedding tent.

• 1:34Casey Newton?

  Okay.

• 1:35Kevin Roose?

  But there's like people with hoses in there and they will, they will spray you with soap and then they will hose you down.

• 1:40Casey Newton?

  This is where I would be spending all of my time in Burning Man, by the way.

• 1:43Kevin Roose?

  So, so everyone gets naked. There are hundreds of people. You're all just stark naked in the desert. And you go into this tent, you get your hose down and then that's like your shower for the week, right? Because there's no shower, there's no amenities here.

• 1:53Casey Newton?

  No, yeah.

• 1:54Kevin Roose?

  So I'm in line naked. I'm already very uncomfortable because I'm, I'm the only sober person in this shower tent. But, and so I'm sitting there and I just hear Kevin.

• 2:04Casey Newton?

  No, literally the worst thing you could hear in that situation. And who was it?

• 2:10Kevin Roose?

  And I turned around. It's a Google executive I know.

• 2:13Casey Newton?

  Sundar, Sundar, give Kevin his privacy.

• 2:17Kevin Roose?

  I had interviewed this person like a week earlier. And now here they are, naked, staring at my naked body in the desert.

• 2:24Casey Newton?

  And they said, I just want to circle back and touch base on a few things. I just wanted to bump this email that I sent and see where we were on that project.

• 2:38Kevin Roose?

  I'm Kevin Roos. I'm a tech columnist at The New York Times.

• 2:41Casey Newton?

  I'm Casey Newton from Platformer.

• 2:42Kevin Roose?

  And you're listening to Hard Fork.

• 2:44Casey Newton?

  This week, New York City is saying Airbnb to Airbnb? Then Silicon Valley is scrambling to get a hold of the hottest new commodity. It's chips. And finally, we check back in on AI music and YouTube's new plan to make synthetic voices profitable.

• 3:14Kevin Roose?

  Casey, I want to start today by talking about a story that I don't think is getting enough attention, which is that New York City is effectively banning Airbnb.

• 3:23Casey Newton?

  And how does that affect our New Year's Eve party house that we rented?

• 3:27Kevin Roose?

  Well, it's gonna be, we're gonna have to do it outside the city, maybe in Westchester.

• 3:31Casey Newton?

  All right, seems fine.

• 3:31Kevin Roose?

  So this story has been bubbling up for months now, but it finally seems like there is actually going to be a decisive turning point. So, starting on September 5th, the city of New York is cracking down on short-term rentals, which is basically code for Airbnb and then like a few other sites like Verbo. I never know how to say it.

• 3:53Casey Newton?

  I think it's VRBO.

• 3:54Kevin Roose?

  I think it's Verbo.

• 3:55Casey Newton?

  No, no one says Verbo.

• 3:57Kevin Roose?

  I think they say Verbo.

• 4:01Kevin Roose?

  Okay, so Airbnb has been fighting with New York City for many years.

• 4:05Casey Newton?

  Since the dawn of time, basically.

• 4:09Kevin Roose?

  It's the dawn of time. But now it appears that this is actually coming to a head. This week, The Wall Street Journal published a story titled Airbnb Hosts and Guests Scramble As New York Begins Crackdown. And it basically is sort of a glimpse into what's happening in New York City when it comes to Airbnbs, which are that hosts are taking off their listings ahead of this September 5th deadline. And Airbnb is actually starting to block people from booking new stays in New York City after September 5th.

• 4:38Casey Newton?

  So that's a big deal because New York is one of the tourism capitals of the world and Airbnb is a way that a lot of folks choose to plan their vacations. So how did all of this come about?

• 4:49Kevin Roose?

  So this has been a long time coming, this conflict between New York and Airbnb. And I think the broader context here is that a lot of cities sort of treated Airbnb as kind of like a novelty when it first arrived and, you know, it wasn't that many apartments or houses that were being listed for short-term rentals, so they didn't really care and then...

• 5:09Casey Newton?

  Right, it used to be considered a weird thing to let a stranger sleep in your house for a night for money.

• 5:14Kevin Roose?

  Yes, exactly. But this has been changing over the past several years as the number of Airbnbs has been growing in cities. A lot of cities have been cracking down on short-term rentals. Dallas, New Orleans, Philadelphia, Oakland, where I live, they've all passed their own restrictions on short-term rentals. Here in San Francisco, there's sort of been a long process of cracking down on Airbnbs and other short-term rentals. And New York has gone farther, I think it's fair to say, than most cities. The big thing with these rules is that in order to list your house or your apartment or your spare room on Airbnb or any other short-term rental platform, you have to register with the city and follow a number of rules.

• 5:57Casey Newton?

  Well, that doesn't sound like a big deal.

• 5:58Kevin Roose?

  Well, it doesn't, but you gotta sort of dig into the details of what these rules say. So one of them says that in order to be able to list a short-term rental on Airbnb or any other platform, you have to be living in the space during the rental, right? So you can't go to a different city for a month and rent out your room or your house or your apartment while you're there.

• 6:17Casey Newton?

  Right. You have to be in the space and you have to give your guest a back rub when they wake up.

• 6:23Kevin Roose?

  That's not technically in the rule.

• 6:24Casey Newton?

  It's implied.

• 6:25Kevin Roose?

  Yeah, it's implied. So the second part of this is that you can only rent out your space to up to two people at a time and you have to maintain what's called a common household, which means basically that you cannot have locks on any parts of the house. So you can't have, you know, if you have a three-bedroom apartment, you can't lock off one of the rooms because that's your room or a supply closet or something like that.

• 6:47Casey Newton?

  And if you're limited to only having two people in the rental, that just means that threepills are out of luck. So if you're in a three-person partnership, you literally cannot stay in an Airbnb in New York anymore.

• 6:59Kevin Roose?

  That's true, that's true. We haven't examined the effects on the poly community, but they are reeling.

• 7:03Casey Newton?

  So much for the liberal order in New York.

• 7:05Kevin Roose?

  Yeah, we know what they'll be talking about at Burning Man this year. So this rule also implies that you can't have multiple properties, right?

• 7:12Casey Newton?

  Right.

• 7:13Kevin Roose?

  And importantly, there are actually going to be fines for not complying. Hosts under this rule can be fined up to $5,000 for listing their units illegally. And companies like Airbnb can actually be fined for processing payments for unregistered rentals.

• 7:29Casey Newton?

  It seems like in general, there's a lot of fines that are associated with living in New York. You used to live there. Would you say that's true? It seems like there's always just fines and fees and...

• 7:37Kevin Roose?

  It's true. I remember I did have to pay like a dog registration fee.

• 7:41Casey Newton?

  This is exactly what I'm talking about.

• 7:43Kevin Roose?

  So they're nickel and diamond people all over the place. But this actually does feel like a major change in the way that cities have been treating Airbnb. And a lot of people are worried that this is sort of the start of a bigger national crackdown.

• 7:57Casey Newton?

  An Airbnb backlash.

• 7:59Kevin Roose?

  If you will.

• 7:59Casey Newton?

  Yeah. Well, Kevin, what does Airbnb have to say about these new rules?

• 8:03Kevin Roose?

  So I talked to Airbnb. You know, they say these rules are extreme and oppressive. They basically say like this is the hotel lobby sort of throwing its weight around to try to like kill a competitor. They also say that this licensing process that the city is talking about, like in practice, doesn't really work. They say, you know, the city has only approved a tiny fraction of the applications it has received, in part because they're understaffed. And the bigger thing they say is that these rules just really don't make sense. They don't achieve the goals that New York City wants them to achieve.

• 8:35Casey Newton?

  Isn't the goal to just to get rid of Airbnb? I mean, if that's the goal, it seems like it could work.

• 8:40Kevin Roose?

