Apple’s AI 'Gap Year' at WWDC?, Elon Vs. Trump Goes Nuclear, NYTimes’ OpenAI Attack
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Apple's big WWDC developer conference is coming up next week. We'll preview the underwhelming AI news we expect to see, along with the other big announcements. Plus, Elon Musk and Donald Trump get into a flame war for the ages, and the New York Times forces OpenAI to preserve our chats. That's coming up on a Big Technology Podcast Friday edition, right after this.

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welcome to big technology podcast friday edition where we break down the news in our traditional cool-headed and nuanced format we have a massive week of news to break down for you today we're going to preview apple's wwdc we're going to talk about the latest between elon musk and trump

And we're also going to talk a little bit about the New York Times forcing OpenAI to preserve our chat GPT chat logs because the Times thinks that we might be trying to get around the paywall and therefore all of chat GPT logs should be preserved. It's going to be a great week and I'm happy to welcome Ranjan Roy to the show as always on Fridays. Ranjan, great to see you. How's it going? Bromances are dead, Alex. Musk and Trump, the bromance is dead.

So every week, I think, wow, we've had a massive week of news and nothing will quite top the craziness of this week, only to be outdone by almost each subsequent week. And

And I can tell you that as this Trump and Elon feud broke across my Twitter timeline, I couldn't believe it. I was just my mouth was open in shock. We had just had the mooch on to talk about the dissolution of that partnership. And we both were under the impression that they needed each other too much to actually go full nuclear the way they do on most of their enemies or partners when it doesn't exactly go the right way. But that was proven wrong in a big way.

Yeah, I tweeted on November 7th that the bromance would break up in March, off by three months. That's why trading options is hard. If you're ever looking at it, timing is difficult. But come on, it was always inevitable, Alex. I didn't think it would get this bad.

I thought it would be tough to preserve, but I was definitely in the camp that they would figure it out. And I think we'll have a lot to say about that. We've just done a full episode about the political side of Trump and Elon. So why don't we wait until the second half to get to that? Because meanwhile, there's actually some tech news coming in. And we did hear from some listeners who were like, yeah, thanks for having the mooch on, but what about the technology? So here's what's going on.

With technology. We have Apple's WWDC coming up on Monday. I'm going to be on site covering the event for CNBC or with CNBC, I should say. And I will also likely do like a solo pod from Cupertino that day. So stay tuned for that. But it's going to be a weird conference, Ranjan, don't you think? This is the Bloomberg headline about what to expect from

Apple developer event will show it's still far from being an AI leader. I mean, typically you don't want to show your distance from your competitors at your big developer event. Here's what Mark Gurman writes. With the one-year anniversary of Apple intelligence approaching, the company finds itself in a bind. It needs to build some AI buzz at the June 9th Worldwide Developers Conference, but has little to add to the conversation.

Apple's comeback probably won't be happening at this year's event. People within the company believe that the conference may be a letdown from the AI standpoint. Other familiar with the company's planned announcements worry that it could make Apple's shortcomings even more obvious. So there's going to be some minor announcements that we'll get into in a bit. But we've talked about the turmoil, the reorganizations, the failures of Apple intelligence. And clearly, a year later, we're not going to see

any imminent improvement. So what do you think about that, Ranjan? I mean, it was just about a year ago that we were sitting here and

I was hopeful. Longtime listeners know my feelings about Siri, and I was thinking they're going to fix it. They're going to fix Siri, Apple intelligence. It felt a bit bombastic in terms of the promises that are being made, but overall, I figured they would at least at the basic level make Siri a little better given how good voice interactions already were getting on ChatGPT and others.

I think it's clear for everyone they didn't. When, yeah, we've talked what it actually means in terms of what's happening at the organization itself. Still a bit of a mystery. There's definitely been some good reporting on it, but no one has really cracked the code. But I don't know. I think like they have to be a bit more tempered on this one. They can't come out gunslinging AI, AI, AI, because everyone in the entire world has seen what they're doing right now.

Oh, they will be tempered. They will. And they don't have much to announce. I mean, if you think back to last year's event, we were promised effectively a contextually aware assistant, Apple intelligence that could combine signals from your apps and make your life easier by doing things like searching your Gmail and telling you when your flight's going to show up.

That has not materialized. It's not materialized. It's not here. It didn't show up in 2025. We may see it in 2026, but we're definitely not at a place where the company is going to announce anything of that nature. So the folks that are watching this are really looking at this as a gap year for Apple's big AI move. And that's why we're going to get into it. But the big announcements are going to be around the operating system, which to me is just like, uh,

You could see why people are telling Gurman that this might make the shortcomings even more obvious. But there is a bit of news that I wanted to run by you, which is that Apple is going to be opening up some of its foundational models to third party developers. This is from Gurman. The move will let app creators tap into the company's on device technology that are currently used to handle lightweight tasks such as text summarization.

It's a 3 billion parameter model, so it's much smaller than anything that OpenAI uses or anything you might use from OpenAI or even Lama.

But the difference here is that it's going to operate on device rather than a more powerful cloud-based AI model, which requires servers. So Ranjan, does this matter in the scheme of things? We've seen models in the past year become more efficient. We've seen them become cheaper to run. All right, so now we're going to have these on-device AI models that Apple is going to enable developers to use. Do you think that this is a big piece of news or a footnote?

