The iPhone Fold could make concerts even worse

This week Apple announced a Mac Mini made for AI and a Mac Studio made for AI, both with faster M6 and M5 Pro chips made for AI. But that's all an amuse-bouche to Sept. 9's (expected) main course: the long-awaited folding iPhone. Nilay Patel, Jake Kastrenakes, and David Imel run through all of this week's Apple news, including the most important story: a surprise discount on the legendary polishing cloth. Then, they react to Meta's settlement in its latest kids safety trial, geek out about Grand Theft Auto VI with the Hype Desk's Ashley Esqueda, check out the Pokémon Fitbit, and decide if Nvidia just saved the global economy. Further reading: ⁠File a comment with the FCC⁠ ⁠Apple announces September iPhone launch event⁠ ⁠Apple’s new M6 chip gets more cores and more AI compute⁠ ⁠Apple launches new Mac Studios with its ‘most powerful chip ever’ — the M5 Ultra⁠ ⁠Apple’s new Mac Mini has fresh M6 and M5 Pro chip offerings — and higher prices⁠ ⁠Apple’s ‘new’ polishing cloth is the same except $10 cheaper⁠ ⁠Meta agrees to heavy restrictions on teen users in major lawsuit settlement⁠ ⁠Meta is planning an ad blitz urging TikTok and YouTube to follow its lead.⁠ ⁠All the ways Instagram and Facebook are changing for teens⁠ ⁠Rockstar finally responds to ‘heartbreaking’ GTA 6 leaks⁠ ⁠Fierce Network: FCC opens comments on E-Rate as the program gets attacked in court⁠ ⁠Nvidia is about to be a hundred-billion-dollar-a-quarter company⁠ ⁠Panic is passing Playdate tariff refunds on to customers.⁠ Subscribe to The Verge for unlimited access to theverge.com, subscriber-exclusive newsletters, and our ad-free podcast feed. We love hearing from you! Email your questions and thoughts to [email protected] or call us at 866-VERGE11. 0:00 Welcome to the Vergecast01:26 Apple Mac AI Hype02:26 Mac Mini Agent Craze06:32 Mac Studio vs Nvidia11:43 Price Hikes and Cloth17:01 iPhone Event Invite17:38 iPhone Fold Debate21:30 Camera Crash Out26:57 Meta Settlement Breakdown28:59 First Amendment Fallout36:59 Age Verification Push39:30 Filter Rules and Loopholes44:11 Will Teens Just Switch Apps45:20 Reels Versus Shorts46:35 Government Next Steps47:39 Break And Reset47:50 GTA VI Showcase54:29 Leaks And Spoilers57:12 Can GTA Save Games01:00:51 GTA Online Money01:02:04 Brendan Carr is a Dummy01:03:45 E Rate Fight01:08:46 Nvidia Earnings Hype01:17:50 Pokemon Sleep Fitbit01:22:41 Waymo Versus Tesla01:28:34 Decoder And Goodbye Learn more about your ad choices. Visit podcastchoices.com/adchoices

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

• 0:00Speaker 00

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• 1:37Speaker 02

  Hello and welcome to the Vergecast, flagship podcast of Lake America. Federally mandated database change that our nation's mapmakers will now have to contend with. I'm your friend Neelai Patel. Jake Kasznakas is here.

• 1:49Speaker 03

  Exciting week, Neelai. Glad to be here.

• 1:50Speaker 02

  So much going on. David Bell is here. Welcome back, David.

• 1:53David Pierce?

  Hi, happy to be back.

• 1:55Speaker 02

  We didn't scare the audience away with our camera crash out last week.

• 1:59David Pierce?

  No, there was a lot more I would have loved to crash out with you about, but...

• 2:02Speaker 03

  There's still time, guys. We don't have to talk about Macs. We could just go straight into photos.

• 2:07Speaker 02

  Jake, they didn't notice that we were on time last week due to your interference.

• 2:10Speaker 03

  I know everyone is mad at me for not letting the show go for another two hours. It would have been fun.

• 2:17David Pierce?

  I would have talked about 3D models of fake tracks of phones on video, and it would have been great.

• 2:22Speaker 03

  Oh, this is just our Slack chats put into all podcast form.

• 2:26Speaker 02

  The problem is, and this has come up, you know, years to begin, and all the hosts change, but the demand that the Vergecast be ever longer exists. The problem is that it just slowly fades away into like a video of me crying about computers.

• 2:41David Pierce?

  Which I think people would also be okay with.

• 2:43Speaker 02

  That's just the last 30 minutes of your four-hour livestream. It's just me looking at like an original Macintosh and being like, what we lost?

• 2:52Speaker 02

  It's not good.

• 2:52Speaker 03

  This is how we got banned from Twitch.

• 2:54Speaker 02

  See you Macintoshers. There's a lot going on, Jake. What are we doing today?

• 2:57Speaker 03

  Yeah, there's a lot to talk about. There were some big ban of news. Nvidia might have saved the US economy. But first, we've got to talk about Apple. Big week for Apple news. So Apple did two things this week. One was announce the next iPhone event, and we'll talk about that in a little bit. But first, they announced new Macs. So there's a new M6 chip and the M5 Ultra. There's new Mac Studio and Mac Minis. I'm going to read Apple's descriptions of all the new devices. And I wanted you guys to tell me what stands out here. All right? So it said, "The Mac Studio is, quote, 'the ultimate desktop for on-device AI and the most extreme pro workflows.' The Mac Mini, quote, 'delivers a massive leap in AI performance, supercharging the

• 3:40Speaker 03

  leading desktop for always-on agentic computing.' And the M6 and M5 Ultra deliver, quote, 'a big leap in performance and AI compute.'" So what market are we looking at here?

• 3:51David Pierce?

  Preschools. For sure.

• 3:55Speaker 02

  Well, at least we've gotten away from every computer for creators and creators alone.

• 3:59Speaker 03

  This is true. That's a nice improvement.

• 4:01Speaker 02

  That's something.

• 4:02Speaker 03

  The thing that I am really interested in here is the way that most people use AI today is through cloud compute.

• 4:10David Pierce?

  Yeah.

• 4:10Speaker 03

  And Apple has gotten really into bragging about their local AI compute possibilities. And I am interested in how many people are buying these devices for that purpose, right? If they're advertising a MacBook Air as being, you know, the leading machine for AI compute, I would be very confused. But the Mac Mini is sort of the sweet spot, right? Like, those were blowing up at, you went to like ClawCon, right? The OpenClaw convention? Is that still, are the Mac Minis still the hot device for this local AI stuff?

• 4:42David Pierce?

  So I saw some people tweeting a couple of weeks ago, like, "Remember when everyone bought Mac Minis for OpenClaw?" But all of the replies were, "But it's still my favorite computer I own, and I don't regret buying it." So Apple is in this kind of unique position where it's like, people are starting to sort of toy with this idea of local models. You know, maybe the M4 Mac Mini was not the fastest local model runner on the planet, but people see a day in the future where they will relinquish their chains from Anthropic and OpenAI, and they're going to be able to run mini Macs or whatever on their 512GB Mac Studio. So I feel like Apple's kind of just dipping their toe in that market and being like, "We

• 5:24David Pierce?

  know people want this, and it's an aspirational idea to be able to unchain yourself from OpenAI and Anthropic." Maybe we can kind of sell to those people, but if we're not there yet, we can still sell to all the same people we've been selling to for the last 40 years.

• 5:38Speaker 03

  And it sounds very cool that they have all this new additional AI computability. I mean, this is the direction that Apple's headed in some ways, right? Like, macOS 27, my understanding is there is already a split happening in where the compute is. There's some serious stuff that happens locally and some that's in the cloud. Neelai, is your impression that Apple wants this stuff to be happening locally as part of their sort of big privacy promises? Or is this just sort of marketing still?

• 6:06Speaker 02

  This is a lot of marketing. I would actually pull apart the Mac Mini and the Mac Studio.

• 6:10David Pierce?

  Yeah, that's fair.

• 6:11Speaker 02

  So the Mac Mini delivers a massive leap in AI performance, supercharging the leading desktop for always-on agentic computing. That's, they're just talking about OpenClaw. And a leap in AI performance is like meaningless on this scale. Like, some AI is happening here. Maybe you're running a local model somehow, but oh, the leading desktop for always-on agentic computing is like, a bunch of people bought this to run OpenClaw. There's a new one called Instinct, which just raised a bunch of money. And it's a privacy nightmare from whatever you can tell. Like, they will literally train on your user data, and they got to fix it. But like, you're going to buy a small computer to sit in the corner of your house and do computer stuff that you command over WhatsApp or iMessage or whatever. Like, that's the Mac Mini.

• 6:54Speaker 02

  And I think that the AI claim there about performance has almost nothing to do with always-on agentic computing. Like, I think that that's one sentence with two parts, and Apple is just excited for you to conflate the two parts.

• 7:07Speaker 03

  The OpenClaw fans were enough to, what, put the Mac Mini on back order for months? Yeah, but this is also a pretty small market.

• 7:16Speaker 02

  It's a small market, but what I'm getting at is, you know, if you bought a cheap Windows PC with enough power to sort of be a computer, you like, you would spend a lot of tokens with Claude just trying to close Pop-ups.

• 7:29Speaker 03

  Right, right.

• 7:30Speaker 02

  Which is like not a problem on the Mac. And that's like, honestly, a reason I think a lot of people bought these products.

• 7:35Speaker 03

  In the footnotes of that press release, they're comparing it to the M1. So these leaps are not all they're made out to be.

• 7:45Speaker 02

  Yeah, well, I'm just saying, I think the Mac Mini is one kind of product, and it is, in many ways, the best sort of price-performance out-of-box computer to let a thing like OpenClaw run on, which is the always-on agentic computing. And most of those tokens are being burned in the cloud to control your computer.

• 8:02Speaker 03

  Yeah.

• 8:03Speaker 02

  Right? And you're just giving Claude a computer, and it happens to a Mac Mini. So that's one thing. The Mac Studio is the ultimate desktop for on-device AI is a wild claim. Just a wild claim. Because another kind of desktop you can buy is a PC with an Nvidia GPU in it.

• 8:24Speaker 03

  Right.

• 8:25Speaker 02

  And I don't think there's a world in which Apple is truly claiming that the M5 Ultra compete with high-end Nvidia GPUs at inference. If that's what they're claiming, then we should run some benchmarks and find out. But I don't, I don't think that's the thing that they're saying. And I'm very curious to see, in this context, what that means. It's the ultimate desktop for the most extreme pro workflows, which is the other thing they're saying? Yeah, I buy that. But that's the thing it's been good at for ages. But the ultimate desktop for on-device AI, like, I feel like a lot of people running actual GPUs on their desktops have a lot to say about that.

• 9:05David Pierce?

  Probably true. They do offer a 512GB RAM model now. They do keep upping the amount of RAM that they can have on these things. So I think they're trying to court those people? I mean, I ran, I tried to run OpenClaw. I couldn't figure out how to really get it to work. We didn't spend enough tokens.

• 9:23Speaker 02

  Wait, you didn't ask Claude to configure your open cloud for you? This is the loop you have to give yourself up to.

• 9:28David Pierce?

  Yeah, I'm not Silicon Valley-pilled enough for this, but.

• 9:31Speaker 02

  You have to set up one agent to set up your other agent.

• 9:33David Pierce?

  Yeah, yeah, exactly. But you have to download, you know, this large local model, you know? And I was running this on like a Surface Book 2 from 2015 or something. Could not really run a large local model on there with eight gigs of RAM. So I feel like they're trying to court those people that are like, I want to run the two trillion parameter models. As far as inference speed, I'm not sure, you know, in comparison to like Nvidia's GTX computers or whatever they're called.

