Apple’s WWDC Retreat, Liquid Glass and One Question, Meta Puts $14.8 Billion Toward an AI Reset
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Hello, and welcome back to another episode of Sharp Tech. I'm Andrew Sharp, and on the other line, Ben Thompson. Ben, how you doing?

I'm doing okay, Andrew. This is the first week of the transition back to Wisconsin for the summer. It's been a busy one. Always an adventure. A little hectic. WBC is this week. Had to write about it. And I literally just finished recording my Thursday interview, which I call out because I talked to Patrick McGee, who wrote Apple in China. And I've talked to other authors. And, you know, they might be good books. But I've never given...

This level of endorsement, which is everyone listening to this podcast needs to read this book. It's one of the best tech books ever. It's one of the best books about Apple. It's one of the best books about China. It's fantastic. So everyone, you can listen to it if you like, just, but definitely go get the book. There.

There you go. Well, I can't wait to listen to the interview and I can't wait to double back and discuss it at some point in the next week or two. Your offline endorsement came through on iMessage before the interview and said it was the best book. It may be the best book ever written about Apple, maybe the best book ever written about China. And I had purchased it and haven't gotten around to actually reading it. And so that was the kick in the ass that I needed to

to get on it over the next month or so here. So I look forward to diving into all of that. I'm also selfishly determined. I think it's at number seven on the New York Times nonfiction list. I want to see. Let's see what poll we have. Give it the stratechery bump. That's right. The sharp tech bump. Absolutely. Wow.

Well, audience, you have your assignment for now. It was actually a bad idea. I think it came out like three weeks ago. So it's probably in a natural, you know, coming down. So I'm going to be unable to resist to, to, to, uh,

uh, stop that. But what are you going to do? Well, let's spike it back up there. You know, I have faith in the stratechery audience. Uh, for now we are going to begin with WWDC this week. I'm coming to enjoy WWDC as sort of a mile marker for the podcast. Uh,

I found myself thinking back to past recaps we've done two years ago at WWDC. We were reacting to Apple's grand plans for the Vision Pro and a future built around Vision OS. Oh, Vision Pro. I was trying to remember what that was. Yes, that's right. The headsets. Back then, I was gently but correctly skeptical of the whole affair. And then last year... The Vision Pro is still cool. Like...

I put it on again because John Gruber had his live talk show and it was broadcast at Vision Pro. So, you know, check it out. Every time I put that on, I like it. It was interesting, actually. I didn't write about this, but the WWC segment on Vision Pro was actually pretty cool. They added a bunch of stuff.

A bunch of it addressed things that we were complaining about back then, including a better guest mode and other people. And two people at Vision Pro is going to be watching the same thing. Imagine that, watching a movie together with a headset on. But a lot of Enterprise stuff. And it does feel like that's sort of like, look, if you need it for a specific sort of task –

Companies will buy it for their employees. And that's where Apple's at. And maybe they'll come to like it. And maybe it'll gain adoption that way. Yeah, I think you were right on the money a year and a half ago with that take. And a year and a half later, Apple is right on time with some sort of direction for the Vision Pro.

Last year, we were focused on Apple intelligence, of course, and how elegant Apple's strategy was because they have access to all the most important data that AI can utilize for customers. And oh, my God. Is this a Whitney of L's for me? Apple is so brilliant.

No, look, I agreed with you back then. I mean, that WWDC knocked my socks off and I was like, wow, Apple's going to be the one that wins here. Obviously, that turned into a prolonged corporate catastrophe for them. This year, it seemed like the big idea is that there was no big idea, no revolutionary step forward at all.

And in your article on Tuesday, you called it one of the more encouraging Apple keynotes in a long time. So tell me why it was encouraging. Because they overdid it. They went too far. And...

There's app, there's the Apple aura sort of in general, and it kind of ties into this book actually. So maybe it's just sort of top of mind of Apple inventing new things. And a big theme in this book is how suppliers will work with Apple knowing they're not going to make any money, but because Apple is basically going to teach them and fund them to learn how to do completely new things that have never been done before.

which they can then take that knowledge to other suppliers or to other sort of customers and charge them much higher rates. And so it sort of pays off in the long run. That's definitely an important theme. But Apple had the benefit of the doubt last year. They actually had the benefit of the doubt with the Vision Pro. Like, if anyone can pull this off, it's Apple. And the Vision Pro, again, was awesome. It remains awesome. It's just $4,500 and weighs like 4,500 tons, and there's no applications for it.

but it's still very cool. It's an amazing piece of hardware. There's no question about that. There just hasn't been much content. There hasn't been much software and, uh,

And literally they are like two or three times a year where I'm like, man, I would love to have a vision pro. The talk show is one such occasion. The Apple vision pro is the exercise equipment of computing devices. It just sits there. No, no. What I mean is after you exercise, you're like, wow, I feel great. I should exercise more often.

In the entire lead up to exercise, you're like, ah, I don't want to do this. This is terrible. Although I'd say I'm probably worse than that because you don't even think about it, right? It's the treadmill down in the basement in stores. I was going to say, it just sits there taunting you as something that you spent thousands of dollars on and it would be useful to use maybe. And yet it just sits there making you feel guilty the entire time. It does. It does. But yes, last year, AI, Apple gets the benefit of the doubt. They present a story.