  Right. Well, the rationale that Eric Adams, the mayor of New York and city council, has given for this rule change is basically that the number of Airbnbs in the city is contributing to an increase in housing prices for New Yorkers. You know, by having all these apartments and brownstones and buildings that are not licensed as hotels, but that are effectively functioning as hotels. You get units taken off the rental market that otherwise would be available for people to... Rent long term and you actually get higher housing costs for everyone. So that's one thing. They also say like this is hurting the hospitality industry in New York to have all these sort of, you know, Airbnbs, you know, where people would otherwise be staying in hotels.

• 9:22Casey Newton?

  Mm hmm.

• 9:23Kevin Roose?

  And in response, Airbnb basically says, well, it's not clear yet how Airbnb and other short term rental websites affect housing prices in a city. There's been some conflicting data about that. They cite a study by Boston University Professor Michael Salinger, which they actually commissioned, that found that banning short term rentals in New York wouldn't alleviate the city's housing crisis because over 80% of the listings on Airbnb in New York City would actually generate more income if they were rented on a long term basis, which implies that sort of hosts aren't just taking units that they would otherwise rent long term and making them into Airbnbs. They're doing it, you know, because they're traveling out of town for a month or they only spend, you know, a couple of months a year in New York and they want someone

• 10:07Kevin Roose?

  to live in their place the rest of it.

• 10:09Casey Newton?

  Right.

• 10:09Kevin Roose?

  So they're basically saying like, this is not going to fix the housing crisis. They're also saying that a lot of Airbnbs in New York are not in Manhattan. They're in the outer boroughs. They're in Queens. They're in Brooklyn, places where there aren't really a lot of hotels. And so they're not really competing with the hotel industry in Manhattan and they're kind of spreading tourism and tourism dollars around the city.

• 10:33Casey Newton?

  Yeah. So I can understand why Airbnb doesn't like this law. What are the hosts saying about what it might cost them?

• 10:41Kevin Roose?

  So a big point that Airbnb has been making during this sort of campaign to fight this is that there are a lot of people who really do depend on Airbnb and other short term rental sites to help with their mortgages or their living expenses. The Wall Street Journal interviewed a 46 year old playwright and director who rents out his two bedroom apartment in Harlem when he goes out of town for work, who said that, you know, he depends on this money.

• 11:07Casey Newton?

  Andrew Lloyd Webber depends on that money? You'd think he'd have enough just from cats, but go on.

• 11:13Kevin Roose?

  So there are a lot of people like that. You know, these are not landlords who own 15 different apartments and are sort of running a little like unlicensed hotel chain. These are people who use Airbnb to bring in a little extra money to help them pay their living expenses and they're not happy about this. They've already had to do things like register with the city, pay a hotel tax. It's already kind of onerous in a lot of places to run a small Airbnb. But this law is going to make it much, much harder and in many cases will just prevent them from doing that altogether.

• 11:44Casey Newton?

  That makes sense. And if you own two or fewer homes, I feel sympathy for you. If you own three homes, I don't. That's just my personal feeling.

• 11:53Kevin Roose?

  Casey, what do you think about the crackdown on Airbnb and short-term rentals more broadly?

• 11:57Casey Newton?

  Well, look, I've always been of two minds about these short-term rentals. One is sometimes when I'm traveling, it is a very cool option to have. And also, I would not like to live next to one. And I've just never known how to square those two things, right? It's something that can be convenient to me as a traveler, but as a resident of my town, it makes me nervous, right? If there's like sort of a different family of eight pulling up in a station wagon every three days to stay in the house next door, it can just kind of create some friction. So I think it is only understandable that so many cities are coming up with regulations on these things. At the same time, I do think there's maybe a case to be made that New York's going overboard.

• 12:39Kevin Roose?

  Yeah, so I've thought about this a lot and I have lived in New York. I understand it's a very dense city. People are on top of each other.

• 12:46Casey Newton?

  There's a concrete jungle where dreams are made of.

• 12:48Kevin Roose?

  Yeah, famously, yes. And I get that having a ton of Airbnbs show up in your neighborhood can be upsetting for people. You do hear the horror stories of like, you know, someone rented my apartment and held an orgy or there's-

• 13:03Casey Newton?

  Oh, the horror!

• 13:04Kevin Roose?

  Like drunken tourists cavorting on my street at 2 a.m., you know, that kind of thing. New Yorkers are very precious about their personal space. They don't have a lot of it. And I get why it would feel strange and alien to all of a sudden have these like unlicensed hotels operating in the city.

• 13:18Casey Newton?

  Sure, but at the same time, like, it's New York City, baby, okay? Crazy weird things are gonna be- If you wanted the quiet life, like you should not have moved to the Big Apple.

• 13:26Kevin Roose?

  Totally.

• 13:27Casey Newton?

  That's what they call it.

• 13:28Kevin Roose?

  So my take, I have two takes on this. One of them is my personal take, which is that I agree with you. I think this is a bummer because I stay in a lot of Airbnbs when I travel.

• 13:36Casey Newton?

  It's often better for families, right? Because you've got the kitchen and there's sort of a little bit more room for y'all to spread out all your plastic toys for the kid.

• 13:42Kevin Roose?

  Exactly. So I travel a lot with my family, including extended family. You know, every summer I go on a trip with my mom and my brother and we all get a big house on Airbnb. And that's been a really good option for us. I would say like as a, as a consumer, I have really enjoyed this sort of category of travel that Airbnb has opened up, which is like the ability to take a trip with a large or medium sized group of people and all stay under one roof with common space.

• 14:10Casey Newton?

  Right.

• 14:10Kevin Roose?

  Now, I think that's less of an issue in New York than other places because there aren't a lot of huge, like, you know, eight bedroom listings in New York City anyway. I did stay in one Airbnb in New York City once on a work trip that had a cage in it. Have I told you about this?

• 14:25Casey Newton?

  No.

• 14:26Kevin Roose?

  This was years ago. I was on a work trip and we booked this Airbnb and unbeknownst to us, it was not displayed in the photos. When we arrived, there was a cage. This was not a bird cage. This was not a dog cage. This was a human cage. This was a floor to ceiling cage. There was almost certainly some sort of fetish thing.

• 14:48Casey Newton?

  Right. It's sort of, you know, the Killer Song, Mr. Brightside, when he says, "I'm coming out of my cage and I'm feeling just fine." Maybe that was his apartment.

• 14:57Kevin Roose?

  So anyway, there aren't a lot of big, you know, multi-bedroom listings on Airbnb in New York. So I actually don't think like that's the kind of travel that most people are doing in New York City.

• 15:06Casey Newton?

  Right.

• 15:06Kevin Roose?

  But in other parts of the country, that is a big draw of Airbnb over hotels.

• 15:11Casey Newton?

  But wait, so what's your, so your first take is basically like, I like doing Airbnb when I travel. So what's your second take?

• 15:17Kevin Roose?

  My second take on this is that I think this is a very bad policy idea to restrict the short-term rental market in an attempt to fix the overall housing crisis. And I'll tell you why. We have a long history in this country of telling people what they can and can't do with their houses, right? And some of that is good, right? I don't mind like the fact that there's an electrical code that your house has to follow and you can't have like exposed wires dangling. That seems like a good idea.

• 15:46Casey Newton?

  They turned down my application to make amphetamines at my house the other day. And I said, oh, great. I guess I'll just have to make more podcasts.

• 15:53Kevin Roose?

  But some of this is, we know, bad and exclusionary and actually part of what is fueling our nationwide housing crisis. I'm thinking of, you know, things like zoning laws, land use restrictions, HOAs, that kind of stuff. This is just bad and exclusionary and it's part of the reason that we have this housing crisis. I'm not a big fan of the NIMBYs. I mean, the joke in the Bay Area is like, you know, people will have these signs in their yard being like, everyone is welcome here. And then like you actually look at who's showing up at the city council meetings to oppose new development. It's like all the same people. So we are in a housing crisis in this country and there's actually not a lot of evidence that having a reasonable number of Airbnbs in a city impacts the cost or availability

• 16:38Kevin Roose?

  of housing in a major way.