There was a time I would have said this is the most amazing piece of news imaginable because the idea that Apple had a competitive advantage and that it could run on-device inference and AI and actually both from a privacy standpoint and a latency standpoint deliver something far superior than having to call out to a server and process through a trillion parameter model or whatever. It sounded at a time like that was a good idea, but...

I don't think it matters at all because latency is not the problem. Privacy, maybe some could argue, and we're going to get into OpenAI and chat retention in a little bit, but that's not the issue Apple's having right now. Just making a barely functional product, call a server, call a server, call a massive parameter model. Just make your promise about

finding your flight info in your Gmail, which should be the simplest damn thing in the world. Just make that stuff work.

I mean, even, but we've talked about it, even Gemini is struggling to do that. The problem is when you're going through an email inbox, you just have so much information to sort through and that can overwhelm the context windows that these bots are working in. But you're right, like you're Apple, you have this information, people trust you, you should find a way to make it work. You obviously thought there was a way to make it work given your presentations a year prior. So where is it? Like, where's the cream filling? So there is some reporting that Apple's

Apple does have a series of AI projects underway that Gurman reported on that we may not see at WWDC, but I think it's worth at least talking about what the AI roadmap is for Apple because there are some things that seem like they're heading in the right direction. So first of all, there's going to be an LLM Siri, this is from Gurman, which he calls a bold redo of the assistance architecture that should eventually make it more like chat GPT voice mode.

The hope is to finally give Siri a conversational interface. Let me just pause here. I think this is harder than a lot of people are making it out to be. It's like something that everybody is trying to build. I don't think anyone's nailed yet. And I'm just reminded that we haven't seen Alexa Plus roll out broadly yet, even after the February event where this thing was demoed and was supposed to be coming soon.

So it kind of with an assistant that sort of guesses probabilities as opposed to like works within a database. There can be lots of things that go wrong. And it's telling to me that the world's biggest tech giants, world's biggest companies can't figure this out. All right. So I'm going to try to be generous here.

Yes, it's hard. And maybe we're giving Gemini voice too much of a pass because you are right that Gemini within Gmail still is not good at searching through your Gmail. So the data problem of taking a massive data set like your entire email history is a lot harder than maybe we should give it credit for. But like,

Again, ChachiPT voice is so good. Gemini voice is so good. Perplexity voice is so good. All of these, even from a latency standpoint, have gotten pretty amazing. So to me, the idea that-- and I actually almost get from Alexa. Alexa, everyone who owns one probably has some kind of deterministic set of queries they make. So they actually have to fight against those have to work and the new LLM layer has to work.

I can't imagine, I don't know, maybe I'm wrong, that Siri is so ingrained in terms of people's workflows and behaviors that they're afraid to screw it up a little bit in terms of actually giving it a bit of conversation and like LLM-based knowledge. So I think it's harder, I'll give it that, to actually have like a system-level chat that's actually LLM-driven, but I still think they should do it.

Yes. And they might have to make an acquisition. And I have a hot take on that that I'm going to get to in a couple of minutes. But it doesn't seem like it's impossible, like you mentioned. And maybe there is a way for Apple to just buy these capabilities and integrate them into the iPhone. So I'll just leave that little teaser hanging in the air and go to the next thing that this is. Again, this is the next thing that Apple does.

plans to do but we might not see next week and i feel like as we're previewing wwdc and we're asking where's the ai it's very important for us to just quickly talk about some of these things there's also going to be they're also working on a revamped version of its shortcuts app which today lets users create actions such as launching certain features within apps or playing a particular playlist

The new version will let people create those actions using Apple intelligence models that could end up being in 2026. So maybe a voice layer that helps you more easily navigate and use your apps. There's also going to be I think their AI health thing is is underappreciated. Largely, they have a doctor service that's called Nick codename Mulberry and a redesigned health app.

uh the project is in deep in development but probably won't be shown this year i think that's interesting and they also this is kind of wild they have a chat gpt chatbot competitor that can pull in data from the open web which they some employees have called it knowledge uh however employees familiar with the worksites already plagued by some of the same problems that delayed the siri overhaul where do i begin where do i begin okay hold on hold on let's let's let's break this down a bit the shortcuts app

This idea, I actually think it's a really important one in the larger AI conversation. So the idea is Apple has the Shortcuts app, which allows you to kind of connect, basically make your own agentic workflow within Apple's iOS. The idea was that, and this is why listeners, if you wonder why I'm so disillusioned, it's because I was optimistic about this stuff.

a lot of developers were talking about, like maybe your mobile app just becomes a series of program shortcuts that you define to help Siri and its intelligence navigate across and take actions. And so you would, instead of having a whole interface in your app, it's just your defining shortcuts. And there's a lot of development talk among iOS developers around this would be the future of app development.

That hasn't happened. At least they're still recognizing that it's interesting and important. I mean, doctor service...

Really, guys? I don't know. Do you use the health app? I was actually thinking about this the other day. Like, Apple, even the health app itself should be the single greatest opportunity for them. And everyone always feeds in their data into the Apple Health app and is your center of health. And I can see this getting pitched internally, but the app is not that good.