And this is probably a weak point for me because I do look at things generally structurally and where companies are. And yeah, this idea that Apple owns the device, they have access to your private data. They can sort of provide an experience that no one else can and then hand off sort of broader tasks to you.

the large foundation models. They can maybe set up an auction to have access on the device. It's like a replay of the Google search deal. They're the AI aggregator, like all these ideas that we talked about that all make elegant sense. And the problem with all of the strategic thinking, and I put myself critiquing myself in this basket, is you still have to execute. And I think if you listen to our podcast, and I think if you go back to what I wrote,

We said, assuming they pull it off, but we didn't say it with our chest or at least I wasn't saying with my chest. It was sort of, yeah, assuming they pull it off and they're Apple, they'll pull it off. In retrospect, there wasn't enough acknowledgement that what Apple was selling at last year's WWDC was in fact Apple.

ahead of the state of the art. That's exactly it. That's why I'm not giving myself an excuse. I should take the L. That was John Gruber's point when he wrote something, he's right in the state of Cupertino. He opened up being mad at himself. He's like, how did I, they couldn't even demo this stuff. Why did I assume that that could happen? And you put it in the context of they were promising an experience that

That OpenAI couldn't deliver, that Anthropic couldn't deliver, that Google couldn't deliver, particularly the Google one because Google has access to your private data. And why is Apple going to pull this off? And it's even worse than that because it's not just that the general like comparative of their AI companies, but Apple historically, culturally, historically.

This is the kind of stuff they're not good at. They're not good at dealing with a gazillion edge cases, failing gracefully. Apple's good at building finished products. They build operating systems that have to ship. They build phones. An even better example that in September, that phone is going to be in a box, on a shelf,

On a shelf, in a customer's hand, and you don't get to go back and iterate it. And the OS has to be ready at that point. That's right. That's right. And it's just a very different way of working. And I think companies that are good at one of those ways at working are intrinsically bad at the opposite. And again, this is why I have to take the L.

I've written exactly that about Apple, that they're bad at those sorts of things. And there was a bit, yeah, I just gave them too much of the benefit of the doubt and in violation of my own previous thinking and principles and in violation of the broader context of the industry. And in retrospect, given that for Apple to get up there,

And it's funny, like they're very mad at John for that article, but they basically in every aspect of this keynote said, John, you were right. That was the takeaway. They get up there and they say, take a beat. Yeah. Okay. This we look forward in the coming year talking about X, Y, Z, the least they admitted up front and then everything else was stuff they could do and everything that they showed they demoed. And it was just sort of a look before you try again.

You have to reset and get everything, get your house in order. This felt like a getting your house in order sort of keynote. And yes, there is the big UI redesign, and it's going to be a mess. People are going to complain about it. This happens with UI redesigns. I'll withhold judgment on it. You probably should withhold judgment. It might even be a couple of years. iOS 7 was really rough. It wasn't until iOS 9 or 10 that it sort of really settled in. This is going to be the nature of it.

But this is also what Apple does. Apple makes user interfaces, right? They're in their wheelhouse. And that's not very exciting. It's not very sexy. But Apple needed to be not exciting and not sexy because they went so far off the reservation in terms of execution over the last year.

Well, and among the things they announced, they are, in fact, opening up on-device AI models to developers exactly as you've been recommending for the past couple months on this podcast. And so now that it's official, can you remind people why exactly you endorse this approach for Apple? The on-device model is interesting. Like, just to be clear, and this is sort of goes in the obvious things that still need to be said and should have been more strongly said last year.

An on-device model is going to be vastly inferior to your chat GPT experience that's running in the cloud on massive NVIDIA GPUs. That's just – that's like the physics of computing. It's running on your phone in your hand on a battery that's not comparable to a $50,000 NVIDIA GPU or a whole host of them that's in the cloud. Mm-hmm.

It was fundamentally flawed for Apple to anchor so strongly on that because they're basically committing to delivering a worse experience because it's not capable enough. They're dressing it up in privacy in these sorts of things. It's also a big cost savings. It's like, oh, yeah, it's because it's using the user's power, right? It's using the user's chip. That's right. And.

I'm sorry, Apple, you don't get to save money and sell it as a feature, right? And when we say Apple anchoring on that, they were going to deliver all the on-device AI and it was all going to have Apple's name on it and then perform worse than anything that's operating in the cloud. That's the core problem with that. Well, there is. And there is a point that's worth, that I do want to bring up a

which I'll come to in a second. But the thing with letting developers do it is...

developers in the most idealized version of the app store, you have sort of like the one, the one person shop and they're just shipping an app on the app store and the app store is amazing. And it lets them build this business doing whatever it might be. I think, uh, you know, a great example is Marco Arment to a lot of people listening to this. You might be listening on overcast. He makes a podcast client and someone like that. They can't,

Use AI in the cloud. It's not compatible with their business model, to say the least. And even sort of the expense and expertise required to do something compelling. If you're only one person, you're not going to pull that off. But Marco, for example, one thing he would like to offer is transcription of podcasts.

and are and that's something that is we'll see how it works once he gets access to these models but he could theoretically offer now that it's for free and in this case the free isn't apple saving money the free is developers can do stuff they couldn't do before or they couldn't afford to do when everything sort of had to be in the cloud because they have access to a local model they have

access to the user's power to sort of pull these sorts of things off. And the great thing from an Apple perspective is suppose Marco builds this and it stinks. Marco's got to deal with the bad reviews and people complain about overcast. That's right. It's not Apple's problem, right?

If it's awesome, suddenly, oh, yeah, the podcast players on iPhone platforms have transcription. The ones on Android, maybe they do. If you have a high-end Android, if you have a low-end one, it's going to be iffy, right? You have this whole unit. You're back in the Android has because they cover everything. You don't get a consistent user experience. You don't know what you're targeting.

