Big Tech is back on trial
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Hello and welcome to VertiCast, the flagship podcast knowing what Facebook is. Which is surprisingly complicated. We're going to explain that in great detail. I'm your friend, Neal. David Pierce is here. Hey, it's going to be a very short podcast if we have to attempt to explain what Facebook is. Or the world's longest podcast. Or the longest podcast ever. Yeah. Alex Heath is here direct from the meta antitrust trial. What's up, Alex? I'm just over here on MeWe, guys. Come on in. The water's warm.

The best part of any antitrust trial is when the accused monopoly insists that insane things are true competitors.

So Comcast will be like, yes, like infrared internet is a real competitor to our fiber network. Whenever it's like, that's not. And they're always like, we're so helpless and weak. And that's very much what meta is doing in the, in the courtroom with other networks like me. We, uh, so we got to talk about that. Alex was in the courtroom with Lauren finer. Mark Zuckerberg was on the stand for a long time this week. We're going to talk about all that. But what's wild is that while all that was happening, uh,

The Google ad tech antitrust case got a decision and the court ruled that Google has a monopoly in ad tech. And I don't even remember this. We forced David to go to that trial way back when. David, just briefly sum up what that trial was like. Sure. I should say poor Lauren Feiner had to go to a lot more of that one than I did. I just had to go for a couple of days longer.

Because she couldn't or just didn't want to or like I think at some point you spend enough time listening to people explain how ad exchanges work. And you're like, I can't do this anymore. And I have to leave. But anyway, so basically,

This case was about three things. One was, did Google acquire its way into a monopoly in advertising technology? Two was, is Google basically putting all the different pieces of its advertising puzzle together in a way that is illegal? And three is basically, does the sort of breadth of Google as a search engine, as a

publishing engine for the rest of the internet like is google so big that it should not have this much power over how advertising works and they spent i mean just just like weeks litigating like the deep tech of the ad stack but what it really came down to is google owns advertising on the internet in like a really real way wait on the web i want to be careful but on the web

Because this is right up against meta and like advertising and meta apps. Well, and not in substantial part of Google's argument is that meta exists. Yeah. But yeah, for the open web in particular.

Google essentially is the advertising engine behind everything. And it increasingly has controlled every piece of the advertising puzzle. It has controlled every market in this space for many, many years. And the overwhelming question was, is it a monopoly? And it actually turned into...

one of the more sort of straightforward monopoly cases we've had. I think like the question of is Google search a monopoly is really complicated. The question of is meta a monopoly is really complicated in ways that we're going to talk about. But like just sort of definitionally what Google has and did with it is like right down the middle of what we talk about when we talk about monopolies, which is super interesting. And I think is part of the reason

I think I certainly left the case being like, I think Google is going to lose this case. And we should also compare and contrast this to the other case.

Antitrust case Google lost which was about its dominance in search, right? So Google was Declared in a legal monopoly in search a while ago by a court that case is headed to a phase Called the remedies trial where you figure out what to do with it also this month also this month the government Wants Google to sell Chrome and maybe some other stuff the Google would not like to do that and then this trial

Reached its opinion by the judge Google has a monopoly in a legal monopoly in advertising and in various ways Which we'll talk about and then that will proceed to a remedies trial All of that is against while the meta antitrust case is like literally happening in real time Like it's happening while we are talking it will be happening while you were listening to this. It will always be happening and then sometime down the line there's gonna be an Apple and I trust case and

So this is a lot of like Lena Khan and Jonathan Cantor stuff happening all at once inside the Trump administration, which we can talk about. But Google in particular has now gone 0 for 2. Yeah. In like big ways, big meaningful ways. You will note Google also when Epic sued Apple and Google for antitrust issues, Google was the one that lost there, which I think is an Apple kind of got away with it.

still on appeal in various ways. Does Google just have bad lawyers? Like, is that really the takeaway here? Again, I'm really interested to compare and contrast this with meta. My read on this is that Google's commitment to openness, and I'm putting openness in quotes, but openness in Android on the web means that it has to influence lots of things that aren't Google. Right?