No, it's a bad app, but I do use it. I use it for step tracking. I have used it for weight tracking. Now I use Claude for weight tracking, but I do think there's an opportunity that if you have a place where your data is, especially for watch users to be able to query that data in natural language. And that's why I see some potential. I,

I even, I have an Apple Watch Ultra again, as I rant on Apple, I'm surrounded and covered in Apple gear with AirPods on and everything else. But like, I actually use this third party app. It's called AutoSleep. Their sleep tracking data is a lot better than the Apple actual health sleep tracking data. Like we're in a world where you should not be paying. And again, I'm glad there's still indie developers out there making a living, but like the

The idea like they should have the best sleep tracking data interface presentation out of anybody and they don't. Yeah, no, that is, I mean, again, the question is, can they at this point of their development lifecycle develop good software?

And I mean, they can do operating systems. We know that. And again, like we're burying the lead here because WWDC is going to be a big operating system reveal. But you got to do more than operating systems like that's table stakes. So a couple more features that we're going to see this. We're actually going to see this at WWDC. According to the reports, there's going to be an AI powered power management mode, I guess, to get your your battery more optimized.

I know. And there's also a reboot of a translate app that's going to be integrated with AirPods and Siri. So that might be the flashy demo where you see someone like speaking a language in the AirPods, translating what they're saying in your ears. That could be cool. I don't know, Ranjan. I'm trying to, I mean, I'm flying out to California for this. I'm trying to find something to be excited for.

But I like read out all these updates together and I can't get there. Well, even like as you have in our doc, and then they're going to quietly rebrand several existing features and apps like Safari and photos as AI powered, not to make this just kind of like a product complaint podcast, but photos ever since they introduced the intelligence layer, mine has been indexing for weeks. Like

Searching photos has become significantly worse. And I actually get annoyed when people kind of talk about jamming AI is ruining products because I actually think I'm very, very overall optimistic around AI and generative AI in general. But this is an example where they're making it worse. Yeah.

Come on. Yes. News Apple. Give us something good. Give us that. What was like the table that was glass that that was rumored? There was a screen. Wasn't there something like that? I'm sure there was, but we obviously don't use it. And it's sort of following a theme here where we had last two years ago, Vision Pro dud. Maybe not a complete dud, but underwhelming. Apple intelligence dud. And

After two years of that, we get to this hangover mode. Now, the one interesting, I mean, again, I'm going to go back to this AirPods example because I'm still trying to pull out the thing that I think could be interesting. Maybe it is AirPods. I mean, again, the AirPods, you need the assistant for the AirPods to be good.

But this language thing within the AirPods might be interesting. They're going to do this sleep auto pause where you could listen to something. And if the sense is that you're sleeping, they're going to pause the music or the podcast. They're also going to allow you to control your camera with your AirPods. So like,

If you're standing for like a remote photo or you put your camera, you know, 10 feet away and you get in the frame, you tap your AirPod stem and it takes a photo. I like that. That's cool. The AirPods, there's a ton of potential. We've also heard rumors of them putting a camera on the AirPods and making it something like the Ray-Ban Metas, which is, again, there's potential here. But honestly, what we're seeing with the AI stuff in particular from Apple is just incredible.

it seems to be symptoms of some illness within the physiology of the company. It really seems like the patient is sick and it's sort of just to be disgusting about it, oozing out, you know, nasty stuff. I'm going to get uninvited, but to me, it's always come down to culture and culture then leads to execution. And we've heard about the reorganizations. Those are public. And this is what you get.

And again, I say this covered in Apple hardware and looking at Apple hardware and talking to Apple hardware. Like we're only commenting on this because we're so deep in the ecosystem that we want it to work. But it does not look like it is. I guess I would distinguish Vision Pro...

maybe dud, but amazing piece of technology. I actually think that was very different than Apple Intelligence. That was almost like too forward looking a piece of technology or too niche, but still an incredible piece of technology. Apple Intelligence is neither of the above.

You know, Ranjan, though, it starts with us. Like when we are like, you know, the early adopters in some ways, like they see this stuff coming beforehand. Not to like, you know, us, our listeners, like we see the direction technology is going because we're steeped here. So these things that we're picking up on actually like...

Yeah, everyone's using their iPhone like the same way they always have. Have we seen a demolition of the traditional search market? No. Have we seen a disruption of the traditional smartphone market? No. But will that come? Inevitably. And if you think about Apple, one last thing, if you think about Apple, iPhone shipments down 2024, according to IDC, 232 million.

Yeah, a million iPhone shipments. 2023, 234. So actually, iPhone shipments are down. Market share, 20% in 2023, 18.7% in 2024. The only reason why revenue remains somewhat consistent is because the average selling price of the iPhone has gone up. I think kind of like building on that,

It is. I mean, there's the data, there's the iPhone sales, there's the lack of Vision Pro sales, there's all these things. But even for me, there is this kind of like almost emotional, I have not felt, there was many years where like, I mean, within friend groups, especially living here in New York, if you had a blue bubble on iMessage, people laughed.

Like I remember I had switched to the pixel when it first came out and talking to- - A blue or a green bubble?

- Oh, sorry, green bubble, green bubble. - People will laugh at your blue or green bubble. - Yeah, green bubble. I was talking to one of my friends, this is like 2017. I was married, he was single, and I was like, "Oh yeah, I switched to the Pixel, I'm checking it out." He goes, "I'm single, man. I'm not trying to rock an Android if I'm talking to a girl." Like, that's where culture was. And now I really am actually jealous. Someone was showing me the new Pixel that has Gemini directly integrated

As I'm trying to talk to Siri, like I'm actually jealous of other devices. And there was a long period of time where it just it was the exact opposite. So I really think there's a culture shift here. Maybe the thing that sort of returns this company. No, I can't even say this. Like the thing that they're going to bet on this year, I was going to say the thing that returns this company's glory. But it's going to be AI if they get it right. And by the way, they have time.