Apple only sells a few iPhones and they're pretty high end. And so, you know, if you get it, you're going to get a better experience. So they can, their upside here is you have differentiated apps on your platform. And again, maybe the vast majority, it's going to, maybe we'll turn out these on-device models are just insufficient for everything. That's fine. There's no harm lost, but people are going to experiment and they're going to find weird things that you never thought to use AI for and

But you can experiment because it's free. Well, and strategically, that's so much smarter for Apple because you're weaponizing the long tail to your benefit. And the one thing that has come through with the last couple WWDCs is that Apple left to its own devices and its own ideas to

doesn't really have any idea what to do with AI. Image Playground is a punchline. But again, every time they come back to Image Playground, I'm like, this is a mess. Who does this exist for? And then merging emojis and stuff like that. There were some grown moments during WWDC. And I trust a universe of developers to come up with cooler, more experimental ways to use AI and AI

optimize it, then I trust Apple at this point. And so on that basis alone, it's a no-brainer. But now they do. Sort of. Maybe. The way Apple does general release features, or whether it be a new API or a new capability, is they do usually do it themselves first.

And so they can figure out how it works. They dog food it. They have to build with it. What does dog food it mean? Where you use it yourself. So say there's an API here. So there's an API to use this language model. Apple was working against that API for the last year, year and a half to build the features that they wanted to build. It was putting on whatever it might be. So they probably made changes to that and said, oh, this actually doesn't work well as a developer doing XYZ. And then...

a year later, then it's broadly available. And the problem with making something broadly available is then you have to support it forever. It's very possible Apple actually always intended to make the local models available this year. It actually is historically in their cadence to first do it themselves for a year. And again, part of that is, yes, they want to get the benefit, but there's actually real legitimate platform reasons for them to do it first. And then it was always going to be available for developers now. But that said, unfortunately,

I'll take the W. So I started out with a string of L's. So if we want to sit here and say, yes, Apple, listen to Ben. There you go. Well, take the W. I feel like that's a sensible strategy on your part. As far as Apple's strategy, I do look back. It was in keeping with their strategy.

newfound control freak ethos to not open the on-device models. So who knows whether this was all part of the plan or not. But the point is they're finally headed in the right direction on that front. Right. And to be clear, this isn't going to like change the world, right? These models do still stick. We should all be honest about that. I think there's a bit where I was like, oh, finally, they're doing the right thing. It's like, let's be clear what is happening. But yes, and yeah, I'll continue.

The right thing that may or may not move the needle. I think the proper way to think about that this week. Look, it was a boring WWDC, a sensible WWDC. Sensible. That's the word. The last couple of years. That's the word. That is the word. It was sensible. And you know what? Apple needed a bit of sensibility.

Indeed. So a couple other notes here. They're deepening their integration with ChatGPT, including ChatGPT animations into Image Playground. And they're starting with iOS 26. Apple's visual intelligence feature will be able to analyze images and text on an iPhone screen. Users can then ask ChatGPT for more information about whatever they're looking at. Sorry, just real quick, guys.

I have a little bit of Apple copying Microsoft here. Microsoft figured out the year version number makes everything a lot easier. It's actually a shame Microsoft got away from that. They were on to a good thing.

Well, is copying Microsoft actually a good thing? I think that might be its own little red flag, isn't it? That's a good question. Partnering with a copy of Microsoft and partnering with OpenAI, this actually I think is really interesting. Okay. In some respects, this is much better than before. It's not every single time, do I do it on device? Do I do it with ChatGPT? Let's ask the user. It was just kind of a mess.

If you're doing this visual intelligence where you do a screenshot or whatever, and so it's on the screen, you can ask right there more about it. It doesn't try to answer and then, oh, I failed. Give it to ChatGPT. It's like, no, it's right there. Ask ChatGPT. Number one, the appropriate level of humility about your capabilities. Number two, if you're a regular ChatGPT user,

Suddenly the iPhone is that much more attractive because if you're signed into ChatGPT on your device, you do a visual intelligence query. You can go to your computer, open up the ChatGPT app, continue the conversation. It's there. It is giver-friendly.

giving something very valuable to ChatGPT, but it's also taking something very valuable, which is to the extent ChatGPT becomes a driver in what phone should I buy, an iPhone's better than Android. Android's going to have all Gemini stuff, right? Now, the level, the deepness and the number of features is probably going to be faster because Google's fully integrated. They're doing it all. But if you're super committed to ChatGPT,

And that matters in your phone choice. Suddenly there's actually a compelling reason to choose an iPhone because of AI. It's not their AI. It's open AI's AI, but that is actually, I think this was underrated. People anchored on the old Ben, you called it or the local device models. I also called for,

I call for replacing Siri. They're not quite at replacing Siri, but this is a very significant step, I think, in that direction. And hopefully it just accelerates.

Well, and also, I mean, it goes back to your take on Apple for 20 years. Their selling point has been delivering the absolute best experience to users. And users don't want to sit there and have ChatGPT be like the backup option if the model fails on device. Like, just give me ChatGPT. So it seems like...

Again, a much more sensible way to handle all of this. Yep. And a much better partner than Google because ChatGPT is winning in the consumer space. Like that's the horse deli way. That's the thing. What users want is ChatGPT, you know? So don't pussyfoot around. I want the iPhone to be – so I have a take on – what is it? This is definitely tortilla chips, but I think I coined this.

in the context of some other food item. I can't remember. It was like a tortilla, but it was like a regular food item that you think people would like. I'm like, I love that food, but because it is a flavor vessel in that it was something that you dipped. I can't remember what it was. Tortillas are the classic flavor vessel. Sure. And this is a little humbling for Apple, but honestly, what I want is I want a chat GPT vessel. Okay.

So to the extent that my phone becomes a tortilla chip. No, no. Apple's a tortilla chip. And openly, I have some tasty salsa. So give me some more.