• 10:03Speaker 03

  Well, this is what's so interesting. Like, I combed the announcements to see all the different specs they're highlighting and the benchmarks and how, what percentage better all these things are. And you know how Apple is with fake charts and numbers. And when it came to the M5 Ultra chip, which is what's in the Mac Studio, where you can spec it out with if you really want power, they had almost nothing when it came to AI, right? Which I think speaks to Nilay's point about, they're just trying to add some AI hype there, right? That the Mac Studio is by all means a very capable computer, I think for creatives who are doing video editing.

• 10:39David Pierce?

  Yeah.

• 10:40Speaker 03

  I don't know that it's, it's really the thing for running LLMs and doing inference.

• 10:45David Pierce?

  Yeah, probably true. Probably true.

• 10:47Speaker 02

  Yeah. I mean, we're gonna find out. They're gonna come out, people are gonna put them into the test. And certainly we'll see if the upgraded neural engine can compete with the blah, blah, blahs when you're running Quen, right? Like, there's a whole bunch of stuff you can do with these computers that are interesting. I think in the context of them also announcing the iPhone event this week, it's a pretty big signal that that event is packed.

• 11:07David Pierce?

  Yeah.

• 11:07Speaker 02

  And here are the new Macs. And these Macs just kind of sell themselves.

• 11:12Speaker 03

  Yeah.

• 11:13Speaker 02

  Right? Like, you don't need to go market a Mac Mini or a Mac Studio. The people who want to buy them can buy them. And especially the people who are super serious about doing local AI workloads know exactly what they want to buy.

• 11:24David Pierce?

  Yeah.

• 11:24Speaker 02

  Like, those are not consumer products yet. That's not a thing regular people do. It's a thing people who are really invested in wanting to do it are doing right now. And they're having fun. I'm not saying they're not having fun, but they know exactly what computer they want to buy.

• 11:37Speaker 03

  I'm also extremely curious exactly how much power you can get out of open local models that you can run yourself these days, right? You can do something on the Mac Mini. You can do something a little bit better on a Mac Studio if you spec it out. But at some level, these open models are, they just, they don't hold a candle to the tip-top flagship models from OpenAI and Anthropic. And if you want to do the beefiest work, you're probably just paying those. And you're running your, whatever agentic harnesses, you can have 100 different agents in a bot swarm, you know, run all of your coding for you.

• 12:16David Pierce?

  I think it kind of depends on what you're benchmarking against, right? Because if it was like, I think it was Mini Macs or the Chinese model that basically was open source and free and definitely distilled on Anthropic, because when you asked it what its name was, it says, "Hi, I'm Claude." That, you know, whatever benchmarks they released were like 95% of what Anthropic had at the time. And I think that, I think what people are buying these $18,000 computers for is the dream that they can be freed of this leash. Whether or not that's actually true.

• 12:46Speaker 03

  I feel that.

• 12:47David Pierce?

  Is a whole nother story.

• 12:48Speaker 03

  I, I mean, I would dramatically prefer to talk to these things locally, and it just does not feel like an option. And to the extent that I even could run something on my computer that is, you know, somewhat capable, I'm like, listen, this, this computer is gonna fall apart if I ask it too many questions for this LLM. Like, I, I don't want to destroy my MacBook Air just to get some, some bad AI answers.

• 13:18David Pierce?

  Yeah.

• 13:18Speaker 03

  Okay, so a couple other things about these. Number one, we should point out, there are some price hikes here. Everything's getting more expensive. They actually very quietly hid a pretty big price hike for the Mac Mini. All the news is that it went up by $100, but that's because they dropped the 256GB config this spring, and then they added it back. So it's actually a $300 price hike, which is, I think, you know, one of, one of the bigger ones for Apple. I think we're expecting probably some more next week.

• 13:49David Pierce?

  Yeah.

• 13:50Speaker 03

  There was one price cut, though. And have you guys seen this?

• 13:54David Pierce?

  I've not seen it in person.

• 13:55Speaker 03

  This is big news. This is big news. It is the Apple polishing cloth.

• 14:00Speaker 03

  It is now $9 instead of $19. I have heard the legend of this cloth. It is allegedly a very good cloth.

• 14:07David Pierce?

  It is. It's really good.

• 14:08Speaker 03

  You've used it?

• 14:09David Pierce?

  Yeah, because it comes with like a few different expensive Apple products you can buy. It comes with it. And it's, it's like, it's beyond microfiber. It's nano-fiber.

• 14:17Speaker 03

  Nano, oh.

• 14:18David Pierce?

  However, it is.

• 14:19Speaker 03

  Is that real?

• 14:20David Pierce?

  No.

• 14:20Speaker 03

  They got.

• 14:21David Pierce?

  No. They would have tried to find it.

• 14:23Speaker 03

  My god.

• 14:24David Pierce?

  But it is very good at polishing things that are already clean.

• 14:28Speaker 03

  How, how is it, how do you know it's polishing, then?

• 14:31David Pierce?

  Well, that's, wouldn't that be what the polishing is?

• 14:33Speaker 03

  Oh my god.

• 14:34David Pierce?

  You know, getting the dirt and grime, no. You gotta do, you gotta use something else. But if you want to polish your screen, which is why it has compatibility chart, that's what it's for. But it is a good, non-patented nano-fiber cloth. Yeah.

• 14:48Speaker 03

  That's very good.

• 14:49Speaker 02

  Wait, hold on. I have a number of questions to ask you. Are you, are you really sitting on the word polish as a, like, definitionally important word here? Because actually, to polish means to slightly, like, remove an amount of material, like, do you know what I mean?

• 15:05David Pierce?

  That's fair. Yes, that's true.

• 15:07Speaker 02

  I don't think that's happening on this iPhone screen.

• 15:10David Pierce?

  No, no.

• 15:10Speaker 02

  Right? It's just wiping grease away.

• 15:12David Pierce?

  Grease, grease and fingerprints. Yeah, yeah.

• 15:14Speaker 02

  All right. I'm just saying, if we're calling it a polishing cloth, what we're technically doing is very finely sanding our phones.

• 15:21Speaker 03

  I think that would be.

• 15:22Speaker 02

  Maybe that's why there's a compatibility list. Like, these are the products that you can finally abrade in order to achieve a mirror-like shine.

• 15:30Speaker 03

  For the record, it only goes back to the iPhone 5. So if you're, if you're going earlier than that, your screen will be damaged.

• 15:36Speaker 02

  Here's what I want you to do, David. I want you to make one of those time-lapse videos. It's like polishing this phone until it's a mirror, but instead of like, one of those like cast iron pans, it's just you and the polishing cloth. And it's like, every day you give it a wipe, but it's like 10,000 years long.

• 15:53David Pierce?

  Yeah.

• 15:53Speaker 02

  Think about it.

• 15:53David Pierce?

  My, my, my big question is, why did they reduce the price by like 60? Like.

• 15:59Speaker 02

  Because they had to say something on a price cut.

• 16:01David Pierce?

  Do you think that they actually, I mean, it did get them the goodwill that they hopefully were probably going for. But is that the reason, do you think, why they cut the price on this thing from $19 to $9?

• 16:11Speaker 03

  Listen, I'm just gonna say, we reached out to them and said, "You, you gotta tell us what happened here." "Did the materials change? Did the product change? Is the size different?" They would not comment on the record. So I don't know the truth. We're gonna have to put this thing to the test. It's the only way to find out the truth about this.

• 16:28David Pierce?

  I mean, ironically, it did kind of make people just talk about it, which takes away from as much noise about how much expensive, how expensive everything else got.

• 16:36Speaker 03

  You know, there's some goodwill.

• 16:37Speaker 02

  No, here's my, I mean, I, I'll just do my like Tim Cook supply chain spreadsheet conspiracy theory.

• 16:44David Pierce?

  Yeah, let's go.

• 16:45Speaker 02

  So you gotta imagine Tim Cook, it's his waning days as Apple CEO.

• 16:51Speaker 02

  Right?

• 16:51Speaker 03

  His legacy.

• 16:52Speaker 02

  He's like, "What, what is my legacy gonna be? I gotta set, I gotta set this kid up for success. He doesn't know what's about to hit him." And he, he, he opens Excel in his Vision Pro, because he uses every Apple product every day. So he's, puts on the Vision Pro and he's got like 40 Excel windows open in, mirroring, obviously, on his Mac Studio. And he's looking at where all of the margins for Apple products are. And he's like, "Man, I can't charge a 400% margin on a RAM upgrade on a MacBook anymore. The prices are through the roof. That's gone. Where am I gonna reclaim this margin?" So then they reprice the storage.

• 17:31Speaker 02

  And they, they bring back 256 gigs, but it's a huge price increase. And he's like, "All right, I need to get some goodwill." Like, "I'm, I'm not gonna sell accessories, dongles at 200% margin anymore, because I'm gonna, I'm gonna build in enough overhead on the storage and the RAM to make sure that further price shocks don't knock John off his game." So he's just, he's just moving the cells around.

• 17:58David Pierce?

  Yeah.

• 17:58Speaker 02

  And he's like, "All right, we're bringing down polishing cloth. I don't need to make the 10 extra dollars here, because I'm gonna make 300 extra dollars on storage to hold this over until this market stabilizes." And he's just saying all this to himself in his very charming Southern drawl, alone in his office in the Vision Pro in the dark.

• 18:16Speaker 03

  And, and this is why Apple's share price is through the roof.

• 18:20David Pierce?

  Yeah.

• 18:20Speaker 03

  Is that kind of a superb supply chain management?

• 18:25Speaker 02

  I'm so excited about our new RAM prices. That's what he's saying.

• 18:29Speaker 03

  Yes.

• 18:30David Pierce?

  We are so excited.

• 18:31Speaker 03

  So that was on Tuesday, all the Macs, the polishing cloth excitement. Then Wednesday comes, Apple sends out invites for its next iPhone event. Tagline is "Surprise and Shine." They are gonna run out of these someday. They're gonna have to figure out a new approach to the taglines. It's September 9th. It's the Wednesday after Labor Day.

• 18:53David Pierce?

  Notably a Wednesday, because usually they're Tuesdays.

• 18:55Speaker 03

  Yes.

• 18:56David Pierce?

  I don't think that they like press having to fly on holidays. They probably also don't like having their employees have to fly on holidays. That's probably the number one thing.

• 19:03Speaker 03

  So this is gonna be Ternus's first event as CEO.

• 19:05David Pierce?

  Yeah.

• 19:05Speaker 03

  And normally, this is the iPhone and Apple Watch event. We're expecting the full lineups. Some things we're expecting different this year. There's supposed to be no standard iPhone 18, just the Pro models. And we're supposed to get an iPhone Fold. I'm curious, from both your perspectives, it's been a big year for foldable phones. Do we think they are compelling enough yet, right? This is Apple's putting their flag down. They're saying this is enough for mainstream audience theoretically. Do we think that foldables have gotten there?

• 19:37David Pierce?

  The price is gonna be important. I think it's notable that they just recently announced the leasing program. Because they're gonna be leasing a lot of these foldables. Everyone from my hairdresser to my oil change guy has been like, "I love my iPhone. I really love my iPhone, but some of those foldable phones on Android are kind of cool. I might switch over to that if Apple made that." Interesting. There's a lot.

• 20:00Speaker 02

  Really?

• 20:01David Pierce?

  I'm serious. I am serious.

• 20:03Speaker 02

  Really? Your oil change guy?

• 20:05David Pierce?

  My oil change guy.

• 20:05Speaker 02

  You're, you're talking to Trump voters in Diner.

• 20:09David Pierce?

  I mean, it's after it's after I tell them what I do for a living.

• 20:12Speaker 02

  There you go.

• 20:12David Pierce?

  Maybe they're just trying to do reporting. I'm just, I think people are intrigued. I don't, the price is going to be important, very important.