They have time to get it right. They just need to. But the thing we're going to hear about largely, and we're going to do this quickly at WWDC, is there's going to be some new operating systems. I don't want to downplay it too much because operating systems, that's your bread and butter. If you change it, you need to disrupt yourself. But again, like, how do you do it?

The first thing that's going to happen is we're going to go to operating systems that have the year instead of the number. So it's going to go from iOS 18 to iOS 26. So pour one out for iOS 19, 20, 21, 22, 23, 24, and 25. You were so close, but you didn't make it. Try again next century.

And then there's going to be a design shift where it's going to mirror the Vision Pro. So there might be some transparency or lightness in this Apple OS ecosystem. That's going to be everyone saying that's going to be the lead news.

"You know what? I like this. I'm gonna go. I like this." - Thank God. No, we needed some good thing here. - No, no, you know what? From a pure branding and comms perspective,

I kind of like, because again, I am an Apple convert in every which way, like every device I own. And I'm like a tech nerd enough that I like look at what are the latest updates and tvOS 15, watchOS 12.2, like keeping track of this stuff. I kind of like the idea that we're at 26.

And it shows courage, Alex. It shows courage. It shows you're willing to take the hard decisions that no one will give you respect for, but you're willing to make a change for the future. Well, Tim Cook famously said that when they killed the headphone jack for the single USB port and made all headphones wireless.

And I sort of mocked that at the time, but in retrospect, I don't know if courage is the word I would use necessarily, but it was the right choice. Never know. Yeah, actually, there's probably still people who disagree, but I agree with you on that one, that the headphone jack, the Mac, I'm glad they went back to...

multiple ports, I think at least on the MacBook Pro was a good thing. No more dongles in my life, but yeah, they make some decisions, I guess. So now just compete. That's all I'm asking for. Let's say WWDC goes according to plan where they do this new operating system. They have some AI announcements. They take some products that have always been there. They call them AI.

maybe they wink at what's coming down the road you never know there could be a surprise the expectations are low we have sufficiently lowered them for all of our listeners over the past 25 minutes is this a good wwdc for apple like are we going to show up next friday and say apple's been in better shape this week than it was on monday or it was last maybe they got a surprise i don't know maybe it's giving too much credit but like as we're talking

It's clear that I don't, and they have almost gone out of their way to not drum up any hype around this or set any high expectations. Maybe that's actually defensive or maybe I don't know what they're going to, the new Apple glasses are coming out. Maybe something's going to get announced. Here's the surprise I would love to see. Tim Cook takes the stage at the beginning of WWDC and says,

All right, we're going to flip the order this year. Usually we give you all the updates and then a surprise at the end. But today I want to call out a special guest that's going to be a big part of Apple moving forward into the future. And Outwalk's Perplexity CEO, Arvind Srinivas. Yes. Who has just agreed to sell his company to Apple for a whopping $20 billion. Yes.

Now, Perplexity is out raising 14 at a 14 billion dollar valuation right now. So a 20 billion dollar sale, I think, would be decent or pretty good for all of its investors going to Apple. It would have to take it. Remember, Apple this year said it was issuing a 100 billion dollar share buyback, which means it has a ton of cash on hand. And what do you do with that cash on hand if not

Position yourself for the next era of computing and perplexity would be the perfect choice. Let me give you a couple of reasons. First of all, perplexity is cheap right now and it has been gaining a tremendous amount of

We have a headline from TechCrunch where Arvind Srinivas spoke at Bloomberg's Tech Summit this week. He spoke on Thursday. He said, perplexity received 780 million queries in May. He said, give it a year. We'll be doing a billion queries a week if we can sustain this growth rate. And the first day they did 3,000 queries in a day. So now they're doing 30 million queries a day.

And that growth, he says, has been phenomenal. So they're rising fast. You generally want to pick up a company before they've sort of hit that, you know, hit that point where they're too expensive to acquire. We also know that Google and Apple may be forced to and I'm sorry. Yeah, Google and Apple may be forced to kill their 20 billion dollar a year deal where Google pays Apple to be the default search engine.

If Apple gets ahead of this, first of all, it buys it. Now it has a backup.

Second of all, it buys it now. It has much more leverage than if it were to wait for that ruling to come out because perplexity is going to say, oh, you now you need a search. You need a search replacement. Well, today's price isn't yesterday's price. It's going to be 40 billion or something like that. I'm just playing it out. And of course, perplexity would solve the AI search problem for Apple. It would solve many of the Siri problems for Apple. And like you mentioned, they have voice.

So this would be a slam dunk deal. I think Apple should do it, should do it this week. I love this. I love this. Even the dramatic rollout. But I agree. And also, perplexity is growing. But from a consumer standpoint, it's still tough. Like, we've seen Anthropic. Like, again, Anthropic is making a very conscious decision of moving more towards coding or, like, API-driven revenue because...

competing against... And Gemini's getting good at a consumer level competing against Gemini and Chachi PT, which is the Coca-Cola and Gemini's the Pepsi, basically. And then you're sitting there as maybe a poppy or something like that, which is still not bad. But I think like making some... Good old poppy. Gut health or whatever it is. I think like...