Right. So with Android, it has to convince Samsung what to do or whatever. With search, it has to convince a bunch of websites to like operate in search and be indexed or whatever. With ad networks, it has to convince a bunch of publishers and advertisers to play ball. And so it does that. It like uses its influence and there's emails and then there's deals and there's meeting notes and there's contracts and there's all the stuff you can go look at. And it's Google executives being like, if I turn this knob, the publishers will do that.

And you have all this evidence. They did the thing. Whereas, you know, with Apple or Meta, Tim Cook or Mark Zuckerberg is like, I don't make number go up. And like some product manager does it. That's the end of that.

And so I think Google is just like structurally at a disadvantage all the time because it has to make deals to get what it wants. The business success of Google over the last 20 years could really be tied to tying this idea of monopoly tying, tying products together to get leverage in another area, which is why the DOJ is pushing for Chrome specifically and changes to Android. We should probably also clarify, though, this ad tech case. This doesn't attack Google.

Google ads on Google search. This is actually a much smaller part of their business. I think the status always it's like 10 to 12%, right? Of the ads that they serve on other websites. That's specifically what this case is about. Yeah. And that it, that number is getting smaller too, right? Google makes its money on search. It makes its money in shopping. It makes its money on YouTube increasingly.

It's the part of the ecosystem where they monetize the entire web, which is what David was talking about. That number is getting smaller, but it's also under the most pressure because Google, well, now we know Google has been a monopoly there. Right. But this is what I mean by it's a more sort of straightforward monopoly case, because the thing that a lot of these other ones have run into is.

What is the difference between me doing something that is good for my business and a monopoly action? And that's actually a hard thing to put together, especially for something like a free product. So like if I make my search engine better,

And it hurts my competition. Is that is that monopoly maintenance or is that good business? And it actually turns out the line there is very fine and really not obvious to figure out. But in this case, it's like the basic finding of the case was and I will attempt to do this without either being wrong or going way too deep on ad tech, both of which are very possible to do in this case.

But that basically Google owned the part of the advertising sack that advertisers use, the part that publishers use, and the part that connects the two things. Those are three separate products and Google owned them all. And basically the only way to get a good experience on any of them was to use all of them. And so everybody essentially agreed, and this was like the expert opinion over and over and over throughout the trial, that these products suck, but you have no choice but to use them

Even though they're bad and more expensive because without one or without them all, you can't get one. And that is like that's a monopoly. That is that just that's just it. Right. That's that's railroads and trains like it is. It is the oldest school version of how we talk about what monopoly tying is.

And it's in such a more straightforward way than, like, what does it mean that no one cares about any search engine except yours? You know what I mean? Well, there's that. I mean, I'll just read you the conclusion from the opinion, which tracks with what you're saying, but in a more strident way. Here it is. Quote, quote,

Google further entrenched its monopoly power by imposing anti-competitive policies on its customers and eliminating desirable product features. It goes on. She's not happy. And really what – it's so funny. I opened the show with a joke about like what is Facebook? So much of this comes down to like what is the market? Is the market for search and competition with people searching on TikTok? And you end up in these like existential minefields. And here, again, it's very simple because there's only three products that do the thing.

You can't be like, well, I could replace this horse with an airplane. What is the market? It's like, no, for here, there's three products, one that displays the ads, one that goes and gets the bids from the advertisers about how much they'll pay and the systems that tie them all together. And you can't just replace those with anything. Like those are literal software products you have to go and buy. And we know what the replacement products would be, and they don't exist because Google killed them all. Like it is very straightforward in a way that makes it easy to talk about, but then it's also ad tech and marketing.

Like, I'm confident we've already lost a bunch of people, but the, the issue is like, this is the money. Like it's a small part of Google's money, but it's the money that funds the open web and the open web is Google. Like Google search without things to search for is not a good product.

Google's AI training that everyone's doing across the entire open web doesn't work if you crush this entire ecosystem. And that is more or less what has been happening. And one of the reasons it's been happening is because now by this ruling, Google has been extracting more value and it's been giving back to these publishers.