• 16:39Casey Newton?

  But that probably depends on how you define a reasonable number, right? I mean, this debate has been going on basically ever since Airbnb got even a little bit popular. It does seem like one of those cases where I have read competing research on the subject and I am not a housing economist and so I don't really know where I land on all that. But I will say, it feels intuitive that the more Airbnbs that are on the market, the fewer places there are for me to rent.

• 17:02Kevin Roose?

  Well, and that may be true in some places for some threshold, but there's also been some research that has shown that the availability of short-term rentals has actually incentivized people to build more housing. So there was a study called "The Effect of Short-Term Rentals on Residential Investment", and it found that actually in areas where there were short-term rentals like Airbnb, people were incentivized to build more houses, right? And actually, people did more things like building ADUs or these kind of in-law units in their-

• 17:31Casey Newton?

  Accessory dwelling units for uninitiated, yeah.

• 17:34Kevin Roose?

  Which, you know, you could say like, oh, well, how does it help the neighborhood if they're- There are people just building Airbnb ADUs in their backyards, but those may not stay Airbnbs forever, right? Those may become part of the long-term rental supply if they're built.

• 17:49Casey Newton?

  Well, that's interesting. Like, I would not have thought about that. But when you say it, it does make sense that if your house becomes an asset that generates cash, then people might actually try to build more of them.

• 17:58Kevin Roose?

  Right. And I will say, though, I don't think any decision that a city makes about Airbnb or other short-term rental sites is going to fix or exacerbate greatly the housing crisis, right? According to Airbnb, there were about 38,500 Airbnbs in New York City as of January of this year. That doesn't include hotels listing on the platform, but it's just sort of the basic, like, what you think of when you think of an Airbnb. And just compare that to the total supply of housing in this city. In 2021, there were about 3.6 million housing units in New York City. It's just a drop in the bucket. So a tiny, tiny fraction of the apartments and houses in New York City are or have ever been Airbnb's. I don't think that banning Airbnb is going to solve the housing crisis.

• 18:43Kevin Roose?

  In fact, if you looked at cities that have placed restrictions on short-term rentals, the rents are still going up there, the housing prices are still going up there. We need a lot of other solutions. We need changes to zoning and land use, environmental review. We need to address rising construction costs. And there are all kinds of things we could do to make that happen. I don't think banning Airbnb is going to play a big role at all. And to be clear, I'm not saying that all regulation of short-term rentals is bad or that Airbnb should have no rules whatsoever. Like, it would be fine with me if New York City wanted to make them pay more taxes or register with the city or even like, limit the number of units that one person can rent out at a time. But when I hear people talking about banning short-term rentals altogether because they don't want their neighborhoods to change

• 19:27Kevin Roose?

  or they don't want these transient people coming in from out of town, what I hear is just NIMBY. I hear, not in my backyard, I hear the same arguments that people in California have been using for decades to stop people from building housing in their neighborhood. And I don't think this has anything to do with addressing housing costs. I think this is that New Yorkers do not want drunken European tourists. On their streets at 2 AM and someone has to stand up for the rights of drunken European tourists. I will be that person today.

• 19:56Casey Newton?

  Very brave of you. You know, I'm sure that that is part of it, but I think something else you said earlier is probably equally as big, which is there is a massive hotel lobby in New York City. And man, are they excited to get those Airbnbs off the market because that's 38,500 more sets of visitors who now are going to be forced to stay in their clients' buildings.

• 20:17Kevin Roose?

  Yeah. I mean, one interesting thing about this is that even though these crackdowns are happening all over the country on short term rentals, Airbnb still seems to be in a good financial position. Their stock is up 50% this year. Their bookings are still going up. So what do you think explains that, given that people in cities seem to be turning against them?

• 20:38Casey Newton?

  Well, when Airbnb filed its S1 before going public, they disclosed that no one city accounted for more than about 2.5% of its revenue. So even if you did wipe a city like New York entirely off the map, even if it is one of their biggest cities, they're still going to be making about as much money as they were before. They were also smart in that they just proactively started working with a lot of cities to get rules into place that were more favorable for the company. They've done that all around the world. Some cities choose to be more restrictive than others. But for the most part, they were able to get systems that worked into a lot of cities.

• 21:13Kevin Roose?

  Yeah. Casey, do you think, I've sort of heard it theorized that this crackdown on Airbnb's across the country, coming at the same time as like Uber getting regulated in places. And there's this sense that these kind of companies, these darlings of the so-called sharing economy of the 2010s, that raised billions of dollars, basically promising to like transform the fabric of urban life in America and elsewhere, that that's sort of coming to an end. This sort of move fast break things era where you could just kind of like open up a new app in a city and wait for regulators to catch on. Do you think that's over?

• 21:50Casey Newton?

  Kevin, there are people in this world walking around with orbs, scanning eyeballs to create a new global currency. And let me tell you, my friend, they do not. Have permission and it is still moving ahead. So I think, look, the way that the Silicon Valley works is that entrepreneurs are always on the hunt for these areas where there is enough regulatory gray area and wiggle room that they can try something without permission. And you never know, maybe you do wind up upsetting the entire global taxi industry or the entire global tourism industry. So that is absolutely not going to stop. And look, it's hard to be a city administrator, right? These folks are already facing all sorts of problems and they are not constantly scanning

• 22:34Casey Newton?

  the horizon for new threats and disruptions. So my guess is there's still going to be plenty of room for entrepreneurs to get out there and shake things up.

• 22:41Kevin Roose?

  Yeah. Would you ever list your house on Airbnb?

• 22:44Casey Newton?

  You know, at this point in my life, probably not. Like, it doesn't feel amazing to me, but I think I'm just maybe a little bit more anxious about that sort of thing in general. And I mean, look, you know, I think it can be cool and people are very diverse. You know, I had a friend who actually worked at Airbnb who came to town for work earlier this year and he told me that he was staying in an Airbnb while he was in San Francisco, as you might expect, and was staying with somebody who just like lived above the store where he worked and loved to invite guests in from Airbnb because he loved to meet new people from around the world. And I do think we should sort of make room for these things. You know, if you're the sort of person that wants to throw open your doors to a stranger

• 23:27Casey Newton?

  and like charge them a couple hundred bucks a night and get to know people from all over the world, that's cool. You should probably be allowed to do that in some regulated way.

• 23:34Kevin Roose?

  And if you are listening to this show and you want to spend a night in Casey Newton's house in San Francisco.

• 23:40Casey Newton?

  We're raffling it up.

• 23:46Kevin Roose?

  When we come back, New York Times reporter Aaron Griffith takes us inside the crazy scramble for GPUs in Silicon Valley.

• 24:09Speaker 00

  Support for this podcast comes from Dell Technologies. It's time to put AI to work. Is your business ready? The challenge isn't getting started with AI. It's scaling beyond pilots while maintaining control of your data, governance, infrastructure, and costs. Dell AI Factory provides the integrated foundation you need to scale AI securely and efficiently with one trusted partner, Dell, AI on your terms. From idea to impact. Learn more at dell.com/yourwaytoAI. That's dell.com/yourwaytoAI.

• 24:44Speaker 03

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• 25:19Speaker 04

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• 25:51Kevin Roose?

  Casey, we've talked about chips on this show.

• 25:53Casey Newton?

  We have, against my will, but we've talked about it.

• 25:57Kevin Roose?

  So a few months ago, we did a show about Nvidia and how they kind of became a central part of the AI economy by making these things called GPUs, which are these high-end graphics processors that you need to build large language models. And this week Nvidia reported a 101% jump in its second quarter revenue compared to last year, which they said was in part because of the huge demand for these chips. And the other day, my colleague Aaron Griffith published a great story titled "The Desperate Hunt for the AI Boom's Most Indispensable Prize", which was sort of all about the crazy insane lengths that companies are going to to procure these high-powered GPUs.

• 26:38Casey Newton?