Get a little soda. Yeah. I think it would make, yeah, it makes all the sense in the world I'm sold. It makes completely all the sense baking it in, getting rid of Siri, maybe even renaming Siri and saying, we get it. We fell behind. Let's just change up everything. Plex. Plex. Turn on the lights. Yeah. That's it? You're welcome.

Send the invoice to Kantrowitz and Roy. Exactly. And here's why I think so. Maybe it happens at WWDC. Maybe it doesn't. Here's why I think it's likely to happen. So you listen to the words of Arvind Srinivas, the CEO of Perplexity, and it sounds like he's doing some positioning here.

Now, he's been attacking Google from the beginning. But again, at this Bloomberg conference, he said Google's assistant was a terrible product and said the tech giant introduces the same artificial intelligence feature year after year without actually shipping it to users.

If you're Eddie Q, the head of services for Apple, and you're listening to that, you got to love it. Basically, he's accusing Google of the same thing that people have been accusing Apple of. So sort of taking Apple's side in some ways while saying, you know, hey, my product might be in a better spot. And Perplexity is also right now in talks for a wide ranging deal to integrate its technology into Samsung devices.

You're Apple. You're seeing this go down. You're watching the AI battle accelerate and perplexity, which you can afford, which would help your business in every which way, which is slagging Google for you, is on the cusp of making a deal with Samsung. That's where you go in and you make your acquisition. Yeah. And another angle of that could be

And maybe we're just beginning to pine the sky optimistic here. But like, if you're a shareholder, that the practice of Apple for so many years of just churning out cash and buying back shares has worked well, and it's boosted the stock price, and they basically were just a cash machine. But right now, the idea that like,

you are not investing in something. Everyone recognizes something is broken and you have the money to do something about it. That if you're shareholders, you're going to have a problem with that or you should. You should be like, I mean, obviously it's nice to receive the buyback boosts to a share price, but at a certain point, like guys, invest that money in something because you're going to be disrupted.

I mean, ultimately, Apple on the market has to be growth stock, right? And what is this going to be a non-growth stock that's issuing dividends and doing buybacks? Is that a company you want to hold on your balance sheet? Well, and for like as a high tech innovation company, they have to be. They have been. But this isn't like like a utility or I mean, this is should be.

a growth stock and a growing company. I think this would be the best $20 billion that Apple spends if it does it. And let me take you back before we move on, before we take a break and talk about Elon and Trump, for those who are interested. But let me just take you back to May 7th, a report in The Verge covering Eddie Q, the head of Apple services division,

covering him testifying in the Google antitrust trial. The headline: "Apple is looking to add perplexity and other AI search engines to Safari." And what Q says is that it's still early days for generative AI, that Apple has agreement with OpenAI for some AI services. It's important to make sure we have the capability to switch

If we have to. Now, of course, he's saying this because he doesn't want the judge to kill this deal with Google. By the way, all indications are that that deal is really under threat. The $20 billion deal, which I'm going to write about in big technology probably on Sunday. So stay tuned for that. I think it's one of the most underrated liabilities for big tech companies to company. It's one of the most underrated liabilities for a big tech company today, if not the biggest. Q has said, look, we might switch off of Google.

That tank Google stock, which kind of shows you the amount of value that's associated with this, makes too much sense for this deal not to happen. - Yeah, I was just looking up $410 billion spent in share buybacks over the last five years, expected 90 billion this year. As your company is like clearly under threat of disruption, spend the 20. - Stop wasting time. - Spend the 20. - Go by perplexity and remember,

I was speaking with Mark Mahaney about this, Evercore ISI analyst. We were talking about it today. Think about it and it probably will show up in the story. Think about it this way. You're going through antitrust review of this deal. Apple has a negligible share of the search market and Perplexity has a negligible share of the search market. Deal will sail through, sail through.

Tim Cook, get that checkbook out and go buy Perplexity today. Hey, Plex, do the deal. Do the deal. Make it Plex. All right. We're going to talk about Elon and Trump. We're going to talk about the New York Times and OpenAI, and we're going to do it right after this break. The future with AI is moving fast, but progress takes more than speed. It takes direction. Cisco gives you the infrastructure, security, and insights to implement AI with purpose. From data centers to workplaces,

We don't just help you keep up. We help you lead. Cisco, making AI work for you. Visit cisco.com slash AI. That's cisco.com slash AI. And we're back here on Big Technology Podcast Friday edition. All right. So on Wednesday, Anthony Scaramucci came onto the show. We recorded on Tuesday and we had this discussion about Elon Musk's criticism of the big, beautiful bill.

And I said, basically, this is almost a direct quote, I think. I said, well, they're not in a flame war, or maybe they are, because Elon is criticizing this Build Back Better deal. And Anthony and I discussed a little bit about the politics between Elon and Trump. And we both sort of came to the conclusion that they had too much to lose for this to happen.

to turn into anything but a cordial parting. Well, we were both wrong. And Anthony, I think, did a very good job explaining why Elon fell out of favor in Washington. But I think the thing that everyone watching this has been surprised by, and you can make the opposite argument, but it's been a surprise to me that it went nuclear like this. And that Elon has in one afternoon on Thursday, said,

said that he was responsible for Trump's victory, said that Trump was, I'm just going to quote it because I don't want to get sued. Elon Musk said real Donald Trump is in the Epstein files. That is the real reason they have not been made public.