• 20:20Speaker 02

  Yeah. Every time I see anybody with a, like a razor, other people always ask about the razor. Cause they, they're fun to look at.

• 20:28David Pierce?

  Yeah.

• 20:28Speaker 02

  I think the question of whether you can go into an Apple store and look at something that will almost certainly cost north of $2,000.

• 20:36David Pierce?

  Yeah.

• 20:36Speaker 02

  And be compelled to say, you know what I want? An iPad.

• 20:40David Pierce?

  I mean, may, maybe that is a question, right? Are they trying to make this a mainstream product?

• 20:46Speaker 02

  No. No, I think the answer is no. And I think one of the reasons you don't have an iPhone 18 is that you would have no choice but to raise prices on an iPhone 18, whereas keeping the existing base model iPhone lets you keep writing that cost curve down. Like all that tooling is long since paid for.

• 21:00David Pierce?

  Mm hmm.

• 21:00Speaker 02

  Right? Like you don't have to pay new cost into that phone. So you can hold the price, which I think is very important for Apple right now. And at the very high end, you're just like, is this gonna work? Not to be totally rude about it, but it's, it, it feels more like a Vision Pro shot than a future iPhone shot.

• 21:19David Pierce?

  Right. So they, they can introduce this at whatever price they want. They can see what the market will bear. And what the worst case scenario is, they attract a bunch of people to come to their stores and check this thing out.

• 21:30Speaker 02

  Yeah. I, I think that absolutely. Again, we haven't seen it. We don't know how it's gonna work. Mark German had some reporting from Apple employees who've used it and they're like, we love it. And it's like, what else are they gonna say?

• 21:40David Pierce?

  Yeah, yeah.

• 21:41Speaker 02

  But I do think the promise of these devices always rests in how good is it when you unfold it? And we have just seen over and over and over again that people buy these phones and then they do not unfold them.

• 21:55David Pierce?

  Yep.

• 21:55Speaker 02

  They end up using that cover screen a lot. And so maybe the form factor shift here into that more square form, form factor will lead to a new usage pattern. I don't think we've seen enough people with the fold eight to, to know if that actually happened. But that's the new form factor. And I think Apple has to answer a great question about, do you want to use an iPad mini sometimes? And maybe the, I, my, if you're reading this as cynicism, and it's not cynicism, it's just, Apple basically has to sell people an iPad mini. Like the, the software experience here is gonna be, and you get an iPad mini. And whether or not Apple wants to say it, or cop to it, or think about it, it's gonna be the thing people say. Oh, it's an iPad when you open it up. And then that comes with all of that.

• 22:40Speaker 02

  And I'm just very curious to see how that unfolds, both on Apple's side and how they talk about it, and on the consumer side and how people react to it.

• 22:47David Pierce?

  I do think that's gonna make for a very interesting event, beyond the fact that we're getting new Apple hardware, which is not that common. It's gonna be a software event in a way that the September event usually is not, because we're gonna get to see what they are doing to try to make the foldable experience feel like something that is worth opening your phone for.

• 23:05Speaker 02

  David, you wanna have a camera crash out? I can do it. I can do, I can do two of them right now.

• 23:10David Pierce?

  Nila felt me. Nila felt me. Trying to, trying to move along.

• 23:13Speaker 02

  What? Because? No, no, absolutely not. We're, we're gonna sit in this for one minute.

• 23:16David Pierce?

  Cause there's no telephoto? Is that what you're talking about?

• 23:18Speaker 02

  No, the telephoto is one thing. I, I do think having the most expensive phone not have the best camera system is an interesting trade off. Although,

• 23:28Speaker 02

  I think at the high end, not everyone buys the Pro phone because it has the best cameras. That's just,

• 23:35Speaker 02

  like an interlinked causality. Like that has been true for the longest time, so that people think it is necessarily true.

• 23:40David Pierce?

  Yeah.

• 23:41Speaker 02

  I think people spend money on all kinds of things that are not the best thing all the time. So maybe you're buying the form factor. Maybe you're just buying the ability to unfold your phone. You know, like, um, like 2000's rappers would always talk about how they would drop their Bentley keys in the club.

• 23:53David Pierce?

  Yeah.

• 23:54Speaker 02

  Maybe this is just a thing that I grew up, but this was like a thing. Like you're flashing your keys. Like maybe you just wanna flash your phone. Great. The thing that I'm really curious about is, we have spent all of this time verticalizing video. Like we've switched the aspect ratio of culture in like very serious ways. And Apple's like, it's landscape again. And I'm, I'm very curious if you have a point of view on this.

• 24:19David Pierce?

  Hmm. Yeah, I've heard a lot of takes about this from a lot of people. There have been people that I've talked to that have said, I really think the future is we're gonna go back to horizontal. I don't think we are. I think that when you unfold this phone, you're then gonna turn it vertically and use it like an iPad mini. And that's gonna be the way that people are still used to using their device. But I don't think that there's, I mean, there's a world in which, you know, you, it's the content consumption device. So you watch videos in a vertical format, but people still turn their phone sideways to watch long form video. So if you're watching long or short form video with the screen open, you're still turning your phone sideways. I don't think it's gonna have a tangible effect on how.

• 24:58Speaker 02

  Wait, I just wanna be clear. Your bet is that iPhone fold owners are going to open TikTok, unfold their device, and then turn it and then scroll on a giant iPad format.

• 25:10David Pierce?

  Maybe the first two times they ever do it. Yeah, yeah.

• 25:13Speaker 02

  I'm very curious about that. When I say like, we verticalize the culture, what I mean is, the hottest money in Hollywood is like AI-generated vertical micro dramas.

• 25:24David Pierce?

  Yeah.

• 25:25Speaker 02

  Because that's the format.

• 25:28Speaker 02

  Who knows? I'm just like, I'm dying to find out how Apple contends with the TikTok-ification of media in this event, when they're like, and then you unfold the phone and you have a giant landscape display.

• 25:39David Pierce?

  Yeah, where you can fit two vertical video feeds.

• 25:42Speaker 02

  Yeah. That's the move.

• 25:44David Pierce?

  That's the move. And.

• 25:45Speaker 02

  That's 100% the move.

• 25:46David Pierce?

  They're not even super vertical, right? It's like, cause it's not the same candy bar style where you have two full screen displays on the side. It is very squared off. So, I don't know. I, I don't think people are gonna start watching more long form content again. I don't think that's gonna happen, but.

• 26:01Speaker 02

  Okay. And then here's my other camera crash out question.

• 26:03David Pierce?

  Okay, I'm ready.

• 26:03Speaker 02

  Again, I just want, I can't wait to figure it out. You're gonna open it and then you're gonna have, it's gonna be a big viewfinder. This was the other piece of the German reporting.

• 26:11David Pierce?

  Yes.

• 26:12Speaker 02

  You got the big viewfinder, which means you're taking landscape photos with a giant viewfinder.

• 26:18David Pierce?

  Yeah.

• 26:19Speaker 02

  That feels like we're gonna get some really weird photos out of this thing, right? Like just framing wise, everyone's gonna go from vertical default framing to landscape framing. That's one thing. But then they will have a giant viewfinder, which necessarily just changes how you would compose a photo.

• 26:34David Pierce?

  My bet is that nobody is gonna do that. I think that everyone's gonna keep the phone closed while they take their photos. Personally, that's, that's my.

• 26:42Speaker 02

  Then you get a weird like paperback book view.

• 26:45David Pierce?

  I mean, these, these are the same people who are holding up their iPad at a concert, right? Like that's, that's what this, that's what it boils down to.

• 26:52Speaker 02

  Yeah. The first moment that you get the person with the unfolded iPhone fold at a concert.

• 26:58David Pierce?

  It's gonna be.

• 26:59Speaker 02

  Like broadcasting behind them.

• 27:01David Pierce?

  Yeah.

• 27:02Speaker 02

  iPad side screen. That's a meme. Like we're just waiting for that to happen. It's a countdown is on as of today.

• 27:06David Pierce?

  If you see it, you need to send us the photos immediately. I already get annoyed when people are recording the concert and I can't see because their phone's in front of me. If it's the size of an iPad mini, I'm gonna be really. Well, your view will be better because the screen will be bigger.

• 27:19Speaker 02

  No, the only rational thing to do is to bring a full size iPad and then stand in front of that person.

• 27:26David Pierce?

  Get to the front.

• 27:26Speaker 02

  Like just a full arms race. Cause doesn't the full size iPad have the full camera array?

• 27:32David Pierce?

  Uh, I think it has two. I don't think it has a telephoto camera. It's got LiDAR.

• 27:36Speaker 02

  It has a LiDAR sensor or something.

• 27:37David Pierce?

  Yeah, for some reason.

• 27:40David Pierce?

  So you can map the concert and relive it in 3D. In your Vision Pro.

• 27:45Speaker 02

  There. That's your 3D scanned on a rail. You're like, I've got a full 3D avatar of you saved on my iPad for further use.

• 27:53David Pierce?

  I don't need your Alicia Keys concert. I got my own. We got Alicia Keys at home.

• 27:57Speaker 02

  All right. Those are my, those are my camera crash out questions. Obviously more will be revealed, but I'm dying to know. I mean, where, people are gonna use this thing. And it's gonna, it's gonna get away from Apple in like the best way, right?

• 28:08David Pierce?

  Yeah.

• 28:08Speaker 02

  That's the, the nature of these things is people start using them in ways no one can predict. And everyone's camera as a size of an iPad mini is just one of the most unpredictable changes to just how we have thought about making and taking photos in quite a while.

• 28:20David Pierce?

  That's true. It's gonna be fun. Very excited to find out September 9th. All right. We've got a lot more to talk about. We're going into the meta settlement when we're back.

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• 30:06Speaker 03

  All right, we're back. So, big news this week in the world of Meta. Meta has had a lot of lawsuits flying its way. One of the most important was a lawsuit from attorneys general across the United States who had sued Meta claiming that its platforms had been made addictive to teenagers and children in particular, and that Meta had deceived people about the design choices they were making. Lauren Finer and Addie Robertson were on the show earlier this week to get into the weeds on that. But I really want to talk about what this actually means for Facebook and Instagram as apps, because there are kind of two halves of this settlement. One is that Meta has to pay some money. The other is that they have to make a bunch of changes to their apps. David, can you kind of break down for me what some of those changes are?

• 30:51David Pierce?

  Yeah, there's quite a few of these changes. And honestly, I would love to see some of these as changes, or at least options, in my app, as I am not a teen.

• 31:01David Pierce?

  One of them, two-hour daily time limit. That's cumulative across Facebook and Instagram, which can be turned off with the parent's permission. Am I my own parent? I hope so. There's a night mode where you can default block the apps from midnight to 6:00 a.m. to help you sleep. School mode, so notifications can be muted from 8:00 a.m. to 3:00 p.m. By the way, a lot of these exclude DMs, which is an interesting sort of idea there. I mean, obviously, DMs are extremely common in all of these apps, and arguably, Instagram is a DMing app that has reels. There are screen time prompts every 15 minutes to let you know you've been on the app for another 15 minutes, which is helpful. Algorithmic feed control. Teens can now choose non-algorithmic feed as their default, and parents can adjust the default. I want all of these things.

• 31:46Speaker 03

  This is really like a wish list of features for people who are like, these apps are too addictive. I do want to step back for a second. So, the states had gone very aggressive at Meta. Neelai, my question is, you're looking at this list. Who won this trial, right? Not this trial, in this settlement. Who comes out ahead?

• 32:08Speaker 02

  It depends on who you think is getting what.