Exactly. OpenAI is the dip that everybody is signing up for. And Apple, you're just the delivery mechanism, but that can be very profitable in its own right. So, all right, a couple more notes here, bullet points. They announced a new games app, which perhaps lays the groundwork for Apple to bifurcate in-app purchasing on games and the purchases made on

other apps this is another crusade of yours a 10 year long crusade it looks like they might go that direction but perhaps they're too late at this point in time given some of the adverse rulings that have been handed down any quick thoughts on that front i put it in there as a retreat like sometimes the retreats are not a function of yeah you're getting shot in the back of the head um

I mean, it was interesting that all the – it looks like the takings clause is not going to take the day, as it were. The appeals court denied Apple's request for a stay of Judge Yvonne Gonzalez-Rogers' injunction that basically said steering is gone. It is what it is. And I'm definitely fine with that. I think the steering thing was terrible. What I would have been fine with all along is –

No steering provision for the vast majority of apps, but games are as locked down as could be like. And again, right. That's the way the gaming industry has worked, right? That's consoles. That's the way consoles work. Yeah. Steam works like, like the specifics might differ with the steering thing, but consoles for sure. It's super locked down and Apple's insistence on it's not enough. And by the way,

The games are kind of skeevy, right? I mean, sorry, game developers. I apologize if I'm going to say it. I'm sure you're good people. But this whole, like, let's, you know, gamification, let's get people to find some digital whales. Like, you're calling them whales. You might want a bit of red flag there. People who are just...

putting in tons and tons of money to get more gems or whatever it might be at the end of the day. And honestly, Epic falls in this too. Epic. It's cool that you got people to buy dances and clothes for your character or whatever it might be. We're not shedding tears for the people who are shaking down 12 year olds all over the world. And so this was always the solution to me is, and that's where most of the money came from.

Keep all the limitations there. Frame it in something like, oh, we're looking out for the kids or whatever it might be, even if you just want to keep all the money. And Unleash, let people that want to actually sell your devices, that want to have productivity software, Kindle wants to sell some books, like let go. Let them do what they do. And that was always the solution to my mind. Now, the Games app is not there yet. It is, though.

Another app store. You can get games in the games app. You can also get them in the app store, but it is at least sort of like laying the foundation to potentially go in this direction. And in the U S it's going to be too late. You're gonna have to allow the games to steer because you didn't do this when you should have.

Right, because you've lost so hard that you've now lost control. Well, and speaking of productivity software, the other two nodes, they're revamping the iPad OS to allow people to use it more like a Mac with multiple windows. And then there are

enhanced continuity features that will help people work seamlessly across their Apple devices, with one example being the ability to monitor a mobile Uber Eats order from your Mac. Do you have any takes on those developments? I can't fully sort of evaluate that one because, as I mentioned, I'm not in Taiwan currently. Where we made approximately 37 Uber Eats orders a day, it actually might have been a distraction having that pop in my menu bar every time. I mean...

You have not experienced the power of food delivery until you've lived in a very dense city with people on scooters. And...

Want a boba tea? It sounds fantastic. It is. You've been selling me on that vision, and I'm not jealous of my friends in New York. I've been here for 48 hours. I'm going through withdrawal of not having Uber Eats. Believe me. It's rough out here in the suburbs. Get out there. Speaking of tortillas, get out there, get yourself some Chipotle, and experience the majesty that the United States of America has to offer. You know? Savor it. It is true. I just need to go do Chipotle, and God bless America. That is absolutely correct.

Do you have any takes on the iPad changes? People have been clamoring for that for about five years now. I like my single window on the iPad. I hate the windowing. To me, it's actually what I...

I stopped using – I mean I used the iPad to do my drawings and checkery, and that's basically it. I actually barely even use it for watching sports anymore because stupid things never charge because there's been some bug where it doesn't sleep properly and the battery drains. And that bug's been there for ages. Maybe it'll be fixed this year. Who knows? But I've kind of given up on the iPad. I wrote a lot about the iPad. I was very passionate about it.

I think some of it is reflected or downstream or related to like Steve jobs is very passionate about it. One of my favorite keynotes was the iPad two keynote, uh,

and they demonstrates garage band and the look of like satisfaction on his face now anyone can make music like it's like the steve jobs sort of philosophy in a nutshell right the platonic ideal of what tech can be and that sort of enthusiasm it was and i wanted more apps like that and a lot of my i was so frustrated with the app store and its policies and that it was foolhardy

To try to make a complex app that took advantage of what it was to be an iPad, take over the whole screen. Because the business model wasn't there and it couldn't there. Even if you found your users, you couldn't monetize it over time. This is before there were subscriptions and things like that. You could sell one time and that was it. And it's like Apple, you're not doing even the bare minimum. You want to control everything and you're –

completely killing an entire part of your economy that would be great for you because people who use productivity apps will buy the latest device with the most power and they'll upgrade all the time and you can't be bothered to help them because you're busy harvesting all this money on gems and games. Yeah. This is the frustration. And this is why the relief this week...

Apple backed up on something. They've been going to the extreme on so many things. And maybe this is a false flag. Maybe they just had no choice. And I'm going to look back on this article and say, wow, that was wishful thinking. But you know what? Like,

If Apple's an alcoholic and they turn on a drink one time, I'm going to hype the crap out of that. But, like, good job. Yeah, seriously. Standing ovation. Absolutely. So, was this a boring WC? Yes. And good. We needed some boringness. And for... So, for the iPad, I feel it's been, like, Apple just, like, gave up. And they're like, okay, well, let's make the iPad more like a Mac, I guess. People like Macs. And...