I should note, by the way, that we run a publisher and we use DFP and our executives are very interested in the outcome of this case. We are far, far away from that. That is literally when you look at a Verge webpage, there's like the stuff we make and the ads and the ads are run by another team and they like literally other computers that are all tied up in Google systems.

Shout out to Ryan Pauly, though, a Vox Media executive who appears in The Decision a couple of times. Does he really? He does. Ah, that's great. Concert, baby. I'm going to go upstairs and find... Yeah, we run a programmatic ad exchange that is all tied up in this. You know, the thing that really got me, and I'm going to try to, like, make this real or at least tangible to people, because ad tech is really complicated. Like...

Complicated and full of like pure hacks to get around Google that Google then crushed like this cat and mouse game, which is kind of neat, but it's also just like a bunch of ad people doing ad stuff to extract pennies at scale and your eyes just glaze over. But the way the essential way it works is that you load up a verge webpage and you know, the story comes from WordPress. That's the system we use. And the advertising all comes from another set of systems.

Right. Double click for publishers is the one they're always talking about in this decision. DFP that goes out and says, I've got this ad space. Does anyone want to buy it? I'm going to serve it to these demographics that I found on this website. And advertisers are supposed to bid on it.

And that's an auction. And so like whoever bids the most for the space and the scale wins or is supposed to win. And what has been happening here with Google is because, like David said, they own all the systems that interconnect. They just keep giving themselves advantages. So they run the software that delivers the ads to us. They run the bridge software in the middle. And they run the supply software that the advertisers buy into, right?

And the two things that jumped out to me are these policies they had. So it's an auction, right? Like just think about you at an auction. Google had a policy called first look, which required publishers to give Google the first right of refusal for every impression. So you're like, I'm going to put this up for auction and Google back. I want it. And that was just the end of the break. And then they had a policy called last look, which gave Google the ability to see everyone else's bids in an otherwise sealed auction before it could bid.

So you have this like sealed auction and Google can look at it and say, oh, that is worth it and pay. So they had the first look and the last look on the auction. Sounds like a great business. It printed money. Like, where do you think all the GPUs came from? They got slides in the office, man. Like all of that Google, you know, like we can't figure out pixel phones. We can just not do that forever because this is printing money.

And every time a publisher would try to do something to stop it, they would do hacks, right? They would run their own auctions before opening up the auctions to Google's ad server. And then Google would find a way to shut that down. Like that's the level of cat and mouse game that was going on. Revenues just went down and Google search traffic is down. You're like, oh, the web that Google built is dying. It's under all of this pressure that we can see, but it was also under this massive revenue pressure this whole time. If Google loses control of this ad plumbing that

fuels and funds a lot of the web, like we're talking about. What happens next? Do we have an idea? I mean, the hopeful version is you get a huge teaming market of ad technology, right? That like there is this big...

a few years ago now. I don't know. What is time? But there was this big push towards this thing called header bidding, which was essentially the idea that actually instead of just Google being able to bid in real time for ads and everybody else had to like submit them ahead of time. Like this whole thing is insane. That was the hack I was talking about. I did my very best to not say header bidding and then David just said header bidding.

But header bidding, the whole idea was like we can use one line of code to essentially level the field and give everybody equal access to this, which means the advertisers are going to get the thing that they want and they are going to pay the most money for it. And everybody wins and the money just keeps flowing. And in theory, that's where that's where this goes. Right. Like the actual technology to make this stuff work.

is out there. It's just that Google has so thoroughly subsumed all of the supply and demand inside of its own system that if you blow it out, in theory, advertisers will get better placement with their ads and thus better performance on their ads. Publishers will get more money for their content. This is the thing you are trying to pry open is just sitting there. The question is,