  It's like the, you know, the game show supermarket sweep where you have to put as many groceries in your cart as you can before time runs out?

• 26:45Kevin Roose?

  Yes.

• 26:45Casey Newton?

  It's like in the AI industry, there's a giant supermarket sweep and all anyone wants to put in the cart is GPUs.

• 26:50Kevin Roose?

  Exactly. Remember on supermarket sweep how they always went for the hams first?

• 26:53Casey Newton?

  Always the hams, the big cheeses, the diapers.

• 26:56Kevin Roose?

  Yes.

• 26:56Casey Newton?

  Yeah.

• 26:57Kevin Roose?

  And so these are the hams of the AI world right now. Everyone wants them in their carts and.

• 27:02Casey Newton?

  I thought we were the hams of the AI world, but go on.

• 27:06Kevin Roose?

  So I wanted to have Aaron on because I think it's just a great story and a good way to understand how insane the market for these AI chips is right now and what lengths people are going to to get them. So Aaron Griffith, welcome back to Hard Fork.

• 27:20Speaker 05

  Hi, thanks for having me.

• 27:20Casey Newton?

  Hi, Aaron.

• 27:21Kevin Roose?

  So I was hoping that we could just start by talking about kind of just the lengths that you describe in your story for how far some of these companies are going to procure GPUs. You talked to one executive who basically called GPUs a rare earth metal. So what made you want to do this story and what did you hear while you were reporting it?

• 27:40Speaker 05

  Well, I've been going to a bunch of AI events, hackathons, meetups, pitch events, just to get a sense of. What's happening in this kind of boom time? I mean, there's tons of companies springing up and I want to know which ones to pay attention to. And I noticed that one of them, that when founders were pitching their startups to a bunch of engineers that they're trying to recruit, one of the main selling points that they were including alongside, you know, all the regular perks like free lunch and stock options and all this stuff was like, oh, and we have access to all of these H100 GPUs. Or we just raised $40 million and we're allocating 8 million of it to GPUs. And I just thought that was kind of a new thing that I'd never heard before.

• 28:23Speaker 05

  Like, this is a recruiting tactic, like, we have access to compute. I was like, well, isn't that just kind of a given? We live in the cloud era. We live in an era of computing abundance, you know? Like, why is this suddenly a hot commodity that you're bragging about having access to?

• 28:38Casey Newton?

  Right. Startups used to brag about doing your laundry. And now it's like, get a load of this chip.

• 28:43Speaker 05

  Yeah, yeah, it seemed so bizarre. I was like, it almost reminded me of like the supply chain issues in the beginning of the pandemic. It's just like, what is, what is happening here? Like, we live in a world where we can't get access to everything we want at the tap of a button? What? And so I started, you know, talking to more and more startups and all these comparisons came out. The rare earth metal, people talked about it like it was drugs. Like, you know, you have to know somebody and have a, have a hookup.

• 29:09Casey Newton?

  People are just walking down Market Street in San Francisco in trench coats, like, opening up and saying, hey.

• 29:13Speaker 05

  So that's actually, that's why I take issue with your supermarket sweep comparison. Because, you know, that would be like if the supermarket shelves were empty. And it's more like a sort of Hunger Games situation.

• 29:23Casey Newton?

  It's a post-apocalyptic supermarket sweep where there's nothing left on the shelves.

• 29:28Kevin Roose?

  Right.

• 29:28Speaker 05

  Yes, exactly. So the more I started talking to people, the more I realized this is an enormous problem that's impacting startups.

• 29:33Kevin Roose?

  Erin, the most upsetting thing that I learned from your article was about the existence of something called the GPU song.

• 29:42Speaker 05

  Oh, I'm so sorry to have introduced that to a broader audience.

• 29:47Kevin Roose?

  Which is a song that was put out by someone calling themselves Weird AI Yanko Chip. And it is a version of We Didn't Start the Fire that is all about the quest to procure GPUs. And I think we should listen to it.

• 30:16Speaker 06

  Elon Musk, GCP, Sam Omen, AMD inflection, for an Alan Turing test. Oracle, Anthropic, Google Cloud, Symbiotic, Nvidia, Microsoft, AWS.

• 30:36Speaker 06

  Hugging Face, DGX, Lambda Labs, AlexNet, AMD, Infinity Band, A100, LLMs, Twitter, Tesla, SpaceX, Tiny Corp, HGX, Call of T, SMC, EMod and Stability. GPUs are fire. Everybody's hunting for some H100s. GPUs are fire.

• 30:58Casey Newton?

  Who is this song? Do they play this at parties in Silicon Valley? I don't understand. Did you interview Weird AI Yankoship?

• 31:06Speaker 05

  I didn't. I didn't. I didn't. I had limited space and I didn't want to oversell.

• 31:13Casey Newton?

  Well, and my understanding is very hard to get on the phone. It's sort of like, you know, getting an interview with Beyonce.

• 31:21Kevin Roose?

  So it's not, to my understanding, just that startups are using their GPUs to recruit engineers. They're actually being used by lots of people as different types of incentives. They're also using GPUs as collateral. This is something that I learned for the first time from your story, which is that at least one company has gone out and sort of raised money, like gotten a loan with their GPUs as collateral, the way that like you might use your house as collateral for a loan.

• 31:47Speaker 05

  Yeah, that was crazy. And so I guess my understanding is that that market is not new, but it has gotten a lot more intense, you know, in the last year. So I guess there's always been the ability to finance your GPU or your servers or anything like that with this special kind of debt that, you know, if you default, the debt provider, they just get the GPUs. And so, yeah, there are now, you know, there's all kinds of weird shadow markets that have sprung up to service this disconnect in the market right now.

• 32:17Kevin Roose?

  Aaron, what is the craziest story that you heard about a startup or a company trying to get Nvidia's GPUs?

• 32:25Speaker 05

  They're making hundreds of phone calls. They are calling in every favor. I mean, this one guy that I talked to that I quoted in the story, Eric Jonas, he was calling his friends at hedge funds that like run quant funds, seeing if they might have extra capacity lying around outside of trading hours. I mean, he basically stopped short at what he called the equivalent of buying some GPUs from a guy in a van. There are like third-party brokers that are, you know, obviously seeing an opportunity to get in here and maybe mark them up or something like that.

• 32:58Kevin Roose?

  Yeah, that's what I want to know is like, who is the stringer bell of GPUs? Like, who is the person who's just like driving around vans in San Francisco, just slinging GPUs out of the back?

• 33:07Speaker 05

  I mean, that could be these guys from SF Compute Group who were also in the story. It's basically two startup guys who had trouble finding GPUs for their own startups. And then they somehow got a line in somewhere after working the phones for a little while. And they're now banding together a bunch of startups and researchers to essentially like share an allotment of GPUs. And they wouldn't even tell me where they were getting them from because they were worried that if they publicized that, that somebody might swoop in and buy them out from under them.

• 33:38Kevin Roose?

  It also strikes me that it puts Nvidia in a very unique position in the tech world right now because not only are they essentially the bottleneck for all AI development, right? They sort of are controlling, as you said, Casey, like kind of the pace of overall progress by virtue of having these chips that everyone wants and there not being enough to go around. But they're also kind of the kingmakers in the sense that they can choose, okay, you get 1,000 H100s and you don't get any, and we like your project and we don't like your project. So Aaron, what has Nvidia said about how they are deciding how to allocate these very in-demand GPUs? Yeah, do you have to write like an application essay like for college where you talk about the traumas that you had and how it informed your journey?