That's been terrible. The whole... They're trying to do the swiping edges and stuff. There's a very loud contingent who...

who loves the processor on the iPad and loves working on the iPad and has been lobbying to turn it into a Mac for like close to a decade now. And so it seems like they're just offering a stop to those people. And, you know, it's hard to get too worked up in either direction on that front. Yeah. I mean, like I said, I've given up. So whatever they want to go ahead. But Apple,

If you're going to make the iPad into a Mac and boy, it's starting to look an awful lot like one with this multiple windows and overlapping and all these sorts of things. How about we, given that we have the iPad, that's like a Mac and you can use a pointer and all these sorts of things. And it's locked down because it's an iOS device.

let's loosen the reins on the Mac then. For those of us who actually want to use a proper computer, stop trying to turn that into an iOS with all the gazillion warnings or whatever. I was getting my tennis match from you, the incredible French Open. I was on a plane, so I couldn't watch it. Yeah. And so...

Because I did this whole channels thing, whatever, I can get the file from your computer and I can put it onto my computer so I can watch it later. And this is a back-end Mac mini that's running on a server. In my case, the storage is on a separate device, a NAS device. And I'm in the terminal where you have to run this. And by the way, I'm running this via my phone because I'm very eager to get this out of my computer. And it's not running and I can't figure out why.

I have to open up a screen sharing application to the Mac mini where there's a pop-up warning. Say, do you want to allow the terminal to access external devices? Oh boy. I'm in the terminal. I don't need to be asked if I want to access external devices. Stop treating me like I'm one of these children that wants to have windowing on an iPad. No, I'm just kidding guys. But no, but, but seriously, like it,

Paternalistic Apple, man. It drives me bonkers. So, yes, if you want to go down this road, again, all the iPad people, I'm sure, are just infuriating me at this point. But if you want to make it like the Mac, then

Let the Mac be like the Mac and not like an iPhone. Thank you. Fair enough. Well, and I personally love the iPad exactly the way it is in between an iPhone and a Mac. And I have not been one of the people clamoring for windows. I like the single window approach on iPads. It's like a throwback approach.

to technology 10 or 15 years ago. And it's a great way- Throwback to using full screen Word as a lawyer on your PC. And having an attention span, you know, and just focus on one thing. I don't have any notifications on the iPad. It's my favorite single piece of technology hardware I own.

And I like it exactly the way it is, but I'm happy all the people with pitchforks clamoring to optimize the processor and do X, Y, and Z with the iPad. All you people have a great time the next couple of years with your iPads. And then the final issue here is,

The sexiest announcement at WWDC was this new OS and new UI called Liquid Glass. Two emails on Liquid Glass. Rich says, Ben and Andrew, as a disgruntled materials engineer, I just needed to put this correction on the record. There is no such thing as Liquid Glass. Glass is an amorphous solid made

caused by quickly cooling from the liquid state before the molecules form a long-range crystalline structure. Marketing BS will be the death of me and every other engineer out there. So justice for all the disgruntled and beleaguered materials engineers out there who may have been taking in WWDC on Monday. I have bad news for Rich about the reality of everything that you're seeing on your computers.

Mostly not real, so I think it's totally fine to call it liquid glass.

I enjoyed the passion. It was a good email. So I had to give him a platform there. Kim says, Andrew and Ben, I agree with Ben's quote from Sebastian DeWitt in his update on Tuesday. Apple's new UI, Liquid Glass, really is like something we imagine the future to be from popular culture. In fact, when I first saw it, it reminded me of nothing so much as what a great Hollywood production designer would say.

would produce for the user interface that populates the world in a high-budget sci-fi movie from a major studio. This is neither praise nor condemnation, simply an observation. I'll leave it to you guys to tell me what it means. So Ben, what do you think of Apple's approach and the new science fiction UI here?

I don't know. I'm going to reserve judgment. I mean, it's one of those things you can't know until you use it. And like I think I mentioned earlier, in reality, you're not going to really know what it's like until we get a year or two in. Like the next year, it's going to be – if iOS 7 is any indication, it's going to be rough. There's going to be a lot of complaints. People are going to post the most egregious screenshots on Twitter of where it just –

completely falls apart. And that's just going to be the reality. And I'm not going to use it because I don't install betas. I am a tech analyst. I am not a product reviewer. I don't need to suffer with short battery life and crashing devices. Your computing experience. That's right. Well, it's funny because it got a lot of attention in

And I was watching the event and came to a lot of the same conclusions you did in your article, which is that this sort of understated approach from Apple, A, is probably the only viable move on the board for Apple at this point.

and b it's probably a step in the right direction if we're ultimately talking about a bunch of incremental improvements to the user experience on various devices from apple leaning on developers to help solve some of the ai problems and pushing this liquid glass ui

that at least in the videos, it looks like it's going to create the same sort of tactile joy that all the best Apple products have always given customers. Right, but we learned from a year ago to not trust Apple's videos. That's what I was thinking. I was sitting there watching and I was like, maybe this is the cost of some of the decisions that Apple has made the last couple of years is normally I would be pretty psyched about this, but watching it on Monday, I was like, well,

will any of this actually work? And I'm still pissed off about what they did to the photos app. And I just, I don't know. Um, none of this works as well as it used to your rant on dithering a couple of weeks ago about the setting situation on the Mac that generated some real passionate feedback. And, uh,

agreement among the listener base. So I would say even with Apple strengths, they still have more to prove going forward here in order to realize some of the potential we saw Monday. And if liquid glass is not just teething pains, but actually horrible, like settings app, horrible,

That is interesting in its own right, because it's like it's not just that Apple can't do the stuff that it's traditionally bad at. What if it can't do the stuff it's traditionally good at? And so that but again, like I said, that is going to be interesting. I did speak to John. He really likes it. He's pretty persnickety about user interfaces. Again, with the caveat, there's lots of rough edges around the corners. And he's like, you know, it's interesting.

They might have shipped it a year early. It also felt like we have nothing to talk about. So let's ship this a year early. That might have been going on here a bit. But yeah, in all those futuristic bits, like there's people griping. Do you know how much processing power it takes to do this?