Is there any actual reality in which that works? Like Google is so far ahead. One of the things they talked about in this trial over and over was how high the switching costs are that like even these companies that know Google is charging them twice as much as some of its competition, which everyone agrees is a better product. You just it's just not worth the hassle to leave because you're essentially just like throwing all of your money away while you try to switch ad platforms. So Google's bet forever has been

people will stay because it's too annoying to leave. And even with all of this, it seems like there's a real chance that that is what happens. And Google ends up being forced to spin off either one part of that pipeline. But I don't know. In practice, it seems very possible to me that not that much actually changes. First, I want to say that David did say header bidding, and I should have just said it first. And I did my very best to not say header bidding, which is if you ask the ad world,

And you say – if you like go into AdWorld and you say header bidding, they all just like lose their minds. Like that's when they lost. They know it's when they lost. It's just this very weird, wonky thing. But there are quotes that really back up what David is saying here from the opinion. I mean just straightforward. Like again, this judge did not play around. Quote, direct pricing evidence shows that Google could profitably price significantly above competitive levels because enough customers would keep buying those products and not go elsewhere.

Right. They were just raising the price and the switching costs were too high. Which, by the way, is like the most classic monopoly move ever. Get everybody in and then once they can't leave, raise the prices. It's like that's that's that's the definition of monopoly.

Yep. AdEx, which is one of the Google products here. AdEx is relatively high market share viewed in conjunction with high barriers to entry and expansion that exist for other ad exchanges, supports the conclusion that Google has had and continues to maintain monopoly power. And then the last piece of the puzzle, which is really interesting, is that Google also has the demand, right? And they have the demand because of search, which they also have monopoly in per another court.

So the court says you can do all this switching, but this big volume of advertisers is already buying Google search and Google's just like selling them this other product on the side. They're tying them together. So here's a quote. Google has been able to amass this unparalleled group of mostly small and medium sized advertisers in large part due to the dominance of search, which another district court has found to be the source of Google's monopoly power in the markets for general search services and general search tech stats.

So even if you can build a better system that returns higher rates, Google has tied its dominance of the ad tech market to its dominance in search. And people are buying the search ads. And they said, you want to buy ads across the web when you're on the shoe review website? People say yes. And Google extracts all of that money, too. So you've reduced competition sort of across the board. And there's all this evidence because Google has to make deals with everyone. And there's all this evidence. But also to your point, Alex, that that's.

In that is the real threat to Google here, right? Because what you're saying is actually all of these things are so powerful in part because they are tied together. Because when you want to buy search ads, now you're in our system and it's actually easier and faster and more efficient for you to buy AdWords ads on the rest of the web in the same way that you're building ads products for search. Now we have a big hole getting poked in the middle of search, big questions about what's going to happen there. And you have...

being forced to open up the ad tech stack, like all of a sudden, if I'm Google, I'm looking at this as like, yes, it's a threat to that small piece of our revenue that is coming from this like open web advertising system.

But this also, this rolls right back into search ads, which is that's where the real money is. Like if you're a Google, that's the money you're worried about. And this is not exactly that, but it is right next to it. It's also, what are you going to search? Well, there's that. Like, what are you going to search for real? What are you going to search? If you kill the web in this way, if you put the SEO pressure on it, you put the AI scraping pressure on it, the AI answers in search pressure on it, you've put this much revenue pressure on it.

Profit really making a webpage, which disclosure is the business we're in, is crazy. Yeah. Like I've asked this question of so many different kinds of media executives, of platform executives, of...

the CEO of Squarespace comes on Decoder. I'm like, why would anyone make a website? They're like, I don't know. And that's bad. Like that is the thing that is worst for Google. The only answer any of those people can ever really give me is to do e-commerce. You start websites to do e-commerce because you don't want to sell your product on the TikTok shop. So you want to kick people to a website so you don't have to pay a bunch of platform fees.

Bad. Like that is, that is a nightmare for Google because the new information is getting published in the platforms that are decidedly closed to the Google search crawlers and the Google AI systems. It's bad for all of us because the open web is just under all this pressure that you can see every day. And all the new information is on TikTok, which doesn't talk to Instagram, which doesn't talk to X, which it's like, there's a real thing here where

It's like the future of Google is at risk, but the future of the internet is at risk because the open system has been kind of crushed out of being. I don't know what's going to happen next. If I was Sundar Pichai, I would call Larry Page and politely ask for permission to break up the company before the government does it first.