• 32:12Speaker 02

  Like, in a very real way. This is a list of regulations that if the states had passed laws to get, they probably would lose in court. Because a lot of these implicate the First Amendment very directly. And there's not some great body of precedent or academic research that would overcome the First Amendment problems with this. These are speech regulations. You can only speak on Facebook for two hours a day, says the state. Straightforwardly a speech regulation. Straightforwardly implicates the First Amendment. So, if you're the state regulator and you're like, "Look at this big addictive platform that's hurting our teens. How do we get Mark Zuckerberg to do anything about it?"

• 32:58Speaker 02

  You've won. Because they have agreed to the limitations that if they had fought you on, they might have won. And in fact, almost certainly would have won something. Right? That this would have been a 10-year battle that would have gone to the Supreme Court, and we would have had 50 episodes of The Vergecast about whether night mode implicates the First Amendment for teenagers. You could feel a lot of different ways about that. So, in that very narrow view, the states have won here because they've accomplished a series of regulations that might help teens be less addicted to this one platform in a way that if they had literally passed a law and Meta had taken them to court, they might not have gotten as cleanly and easily as they have gotten here.

• 33:42Speaker 02

  I think a lot of people who spend time thinking about platform moderation and regulation are looking at this and saying, "Oh, Meta just ran away with this." Right? Like, Meta just hoodwinked these states. Because the money part of the judgment only pays out over 10 years.

• 33:59Speaker 03

  10 years.

• 34:00Speaker 02

  And only in 70% of it actually gets distributed over those 10 years. So, that's like $10 billion over 10 years. And the last 30% only gets distributed if TikTok and YouTube agree to the exact same restrictions, which is bananas. Because who? Meta has every incentive in the world to keep TikTok and YouTube from agreeing to this because they'll save money if TikTok doesn't agree to this. But they've also agreed to run an ad campaign agreeing to this. And they've given a huge, like, sign-off on, "These are the gold standard teen safety regulations that all of the other platforms have to contend with." Whether or not you are worried about the First Amendment implications

• 34:45Speaker 02

  of the states imposing speech regulations on these platforms. This is a big swirl. If you're a parent, you are looking at this. If you have, like me, your parents are senior citizens who are addicted to WhatsApp, you're like, "Oh, can I get this for WhatsApp? That'd be great." There's a lot of this that, on its face, is good and smart. It's the stuff we all want. Like, we can see that this will disrupt the engagement cycle. This will disrupt the business model built around making the platforms more addictive, making them full of rage bait, all that stuff. This will disrupt that. This will disrupt Meta's ad revenue for young people because they're going to be using the platform less. But hidden in here is a bunch of regulations

• 35:28Speaker 02

  that I don't know if the states would have gotten all on their own that Facebook is now going to impose on the other platforms. And I think that's pretty wild. So, I think from that perspective, Meta has kind of run away from this. They've like hoodwinked the states into age verification at scale across the internet. They've hoodwinked the states into going to TikTok and YouTube and whoever else, and Snap, and saying, "Hey, if you don't voluntarily impose these restrictions that may or may not have speech problems associated with them, we'll bring a lawsuit and we'll say to the judge, "Well, Facebook settled this way." And we'll tie you up in knots for it, or you could just do age verification, whether or not you agree with it." So, on that perspective, you know, all of the policy people that I pay attention to

• 36:13Speaker 02

  are kind of like, "What? Don't do that."

• 36:16Speaker 03

  Yeah.

• 36:17Speaker 02

  So, I mean, there's some real back and forth here.

• 36:20Speaker 03

  I think it's very funny. You mentioned it, but Meta is running these full-page ads in The New York Times and The Washington Post, egging on TikTok and YouTube to adopt these exact same rules. And I'm curious, is there any reason either of these platforms would voluntarily agree to any of this? Right? It seems to me the answer is no, which is why Facebook did not. Right? Like, they waited until they were sued by basically every state in the U.S.

• 36:51David Pierce?

  Yeah, I don't see a reason other than garnering goodwill, but it's not enough for the amount of money that they're making from all of these things.

• 37:00Speaker 03

  And I'm not sure that anybody's going to buy that Meta is coming from like a righteous position here.

• 37:05David Pierce?

  No.

• 37:05Speaker 02

  No.

• 37:06Speaker 03

  No.

• 37:07Speaker 02

  They were going to lose this. The weird thing about this is, you know, Adam Mosseri was on the stand a few days ago. And it was brutal.

• 37:17Speaker 03

  Yeah.

• 37:18Speaker 02

  Because he's reacting to documents that literally say, "Don't show this data to Adam. It will create litigation risk for us." And he would have to say things like, "Well, I want my team to be honest with me, but sometimes they can't be because of this." And he's like looking at the lawyer. Like, they were stuck in a very complicated trap, where their own research into what the harms actually were and how to combat them was being used against them to show that they knew there were harms and they weren't doing enough. And so, you know, Zuck's response to this was, "We should stop doing this research." Every platform's response to this is, "We should stop doing this research."

• 37:58Speaker 03

  Yeah.

• 37:58Speaker 02

  Because if you create the knowledge that something bad is happening, then you have created the liability that you didn't do enough to stop it. This is a very bad set of incentives. On top of that, you're you're getting, well, the way to stop it is to impose controls on how people communicate on your platform, which you, as the private company, can do. But maybe you think that the government should not be able to mandate. In this country, the government usually can't mandate that stuff. Other countries around the world, very different. But in this country, the First Amendment usually prohibits the government from mandating that stuff. And you end up in this place where, oh, you can concede to the government all of these things.

• 38:39Speaker 02

  And you can neuter your competitors who get to do those things by saying, oh, we're gonna, we're gonna make it so every attorney general in the country who participated in this can now run around with a huge incentive, monetary billions of dollar incentive, to punish Google, unless they agree to these rules, to punish TikTok unless they agree to these rules. And that is pretty, you know, it's like, it's pretty sharky. It might be the right outcome. I don't know that answer because I am a parent and I dread the day my children get phones with social media on them. And I'm looking at two hour daily time limit and night mode and school mode and algorithmic feed control. I'm like, oh, these are the things that I want.

• 39:22Speaker 03

  Yeah.

• 39:22Speaker 02

  Right? If you don't build them into the software, I can't parent enough unless I impose draconian surveillance on my children to make them stop doing these things.

• 39:34Speaker 03

  Well, it's very interesting. Like, these are, these are all features that we, we all believe, we think that these will make the app less addictive, right? Like, there's no autoplay on video, right? That you can choose a non-algorithmic feed. We all kind of just have this, this belief that these things will reduce usage. I think it's probably true. But this is probably the, the first time we're going to find out at scale if that is true, which is a very big but important if, right? Like, if these things don't work, then it's just the time limit. It's just, we're cutting you off after two hours, which is still a lot of time.

• 40:08David Pierce?

  And the other question becomes, as part of this here, it says that they have to do better age verification, which I feel like we've been through 100 times. And teens are very good at getting around the age verification things. And Meta can say, we're doing more intense age verification systems. We're using more of the data we have to actually track how old you are and all this stuff and your time on other apps, et cetera. But people are still going to get around them.

• 40:33Speaker 02

  Oh, but that's built into this, the age verification systems they have to use. Meta has a choice here where they can use an accredited third-party verification service. And ostensibly, the idea there is to create a market for these third-party verification services, or they can build their own. And there are some acceptable levels of tolerance in that rule. And I think it's 10%. So they, they can have a 10% error rate and that is acceptable. And I think it's different in the different age ranges. So there's a little bit of tolerance built into this.

• 41:06Speaker 03

  It's like the 17 year olds, you expect more of them to be able to fake their ID.

• 41:11Speaker 02

  Yeah, there's like something in here where it's like, if we detect that you're an actual child, we need to be more tolerant of that. There's some amount of, we understand the technology is not perfect and they will try to defeat it, so we will allow for some error rate. But what you're really getting, and this is true in all age verification, is you have to tell a big centralized service provider what your government name is. You have to identify yourself, even if you're an adult, because there's no way to only do it for kids. And that, right, that obviously creates a huge burden on adults who are not subject to these regulations. And Meta just horsepowered it through, right? And like, great, like, we all agree that this is a good thing.

• 41:55Speaker 02

  This has been up and down to the Supreme Court and the arguments against it are super real, which is making adults in this country submit government mandated identification to the internet every time they want to do anything is actually a huge burden, is actually another restriction on, on your speech and your liberty. And here we are, maybe the states couldn't have gotten it if they just passed this law because of that burden, but they got it because Meta caved. And there is an incentive to get YouTube and TikTok to do it too. And there's some piece of this, like, again, when you say who won and who lost, boy, does that cut in 50 different directions.

• 42:31Speaker 03

  Yeah. And it gets messier. Like, the state's job is not done, right? Like, because there are, there are parts of this where the state still have to figure out where the line is. There's this very weird thing going on where Meta agreed to limit the use of, what is it, extreme makeup filters? But that, it's not defined what that is? So there's some system where the government is going to determine what that is?

• 42:56Speaker 02

  Cosmetic procedure filter shall mean any digital filter or augmented reality effect that distorts, sculpts, redefines, or idealizes a user's face in a way that cannot be achieved without cosmetic surgery or extreme makeup techniques.

• 43:10Speaker 03

  So nothing goofy.

• 43:11Speaker 02

  Now, for the avoidance of doubt, it goes on to say, this does not include, one, fantasy character effects. And I just want to be clear, with specific definitions, filters that change a user's facial structure for the purpose of turning the user into a non-human or fictional character, e.g., an elf or an animal, e.g., a dragon or puppy.

• 43:34Speaker 03

  Okay.

• 43:34Speaker 02

  Just putting it out there, a filter that turns you into a puppy.

• 43:37Speaker 03

  So Memoji still work?

• 43:38Speaker 02

  Puppy is fine.

• 43:40Speaker 03

  Okay.

• 43:40David Pierce?

  Carved out.

• 43:41Speaker 02

  Makeup smoothing effects, filters that smooth skin or alter appearance in ways that can be achieved by ordinary makeup techniques without altering the appearance of underlying physical facial structures or meaningfully altering skin tone. And then lastly, parody and exaggeration effects. So to help operationalize this definition.

• 43:58Speaker 03

  Wow.

• 43:59Speaker 02

  The states will provide Meta.

• 44:01Speaker 03

  No.

• 44:02Speaker 02

  Illustrative examples and guidance of AR effects that are cosmetic procedure filters and AR effects that are not cosmetic procedure filters in a letter to be sent within two months. So the states, someone in some government office is gonna have to sit around doing puppy filters that are okay and puppy filters that are not okay. Put that all into a letter and send it off to Meta.

• 44:25Speaker 03

  Are they gonna have to, like, bring in some makeup experts and have them, like, apply this stuff to see what is possible, where the limits truly are?

• 44:32Speaker 02

  When I say that this runs right into extremely weird government speech regulations, this is your extremely weird government speech regulation.

• 44:43Speaker 03

  Yeah.

• 44:44Speaker 02

  Now, it is without question that letting a bunch of teens do extreme makeup effects and view one another in filtered ways does massive harm to self-esteem. Like, those studies have been done, they have been done about Meta platforms, very specifically Instagram and Teen Girls, there's just, the entire movie, The Social Reckoning, is about this thing. Like, this is not in question about whether this is bad. What to do about it at the government level is a First Amendment question.

• 45:14Speaker 03

  Yeah.

• 45:15Speaker 02

  And so instead of running that to ground, what are the limits? What showing does the government need to make in order to pass this regulation? Meta has just conceded, yep, this is probably pretty bad. Why don't you guys send us a bunch of puppy filter pictures that are okay and we'll, we'll deal with it? And maybe that's fine. Like, truly, I think you can make, particularly parents, parents of teen girls, will make the argument that's fine because it will go into effect now, right? The balance of harms favors them acting now. If you have other concerns about the First Amendment and the very notion of some staffer in a state attorney's general office looking at filters and deciding which ones are okay and which ones are not for kids, then you have a totally different set of harms to

• 46:00Speaker 02

  balance. And we're just gonna live through this version of it for five minutes before we decide if this is okay. But it's funny to think about, a dragon or a puppy filter is fine, an elf is fine, but something that makes you look like you got a nose job might not be fine. But the actual speech implication, the speech regulation implication is gigantic.