It takes a lot. And that's why Apple can do it because they make their own processor and they make their own graphics and they have all the subroutines to do it efficiently. And that's great. They're doing what they're good at. Hopefully, they're still good at it. We'll see if they're still good at it. Yes. And for every Apple event, our colleague, Dhaman Rangula, runs a prediction contest with 10 questions about what will or won't be announced.

And all the members of our tech group chat participate for the second consecutive year. I emerged victorious as the winner. Andrew Sharp. You've just been sad begging us for years. It's amazing. That's right. Lest there be any doubt about who's the normie. I'm stacking the L's and you're stacking the W's. It's true. I tied with ChatGPT. So I guess ChatGPT is also the expert there. But speaking of AI...

Meta and Scale AI. I got to read a story from the New York Times. Meta is preparing to unveil a new artificial intelligence research lab dedicated to pursuing superintelligence, a hypothetical AI system that exceeds the powers of the human brain as the tech giant jockeys to stay competitive in the technology race, according to four people with knowledge of the company's plans.

Meta has tapped Alexander Wang, 28, the founder and chief executive of the AI startup Scale AI, to join the new lab, the people said, and has been in talks to invest billions of dollars in his company as part of a deal that would also bring other Scale AI employees to the company. Meta has offered seven to nine-figure compensation packages, nine figures, for the

to dozens of researchers from leading AI companies such as OpenAI and Google, with some agreeing to join, according to the people. So some of these researchers getting Jordan Poole money to join up with Meta. Very impressive stuff. The numbers that have been reported around this deal are $14.8 billion for a 49% stake in Scale AI and an agreement to install Alex Wang to a leadership position inside Meta.

We've got a couple emails on this, but generally speaking, this was the other big news in tech this week. What do you make of what's happening here? Well, take number one is I've told this story on the podcast before about this sort of moment I had when Apple bought Beats.

And it seemed like this huge deal. And there's a gazillion stories about it. And of course, I'm writing about it. It's very exciting. And then I realized that Apple bought them for three billion dollars. And Apple was worth, I think at the time, like six hundred billion dollars. And it just really didn't matter at all. It wasn't a big deal. And I think there's a bit about that.

With this AI stuff, Meta spending what, $65 billion or $70 billion on CapEx this year. All the tech companies are in the high, you know, eight figures here. In that context, $14.8 billion, a lot of money. Like, let's be clear in the context of spending all that money on GPUs that are going to be unusable and obsolete in a few years. Yeah.

In the grand scheme, not that much. And that's just crazy to think about. And it's the same thing, by the way, with these packages they're offering to these high-end scientists. It's like, if you're going to spend all that money on the hardware...

You need really good software. And the software in this case is the actual AI researchers that sort of go into that. So I think just sort of a meta observation, no pun intended, accidental pun, is that. I think that is sort of interesting about how crazy these numbers are. Totally, totally. Well, and I always think about that when people start wringing their hands about what Apple is spending on Apple TV++.

programming. It's like a drop in the bucket. And Meta, I just looked this up, their Q1 revenue, $42 billion in Q1 2025. They have the money to spend and they're spending it in all sorts of other ways on AI. So yeah, I think that's good context for the numbers, which do still look pretty astounding given it's not clear to me how additive

scale AI is all the other part. That's the part why this is weird. Okay. Apple buying $3 billion. Okay. They get beats headphones. We get it. We kind of get the angle. They get what became Apple music from the software side. They get a nice hardware business, which they can sell in Apple stores. It all sort of like, yeah, it makes sense. Nothing about getting 49% of scale. AI makes sense.

Scale AI, they started out as like a data labeler. They generate data for LMs. They were a big early customer for OpenAI. OpenAI is doing more and more of this internally, probably in part because of something like this. But Meta is a customer. Google is a customer. And you need data. Like with the reasoning models, like a lot of the initial stuff was just people sitting down and doing math problems and documenting all the steps.

and just doing like doing that at scale and scaly i they like to talk about those parts because they they're like hiring like oh yeah we hire the phd candidate in pennsylvania they make some money on the side um they're also like running sweatshops in like the third world to like right label stuff like so the it's a it's a necessary business um it's also a business that just died

Like if you're open AI or you're Google, are you going to continue using scale AI when what's to stop scale AI from giving it to their 49% parent and suddenly you're helping fund your competitor, right? So this can't be an acquisition for scale AI and its capabilities because the nature of the acquisition kills the value of what you're acquiring. So that can't be what's going on.

So what is going on? Well, there has been... We talked about this a little bit when I interviewed Mark Zuckerberg. This is kind of a weird interview. I was annoyed that he also did an interview with Dorkish Patel. Dorkish is a great guy, a great interviewer. But, like...

Usually he does like one interview, like a particular period. I'm like, oh, he's doing a fleet of them. That's kind of annoying. And then the and then when I talked to him, he seemed kind of unfocused. It's like just we talked about spaghetti against the wall. Right. Like just talk about all this sort of stuff that I could do. Right. There's sort of a spray and pray approach to meta AI development. Right.

Well, particularly in that interview, whereas it felt almost more cogent to me previously. And then I sort of heard through the grapevine that, yeah, we knew a lot of the llama people had left. Llama 4 was a mess, not very impressive. They fudged some numbers on a test to make it look better than it was and sort of heard, oh, yeah, Mark's looking for someone to reset their initiative and sort of head the team. And that, I guess, is going to be

Alexander Wong, like I mean, he's not an AI researcher. Those are the guys that are, you know, that that they're trying to hire from DeepMind and from OpenAI and giving you whoever else it might be. But the head like Sam Altman is not an AI researcher, like but he's like the the person leading the charge and is actually figuring this all out.