That's what I would do. Like straight up, that's what I would do. I would say, look, we're going to sell YouTube and let YouTube be its own thing. And we're going to try to fix this web problem so that we don't lose to closed systems because our entire self-conception has been about openness. And if we lose openness because we crushed it out of existence, that will just be our fault. I don't think they're ever going to do that.

We did learn in the meta trial that sometimes they think about splitting up their own companies. And I would just say to all these executives, it would be better for you to do it on your own terms and have the government do it for you. But it's kind of like Google might be at that point where it would be better for them to do it themselves before letting two different district courts decide.

in two different remedies phases, come to their own conclusions. This feels like a make or break moment for Google in pretty much every way. So you've got them losing their monopoly power that they've used to build the best business in the history of the world over the last 20 years. You've got open AI and AI eating into search. You've got the internal cultural problems, which I've written about a lot over the last year.

And yeah, it feels like Google has to rise to this challenge or this may be the end of Google as we know it. Yeah, I think it absolutely is the end of Google as we know it. Right? It already is. Right. Structurally. But I'm saying in terms of relevance, in terms of power, in terms of Google just being this on the Mount Rushmore of big tech, just always being there. It feels like they are vulnerable. I've been wondering recently if that happened a while ago and we just didn't notice. Because I think...

The certainly in terms of like relevance and sort of market power, it's still at the peak of everything. But I think

I just think about sort of the company that Google was for a long time. And like, I think a lot of people really rooted for Google because Google set itself up in a way that was like, okay, as the web, as an open, accessible thing wins, Google will win. Right? And I think most people saw that as like a net good. Google was like, okay, we want to help people get online. We want to give people things to do on the internet. We want to give people access to lots of things. We're going to make a ton of money.

a ton of money and that's a pretty good trade. And it was. Like, that was a pretty good trade. The mission statement was organize the world's information and make it universally accessible. And I think that last bit is what the industry at large loved and what endeared a lot of goodwill to Google and what these monopoly cases are showing is that

Once the money came in, it wasn't actually about making it universally accessible to everyone. It was about how can we benefit our constellation of products that we use and tie together to maintain dominance. Right. Totally. And I think somewhere along the way, Google stopped being good for the Internet and it just took us a long time to realize it. Yikes. I got to sit with that one for a while. That really does cut against everyone's conception of Google.

Including Google's conception of Google. I have been harsher on Google than anyone in these past few years. There's still the idealism within the company. And I think the thing that Alex is pointing at is the money side of the company stopped being idealistic a long time ago. That is just a bunch of sharks. And that's advertising. Have you ever met people in advertising? They're sharks. They're just trying to sell you nail polish in sports cars. And it's great. I love those things. But

Like Google's idealism to make great products and to funnel that money into whatever wacky idea or the contact lenses that could see detect health problems. Like all of that started fading because none of that started working and they weren't they didn't find anything else to make money on except search. So they just turned the screws on search in this very specific way. And the openness became their weakness in these antitrust cases. Like I said, if it was up to me, I would.

You know, this is like the time for radical reinvention of Google and in particular to say the open web needs to be protected because if it dies or the next new person who has an idea to make information will not do it on the web.

That's death. Like, that's just death. I think I even asked Sundar Pichai last year, like, why would anybody start a website? And he was kind of like, well, we have YouTube. And that's not great. Like, that's death. And you got to do something to protect that feedback loop so that the web persists in a way that allows search to exist, but also just allows more information to be published in open ways.