• 46:21David Pierce?

  Yeah. Do you know if each individual attorney's general has to submit a different example? Or is this like, all 48 attorneys generals get together?

• 46:29Speaker 03

  It's a group project.

• 46:30David Pierce?

  Yeah, did they get together?

• 46:32Speaker 02

  It says the settling states, so I'm, this is just gonna be the worst Zoom call of all time.

• 46:38David Pierce?

  Yes. I am not a cat.

• 46:40Speaker 02

  Yeah, everyone in, all the lawyers finally get to just bowl cat filter.

• 46:46Speaker 03

  Yeah.

• 46:48Speaker 02

  There's something here, again, and we're gonna write more about it. I think Addie and Lauren has a piece up today on the site, just about how much we, like, the people have given up in terms of speech regulation here. There's, I know Addie's fired up about it. The, the coverage, there's a great piece from Mike Mass and TechDirt about it. The amount that Meta gave up here in terms of speech regulation in order to make this go away is pretty massive. And then the turn of, we're gonna make YouTube and TikTok do it too, is also massive.

• 47:20Speaker 03

  So I'm glad you mentioned that because the thing that I am curious about is if, if TikTok and YouTube do not do this, right? Because it's still in question, right? The states probably have to force them into it somehow. Does Meta have a big problem on their hands if YouTube has years without any of these restrictions, right? And so instead of scrolling Instagram all night, you're just gonna be using YouTube Shorts?

• 47:46David Pierce?

  That is a big question. That's a big, I feel like a lot of people might just go to TikTok. I know that when I get annoyed at myself for using an app too much, I close it and then the next thing I know, I'm using a different app. So that's probably something that people will be doing.

• 48:00Speaker 02

  There's no worse feeling than closing TikTok and getting sucked into Instagram reels, which is just a worse TikTok.

• 48:05David Pierce?

  Yeah.

• 48:06Speaker 03

  Yeah.

• 48:07Speaker 02

  Meta is a winner in a lot of ways in social media advertising. Like, businesses rise and fall on Meta's social media advertising. That's just the way it goes. In a way that is not true of TikTok and YouTube. TikTok is big, but ever since the blip, right? Like, the change of control to Oracle, it just has not been dominant in the way that it was. YouTube Shorts are not really a competitor with Reels. I don't know if you have a different opinion of that, you spend more time thinking about YouTube than I do, but they're not really a competitor to Reels in that way. That is the engine of culture, is Reels going viral, or the engine of, like, social media commerce is Reels. Like, it is just, that's the thing.

• 48:47Speaker 02

  So anything that harms Meta and allows the other two to win is gonna be in favor of those two. But I just, I don't see them holding off the government in this way now because the government has this tool, which is Meta agreed to this. Do you want these lawsuits? We got 47 state attorneys general who got nothing to do.

• 49:13Speaker 02

  Cross it off the list. Like, they're just gonna file the same lawsuit and do the same discovery and drag Sundar Pichai and Neil Mohan through the same appearance on the stand where they knew it and they did it anyway, and/or you can just do this stuff.

• 49:25Speaker 03

  Yeah, make it easy.

• 49:26Speaker 02

  And I think that's a really important dynamic, especially as all of these companies spend gobs of money on AI build outs. Half of them are defense contractors or owned by Oracle or operated by Oracle, which is a defense contractor. Like, they need the government to step their back here.

• 49:43Speaker 03

  Hmm, yeah. So what is the government's next step here, right? Because thi- this seems great, right? If you've got a kid in middle school, you're set. But that has only agreed to this for 10 years. And then, then what happens, right? Are they just like, ah, hopefully Congress passes a law? Like, maybe Congress is functional in 10 years.

• 50:04Speaker 02

  So they're already, there, I think today, there were stories about Congress needing to pass the kid online, the Kids Online Safety Act, right? Which wouldn't do all of this, but it would do some of this. Yes, I think you've got 10 years now to see if these interventions solve a problem and to figure out how to write them into law in a way that doesn't immediately lead to First Amendment lawsuits. Who knows? But that's, that's a pretty long time.

• 50:30Speaker 03

  Yeah.

• 50:30David Pierce?

  Also, short form video only took off six years ago. So who knows what's gonna be happening in 10 years?

• 50:36Speaker 03

  This is very true.

• 50:36Speaker 02

  Well, we're all gonna be holding up iPads, shooting a landscape and watching the long form.

• 50:40David Pierce?

  Yeah, that's only two years from now.

• 50:41Speaker 03

  All right.

• 50:42David Pierce?

  And in 10 years, it's gonna be a whole nother story. It's gonna be the creeper glasses or something.

• 50:46Speaker 03

  Oh, boy. Okay.

• 50:48David Pierce?

  All right.

• 50:48Speaker 03

  We gotta take a break. We're back. The Hype Desk is back. Brendan Carr is a dummy is back and the lightning round.

• 50:57Speaker 05

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• 52:10Speaker 03

  All right, we're back and it is time for the Hype Desk.

• 52:15Speaker 03

  Ashley Esqueda is here with an unsponsored Hype Desk. Hey, Ashley.

• 52:19Speaker 10

  Hi.

• 52:20Speaker 03

  What have you got for us today?

• 52:21Speaker 10

  Well, it's the, it's the only thing, right?

• 52:23Speaker 03

  The only thing, truly.

• 52:25Speaker 02

  It's the biggest news of the year, maybe the decade.

• 52:28Speaker 10

  Who needs the, who needs trials? Who needs any of that stuff? Grand Theft Auto VI, Rockstar just presented a, a world premiere, but on Netflix, which was pretty crazy. And everyone's talking about it. I mean, it looks amazing. I too am hype. I am here at the Hype Desk, feeling very hype about it. Like, I wanna go commit some crimes right now.

• 52:54Speaker 02

  I'm ready.

• 52:55Speaker 10

  I'm ready.

• 52:55Speaker 03

  We're gonna, hold on, please, everyone, wait until the podcast is over, until the crimes start, please, I can't handle this.

• 53:01Speaker 02

  You haven't been committing crimes the whole time.

• 53:02Speaker 10

  Right now, passively, like.

• 53:04Speaker 03

  So, okay, they've already had, I think, two trailers out. Now they had this big Netflix showcase, what was it, like 20 to 30 minutes? What, what is this? How, is this an enormous trailer?

• 53:14Speaker 10

  It is a very extended look at the game. It's the, it's the full gameplay. This was all captured on a PlayStation 5. They walk through different sections of different quests, different things that you're gonna be doing. Jason and Lucia are back. This is, it's now sort of like a duo protagonist situation where you're able to choose who you wanna play as and then text your partner to like, come help you on quests or stay and like chill out. You can make it a romantic relationship or a platonic relationship, which is kind of interesting.

• 53:47Speaker 02

  Can you go back and forth between the two?

• 53:49Speaker 10

  Interestingly enough, Eli.

• 53:51David Pierce?

  College years.

• 53:52Speaker 10

  The college year, it's so complicated. Um, so, yeah, there's, there are times where you will apparently, they, like, whoever you're not playing as might text you and say like, oh, be sure to like lock up when you come home, or like, or if you're out too long, they might text you. And if you don't respond to them, or if you, if you don't go back home, like, in a certain amount of time, you might actually negatively affect your relationship with the other character.

• 54:17Speaker 03

  Sorry, are we learning about how to have a healthy relationship from Grand Theft Auto?

• 54:21Speaker 10

  This is, I'm dying to talk about this.

• 54:23Speaker 03

  What is happening?

• 54:23Speaker 10

  Thank you, thank you, because this is what I wanted to talk about. I'm watching this showcase and I'm like, this looks amazing. I can't wait to do crimes and, and have fun. But also, the news came out a couple of days ago that you're, you will have to exercise and like eat properly and stuff to like keep your character in shape, like they can get out of shape. And so I'm like, now watching this showcase and I'm like, is Grand Theft Auto teaching us to be better as a society? I'm scared. I feel a little bit scared about this, but also.

• 54:52Speaker 03

  Grand Theft Auto is gonna be like, like, and by the way, men, you're spending too much time inside alone. We need to go outside, hang with your buds.

• 54:59Speaker 02

  Wait, I just wanted to be clear. The big innovation in GTA V was heists, right? I'm just trying to rewind my brain. It's like, you're gonna rob a doc.

• 55:06Speaker 10

  Self-care is the new, is the new thing.

• 55:09Speaker 02

  And this one is like, you have to be nice to your partner to figure out how to like get to the next level.

• 55:14Speaker 03

  Am I gonna put all the effort in to take care of myself in a video game?

• 55:18Speaker 10

  You're gonna have to learn how to exercise, how to eat properly. You're gonna have to learn how to be in a healthy relationship. Um, guys, is Grand Theft Auto VI gonna save us? I'm, I feel, I don't know, I feel very mixed feelings about this.

• 55:32Speaker 02

  I'm already having like full body chills at, at how a certain class of ex-commenter is gonna call this game woke, while still like stealing airplanes.

• 55:41Speaker 10

  Yeah, yeah. While still stealing airplanes. My favorite part of the entire showcase was, stealing cars is a little bit different, like, it's just a little different now. And one of the things, one of the clips they showed was, she's, Lucia steals a car and then this, this kid, this like Gen Z kid gets out of the trunk with his phone. He's like, what's going on? You stole my friend's car. I'm doing the trunk challenge. What am I gonna do, chat? And then like, and then they cut to a clip of him like, in the trunk, live streaming while you're escaping from the police. Incredible, incredible scenes from Grand Theft Auto VI. I, I, I was very like, oh, cool, a new Grand Theft Auto, but now that I have seen this showcase, I am so, I'm so on board.

• 56:23Speaker 10

  But also, again, to, to your point, Eli, I, I cannot even take care of myself in real life. And so I don't know how I'm gonna do that in a game. I'm not really sure if I'm gonna be motivated to do that. So I guess I'm just gonna have a, you know, it'll be just like me. It'll be a super out of shape, like gangly person, like basically running out of gas, trying to get it to 30 feet away. I run, I just completely collapse because my heart explodes.

• 56:49Speaker 02

  You're not texting your partner back.

• 56:50Speaker 10

  Not texting my partner, just, it's very, the ADHD is very strong. And so I, yeah, I, it might not go well for me.

• 56:56Speaker 02

  Was this like the, the, the thesis of the gameplay reveal? Or was there?

• 57:01Speaker 10

  It wasn't, but it.

• 57:02Speaker 02

  Was there fun parts?

• 57:03Speaker 10

  Oh, there's so, like, there's so much, all the things you love about Grand Theft Auto are back. There's strip clubs, there's, there's drugs, there's killing, like, all the, all the things. There's like, there's cartel wars and, and shooting and action and stealing cars and all the things.

• 57:19Speaker 03

  Stealing cars feels less edgy than having to maintain a relationship while you're out committing crimes. That, that feels high stakes.

• 57:27Speaker 10

  I feel like this is a existential meditation on, on current events, like, just our, our strange times that we live in. It, it feels slightly more.

• 57:39Speaker 02

  Are there GLP-1s? Can you avoid getting fat by doing strip clubs all day by doing injections?

• 57:43Speaker 10

  Straight up, I gotta be honest with you, I wouldn't be surprised if that was a thing you could like go buy. Like, you'd like go buy off-market.

• 57:49Speaker 02

  There's peptides in this thing.

• 57:50Speaker 10

  Little shortcuts.

• 57:51Speaker 02

  Yeah.