It appears that's how it works. And this is like one of the world's most expensive acquihires where they're kind of buying him out. Like he has his company. It's successful. And now he's going to be an executive at Meta. And it's not all just throwing him the money.

Like now scale AI is going to do work for meta that meta would have paid for at some point. So it's not like it's just like flushing all that money away. They were going to spend some amount of it anyway, sort of like an Azure open AI sort of relationship. But yeah, it's a, it's a, it seems to be a pretty strong sign of, I don't know if it's desperation, but like,

a real reset and we have to pull out all the stops because we're not good enough. And that's, that's my takeaway from it.

Yeah, well, we got this email from Mario. He says, Ben and Andrew, regarding Ben's note on Meta and AI, I would posit that Gen AI is potentially more disruptive to Meta than Ben suggested in his Wednesday piece. And then Mario links to a tweet noting that ChatGPT's mobile app usage is now up to 20 minutes per day per user.

And then he continues and says, while you allude to competition for attention with OpenAI in the last paragraph of Wednesday's Daily Update, I think the subject demands far more attention than has been given it in Stratechery. So far, Meta's presentation of AI through its consumer services has been very forced. I've spoken to numerous PMs at the company who feel that this approach has been the wrong approach, but the product decision was made at the very top.

Given the relative lack of utility of Meta AI compared to ChatGPT, Gemini, and Claude, I think the proper lens through which to view Meta's recent AI decisions is that they stem more from fear than opportunity. That's not to say there are not great opportunities for Meta. I, too, feel that they should benefit many-fold from this new way of interacting with computing.

At this moment, however, they risk harming a crucial vector of top line growth for their core business should they not get this right. And that email, it was interesting to me in two respects. One, the

The OpenAI number is pretty impressive and will inevitably get bigger as we go. So independent of any meta commentary, I appreciate Mario highlighting that stat. And it occurs to me that they probably are a long-term threat if the...

market is attention. Meta is probably right to view them as a competitive threat. What do you think about that read on what's happening here? Well, number one, it is a good email. If I state in a sentence that they are competing for attention with OpenAI,

I count that as established on strategic reading. I trust my readers to not need more than that. I think it's pretty clear. So, Mario, come on. You don't need to do the LLM thing. No, no. Exactly. I don't need to pad it. That's right. I gave you this sentence. No, I do. Actually, I was thinking as I wrote that sentence this morning that this is something I should have.

been clear about previously. So, so I actually think Mario's overall point, Mario, you should have sent the email a day earlier than you could have really called me on it. Unfortunately, you waited for me to have already said it. You could have quoted the email on Sir Techery. That's right. Who knows what would have been possible. Too bad. Might have been. That's right. 24 hours earlier. So, no, but I do, I do think that is true. That is, that, that is a threat. And I will just say in general, I feel like

I'm more optimistic and see more potential for AI on meta than meta seems to. And what Mario said on here that they're operating from fear is

Feels exactly right. When you're fearful, you're in a defensive crouch. You're not looking at the opportunities. And one of the things, again, the whole Zuckerberg interview did kind of annoy me because I thought I went there in person. You think, oh, this is going to be like the big interview about this event. He does a bunch of other ones like, well, that was a waste of time. But then also they wanted to wait till after earnings to publish it, which that was Thursday for me. And so like that was good.

And then people come back and say, oh, yeah, he just repeated what he said on earnings. Actually, what he said on earnings was different because it was post-interview where his articulation of Meta's AI opportunity I thought was poor and limited. And I'm like, what about this? What about that? Particularly the whole AI's importance to the metaverse and all those sorts of things didn't even bring that up.

And it was there on the earnings call, which it was published before the interview, but he changed his spiel because I'm the one correcting him about your insufficiently listing the potential benefits of AI from him. And this is why I'm giving Mario a hard time. This is a great point. This fear coming from position of fear. I think he's right. They don't... Again, I feel...

I'm nervous because I wrote about how AI should make them the most valuable company. And they're not operating like an entity that is going to achieve that. And worse, they don't seem to be fully aware of it, what they can do. Like this concept that I put forward, to me, this is like...

I've made the case. Actually, let's get to this next question because this next question leads directly into it from Joseph. I was going to say, it's all related here. Joseph says, Ben and Andrew, undiscussed in Meta's AI struggles is the role of AI head Jan LeCun. He has been a vocal skeptic that LLMs are not going to be

Real intelligence. While Facebook AI research has done some incredible work from a recruiting perspective, I wonder if Jan's outlook has held the company back. It reminds me of the onions decision 80 joke comparing Jimmy Carter's let's talk better mileage messaging versus Ronald Reagan saying kill the bastards.

What researcher wants to work for an org whose leadership is scoffing at frontier LLM work when Sam Altman is pitching, get in loser, we're building the god machine? I'm not sure Alexander Wong solves this problem either. Scale provides a vital service for AI, but it's not the source of hard research and innovation.

So is there a harder problem here that money can't solve? What do you think, Ben? 100%. Facebook's not going anywhere until they fire you on the coon. I completely believe that. And he's a legend to be clear. And I also kind of agree with him. I'm a skeptic about LMS achieving like a human brain, human brain. Yeah.

So I actually agree with his points. The problem is – and again, he's won the Turing Award. He helped invent neural networks. Like he is a brilliant guy. The problem is, number one, to Joseph's point, why would you want to go work with him if you're excited about this space? Their most famous person is pooh-poohing the entire thing, number one. Number two –

It doesn't matter for this entire vision. I paid for Facebook. They don't need a GI. They need LMS as they exist today to achieve all these tremendous business outcomes. Like the, the most pie in the sky outcome that I've talked about for Facebook is that every single pixel on a Facebook property is

could be advertised against. Like, you should be... Like, you would recognize, wow, that green shirt Andrew wearing is pretty cool. AI should be able to recognize that. The makers of that green shirt should be able to have a bid in there that if my item shows up, I want to bid on it and make it clickable, and they can make money for... Like, the... This is...

doable with what exists today. We're not trying to build super intelligence is your point there. Yeah. Exactly. And for the record, this is part of what's confusing about the messaging around this scale acquihire situation is like, why is there a super intelligence unit being developed at Meta here? And are you doing that solely to recruit talent from DeepMind and some of these other labs? I don't understand.