I don't know what's going to happen. Like there's a remedies phase. There's the search remedies phase. It's just wild that this existential problem for Google is literally coming up the week that Meta is also facing an antitrust trial. And they seem to be in almost the exact opposite position where the government can't even describe what Facebook is. It's so funny. We're talking about this. I've been looking at my notes because being in the courtroom, you know, you can't have a phone. So I've just been writing all these notes all week. And, um,

Zuckerberg actually talked a lot about Google because he was getting asked about basically, and I don't know if we're officially segwaying now, but the FTC was saying, do you think that Instagram and WhatsApp could have been as successful with another company? And Google was kind of the main example. And I don't have the exact quote, but it was something along the lines of, he said, well, I think ability and execution are different things. And he basically said,

chat on Google's organizational structure and he was like look I think they're technically excellent I think that they often struggle he was basically like it perplexes me sometimes the decisions they make because they have the ability and I think organizationally I think he said they're challenged and

And it's just funny in hindsight with like these two cases back to back. We should talk about the meta case now. I don't know what's going to happen to Google. We are going to get the two remedies phases. Google, by the way, says it's going to appeal. And in its statement said we've won half the case. I hate to be a scold. There were three counts. Google got one dismissed and lost the other two. That is technically one third.

Just putting that out there. Just noting. And it turns out that losing by a little and losing by a lot don't actually matter all that much in cases like these. It's not like the scoreboard doesn't really chart. If Google has to sell AddX and DFP, they have lost by a lot. And that's what they're staring at. But the MetaCase is fascinating, right? Not only because Mark Zuckerberg is apparently doing decoder bait live on stage in our nation's courtrooms, but because there isn't all of this contractual evidence available.

That they were influencing the thing, even though everyone knows that meta ties its products together to make a stronger ecosystem. Yeah. Like if you breathe at Instagram, that content ends up on five different platforms before you even like finish pressing the button. But that's meta controls it all. So it's like fine. And I think the government is really, it appears the government has very much struggled in this case. Yeah, I would say so. Um,

First, I just want to talk about what it was like being there because there's something beautifully egalitarian about being in court for something like this because Zuckerberg, he rolls like the president. He's got a ton of bodyguards. He's the third richest man on earth.

And, you know, it's kind of it was cool and and made me have some hope for America just watching this all play out. So this judge, Chief Judge Boesberg of the U.S. District Court of D.C., during like one of the breaks, like 10 minute breaks, he filed, you know, that he was possibly going to hold the Trump administration in contempt over the El Salvador deportations and the illegality and question marks around that.

So he's got a lot going on. Trump has called him a left-wing lunatic. The security in the court beyond just Zuck being there was very intense because of the fact that it was him doing the case. So it was really interesting to see this. And

And, you know, I expected, you know, I was there with a few other reporter friends and the first morning we expected, you know, throngs of cameras and lines of the public because, you know, it's a public courtroom. Anyone can go in. I don't know if people realize this in this country. You can literally just walk into this courtroom. There was a guy, fun fact, not to derail you, but there was a guy who sat in the courtroom every single day I was there for the Google search trial and read a book.

I cannot explain to you why this man was there, but he just, he wore like cargo khaki pants and read what looked like a, like John Grisham novel every single day in court. Don't know why. I mean, the Marshalls are very serious, like no electronics, like, um, very funny. Mike Isaac from the times was wearing his meta Ray bands at one point and he almost got thrown out because they were like, is that recording? Uh,

Um, but it was very cool just watching it play out and the, um, the pomp and ceremony of it all, but also just like the, okay, this, this part of the government, at least right now seems to be working. Um, and you know, meta has got all these high price, fancy lawyers. Uh, the FTCs team was, I would say fairly young. Um, I was actually surprised to see everyone looked to be like kind of in their thirties and, um,

It was interesting to see the dichotomy of the two sides. But it's literally me, a few other reporters, like Joel Kaplan. I was sitting right behind Ferguson, the chair of the FTC, the first day. Would not talk to the press. Wouldn't really look at us. And...

so yeah, that was just like what it was like being in the room. It's this grand, you know, it's the chief judge's room. So it's just very grand. Um, and to watch Zuckerberg walk in, you know, he still manages to have like one bodyguard come into the room with him. Um, but just to watch him be regulated to like a common man, you know, like he doesn't, he doesn't get to like leave first or come in last. Right. He kind of filters out with everyone like shoulder to shoulder, you know, it was cool. Um,

But the case itself, I left DC really with the impression that our government does not understand how social media works, which is a bummer because I think there's a lot of really interesting questions you should be asking about if you're the US about Meta's power. Should one company own this much of social media, really control fundamentally speech at this level?