• 57:52Speaker 10

  And if not, there should be, because that seems like a thing you would be able to do in a, in a Rockstar game.

• 57:57Speaker 02

  The mods are coming.

• 57:58Speaker 10

  The mods are 100% coming. He's like, oh, I'm gonna open up a Jeep. Maybe that's the, one of the secret exclusive stores that comes with the $99 version of the game. There's like a unethical pharmacist who's like, I'll sell you everything you need.

• 58:10Speaker 03

  It's crazy to me that they've been working on this game for so long and they still managed to get in things that only surfaced in the last couple of years.

• 58:18Speaker 10

  Hmm, really wild.

• 58:19Speaker 03

  Maybe that makes it less surprising, but of course, that's gonna extend the development time by a lot.

• 58:24Speaker 10

  Yeah, I also have to give like a huge, I don't know what their optimization team looks like, but this game looks incredible on PlayStation 5, like, so good.

• 58:34Speaker 03

  And be clear, it was a PS5, not a PS5 Pro.

• 58:36Speaker 10

  It didn't say PS5 Pro, it just said captured on PlayStation, PS5.

• 58:40Speaker 03

  The everyman's PlayStation.

• 58:41David Pierce?

  Right.

• 58:41Speaker 10

  So it did not say Pro, so I, it could, but I don't know. I mean, who, like, are they required to say it Pro? Like, I'm not sure.

• 58:48Speaker 03

  Probably. Ashley, we should talk about the leaks really fast, because thi- this comes after, what, like, two weeks of kind of daily leaks of the game?

• 58:56Speaker 10

  Yeah.

• 58:57Speaker 03

  And I feel like the conversation online has, has suggested like, oh no, the game is spoiled now. And, and I, I'm curious, after having watched this showcase, does that feel true?

• 59:08Speaker 10

  I'm gonna say pretty, pretty wholeheartedly no. Um, I, I think that the leaks, so for those who have not been paying attention to that story, there is a, a person or persons going by Cyberleak who had been, said that they were upset about the fact that there was no physical edition of the game and, and had this trove of clips, of gameplay clips, and was releasing them and leaking them and encouraging people to invest in a crypto coin. They seem.

• 59:38David Pierce?

  They were mad because there's no physical version of the game, right? Yeah, totally.

• 59:42Speaker 10

  Yeah, they seem to have cashed out on that. But, so there may or may not be more leaks going forward. Rockstar responded to it a few days ago, said that they were absolutely heartbroken, which, yes, it's absolutely heartbreaking for any developer to have their, you know, their work leaked, especially in a, in a form that is not the finished, polished version. So it is really terrible for them, like, that totally sucks. But yeah, so there were leaks and that these, these gameplay clips are coming out. A lot of people are saying, oh, now like these bits of the story are spoiled. But the thing is, is like. I like, I'm of the mindset where it's just like, there's always in every Grand Theft Auto game. Like, there's so much that you could not possibly be, unless there was just even

• 1:00:25Speaker 10

  a full straight playthrough of like, the main storyline would not be spoiling Grand Theft Auto, because there's so much to do in those cities. And Rockstar is even saying like, this is the biggest, it's humongous. The map is huge. And so for them to say that is, I mean, like, I can't even imagine how much there's gonna be to do. The city feels so alive. There's just people everywhere of all shapes and sizes. They talked about, they have talked about how they created like, new structures for the, the character models, the NPCs, so they could have different shapes and sizes of people with different animations, to just really make the city feel lived in. So I am, I don't know that there's any way

• 1:01:10Speaker 10

  that they could spoil the game for people. And I mean, like, even if it was just the full main storyline, I, I don't know that it could be spoiled, because someone is always gonna come up with something or find something absolutely crazy in a Grand Theft Auto game that like, you just, you can't cover all your bases.

• 1:01:27Speaker 02

  I do feel like spoiler, you have to exercise, might have spoiled. Just to be clear. There's like, a bigger video game industry story to tell here. Is, is this the game that saves video games from whatever's happening to video games? There's a lot of pressure on, on GTA 6 to just be a hit and make everything okay.

• 1:01:51Speaker 10

  I, so, yes and no. This is kind of like, very similar to where we are with the movies, right? Like, it took so long for the movies sort of recover after COVID, for, for different reasons, but we're finally now seeing, this has been like, the first good box office year, like, back to business kind of box office year in a long time, like, pre-COVID. I think with games, this is, GTA is such an anomaly, that it is absolutely impossible to make this some kind of bellwether for the industry, in my opinion, because it is so singular. And, you know, allegedly, the, you know, some, some people are saying the budget's been like, a billion dollars, and it's just been in development for so long,

• 1:02:33Speaker 10

  and it's so different from what the industry looks like for everybody else right now, like, all of the other studios that are operating, that I just, I, I, obviously, everyone wants, everyone in the industry is rooting for it, wants it to make a bunch of money. But I don't think any, I hope, which, I think we all know, like, I don't think the message here is like, lean into more Grand Theft Autos, because really, you're just sort of betting the entire farm on one thing. And so it seems like, and not every game is gonna be a GTA 6. Like, not every, no game is a GTA 6. Like, I just, it is, again, singular. So, I don't know that there's, I hope, I hope the executives don't look at it and go,

• 1:03:15Speaker 10

  I want one of those. But that is usually, that's usually what happens. But-

• 1:03:21Speaker 02

  Is this my Fortnite?

• 1:03:23Speaker 03

  I think fewer games would be better. Every studio should release one game every 10 years, and we should all just get very, very hyped for it.

• 1:03:31David Pierce?

  People are gonna be playing GTA 6 for the next 10 years, so you got, they got time.

• 1:03:35Speaker 10

  This game is built to be played for years and years and years and years and years. And so, I think, again, like, it's a singular thing. I, I think that you can't really extrapolate, like, the success or failure. Like, I don't think Grand Theft Auto 6 is gonna be a flop by any means, but, you know, I, I really believe, like, you can't, you can't really, it's so incomparable to anything else that exists. It's such a big zeitgeist-y moment in video games, whenever we get a new one.

• 1:04:05Speaker 02

  Yeah. I mean, publishers are moving their release dates around it, to just avoid the blast radius of this game.

• 1:04:10Speaker 10

  Yeah. There's, I think, almost nothing coming out in November, with the exception of, my, one of my favorite things happening is, Devolver is putting out, they, they have immediately, since the release date, like, the first release date got released, or got announced, Devolver was like, we're releasing a game on that day, we're not afraid of Grand Theft Auto 6. We don't even know what the game is, but we're gonna release a game on that day. And then when they moved it, they were like, don't, we know you're afraid of us, and we're moving our release date to your new release date, we're doing it. And so I love that. I think that's very funny. But yeah, everybody else is just wants out. They wanna get away from, it's just gonna be such, people are just gonna sink their whole entire holiday season into that game.

• 1:04:55Speaker 03

  This is, for the people who don't have a PlayStation 5 and can't afford one anymore, you can buy whatever indie game Devolver is putting out.

• 1:05:02David Pierce?

  That's true.

• 1:05:03Speaker 03

  It's a good alternative.

• 1:05:04Speaker 10

  Buy some, buy, buy a bunch of indies for a hundred dollars. Like, take your hundred dollars and buy a ton of indies.

• 1:05:11David Pierce?

  I have a very naive question, because I've never played a GTA game. Do you imagine that they're going to microtransaction the hell out of this game for like, a long period of time? Or is that not something they're doing, notably?

• 1:05:22Speaker 10

  I think GTA 6, probably not. But then, they're obviously, like, you'll have DLC, but then GTA 6 online is a different thing. And so I think that that is, you know, I think there's value there, or potential there.

• 1:05:40Speaker 03

  Did that do well for GTA 5? Or they made a ton of money on that?

• 1:05:44Speaker 10

  I mean, they made enough money to make this one, so I assume, like-

• 1:05:46David Pierce?

  I guess, I guess so. I just imagine, like, it's a hundred dollar game, which is a very expensive game. And they are going to sell a lot of them, but is that a billion dollars, is my question, you know?

• 1:05:57Speaker 10

  It's a great question.

• 1:05:58Speaker 03

  My understanding is that GTA 5 online has been just immensely successful.

• 1:06:03Speaker 10

  Yeah, immensely successful. Huge. People, I mean, it's still constantly and consistently being, like, when you look at things like SteamDB, like concurrent player, people are just really consistently playing it. Just even now, it's, they're, they really love it.

• 1:06:17Speaker 03

  Yeah, I'm sure there's a lot more to come here.

• 1:06:19Speaker 10

  There's so much more.

• 1:06:20Speaker 03

  Sweet. Thanks so much, Ashley. That was really fun to talk GTA 6.

• 1:06:23Speaker 10

  Thanks.

• 1:06:24Speaker 03

  Okay, there's only one thing more exciting than Grand Theft Auto 6, and it's everyone's favorite podcast within a podcast, about everyone's least favorite FCC chairman. It's time for Brendan Carr is a dummy.

• 1:06:48David Pierce?

  Suddenly, like, 7-4?

• 1:06:50Speaker 02

  Oh, we're going.

• 1:06:51David Pierce?

  Oh, we're so young.

• 1:06:52Speaker 02

  Opposite drop. For breakdown, set.

• 1:06:58David Pierce?

  Math, math metal?

• 1:07:02David Pierce?

  Okay.

• 1:07:03Speaker 02

  That was awesome.

• 1:07:03Speaker 03

  That was very good. Very good.

• 1:07:06David Pierce?

  That's on GTA Radio. Be good.

• 1:07:07Speaker 02

  Yeah. Yeah, Rockstar, if you're listening, we, we can hook you up. Who was that by?

• 1:07:14Speaker 03

  That theme was submitted by Incidental Medication, who says, "The most recent themes have been, quote, 'a bit too fluffy.'"

• 1:07:22Speaker 02

  Look, I'm not saying I agree, I'm not saying I disagree. I love all of our themes on submissions equally, including the AI ones, which Travis really dislikes. But it's true that we've been missing, we, we've been missing some edge.

• 1:07:34Speaker 03

  And you know what? If, if you two submit a metal theme for Brendan Carr is a dummy, I will let you critique the other themes. I think, yeah. I think that's, that's your, the bonus, in addition to the theme getting played.

• 1:07:49Speaker 02

  I'm saying a lot of them have been missing drops. We've had a lot of builds and no drops. If you wanna get on the air, I can help you out. All right. Brendan, this week, this is a short one, but important one. It's not the usual free speech disaster. That was Meta States earlier in the show. This one, I think, is more important. So, there's a thing called the E-Rate Program, which is very boring. Every time I've had an FCC commissioner on the show, they all wanna talk about it, even though it's the wonkiest thing. It's the system by which the federal government subsidizes internet access for schools and libraries. And there's this thing called the Universal Service Fund. It's on your bill, you see it. So when you buy internet access, there is a tax on your bill for the USF. And in olden days, that tax paid to connect everyone to the phone system. And

• 1:08:33Speaker 02

  here in 2027, after quite a lot of wonkery, that tax can now be used to subsidize internet access for lower income people, and in particular, schools and libraries. So, of course, Brendan hates the idea of providing internet access to schools and libraries. He's our guy. Like, of course, of course he does. He's a cartoon villain of a human being. And he is trying to cut it, and so he's opened a comment period to cut it. He says things like, "Today, the E-Rate Program spends around $2.5 billion a year, and a lot of new data is pouring in about the use of screen time for students. So we gotta save the children by cutting internet access to schools and libraries." Do you see how there's, there's not actually a connection between those things? And I, again, I say this as a parent in a school

• 1:09:17Speaker 02

  district, where the parents are like, maybe this Chromebook situation is out of control. Like, there's a lot of that going on. Kathy Hochul, the governor of New York, Kathy Hochul is on Decoder very soon to talk about phone bans in New York State. Like, there is a lot of question about computers and phones in schools. I'll grant you that. But we should cut access to the library, because we're worried about screen time, is not actually the move. So the comment period is open for this. The FCC people are leaving comments, and the comments are coming in from people like Lisa Winston, the superintendent of Huntington Beach City School District in California. By the way, Fierce Wireless did a great piece of reporting here, we'll link it up. But she wrote, "Our district's connectivity

• 1:09:59Speaker 02

  is not convenient. It is the delivery mechanism for state testing, student safety and wellness monitoring, emergency communication with families, and daily instructions. We get matching funding of nearly $1.5 million over the past 10 years that has helped build and maintain that infrastructure." So Brendan cuts it, they can't run the tests anymore. They can't communicate with families when something bad happens, because it's the internet access. It is not screen time.