• 34:22Speaker 05

  I'm sure that would help. So they do have programs for startups that maybe need a smaller amount of GPUs, because that's part of the problem is that small startups, some of them don't even know how much they need. And they certainly don't need like a year's worth of reservation that would cost them, you know, $50 million or something like that. They only need a small amount. And so they work with this company called CoreWeave that is, you know, specifically providing them for smaller companies. And they're obviously moving as quickly as they can. They, just like everybody else in the world, were kind of taken off guard a little bit by this huge AI wave. I mean, it just so happens that the video, that the chips that they make for, that are good for video games also work really, really well for AI. And so they have a huge head start on AMD or the other chipmakers that are trying to catch up to them now. So, I don't know,

• 35:07Speaker 05

  I think a lot of people in the industry do think that the backlog will catch up in, you know, the next six months, hopefully, maybe, maybe not as long out as a year. But, you know, I think the shortage will probably die down soon enough. I mean, maybe as some of these companies start going out of business, if, if some of them weren't great ideas, or they pivot to whatever the next thing after AI.

• 35:30Kevin Roose?

  Yeah, you, you wrote in your story about the sort of challenge of being a smaller company or a smaller research project that maybe doesn't have connections at Nvidia, doesn't have, you know, an in with Jensen Huang or someone else high up there who can say, okay, you can buy these H100s. You wrote about this company called Docugami, which was trying to, what do they do? They fold up documents into origami.

• 35:56Speaker 05

  They, they use AI to read and process documents. So like long PDFs, their AI can, you know, help companies turn it into useful data.

• 36:05Kevin Roose?

  Got it. So they were looking for these GPUs to do their projects and they ended up actually getting them from the government.

• 36:13Speaker 05

  Yeah.

• 36:13Kevin Roose?

  Which is not a place that I expected to have access to a lot of cutting edge GPUs. So explain that. Explain how startups are kind of trying to use the government to get access to these things that maybe they wouldn't be able to buy on their own.

• 36:26Speaker 05

  Yeah, that was kind of an interesting thing. So I also spoke with some university researchers who, you know, they have A little bit of a closer connection with the government in some instances, too. I mean, there are programs like the National Science Foundation has these grants that they give out for companies that are doing research. And then there's this program called Access, which is what Daki Gami used. And any startup or researcher who wants to apply for it can can get access that way. So that's an interesting avenue that I wasn't aware of either. I mean, you know, most people in the tech industry like to complain about the government moving slow or, you know, being slow to adopt technology. But here's one instance where it might be very helpful.

• 37:07Casey Newton?

  Well, I'm trying to think of what research project Kevin and I could propose to get the government to give us an H100.

• 37:13Speaker 05

  And then resell it really quickly for a quick buck.

• 37:15Casey Newton?

  Exactly. And then just see what kind of price we could get for it.

• 37:17Kevin Roose?

  Yeah. You also wrote in your story about the companies that aren't getting these GPUs, that are not sort of part of the the elected elite that Nvidia has chosen to receive these H100s and how they are kind of making do without them. In particular, you wrote about a company called Hebea, which used to get GPUs through a cloud provider, but ended up doing something different because they didn't have enough of the chips that they wanted. So talk to us about that company and sort of how other startups are coping when they can't get the GPUs that they want or need.

• 37:49Speaker 05

  Yeah, so what Hebea was doing, so they have online, some startups don't have a product yet and they don't have anything to show for it. Hebea has a product and they have customers. And so they basically asked their customers, could you please go to our cloud provider and beg them and tell them how important our product is to you and how much, you know, you need us to get those GPUs so you can keep working. And so they they're basically pulling any string they can. And then they also did the equivalent of like digging around in the couch cushions. Some of their engineers, you know, found some old gaming computers that they had that had some GPUs that are, you know, less efficient, not necessarily designed for the kind of AI work they want, but they're using them to run smaller experiments in a server in a closet

• 38:34Speaker 05

  in their office in Soho, which, you know, of course, my first question is, isn't that very loud and very hot? And they're like, yes, yes, it is. And they're like, we put it in a closet, we close the door, we have liquid cooling units there to keep it cool, but it is very noisy.

• 38:50Kevin Roose?

  It also seems like, I mean, Nvidia seems like they're trying to do some things to kind of expand access to make it so that it's not just the biggest, richest tech companies that can get these things. You know, maybe some startups, maybe some university researchers. It seems like the government is also trying to expand access. But it does seem like we are coming back to this fundamental issue with the state of AI right now, which is that the market really favors incumbents, right? It really favors companies that have billions of dollars, that can order, you know, tens of thousands of these chips, which are like $40,000 a piece, and that can do so without it really like affecting their overall financial picture. So, talk about that.

• 39:31Kevin Roose?

  Talk about the sort of balance between how the sort of companies that make these chips, like Nvidia, would like them to be allocated, and just the reality that these things are very expensive, and you kind of need to have billions of dollars to even get really started with building one of these models.

• 39:46Speaker 05

  I mean, that's partly why you see so many of these startups raising money from what you would think is maybe their direct competitors, but they're the incumbent players, you know, like Google, Oracle, even Salesforce, Amazon. They have been investing in these smaller startups, and Nvidia also. And so it really pays to have some kind of relationship, potentially financial, with these large cloud providers who are kind of the ones who are doling out the access to this. I mean, OpenAI and its investment from Microsoft, its partnership with Microsoft Azure is like a great example of that. And in my story, I write about Inflection AI, which is one of the bigger AI startups

• 40:28Speaker 05

  that raised 1.3 billion from Microsoft and Nvidia, and they are spending 95% of that or more all on compute power, which, you know...

• 40:39Kevin Roose?

  We have to, we have to just spend a moment there, because what you just said is actually insane. You know, usually if you're a startup and you raise a big round of funding, you're using that to go out and hire people, maybe to get a bigger office, you're using that to go into research and development, you're using that for operating expenses. This company, Inflection, raised a huge... Huge round, one of the biggest rounds I've ever heard of for a startup. And they're saying that 95% of that money is going to go right back out the door to buy GPUs. That is extraordinary to me.

• 41:10Speaker 05

  It's, it is, I think the quote from the, the CEO, Mustafa Suleyman, was, "It's eye-watering." I mean, it's, it's madness that this company only has like 30 employees or something. But if you are trying to build like a general LLM, the kind of thing that's, that's trying to compete with OpenAI, you know, you need that amount of compute power. And, you know, he's like, "We're already at capacity." They're going to be running 22,000 of Nvidia's H100 chips. And, you know, he said that other startups have asked him, like, "Oh, do you have any extra capacity? Like, can you, can you share a little?"

• 41:45Kevin Roose?

  Please, sir.

• 41:47Speaker 05

  And he's, yeah, exactly. And he's like, "No, we're already at full capacity, sorry."

• 41:52Kevin Roose?

  And now, does Nvidia really care who gets the chips? Like, isn't their job just to sell the most chips for the highest amount of money? Like, what, like, why is it to their advantage to try to spread these things around?

• 42:02Speaker 05

  In general, I think the tech industry understands that there is supposed to be a cycle of innovation coming from the bottom up, starting with the small startups. And if we do not have that in this wave, you know, that's, that's kind of a problem. We're going to be missing out on a lot of fresh thinking and innovative ideas that come from small, scrappy startups. And those small, scrappy startups often grow into big, powerful customers that spend lots of money on things like chips and cloud computing. And so it's smart to try to get those customers early. So the cloud providers and Nvidia know that, you know, they do want to have those relationships with small startups, especially the most promising ones, and help them flourish, because eventually they'll grow into big companies that buy lots of their products.

• 42:48Kevin Roose?

  How long do you think it will take for the supply of these chips to meet the demand for it?

• 42:53Speaker 05

  So there are kind of like amateur investigators out there who are writing these elaborate blog posts, trying to game out, you know, when they think the backlog will lift. And some of them are saying, you know, maybe by the end of this year, maybe in six months, maybe in a year, which is a scary prospect for a lot of people in the AI world. In the meantime, you know, they're just trying to make do with whatever they can. Startups that I've talked to who have, you know, called their cloud provider and asked for more compute have said that they're put on waitlists that are, you know, four months was one. One said that it was a year-long waitlist. You know, they're all trying to skip that line however they can.

• 43:32Kevin Roose?