And unfortunately, the way they're attacking it, I think is, is it just makes no sense. It's not, it doesn't, anyone who actually uses the internet would look at this case and say, it makes no sense. So, um, basically,

Basically, the way the FTC is, because for an antitrust case, you have to define the market, right? And this is actually where this case has struggled and where it got thrown out originally is the judge found that the FTC had not kind of properly defined the market. So they narrowed it down to what they think is the market that meta-competes it in the US. And do you want to know the only other apps that are in that market? Wait, no. Before we even get to that, I want you to explain what they think that market is, because I have read a lot about this now. Yeah. I couldn't explain it to you.

But you sat in court. How do they think about this market? They have narrowed it to what they call personal social networking services. The hell does that mean? I don't know. No one knows. I've covered social media for 15 years. I've never heard of this before. Can I just add one more piece of information to that? Because I think you just mentioned that this case got thrown out once before. Yeah.

Lena Kahn's FTC got this case thrown out. Judge Boasberg threw out Lena Kahn's version of this case, saying the market was ill-defined and made no sense. Andrew Ferguson...

Trump's FTC chair is now in charge of this case, pursuing it even though Mark Zuckerberg is in the White House every day, and he's landed on whatever this definition is to cure the already muddled definition that Lena Kahn got through. Yeah, and there's also a narrative out there that this was the Biden administration's lawsuit. It actually got first filed under the first Trump administration. So this has gone through now three administrations. Yeah.

So that's their idea. So basically, Meta competes for sharing between friends and family. That's the market they're trying to say they should break Meta up for. Okay, guess the apps that are in this market. Sharing between family and friends. Yeah. Facebook. Facebook. Besides Facebook. Like X? Seems like it would belong...

Snapchat. Yes. Snapchat's a good one. There's only one more besides Snapchat. I keep thinking of messaging apps that Meta already owns, which is a bit of a problem. It's not messaging, right? No, it's not messaging. But if we're sharing between friends and family, that's where people share. No, not according to our government. Oh my God. Okay. Snapchat and one other. Tumblr.

No. Is it me? We is the one that you mentioned? It's me. We I don't even know me. We is I just heard you say it before. Meta's lead attorney asked Mark Zuckerberg that very question on the stand. And he said he does not know. And he said, Have you ever heard of it before this case? And he said no.

I checked my email. I've actually gotten pitches from MeWe over the last couple of years. Well, what have you been doing, Alex? This is the greatest threat to meta that exists. They have some kind of blockchain angle. Of course. Tim Berners-Lee is involved. Frank McCourt, who is also trying to put TikTok on the blockchain, is an investor. So that's MeWe. They have about 20 million, I think, something like that users worldwide. I have never used it. I have never met a person who has used it.

But that is the market according to the FTC. So on its face,

That's just ridiculous, right? And I was talking to some other antitrust reporters who know the actual how the mechanics of this play out better. And apparently the judge can define the market however he sees fit. So it's not like the FTC's market is definitely going to stick or that Meta's rebuttal of it will stick. The judge may just be like, you're both wrong. And they probably are. Although I do actually buy Meta's argument a little more, which is that, no, we compete

across TikTok, iMessage, YouTube, X, Telegram, Signal, etc., etc. I would say Zuckerberg spent a lot of time saying that YouTube and TikTok especially were his main competitors. And a lot of time, I would say throwing founder shade at Snapchat and saying like,

uh, yeah, I wish we would have made it work. I think they'd finally beat a billion users and they still aren't 10 years later, uh, stuff like that. So, um, cause he, you know, it came out in the courtroom and it's been well covered, but that he, he tried to buy them as well. Um, so this is the FCC's argument. And, um,

you know, I do think they're also looking at some interesting things around network effects around what happens when you reach this scale. And there's so many people on a network and the switching costs is actually your friends not coming with you. And they talked about that a little bit, but, um, I found their examination to be fairly meandering. Um, there was a lot of like, do you remember that you wrote this Facebook blog post in 2008 about sharing on the newsfeed, like stuff like that.