Okay. So, and Trump hitting back saying Elon was wearing thin and that he asked him to leave. He took away this EV mandate that forced everyone to buy electric cars that nobody else wanted. And he knew for months I was going to do. And then he just went all caps crazy. Flame war for the ages. Ranjan, let me just toss it to you. What was going through your mind when you saw this and what,

If our assumption was that they had too much to lose to go nuclear on each other, why do you think they went nuclear on each other? I think your assumption is based on a prisoner's dilemma of two rational actors making decisions, analytically driven decisions. And I don't think that's what we're dealing with. I'd like to say, we must, I need to go back through past of our podcast audio, but I tweeted on November 7th,

breakup Musk-Trump coming in March. I was off by three months. But yeah, I think, I don't know. I actually, out of all the things that have captivated my attention, this one almost I didn't pay that much attention to just because it was sad. It was kind of painful. But to me, again, expected.

these are not rational actors in the traditional sense. And again, it's been the strength of both of them to not be a rational actor by kind of like conventional wisdom. So I think it was inevitable. And I'm more curious of where this goes as opposed to what's happening now. I will say like the, I definitely enjoyed the memes of like, Trump is in the Epstein files, yet I helped him get elected, obviously. Yeah.

There's logical inconsistency there, but overall, I mean, where this goes is- Maybe Elon didn't know beforehand. Yeah. But let's be honest, if Trump was in the Epstein files, I mean, this is a point that Laura Loomer made, so all caveats included. If he was in the Epstein files, you don't think the Biden administration would have let those out?

Oh, yeah, yeah. I mean, 100%. And I think I want the Epstein files, though. Sure. Let's take a look at them. Imagine if they're just incredibly boring. I'm sure they are. Like even Dan Bongino came out and said that there's no evidence that Epstein was...

was killed like all science points him killing himself so yeah yeah release them we the transparency was good because release the files release the files that's our call here on big technology apple by perplexity and then release the epstein files that that's our platform that's our thing now you got to stand for something ron john yeah

He's running. He's running. He's running. I will say here publicly that I was wrong. I said to you and to Chris Hayes on an episode that I thought that this relationship had more staying power than a lot of people were giving it credit for. And even with Mooch didn't bring up the fact that it could blow up spectacularly, although said maybe we're in the beginning of the flame war to be completely clear about what happened. But

I was wrong. I didn't see it going as bad as it did. And it did go as bad as it did or even worse than I think we we imagined it could. Where does it go? That's that's that's what matters. So for implications for four players here, Tesla, SpaceX, the tech right and Elon and his legacy. So let's just do it quickly. So space. So Tesla, they dropped 14 percent. Stock drops 14 percent on Thursday.

and it's up five or close to six percent today friday so a bit of a rebound but uh loses 100 billion in market cap basically right away and um look it's got there's a chance that it's going to have this autonomous driving pilot or launch coming up in austin next week who knows if that is going to be delayed but this will definitely hang over it because of course if you're

Running self-driving cars, you need regulatory approval. And of course, it's on a state level, but we know how the U.S. government works. The federal level can dictate to the state because the federal level does have a lot of funding. Big, beautiful spending, shall we say, that impacts the state. So that is yet to be determined. I think we've also seen a purchasing pullback on Teslas.

especially in Europe. I mean, I think Europe fell 50% year over year in a couple of months. And that is a damning trend for Tesla sales because the company needs to sell cars. It's a car company for now, at least. So I don't think Elon breaking with Trump is going to be good for winning back those buyers in Europe. That's a pipe dream. And I think it will probably stop

let's say Trump supporting a cyber truck would be buyers from going out and buying the cyber trucks. So it could end up being that like this doesn't help with those that it's hurt and it hurts those that were leaning into the Elon camp leading to worse prospects for Tesla. Of course, that's the most negative possible interpretation of what's happening. And maybe they make up next week and, you know, all is hunky dory, but it's hard to see that happening. What do you think, Rajan? Well, I think

Just as a sign of the state of politics right now, one of my friends was convinced that Trump and Musk are going to make up next week, and both of them are just very long Tesla call options. And I remember he kind of said this, and it's somewhat in jest, but I was like, you realize? Do you really think so? This is the president of the United States we're talking about, yet this is actually a thought and a conversation. But I think Tesla, the car company...

I don't see how you recover from this. Cause again, like the core constituency of more environmentally driven people, you're not going to just make up that brand damage tomorrow. I think maybe to take the like positive side on things, I think this is going to force robots or, uh,

self-driving like they have to nail one of those they have to Optimus self-drive like self-drive robo taxis Finally, it's been promised for a long time. He's going back deliver one of those and everything's gonna be okay but Tesla as purely a car company the valuation has not made sense for a long time and it does it certainly doesn't make sense now and is under threat from a lot of different directions and

here's what you need you need the autonomous driving to work so that'll be a good answer if it starts next week and it actually works if that happens i think tesla is saved elon's legacy is saved we're going to get to that in a moment but uh it has to work bottom line spacex though spacex is going to be interesting so spacex has a ton of money in federal contracts and if you remember sagar and jedi's episode here a couple of months ago

We talked about this potential that maybe like Democrats get elected and they doge SpaceX contracts. We never thought that maybe Trump would then doge SpaceX himself. But certainly it seems like Trump is going to think about the subsidies. He's put this on social that Musk gets and probably the contracts, although you would I would argue and I think it's.