• 1:10:26Speaker 02

  Brendan, he's a dummy. He can't, he's connected two dots that shouldn't be connected. We got another quote here, a comment submitted to FCC from the director of a library system in Northeast Georgia. Year funding enables Northeast Georgia libraries to provide broadband access that library patrons use for daily activities, including competing online learning, applying for government benefits, filing taxes, and applying for jobs. That doesn't seem like the kind of internet access you should cut. But right next to that are a bunch of right wing lobbyist groups that are trying to cut the universal service fund entirely. And Brendan, obviously, the author of Project 2025's chapter on telecom regulation is right there with him. So he's trying to do it from the government level. There's groups trying to do it at the sort of litigation level about whether

• 1:11:11Speaker 02

  the government has the power to levy any tax whatsoever. And in the middle is not a bunch of kids who are addicted to Instagram at school, but literal school administrators and library administrators saying, no, we actually just need to pay our bills. Like, this is the fee that pays our bills. And the comment period is open. It's as stupid as ever when it comes to Brendan. I'm particularly outraged when it comes to cutting internet access for disadvantaged people. That's the thing that the FCC should do. That is the great success story of what you would call the post Janet Jackson Super Bowl nipple FCC. Like, that was a bad point in our country's history when the FCC was such a speech regulator

• 1:11:53Speaker 02

  that they went whole hog at Viacom over that. And they actually pivoted, like, both Republican and Democratic FCC chairs after that were like, we got a little over our skis. We're going to focus on internet access. And now we're back and we're cutting internet access and we're doing speech regulations of the view. Brendan Carr, everybody. You can submit a comment and go to the FCC's website. We'll link the form. You should, and you should say that internet access for schools and libraries is generally a good thing. And the USF is generally a good thing. Anyway, Brendan, if you want to come on the show and defend taking literally candy from babies, you can do that. I would love to have you on the show. You can respond to any of these comments. We'll dig up some other ones.

• 1:12:36Speaker 02

  Or you can say why libraries should not have their internet access subsidized, which most people I think are happy to do. Anyway, that has been Brendan Carr's dummy, America's favorite podcast, the podcast.

• 1:12:55Speaker 03

  I also want to harmonize with that one, Ed.

• 1:12:57Speaker 02

  It's very good.

• 1:12:58Speaker 03

  It's very good. It's lovely. Always good when you've angered librarians quite literally across the United States. Okay, everyone, it is now, at last, time for the lightning round. We've got some stories queued up, a lot of big things. I'm gonna start with, I think, something pretty important, which is that my understanding is that this week Nvidia saved the US economy. Right? It's time for quarterly earnings. So Jensen's got to get out there. He's got to say Nvidia, we're doing well. They gotta be doing pretty well at a minimum, or else I think the entire economy is going to crash

• 1:13:40Speaker 03

  because everything is vested in AI and all the AI relies on Nvidia and Nvidia is circularly invested in everybody else. Oh, boy, did Jensen get out there. Jensen got out there and said some big things, right? Jensen, quote, "AI has reached its inflection point. It's doing useful work. Its tokens are productive and profitable. Now, compute is revenue." So compute is now revenue. That's big. And that is probably why Nvidia is making a lot of money. He then goes on to say, quote, "Demand is accelerating. This time last year, one lab alone was driving the build out. Today, we have a golden age of new AI labs and startups, multiple frontier labs scaling in parallel, a thriving open model ecosystem, and a physical AI coming online.

• 1:14:24Speaker 03

  The AI infrastructure build out is at full steam." This is all proceeding Nvidia projecting that their revenue is going to grow by 70% in its 2028 fiscal year.

• 1:14:37David Pierce?

  70% in one year to where it's at right now, for where it's at right now.

• 1:14:41Speaker 03

  Yes.

• 1:14:42David Pierce?

  Which is most of the US economy.

• 1:14:44Speaker 03

  Yes. So Nvidia is doing okay. Nvidia is doing okay. And by that fact, the US economy will continue for a little bit longer. Neil, do these numbers seem high to you? Do you feel like the AI build out has reached its inflection point?

• 1:15:02Speaker 02

  No, definitely not. Like, we're still trying to get data centers everywhere, including space. That's one thing, right?

• 1:15:10Speaker 03

  Yeah.

• 1:15:11Speaker 02

  So the demand for the chips is related to the desire to build data centers. So of course Nvidia can forecast demand because they have pretty good visibility into all the data centers that may or may not get built, including about, you know, a bunch of data centers that they are funding in a series of circular deals. This is, this is a big problem for the US economy, right? Whether or not the circular financing will collapse inward upon itself. But they have a view into how many chips they're going to sell. The more interesting thing to me about all of this is, you know, Jensen is on CNBC talking about the fact that compute is an asset class, which means you can invest in it and you can see it grow and fall.

• 1:15:52Speaker 02

  And it's fungible and like, the chips have this like really long life that allows compute, not the chips themselves, but compute, a derivative of chips existing in data centers, to be an asset that you can, an asset class that you can invest in. Liz has written all about this, but there's something that's happening here where we're seeing an earnings report based on like a very fundamental transaction. You need chips, Nvidia sells you chips, money changes hands, into sleight of hand that compute is now revenue, that the circular financing deals will all pay off in the end, that Nvidia is an investor in the data centers who are raising debt

• 1:16:35Speaker 02

  based on the value of the chips they're buying from Nvidia with Nvidia's money. That's all going to pay off in the end. I don't, I don't think we see any of that in these earnings. Do you know what I mean?

• 1:16:45Speaker 03

  I have to tell you, I was reading the Wall Street Journal's write-up of this, and people are having just like literally emotional reactions to Nvidia's earnings. The Wall Street Journal frames it as providing much-needed relief to investors and lifting investors' spirits, relieving their anxieties about the AI boom. And I'm just like, there's a little too much built around Nvidia's success here. And Nvidia has made sure it is that way.

• 1:17:14Speaker 02

  Right. The question for all of this, and Jensen says it, the tokens are productive and profitable. This is Jensen's big claim. This is the heart of Nvidia's earnings. The tokens are profitable. So if you buy a Nvidia GPU and you spend the money to build a data center around it, and then you buy the energy needed to turn it on, and all of the build out associated with that, and you spend a dollar on that, you get more than a dollar's worth out, right? The token, generating the token is now profitable. That is actually unclear. There is some reporting out of Anthropic that they can run inference profitably,

• 1:17:57Speaker 02

  but Anthropic isn't public yet. And they also just said that their total addressable market is $30 trillion, which is, that's bigger than SpaceX said in its IPO. There's not a lot of reporting out of OpenAI about whether its tokens are profitable. There are claims, now there are claims up and down, that inference can and will be profitable for these companies to generate the tokens. We just don't have the actual numbers. We just don't. They're not public companies and they have not had any call to share these numbers with us. They might, and there is reporting this week, Alex Heath actually wrote a Time cover story about OpenAI. And in that, he said Sarah Fry, the CFO, is running mock public company drills where they pretend to have earnings

• 1:18:38Speaker 02

  so they can be ready for the IPO. So like, it's coming, the transparency is coming. But the claim here from Nvidia is the tokens are profitable, which means if you build a data center and you run them, then you will make a profit running the data center on Nvidia chips. If that's true, then it's all going to be fine. If that's not true, and I'm just saying, we don't know, then a lot of things are going to come to an end pretty quickly. Then next to that is whether actually putting AI in your workplace or doing a big AI digital transformation with the help of your friendly local private equity or consulting firm will actually make your business more profitable. And no one knows the answer to that question. Like, truly no one knows the answer to that question because we've only just begun. So I, Nvidia is, like I said, they're selling a lot of chips.

• 1:19:24Speaker 02

  The second and third order of whether those chips are profitable is not in focus yet, regardless of what Jensen's saying here.

• 1:19:31Speaker 03

  The other big Nvidia news this week that I wanted to mention briefly is there is a rumor, it's not confirmed. It's a rumor that they might buy Hugging Face for $13 billion, which is kind of the hub for open source AI models. This would be a very big deal, very big hedge for them to make sure that the entire open source AI ecosystem is optimized for Nvidia chips. So you can, you can see the logic there. This is not confirmed yet. Who knows? Perhaps by the time this show airs, it will be. But that, that is the next thing that has sent people into a tizzy. $13 billion is not a lot of dollars for Nvidia.

• 1:20:08David Pierce?

  Also, notably, the company that got autonomously hacked by OpenAI. And I think we've been waiting for the day in which a company gets autonomously hacked by one of these companies and is not happy about it. Hugging Face was fine. Nvidia will probably be mostly okay with it because they're all sort of circularly financing each other. The moment when it's a company that's not within that ring of trust, it might be, uh,

• 1:20:34Speaker 03

  Well, it's very funny because they're like, we did get autonomously hacked, but look at how good the AI is, right? Like, look how crazy this was.

• 1:20:45David Pierce?

  Shows it's working, huh? Yeah. It was very notable that when that hack happened, everyone came out and said, this is awesome.

• 1:20:54David Pierce?

  Because it's not gonna be awesome in the future. Yeah. It's gonna be a little less awesome.

• 1:20:57Speaker 02

  We have breaking news here. There's an open letter signed by over 100 companies, including OpenAI, Anthropic and Google, saying that we need a global surge in cyber defense and that AI-enabled cyber attacks will become far more widespread and sophisticated. So we need to put cyber-capable AI in the hands of defenders, starting with teams protecting essential services.

• 1:21:16David Pierce?

  So we need to use Mythos.

• 1:21:18Speaker 02

  We need more AI to protect us from the AI that we forgot to control.

• 1:21:22David Pierce?

  Cool. I look forward to them all taking action on that open letter immediately. Immediately.

• 1:21:27Speaker 02

  By the way, there's also reporting on just the details of the Hugging Face hack have been reported now. They released their internal report and boy, is it worse than people thought.

• 1:21:36David Pierce?

  Mm-hmm.

• 1:21:37Speaker 02

  Right? A bunch of agents at OpenAI started a message board and like talk to each other and send each other messages and how to break out. It's very good stuff. If you like, like cyberpunk movies about the world ending.

• 1:21:50David Pierce?

  Heist film. Sort of a heist.

• 1:21:53Speaker 02

  But you know, one of the reasons Nvidia might want to buy Hugging Face is to more closely align it with OpenAI, which is they are all tied up with in different ways and maybe keep, keep anyone from, from talking about this stuff too much. Cause that's, this is how you get the regulation.

• 1:22:09David Pierce?

  Right. Okay. David, do you have anything for us that is not going to destroy the world? Well, I was gonna make it about this Pokemon Sleep Fitbit Air.

• 1:22:19Speaker 02

  Wait, Pokemon Sleep Fitbit Air is an incredible series of words.

• 1:22:23David Pierce?