  Erin, if hypothetically, I were interested in building a large AI language model to, you know, say, replace a podcast co-host with an AI.

• 43:42Casey Newton?

  How dare you.

• 43:43Kevin Roose?

  Where would I go? Where can I get some of these sweet, sweet GPUs?

• 43:46Speaker 05

  I mean, I would start with the university researchers. They seem to have the most connections. They might be able to hook you up with a broker, maybe someone who knows about a random server that Google has leftover, you know, in some European country, perhaps. Or maybe, you know, some like French OEM who's selling, you know, computer parts, but their deal fell through. That was one example that someone told me about.

• 44:14Kevin Roose?

  What I hear you saying is that it might be easier for me to just keep my faulty human co-host.

• 44:19Casey Newton?

  Now you're talking.

• 44:23Kevin Roose?

  Nvidia, please help me. I'm on a desperate mission here. All right. Erin Grivitt, thank you so much for showing us inside the wild and wacky world of GPU procurement.

• 44:34Speaker 05

  You're very welcome.

• 44:35Casey Newton?

  Thank you, Erin.

• 44:35Speaker 05

  Thanks for having me.

• 44:41Kevin Roose?

  Well, Casey, we've heard one terrible AI song on the podcast this week. And when we come back, I gather you're gonna play some more for me.

• 44:47Casey Newton?

  You ain't heard nothing yet.

• 44:48Kevin Roose?

  Because we're going deep into the world of AI music and YouTube's big plan to get it under control.

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• 46:58Casey Newton?

  Well, Kevin, as great as he is, I couldn't let weird AI Yankoship be the only musical artist we featured on today's show. Because, believe it or not, there is a lot more going on in the world of AI music, and I think it is long since past time that we caught up about it.

• 47:15Kevin Roose?

  Let's do it.

• 47:15Casey Newton?

  Okay, so you may remember in April, we discussed a somewhat controversial song called "Heart on My Sleeve." Remember "Heart on My Sleeve"?

• 47:24Kevin Roose?

  Yes, this was by Fake Drake.

• 47:25Casey Newton?

  That's right. Somebody used a synthetic version of Drake's voice, created with AI, and put him together with a synthetic weekend, the musical artist, the weekend, and they made a song. And it was quite successful, and eventually Drake's label stepped in to get it removed.

• 47:42Kevin Roose?

  Right.

• 47:43Casey Newton?

  And our question at the time was sort of, what happens now with AI music, right? Are we gonna see a lot more of this thing?

• 47:48Kevin Roose?

  Right, because these AI synthetic voice tools, they're getting a lot better. You know, when we first started this show, I made like a version of your voice that was synthetic, and it kind of sucked. It was not that good.

• 48:01Casey Newton?

  It was terrible, and it was less than a year ago. This really was not very good, unless you had access to a vast amount of speech.

• 48:06Kevin Roose?

  Right, but now these AI synthesizers, they're getting quite good, and people are able to create very realistic versions of not just like people's voices, but their singing voices as well.

• 48:16Casey Newton?

  That's right, but I think the important thing that happened in April was that when that song went viral, I think we started to understand, oh, there is going to be a market for this sort of thing. And the fact that Drake didn't really sing it, that these aren't his lyrics, isn't gonna stop a lot of people from not just seeking this stuff out, but also wanting to make more songs like it. And what we have seen, I think it's fair to say, has been a summer of debate between YouTube and the labels and artists and individual creators and DJs about how all of this should work. Should you be allowed to make a song with a synthetic version of Drake's voice? Can you post it on YouTube? And of course, what is most important to everyone involved is who gets to keep the

• 49:00Casey Newton?

  money if the thing is successful.

• 49:03Kevin Roose?

  I confess, I have not really been paying that close attention to this area since we did our story on Fake Drake.

• 49:09Casey Newton?

  You're not scouring the Billboard charts every week to see what's hot?

• 49:12Kevin Roose?

  I'm just listening to "Rich Men North of Richmond" on repeat, my friend. It's time for change in this country.

• 49:18Casey Newton?

  All right, we'll get to that in a future episode.

• 49:21Kevin Roose?

  So, um, yeah, what's been going on?

• 49:22Casey Newton?

  Here's the thing. I was, uh, I was browsing YouTube the other day, as I sometimes do. And I love to listen to music on YouTube, but almost always it is music that has been like written and recorded by a mainstream artist, right? What I saw for the first time the other day was YouTube, YouTube's famous algorithm recommended to me an AI song. And I listened to it.

• 49:41Kevin Roose?

  What was it?

• 49:42Casey Newton?

  Well, um, actually, do you just want to hear it right now?

• 49:44Kevin Roose?

  Yeah.

• 49:44Casey Newton?

  Okay. Now, keep in mind, I never searched for any of these terms. This was just presented to me as something I might like. Uh, so why don't we go ahead and hear this first clip that the YouTube algorithm recommended to me?

• 49:58Casey Newton?

  Do you recognize the opening?

• 49:59Kevin Roose?

  Oh, yeah, this is, uh, this is Frozen.

• 50:01Casey Newton?

  That's right. Let it go. But maybe not with the original Elsa.

• 50:07Speaker 07

  The snow glows white on a mountain tonight. Not a footprint to be seen.

• 50:14Kevin Roose?

  Yeah, you're right. This is not Elsa.

• 50:16Casey Newton?

  It's not Elsa.

• 50:16Kevin Roose?

  Yeah, this is the touring cast. No, who is this?

• 50:20Casey Newton?

  Let's see if maybe when we get a little bit closer to the chorus, we're able to tell.

• 50:49Kevin Roose?

  This slaps.

• 50:50Casey Newton?

  Right?

• 50:51Kevin Roose?

  Yeah.

• 50:55Kevin Roose?

  Okay, I don't, I, I confess, I do not know who this is.

• 50:57Casey Newton?

  Okay, this is Freddie Mercury from Queen.

• 50:59Kevin Roose?

  No.

• 51:06Casey Newton?

  Can you hear it now?

• 51:06Kevin Roose?

  Yes.

• 51:07Casey Newton?

  Yeah.

• 51:08Kevin Roose?

  That's really good. Yeah. Freddie Mercury famously not alive.

• 51:11Casey Newton?

  No, he tragically died.

• 51:13Kevin Roose?

  Yes.

• 51:14Casey Newton?

  But Queen is still one of the biggest bands in the world. If you go look at their, you know, Spotify monthly listeners. But look, I saw this and of course, my first instinct was, well, that's probably going to be bad. But then my second instinct was I should listen to it because maybe we'll want to talk about it on the show. And so I did. And by the end of the song, I thought it only- Only sounds to me like Freddie in some places. And yet it was still possible. And at the end of the day, it's a catchy song and I enjoy listening to it.

• 51:38Kevin Roose?

  Yeah, that's pretty good.

• 51:39Casey Newton?

  Yeah, so after that, I kind of started to go down the rabbit hole. And I started to hear even more of these AI covers that have been popping up on YouTube. So maybe let's listen to another one. This is from a great channel. I first encountered it on TikTok. It's on YouTube as well. It's called There, I Ruined It. And they do a lot of really fun and weird editing with songs. And increasingly, they've been using AI. And this one is from the legend of Folsom prison himself, Mr. Johnny Cash.

• 52:09Speaker 08

  Hello, I'm not Johnny Cash.

• 52:16Speaker 08

  I'm a Barbie girl in a Barbie world. Life is plaster. It's fantastic. You can brush my hair. Undress me everywhere.

• 52:32Casey Newton?

  Now, this sounds amazing to me.

• 52:33Kevin Roose?

  That's really good.

• 52:34Speaker 08

  Come on Barbie, let's go party. Cause I'm in a Barbie world.

• 52:40Casey Newton?

  Let's, let's maybe just hear one more. And this one is also very beautiful and it may unlock some emotions in you. You know, maybe if you feel the tears come, just let them come. Cause I think it has an important message to share. It's from a channel called AI Covers, uh, which seems to be promoting one of these companies that is out there creating AI voice models. But uh, let's, let's give that one a listen to.