hard to really go against this that the us government kind of needs spacex more than spacex needs them or maybe not even more but they both need each other and that's why elon kind of tweeted like make my day because like nobody's gonna go to the international space station without them so this is again this is uh some reporting from our big technology fellow owen levine he says uh he writes again in in our our newsletter from

from Thursday beyond its existing 4.5 billion in federal contracts. SpaceX is also poised to get a slice of the 42 billion in contracts to provide internet connections to rural areas through Starlink. They also have this, this,

Dragon capsule that they are working with with the ISS and Musk said, we're going to stop that. And then like in an account with like 20 followers said, you know, you probably shouldn't stop that. And he goes, good idea. We won't stop that. But DXYZ, which is a fund that has a large portion of its portfolio invested in SpaceX, went down 10 percent yesterday as well. So that's the SpaceX outlook. What do you think? Yeah, I mean, I think you make the right point that

They need each other a lot more than Tesla and the US government need each other. There's been a lot of advance and in terms of like, it's our overall as a country positioning, especially relative to China in terms of space exploration, in terms of satellite launches, like

And I think it's a much more sensitive, interesting one. Like, could Trump be vindictive enough to actually risk all that and just go nuclear on it? Certainly. I actually, you know, I think the SpaceX story is going to be more interesting in the near term because Tesla is going to, again, if some massive technological advance happens in the next few months, it gets very interesting. But otherwise, you see like,

a slow decline and maybe some kind of rebound over time or steady, like steadying of their overall sales. But SpaceX can move fast in either direction. Oh, yes, you're right. Totally immediate consequence that we could see. All right. What about the tech right?

So this coalition among people who supported Elon and Trump together sort of coalesced in Silicon Valley, not all of Silicon Valley, but some vocal leaders, a lot of VCs. Think of Marc Andreessen, for instance. Some of the all-in guys like David Sachs must be having an awkward moment in the White House, probably hiding in his office, thinking about Trump.

His two buddies are fighting. So there's an interesting moment here where the tech right may have to pick sides. Do you go with Elon or do you go with Trump if this fissure continues? My perspective is that they are going to try to not take sides, that you're going to see things like Bill Ackman saying, you know, these you guys really need to get along for the good of the country. I don't know if you would include David Friedberg in this conversation.

in this group but he wrote uh he's been one of the all-in hosts he wrote China just won he's been to the White House a couple times uh to do some interviews so basically not trying to pick sides saying China won uh I think many will land with Trump over Musk if you really press them he is the president after all but what do you think about the implications of this fissure in the tech right I think majority of the names you just kind of listed off

will move on and act like none of this ever happened, that they said anything or had had any position relative to either Musk or Trump. I think overall, people move back towards Musk and definitely not choose Trump over Musk. But I think the idea that they ever had positioned the two of them together as truly transformative, people will just ignore that they said themselves.

Now, let's talk about Elon's legacy. I think that it's still too early to say where this is going to be in the Elon Musk history book, but it will be there. And I think the real question is, is this the first chapter? Is it a footnote? My sort of cynical take is it's just going to depend on how his businesses do. Like if SpaceX gets to Mars and Tesla starts shuffling people around the world with autonomous cars, then this will be a footnote. But

those businesses future are tied in some ways to uh Elon's political bed here I agree with that I mean I think like the amount of wealth created both for Elon Musk but also for every shareholder of any of those companies is what drove the power to to like get to the White House in the capacity that he did so yeah I think in terms of Legacy

It's always been a bad bet to bet against Elon and he's still around and he's got a long way to go. So I think that side, that story remains to be written. I think like, you know, what the effect of Doge was probably and hopefully more comes out and we actually start to see some concrete evidence of certainly the negative a lot came out and maybe there was some positive, but overall, like what were the real impacts of those few months of

running around with Doge, but, uh, yeah, I think overall Elon's legacy, we, it remains to be written overall. I do want to like pause for a point, a moment here and just kind of like you brought up the Doge stuff. I think we should talk about it. I think that, uh,

If it's possible, what he did with USAID has been undercovered. Probably good arguments for reforming it, but why do you destroy it? And then there's other stuff that we're going to find with Doge that just didn't work according to plan. We might look at this as a moment that...

Went from Elon Musk being a suboptimal performer with Doge to being maybe a disaster. Because there's this other tool, this is from ProPublica, that they developed this error-prone AI tool to munch Veterans Affairs contracts online.

Here's from the story. There was an engineer who worked for Doge who built an artificial intelligence tool to identify which services from private companies were not essential. He labeled those contracts munchable. But the tool hallucinated the sizes of contracts, frequently misread them and inflated their values and concluded more than a thousand or

each worth $34 million, while some of them were worth only $35,000. The AI tool flagged more than 2,000 contracts for munching. It's unclear how many have been or are on track to be canceled, but they included, but some of the canceled contracts, unclear if this is 100%,

or related at all, but some of the VA contracts that have been canceled, including one to maintain a gene sequencing device used to develop better cancer treatments. Another was for blood sample analysis in support of VA research. Another was to provide additional tools to measure and improve the care that nurses provide. The programmer that worked with Doge, Sahil Lavengia, he said this article

And he was also, I think he was, he was, um, ousted or left Doge, uh, after going public with some information about it. Uh,

He said, I think mistakes were made. I'm sure mistakes were made. Mistakes are always made. I would never recommend someone run my code and do what it says. It's like that Office episode where Steve Carell drives into a lake because Google Maps says drive into the lake. Do not drive into the lake. This is bad. I mean, you had basically people coming in, volunteering, building AI tools, but

And then the government just kind of following their advice seemingly blindly and killing important programs. What a disaster. Yeah. I mean, I think it's definitely...