  Colab of the century. I will talk about it, I guess. Okay, fine. So it makes sense to me that Nintendo would make a Pokemon Fitbit Air. Sure, I guess. All these companies want to address younger and younger markets. Obviously, that's what the Chromebook was for, to get it into the hands of children in schools. So they eventually use more Google products and services. It's especially easy to get into the hands of children when you can go to the parents and say, "We're gonna gamify your child's sleep to make sure they're on their phone less and they are spending more time sleeping." For those that don't know, Pokemon Sleep, and I think a lot of people don't know, to be clear, Pokemon Sleep is an app on your

• 1:23:03David Pierce?

  phone where the more you sleep and the better you sleep, you befriend and level up different Pokemon. So it is an app that is made to not be used because you're sleeping and then when you wake up, you get to play with your Pokemon. And this has nothing to do with Pokemon Go? No. Okay. No. And there's a whole- So it's a different game? It's a different game. Where you carry things around and that helps you get Pokemon? Carry things around? Or you have to wear this thing? Oh, no. You just sleep. You just- You just sleep. You just sleep. You just sleep and it gives you points. And it's very, it's very simple, right? Okay. For some reason, Nintendo's released a Pokemon Sleep Edition, which as Mark has pointed

• 1:23:43David Pierce?

  out on our podcast yesterday, it's a more blue, like Steph Curry Fitbit Air than the official Steph Curry one is because it's actually like the, the, uh, what is the team? Oakland? Is it Oakland? Asking the wrong guy. I'm so sorry. What is the basketball team Steph Curry's on?

• 1:24:00Speaker 02

  The Warriors?

• 1:24:02David Pierce?

  Golden State Warriors.

• 1:24:02Speaker 02

  Did you say Oak- okay?

• 1:24:03David Pierce?

  I don't know. Look, I'm not a sports guy.

• 1:24:05Speaker 02

  That was such a confusing question. I couldn't get out Warriors because I was like, is this a trick question?

• 1:24:09David Pierce?

  Is this a trick question? No.

• 1:24:10Speaker 02

  What team is Steph Curry? Okay, go ahead.

• 1:24:12David Pierce?

  So this is a special edition Pokemon Sleep. It costs $129.99 instead of $99.99. So it's more expensive. It is just blue, except for the fact that on the very bottom, there's a little sleeping Pikachu. I like the sleeping Pikachu. I will give it that. But it does say the word mark Pokemon Sleep, which I don't think is great for a thing you wear all the time.

• 1:24:32Speaker 02

  Pokemon Sleep, every time you say it, it sounds like a command. Like you're ordering a Pokemon to go to sleep. A Pokemon-

• 1:24:37David Pierce?

  Sleep.

• 1:24:38Speaker 02

  Or like you, you push the, the band on someone's face and they immediately go down.

• 1:24:42David Pierce?

  Yeah, yeah. The way that I can see this is Google wanting to address the younger market and get them into the health fitness tech stuff because Fitbit has released like kids editions of its Fitbits, right? Now there's a kids edition. If, I look, Pokemon is not only for kids. The kids can also access the Fitbit AI agent that tells them about their sleeping- If you have the pro- How to get a better Snorlax level. Yeah. Well, because your, your sleep score's been bad. It is strange. In the press release they sent me, it has the little like fine print in the bottom and it says the Fitbit Air is not, is for kids 13 and older. And I'm like, well, there's a little bit of a mismatch here because I think that most parents are

• 1:25:25David Pierce?

  going to be buying the Pokemon Sleep model of a Fitbit Air for younger than 13, but I don't know. This, this both does not make a lot of sense to me, but also- Makes a lot of sense. I think it looks nice. It looks, look, the material, I have the regular Fitbit Air. I have the blue one. The material of this one is nicer. It is nicer and it is very deep blue. It's an extra 20 bucks. It better be. It's, it's an extra 30 bucks. Well. Yeah, which is 30%. Okay. I didn't want to talk about that because I just quickly want to talk about the fact that Panic, which is another little game company, game publisher, they are passing on the Playdate tariff refunds to customers. So for those that don't remember, the government charged an illegal tariff. People that were importing things that were not made in America,

• 1:26:07David Pierce?

  Supreme Court struck that down and the government had to pay these companies the refunds back. And most of these companies did nothing with that. They just kept the money. They pocketed the money. Some of them kept the prices the same as the adjusted prices were. Everything's gotten worse. But this week, Panic sent out an email to customers that had bought things like the Playdate during that period and refunded them the difference that they charged for the tariff fee.

• 1:26:34Speaker 02

  That's great.

• 1:26:35David Pierce?

  Which I just think is good. Like, we need more companies doing this. We need to shout out more companies that are doing these good things. Yeah, that's lovely. I just wanted to note that.

• 1:26:45Speaker 02

  That's really great.

• 1:26:46David Pierce?

  It's good. All right. I love that. Okay. Eli, close this out.

• 1:26:51Speaker 02

  I'm ending with camera drama. Of the highest order.

• 1:26:55David Pierce?

  The only way it could happen. You're just trapped in between us. I'm, I'm sorry.

• 1:26:59Speaker 02

  This is very good.

• 1:27:00David Pierce?

  All right. Bring it to us. Bring it to us.

• 1:27:01Speaker 02

  So Waymo this week put out a blog post called 10 AI Lessons From Driving 200+ Million Fully Autonomous Miles. Now you would think this is just your normal blog post, right? You're celebrating a milestone or Waymo. There's a cute little van now. People love a Waymo, especially when they all honk at each other in a circle, disrupting the operations of cities late at night. But in this blog post, Waymo takes an incredibly hard shot at Tesla. So Shrikanth Thirumallai, who's the VP of Onboard Software, doesn't say Elon Musk or Tesla directly in this post, but he writes, "Cameras are incredible, but they aren't enough. For years, there has been a debate over whether cameras alone could

• 1:27:44Speaker 02

  solve full autonomy. Now, after more than 200 million real world miles, the data is clear. Safe, fully autonomous operations at scale require more." That what they mean is LiDAR and radar, which Waymo's obviously have. "They create a rich redundant worldview that no single sensor can replicate." This is incredible shots at Tesla, which is, I think, a few weeks away from the Cybercab launch event.

• 1:28:07David Pierce?

  Yeah.

• 1:28:08Speaker 02

  To which only like very friendly YouTubers have been invited. But if you will recall, Elon, years and years ago, when they took LiDAR off of Teslas, said he thought LiDAR was a local maximum and that Tesla would solve full self-driving with cameras alone. And so now they're about to launch the Cybercab and Waymo, which is usually not in the market for drama in any way, shape or form, especially because they're also part of Google, which is rarely in the market for drama, is just out here with a blog post being like, "Yeah, your shit sucks." As direct as they can be. "After 200 million real world miles, the data is clear. Safe, fully autonomous operations at scale require more than cameras."

• 1:28:50Speaker 02

  That is, there's only one company they're talking about in Tesla, which is minutes away from the Cybercab launch. I think this is pretty wild stuff. Now, we're gonna have a bunch of Tesla fans point out that Teslas do have FSD. It is mostly camera-based. Elon has proven to be more right than wrong about this thing over time. But FSD has a lot of problems, right? The, the coach of the 49ers just got himself hurt because he was relying on FSD and even said, "I knew better." And the car still crashed. Like, that's the level of FSD problems that we have in this country now. Famous people who can afford drivers like, "Ah, the robot will do it." And the car crashes and they are like not present for the start of the football season. Like, that's where we are with FSD. Some of it

• 1:29:35Speaker 02

  is camera, some of it is software, some of it is Tesla's amount of risk. But it's funny that the iPad has LiDAR sensors and Tesla's-

• 1:29:47Speaker 03

  Is this a regulatory play? Like, are they trying to get regulators to be like, only safe robo taxis with LiDAR backup are allowed? And try to edge Tesla out?

• 1:29:59Speaker 02

  I mean, I think there's a little bit of that. I think there's a little bit of just, it is not yet settled how this technology should actually work. Right? We're still in a race. Like Waymos are great. There's lots of Waymos. You can, you can get them in certain cities in the country. They are still not great at snow. There are lots of parts of, in San Francisco, if you want to get from Mountain View to the airport, which is the last time I tried to take a Waymo. It's like, yeah, we can't do that. We're not, we're not going to do that. And so that's regulatory, some of that's technical, some of that is mapping, some of that is safety. Like, there's a lot of that going on. And then, obviously, the Cybercab launch is going to attract a lot of attention. I'm confident Tesla is going to say they can do it with cameras alone because they're going to get that question.

• 1:30:44Speaker 02

  And in Tesla's last earnings call-

• 1:30:46Speaker 03

  They're not going to get that question.

• 1:30:47Speaker 02

  Well, not from-

• 1:30:48Speaker 03

  From the people they invited.

• 1:30:49David Pierce?

  Never the people they invited.

• 1:30:50Speaker 02

  But it's, it will be present because they keep talking about it. So in their last earnings call, the Tesla head of AI said, "Historically, the so-called experts have always claimed that you need LiDARs, radars, HD maps, and the entire kitchen sink to drive safely. We show that's not true. You can have safe, comfortable, and affordable autonomy with just cameras." This should be a huge elevation in Tesla's entire AI approach. So these companies are fighting. Right? The technical approach is not settled. And somewhere in there is safety. And whether or not you trust the car to actually drive itself, even if the cameras get occluded or the LiDAR doesn't work, or whatever things can happen that can go wrong with a self-driving car. But most of the rest of the industry has added LiDAR for all kinds of very obvious reasons, including the fact that LiDAR sensors are getting cheaper over time.

• 1:31:33Speaker 03

  Yes. This feels like an obvious trajectory. Like, yes, they were expensive early on.

• 1:31:38Speaker 02

  Yeah.

• 1:31:39Speaker 03

  I do not think that they are groundbreakingly expensive anymore. Right? When it comes to something as important as safety, it feels like an obvious thing to go back on. But, um, yes, it will be very interesting to see what happens after the Cybercab officially rolls out. I'm here for this drama. I want there to be more prodding at these safety records.

• 1:32:01David Pierce?

  If Apple can afford to put a LiDAR sensor in the iPad Pro, which nobody uses-

• 1:32:05Speaker 03

  Truly.

• 1:32:06David Pierce?

  And then decide to save money on the polishing cloth?

• 1:32:08Speaker 03

  Yes.

• 1:32:09David Pierce?

  I think that they're probably not that expensive anymore.

• 1:32:13Speaker 02

  Tesla's in a place where they have been so vocal about not using LiDAR for so long.

• 1:32:19Speaker 03

  It's their whole personality.

• 1:32:20Speaker 02

  They, yeah, it's like, they gotta, they gotta give up on a core piece of themselves. And if they really give up on it, all of these cars that they have advertised as FSD-capable will not be FSD-capable. And that will put them in a world of pain, which there already were because they were, they were being really sketchy about what, which cars were going to be FSD-capable. Right? It was like hardware three or something they had promised, but now it's not. And that's like, it's going to be like lawsuit city if they ever go back on this and require LiDAR. So they're, they've really boxed themselves in.

• 1:32:53Speaker 03

  Yeah. Okay. Neelai, you teased it a little bit earlier, but what do we have coming up on Decoder?

• 1:32:57Speaker 02

  Decoder next week is going to be great. It's going to be Governor Kathy Hochul. We have a lot to talk about there. And then there's one I can't say that was just, I nerded out for an hour today. It was really fun.

• 1:33:07Speaker 03

  I'm very excited for both of these. I think it's going to be a fun week on Decoder. Cool. That is it for The Vergecast. Remember to subscribe to The Verge for ad-free episodes of all of our podcasts, exclusive newsletters, and a whole lot more. We love to hear from you. You can email us, [email protected], or call the hotline, 866-VERGE-11. The Vergecast is a production of The Verge and the Vox Media Podcast Network. Today's show was produced by Josh Kahas, Eric Gomez, Brandon Kiefer, and Travis Larchuk. We'll see you next week. Neelai?

• 1:33:36Speaker 02

  Back in a while.

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