Again, Scalii is not doing research. They're doing data. I mean, I see they need a leader. I guess he thinks that that Alexander can can sort of be that leader. But yeah, and probably what you're getting in the coon to work for Facebook was a huge cool. And probably it's like, well, if we get rid of him, that's going to make it hard to recruit also. But I think the entire message coming from.

Again, when I say that they need to fire him, that has nothing to do with his takes. It has to do with he's the wrong person with the wrong takes for meta and what their opportunities are. They have huge opportunities. To Mario's point, in a defensive crouch, they don't seem to even see them. And then they're layered on with just this

cloud of doom and gloom that is immaterial to their business. The reason I'm optimistic about Meta AI is not because I think Meta is going to be first artificial general intelligence. I think it's because

LM's slot into what they already do in a very compelling way. Right. Potentially additive in a number of different areas. Right. And this is the whole thing about the sustaining innovation versus disruptive innovation. Like, adding AI to all their stuff, yes, it's to the extent that... And by the way, it's not... It has a pick on Mario. OpenAI...

Stealing time is not disrupting Facebook. That's just them beating Facebook. Disruption is when Google...

takes the Gemini tab out of the Google app because people using Gemini is bad for the business because they don't get to put ads against it. Disruption is structural changes to the market. Structural changes that hurt the bottom line. And your bottom line pushes you to do something that's not the best for sort of winning in the market. So this would just be classic losing in Meta Space. Yes, exactly. And it's a shame because I think

LMs are additive to every aspect of their business. Now, again, if someone else can use it better, like, again, that's just getting beat. Like, and so they're getting beat.

And that's a problem. And so it's a good thing that Mark Zuckerberg is throwing money around and making changes. People should be cheering this. This isn't a metaverse sort of like, um, like maybe he's really serious. It's not just getting rid of the, on the coot. It's getting rid of the metaverse. Um, yeah, there's some money to spend. He should be spending this money and the expectation to use the clay Christian's framework is

Is that they do spend this money because that's his point of sustaining innovations is the incumbents. They recognize why it's important. They do spend to get it done. And so we're seeing them doing that. Now, the question is, is talent so scarce? Is talent.

the dream of AGI so large that to go work for a mere reaching billions of people is not sufficient. Maybe that's the case, but yeah. Well, maybe that's why you need to pay a nine figure premium to get some of the best researchers in the world in the door at Meta. I mean, that, that's,

That statistic alone is pretty amazing to me. But when you look at what these companies are worth and what they're spending on all the other AI development every year, then perhaps it's not that crazy to pay somebody $100 million to come work for Meta. Yep. Stuff's definitely much more of a mess than it seems. That's my biggest takeaway. It's like you kind of heard stuff and stuff seemed a little odd. This is so bizarre from any normal business analysis that the only takeaway can be it

stuff is a mess. It's a, well, clearly. Yeah. I mean, and there's been a couple of years where the investment has been substantial and to get a couple of years in and have a reset this fundamental to what meta is trying to do. That sort of speaks volumes about how lost they are right now. And perhaps, uh,

Alex Wong can help right the ship going forward. But I think the line in Mario's email, they risk harming a crucial vector of top line growth for their core business should they not get this right. It does seem clear that Zuckerberg is determined to get it right.

Just what that looks like and how it's executed is a complete mystery right now. And it seems like they're sort of fumbling in the wilderness as they try to see their way through here. Yep, it does seem so. And I think as long as I'm taking L's this episode, that's the theme. Perhaps I should have seen that coming to a greater degree. Like the all the reasons to be optimistic were structural and and the early llamas were really good.

And I probably should have talked more about all the talent that they lost. Like Mistral is basically Ex-Lama Engineers by and large. And yeah, that's a big problem.

Well, great in theory, an absolute catastrophe in practice. That was the theme of Apple Intelligence and WWDC last year. And perhaps that will be the theme of Meta and its AI adventures this year. Who can say? Yeah, not great for me. Not great for me. We'll see how it goes. I did want to just reemphasize again, because Yann LeCun is amazing.

like a real pioneer in the field. I'm not insulting him personally, and I actually kind of agree with his take. Just to double down on the four meta specifically, I think Joseph's exactly right. Like, it's just a big issue, so... Yeah, because they need to be pushing AI into products and doing things beyond...

AGI super intelligence work right now. That's right. All of that made sense to me. But on that, and honestly, all podcasts just made sense. I'm paranoid that's going to get clipped now. And me adding, repeating myself to add the same context I already added three times is not going to stop from being clipped. It's just another L for me right there.

Yeah, well, I took your comment in good faith. I understood what you mean. And again, you were very coherent throughout this podcast. So great work by you after a wild 72 hours and can't even imagine how jet lagged you are right now. Oh, no, I'm fine. Just by virtue of not sleeping, you get over jet lag.

quicker than you would think your system just shuts down after a little while uh well i look forward to the interview with patrick mcgee yes go buy apple and china i'm actually dead serious it it's

It's great. It's really good. I know. Honestly, I feel like an absolute moron for not reading it over the last three weeks. So I will rectify that this weekend. And we will come back next week. Go get yourself some Chipotle. Celebrate being in the greatest country in the world. And I will talk to you on the other side. Talk to you later.