pretty terrible. I think you're right that perhaps it was undercover because also everything was moving so fast that actually like trying to get a handle on things and report on it properly was incredibly difficult. So what the actual impacts are, maybe there is a lot more to come out. I think to bring it back on the tech side, I think like this is actually a perfect example as well of like

AI and like the idea of like at scale going over contracts. I wonder if they're like what models they were just creating wrappers around for Doge AI and like to actually make decisions without even reviewing them in any kind of way or like understanding what you're looking at.

this is like exactly the nightmare scenario that people who are negative and bearish on ai present i think that part trying to separate this purely and at a technological level like that's the stuff that's almost like frustrating because it's this is exactly the negative scenario that everyone presents and in most cases that's not how things are operating but this was exactly that just you

using AI in a shitty way and then actually like making really bad decisions using that. Yeah. Like maybe there were some good, I think there were some good implementations from the Doge program. Again, we're going to have, I've been teasing it for a while, but the news cycle has been nuts, but Bill Vass from Booz Allen is going to come on and talk a little bit about the technology implementations and how they've helped. But yeah, some of these things, I don't know. I don't know how you justify them.

Okay, very quickly before we end, OpenAI, New York Times, they're in court and the New York Times is telling OpenAI, has gotten a judge to rule in favor of this position, that OpenAI has to preserve its chats because people who are using OpenAI's chat GPT to go around the New York Times paywall may delete those chats.

And therefore, OpenAI has to preserve all ChatGPT chats to some degree. I mean, I guess this is people using ChatGPT versus some of these bespoke APIs. Is this a privacy disaster waiting to happen? I actually think this is one of the most interesting court cases going on right now because think about the implications. It's OpenAI wants to delete your data, right?

And most people are worried about OpenAI hoovering up too much data and, you know, copyright issues and whatever else. They're saying, let us delete your data. And from like, especially a security and privacy standpoint as a user, you want to be able to delete your data. And then...

because of the New York Times worrying about OpenAI actually allowing users to access copyrighted material, saying they should not be allowed to delete your data, is kind of a ninja move, I think.

It's kind of like you're both forcing OpenAI to actually have to answer to accusations around copyright, but you're also kind of, if this holds, this actually hurts OpenAI even more from a privacy perspective because the branding element that they're holding on to all of your chats

As we've talked about at length, people are getting more and more personal with chat GPT. And if that actually, that's a very sticky point from a product perspective. So if people start feeling a little ickier about it and like a little more uncomfortable because they know that

that data is always living somewhere, that actually could be like a double-edged threat on open AI coming from the New York Times. I wonder if they're that strategic about it. I don't know. Doesn't that make the New York Times then a bad actor for doing that? Just like imperiling hundreds of millions of users for like a W? I like it. I like savage New York Times coming in in the cage match. If they're acting that savagely, I kind of like it in this one.

Could I say one way that OpenAI could have avoided all of this is, I guess... Not call the New York Times. We don't know the answer right now because the court case is still going, but like, come on. Maybe talk to the Times before putting some of their material in your large language model? Yeah, but they can't do that. They feasibly cannot talk to every single publisher and have a conversation, have a request. Their business model...

is dependent on not having those conversations. And they're going to have, I think they do licensing deals with like Reuters, a couple others, and they're going to have at a high level. But like, if that becomes the absolute norm and expectation, then crawling margins in big technology, we should, they should have to ask us first. Like, can you imagine the level of team you would need to make that happen? Spirit of the law.

Or spirit of the situation. Do you think open... Yeah, because let's put the law aside for a moment. Let's talk purely on spirits here. Spirits. It's Friday. Do you think the Times is right to tell OpenAI not to crawl the stuff? Like, I don't know, are people really... Could OpenAI, you know, effectively crawl that information and transform it? They're not like... I don't think they're just copying and pasting the New York Times and making it available in ChatGPT.

So is there something actually all that wrong with what OpenAI is doing? Well, we've seen this over and over on the publisher side, like perplexity in Forbes, but perplexity was even kind of presenting an image in a very long summary of paywalled content. OpenAI, same concern, but the New York Times had shown that they can almost verbatim recreate stories on ChatGPT. So on one hand, obviously that's a massive threat, but then on the other, like,

Could you argue that the New York Times, as people migrate more towards these platforms, actually suddenly is left out of the conversation? Perhaps as well. So like, I think in this, I don't know, like, I think asking, forcing them to not delete chats because some of them might have shown people trying to bypass the New York Times paywall.

That is ridiculous. From like a pure, like that feels like legal ninjutsu. But again, if the gray lady's jumping off the top rope and dropping an elbow, like I kind of like it from a purely like succession style business war standpoint. I like it.

You're all about that fight, Ron John. You love the New York Times open AI dropping elbows on each other's faces. But when Musk and Trump are fighting, whatever, I was expecting that. Musk, Trump, that's easy. Open AI, the gray lady. This is the main event. Samming the gray lady. All right.

Rajan, great speaking as always. I wish we had two hours. This is just a great conversation. Let's do it again next week. See you next week. See you next week. All right, everybody. Thank you for listening. MG Siegler will be my special guest. WWDC week. We'll record right after the event and have that up for you on Wednesday. Also stay tuned. Maybe we do a solo pod from the event and then Rajan and I will be back on Friday to break down the week's news. Thanks for listening. And we'll see you next time on big technology podcast.