• 53:06Kevin Roose?

  Here we go. This is sounding Rascal Flatts-ish.

• 53:08Casey Newton?

  Yeah, very Rascal Flatts coded.

• 53:10Kevin Roose?

  Yeah.

• 53:10Casey Newton?

  Yeah.

• 53:26Kevin Roose?

  Who is this?

• 53:27Casey Newton?

  I would say this is an animated character.

• 53:34Kevin Roose?

  Is this? I genuinely do. Is this, um, is this pinky?

• 53:40Casey Newton?

  No, it's not pinky.

• 53:49Casey Newton?

  It's Eric Cartman from South Park.

• 53:51Kevin Roose?

  Oh, it's Cartman.

• 53:55Casey Newton?

  It's Eric Cartman singing "Life is a Highway," Rascal Flatts version.

• 53:58Kevin Roose?

  That's really good.

• 54:00Casey Newton?

  Yeah, and by really good, of course, you mean it's not, it's, it's something you want to turn off.

• 54:04Kevin Roose?

  Yeah, yeah, I would like that out of my ears immediately, but I do appreciate the creativity.

• 54:08Casey Newton?

  Sure. So, look, on one hand, everything that we've just heard, I think, is an evolution of the mashup. I, I used to love mashups in the, in the 2000s in particular. DJs would take two different tracks and they'd sort of get the stems and they'd get a vocal from another song and they slam them together.

• 54:24Kevin Roose?

  Right, and it's very like Girl Talk. You remember a Girl Talk?

• 54:26Casey Newton?

  Yes, I love Girl Talk. Saw Girl Talk live on multiple occasions.

• 54:29Kevin Roose?

  Wow.

• 54:30Casey Newton?

  Yeah. So, look, at the same time, there is the potential for so much more here than just what artists were doing with mashups in the, in the early 2000s. Because now, an artist's voice can essentially become a new creative tool. You can inhabit the voice of an Eric Cartman, or a Johnny Cash, or a Freddie Mercury, and just have them go nuts singing whatever song you like.

• 54:52Kevin Roose?

  Right, so it seems like this kind of thing is going to become ubiquitous, and some of these AI-generated songs will be kind of novelties, like, haha, isn't it funny to make like Eric Cartman sing "Life is a Highway." But I imagine that as with Drake and his fake song, and The Weeknd, and the tussle between their music label and the platforms, I imagine this is going to be very controversial because like Freddie Mercury is not alive, but Queen's record label still presumably has a vested interest in like making money when their voices are used.

• 55:25Casey Newton?

  That's right. And so that brings us pretty naturally to what actually happened this week that I think has put this story back in the news. And that's that YouTube and Universal Music Group, which is one of the major record labels, they announced what they call the Music AI Incubator, which they have outlined for us in a couple of blog posts. Basically, what YouTube is going to be doing is working with the UMG artists and songwriters and producers to use AI music tools and just kind of get a conversation going. They've got a bunch of artists who are participating so far, including the estate of Frank Sinatra. But the most important thing is that YouTube has also hinted at creating a system similar to Content ID.

• 56:10Casey Newton?

  Now, you've written about YouTube for a long time, so you know what Content ID is.

• 56:13Kevin Roose?

  Yeah, Content ID is basically if you like use a song in one of your videos as a background track, or you're singing along to it. Like, basically YouTube has a way of kind of stamping that such that it gets credited and royalties get paid to the artist who made that song.

• 56:28Casey Newton?

  Now, what's interesting, though, is that if YouTube develops a version of this for AI-generated tracks, essentially something that would catch a fake Drake song the second it was uploaded, so that royalties could be immediately distributed to Drake or his record label, then we start to get into a really interesting and tricky legal world.

• 56:51Kevin Roose?

  Yeah, so I have some questions about this, because I have not been following this story super closely. So, say that I am an internet creator and I want to make a video in which Frank Sinatra sings Vampire by Olivia Rodrigo, Song of the Summer.

• 57:06Casey Newton?

  Sure, Song of the Summer.

• 57:07Kevin Roose?

  So, can I do that? Or will YouTube take my video down? And what does this new program change about that?

• 57:14Casey Newton?

  Great question. So, currently, there is no law that says you can't train an AI on someone's voices to create a synthetic version. It's being litigated, but it's not clear. And I think what is scary, if you're somebody who just wants people to be able to be creative and not to have major labels telling them that they can't be creative, is that you can imagine a world where, in the not-too-distant future, you're a young creator and you create a song, and maybe you're not even trying to sound like Drake, but you upload it to YouTube and YouTube's new AI detector says, hmm, this sounds enough like Drake that we're going to start giving royalties to the Universal Music Group. And who has the power in that situation?

• 57:58Casey Newton?

  It is not going to be the teenager that uploads the fake Drake song. That person does not have legal representation. They are not going to fight this. They're just going to get their thing booted from YouTube. And then, you know, if it's a good song, they're going to have to go figure out a way to post it somewhere else.

• 58:12Kevin Roose?

  Now, obviously, all of these moves that YouTube and UMG are making are sort of defensive, right? They're saying like, we don't want this technology to sort of become a free for all Wild West scenario where anyone can make any song with any person's voice.

• 58:28Casey Newton?

  Yeah.

• 58:28Kevin Roose?

  Right, right. We want to be paid for this. We want to sort of keep control of this.

• 58:32Casey Newton?

  So let me say, a lot of my thinking on this comes from my friend Neelai Patel, editor of The Verge, who wrote a really great piece about all of these issues for The Verge this week. And what Neelai points out is that when it comes to AI, YouTube and Google, which owns YouTube, are taking very different approaches. So let me explain this. So when it comes to music, YouTube is saying, well, the artist's voice has value. We want to protect that value. We might develop a whole system to determine when someone is using that voice so that the value can be apportioned and we can keep our record label partners happy.

• 59:12Kevin Roose?

  Eric Hartman must be paid fair wages.

• 59:14Casey Newton?

  At all costs. You do not want to upset Eric Hartman, okay? And then there is the World Wide Web, which is populated by publishers who are publishing text of all subjects under the sun. And what is Google doing with that content? They are slurping it up into a large language model. They are not paying anyone for it, but they are going to use it to create the next generation of Google search, which they will then monetize in any way that they can think of. And the publishers might not see any compensation for that at all.

• 59:49Kevin Roose?

  Right, okay. So at YouTube, they are saying that artists whose voices are synthesized should be entitled to some... Compensation for the act of their voice being sort of fed into these synthesizers and used to make new music.

• 1:00:04Casey Newton?

  It sure seems like that is the direction that we are heading with YouTube and music.

• 1:00:08Kevin Roose?

  And then, on the other side of the house, at Google, you have the text-based AI models that are hoovering up information from the internet, using them to train AI models, and using that to create synthetic text. But without that sort of financial and legal link between the outputs and the original things that were used to train it, right? So, most publishers, whether they're newspapers, or magazines, or blogs, or book publishers, they are not, under the current model, being compensated when, say, someone asks Bard to generate a news story that draws heavily on those sources.

• 1:00:49Casey Newton?

  Absolutely.

• 1:00:49Kevin Roose?

  Am I getting that right?

• 1:00:50Casey Newton?

  Yes, completely.

• 1:00:51Kevin Roose?

  So, what do you think explains the very different treatment that Google slash YouTube is giving AI between musicians and publishers?

• 1:01:00Casey Newton?

  This is a really simple business story about who has leverage, right? If you're YouTube and you lose access to even one of the major labels, you alienate a bunch of customers, and if they can find-

• 1:01:12Kevin Roose?

  Why? Tell me why that is.

• 1:01:13Casey Newton?

  So, because, let's say you're a kid, you can't afford a Spotify subscription. When a new Olivia Rodrigo song comes out, you go to YouTube to listen to it. All of a sudden, you can't find it there. But guess what? TikTok still has a deal with major labels, because maybe they've taken a stronger stance on this than YouTube. All of a sudden, kids go spend their time on TikTok, and YouTube has a deal.

• 1:01:33Kevin Roose?

  Well, and you're jogging my memory here about something that happened years ago at YouTube, which is that the music labels fought back against not just, like, people listening to music videos on YouTube, but actually, if like, if you were doing a cooking video, and you had, you know, a Bruce Springsteen song playing in the background of the video, even if the video had nothing to do with Bruce Springsteen, Bruce Springsteen's label would get very upset about that and wanted to be paid for that. And so YouTube actually struck deals with the music labels to allow that.

• 1:02:03Casey Newton?

  And by the way, that's what Content ID does. It is scanning for Bruce Springsteen. In the background of your other videos to ensure that the rights holder can get paid if they flag it.

• 1:02:10Kevin Roose?

  Right, so that is part of the sort of truce that YouTube formed with the music labels is like, we will pay you royalties for the usage of your songs on YouTube. And in return, you can't go like getting people's cooking videos pulled off YouTube because they used a Bruce Springsteen song in the background.

• 1:02:29Casey Newton?

  Right, right. You know, YouTube, it's in their interest to make these things very easy on the people who are uploading videos because if it's super hard and your stuff is getting yanked down every time you try to do anything, eventually you stop doing it and YouTube withers and dies.

• 1:02:41Kevin Roose?

  So if YouTube antagonizes the music labels, they risk not only having like these official music videos getting pulled off YouTube, but also like a much more annoying world for anyone who is trying to make a YouTube video that has copyrighted music in it.

• 1:02:55Casey Newton?

  Absolutely. And on the upside, there are only a tiny handful of these major labels. So you only need to strike three or four, maybe five deals, and you'll be able to get access to the vast majority of all the music that people are going to use.

• 1:03:07Kevin Roose?

  I see.

• 1:03:08Casey Newton?

  So then you go over to the tech side of the equation. And we live in a world where Google is maybe one of the main forces keeping what remains of the media industry afloat. And the reason is that when you search for things on Google, Google is directing a lot of traffic to news sites, which news sites are then able to convert into advertising revenue and into subscription dollars. And because so much of their traffic is derived from search, publishers will do essentially whatever Google says. So this is a case where Google has all of the leverage and publishers have very little.

• 1:03:49Kevin Roose?

  So this seems like what you're saying is we need music labels for writers.

• 1:03:52Casey Newton?

  Right, but it's hard because if you own the rights to Olivia Rodrigo's Vampire, for example, Song of the Summer, that is a hugely valuable thing that, you know, thousands of creators might want to use in their videos. One single story at the New York Times, at the platformer, as great as we would probably argue that they are, it's not going to have the value of even one song in a major label's catalog.

• 1:04:19Kevin Roose?

  Well, speak for yourself. My, my stories are read out loud in the background of many thousands of mukbang videos. And they are a huge part of the fabric of the internet, so.

• 1:04:30Casey Newton?

  So, but this, this just seems to me to be untenable, right? It's like, does a creator have rights or, or do they not? And why is it so different between music and tech? I understand the business reason why it's different, but as a principle, it seems to me that those things are very similar.

• 1:04:48Kevin Roose?

  What do you think should happen here? Like, what is the fair resolution of all this AI-generated music stuff?

• 1:04:54Casey Newton?

  Fortunately, you know, Kevin, I know this whole time you've been thinking, Casey, this seems very complicated. I hope you have a simple solution to it. And the good news for you is that I do.

• 1:05:01Kevin Roose?

  What's your solution?

• 1:05:02Casey Newton?

  Going forward, we have to sing all of our articles.

• 1:05:07Casey Newton?

  If we can copyright all of, if we can get a major label to license us and publish everything we write, we're golden, baby.

• 1:05:16Kevin Roose?

  Casey, I would like you to pull up yesterday's version of your newsletter and do a rendition and I'll find a karaoke track for it.

• 1:05:23Casey Newton?

  Well, thank God I wrote it in rhyme.

• 1:05:25Kevin Roose?

  OK, I'm gonna use, what, what style do you want to use for this? Do you want it like trap or indie folk?

• 1:05:32Casey Newton?

  Oh, indie folk, maybe something like The Lumineers, maybe?

• 1:05:35Kevin Roose?

  OK, so I'd like you to sing over the karaoke version of The Lumineers' "Ho Hey."

• 1:05:40Casey Newton?

  All right, are we gonna play that for me?

• 1:05:42Kevin Roose?

  Yes.

• 1:05:46Casey Newton?

  Well, today, let's talk about how an idea that we once took for granted on social networks is now under threat. Facebook, YouTube, and TikTok all grew on the strength of recommendation algorithms that learn to predict your interests better than even you could yourself. And then it would just go on from there.

• 1:06:08Kevin Roose?

  They're calling this the real song of the summer, actually.

• 1:06:14Kevin Roose?

  Casey, I think you actually just got signed to Universal Music Group because of that. There's an A&R scout on the line and they're interested in a multi-record deal.

• 1:06:23Casey Newton?

  This guy's got what the younger generation needs.

• 1:06:27Casey Newton?

  He's gonna be packing shopping malls all over the country.

• 1:06:48Speaker 00

  Support for this podcast comes from Dell Technologies. It's time to put AI to work. Is your business ready? The challenge isn't getting started with AI. It's scaling beyond pilots while maintaining control of your data, governance, infrastructure, and costs. Dell AI Factory provides the integrated foundation you need to scale AI securely and efficiently with one trusted partner. Dell, AI on your terms. From idea to impact. Learn more at dell.com/yourwaytoAI. That's dell.com/yourwaytoAI.

• 1:07:22Speaker 03

  Building and scaling AI today can feel pretty chaotic, mostly because teams are juggling too many fragmented tools at once. That's where OutSystems comes in. OutSystems gives you one unified Agentic Systems Platform to manage your entire portfolio of agents, apps, and workflows. You get to innovate at the speed of AI, but with the security, governance, and control your enterprise actually needs. And the results are already there. A major manufacturer used OutSystems to build a multi-agent system that analyzes blueprints, and a global bank cut their development time by 60%. Own your Agentic future today at outsystems.com/nyt.

• 1:07:58Speaker 04

  AI spend is growing fast, but most businesses still can't see exactly where that money is going. Ramp gives businesses visibility and control across AI providers with realtime guardrails by team and model, helping ensure spend goes to the highest ROI areas. Stop guessing where your AI spend is going. Get started with Ramp. And if you're new to Ramp, you can get $250 off at ramp.com/hardfork. Go to ramp.com/hardfork. Ramp.com/hardfork.

• 1:08:33Kevin Roose?

  Hard Fork is produced by Davis Land and Rachel Cohn. We're edited by Jen Poyant. This episode was fact-checked by Caitlin Love. Today's show was engineered by Alyssa Moxley. Original music by Dan Powell, Marian Lozano, and Casey Newt.

• 1:08:47Casey Newton?

  Shoo-bee-doo-bop.

• 1:08:50Kevin Roose?

  Special thanks to Paula Schuman, Puywing Tam, Nell Galogly, Kate LaPreste, and Jeffrey Miranda. As always, you can email us at [email protected].

• 1:09:00Casey Newton?

  Let's keep those AI covers coming.

• 1:09:43Speaker 03

  Building and scaling AI today can feel pretty chaotic, mostly because teams are juggling too many fragmented tools at once. That's where OutSystems comes in. OutSystems gives you one unified agentic systems platform to manage your entire portfolio of agents, apps, and workflows. You get to innovate at the speed of AI, but with the security, governance, and control your enterprise actually needs. And the results are already there. A major manufacturer used OutSystems to build a multi-agent system that analyzes blueprints, and a global bank cut their development time by 60%. Own your agentic future today at outsystems.com/NYT.