And meta's argument about the market to be much stronger. Yeah. It just feels like I just have a really hard time looking at this in any way that says Facebook doesn't compete with TikTok and taking that seriously.

It just does. It just does. Some of the most interesting evidence was actually in the opening arguments, Meta displayed some internal data. And we have it on the site. We've got a stream that I and Lauren Feiner have been contributing to. Everyone should go check it out. There's a lot in there. Meta actually showed data that when TikTok was briefly offline earlier this year because of the ban...

traffic searched to actually Facebook a little bit more than Instagram. And then they had like Snapchat way at the bottom, like Snapchat got like a percent. And Snapchat actually got so mad about this that they had their lawyer in the courtroom a couple of days later. Also because Meta didn't properly redact the slides for the public saying like, you're revealing our confidential information. Snap's lawyer is like, don't tell anybody that nobody uses our products. Yeah.

The inside baseball, by the way, is that Meta tried to threaten Alex into not publishing their unredacted slides. And I was like, that's not, it's just not our problem. Like if you email us unredacted slides, we can publish. Yeah. It's a tale as old as time. You know, this has happened in like every good case. The Apple's lawyer was in there too. Like saying we don't have faith metal. Well, you know, not disclose our confidence, you know, confidential info, which I'm sure meta would love to, right. They, they hate Apple, but yeah,

Um, yeah. And that's, that's, that's the high level of it. And I'm curious, like, I'm curious how much of this case is actually just naked politics because I was watching Ferguson on Fox business after the first day and he point blank said, we are doing this to make sure 2020 never happens again.

And he didn't say exactly what that meant, but I think it means the Trump administration has been very mad about how Zuckerberg funded voting drive stuff, mail-in ballot initiatives during the election. He actually thinks that Zuckerberg somehow played a key role in him losing that race.

And then you have Ferguson on, you know, the president's favorite news channel saying, you know, this case is to make sure that never happens again. So I think that kind of shows the motivation here. I want to get to the substantive argument, but I'm actually fascinated by all of that aspect of this case in particular, because.

You know, the Google case we're talking about that was argued under the Biden administration. It was filed on their first Trump administration, argued under the Biden administration by Jonathan Cantor, who has been on our shows before. I'm trying to get him to come back and actually talk about it. But, you know, like I've asked Cantor, like, you're the assistant attorney general for antitrust. Like, how do you run your team? And he had like answers. He's like, here's how I do decisions. Here's how I prioritize. And they were very good. Right. And that's the DOJ, which was basically a different law firm with a different boss.

This case is the FTC, which was run by Lena Kahn. Different law firm. Like, that's the way to think about it. Like, the DOJ and the FTC have different legal teams. They might have the same theories or the same goals. Different lawyers, different legal teams, different relationships to the president. Right? The DOJ is a law enforcement organization. The FTC is a law enforcement organization, like, in a civil way. Right? Like, they're just different. And Ferguson, in particular, is caught up, the new chair of the FTC under Trump, with

his Democratic commissioners were fired. Like Trump fired them. They're suing him. It will go to the Supreme Court and like a hundred year old precedent about whether the president can just fire FTC commissioners is going to come up for review. So Ferguson is in this weird box, right? He has a boss who shouldn't be able to fire him, but has proven that he will and like break the law and like go fight at the Supreme Court. And

Under this conception that the president is the chief executive of the country and makes all the decisions, which is not true, but kind of true. It's like very weird, right? He's just in this weird spot and he's got this case that was argued by a bunch of his predecessors. And now everyone else got fired too because of Doge. So he's got all these baby lawyers.

And he has to play the role of like the fire breather that everyone else has to play now. And so, of course, he's on Fox Business being like, the reason I'm pursuing this case is because Donald Trump didn't get a candy bar on January 6, 2020, or like whatever it is, right? But that's not why this case started. That's not why this case was pursued under Lena Kahn and Biden. That's not why they kept the case going. That's not why they kept the case going, even though Mark Zuckerberg has been in the Oval Office repeatedly, right?

saying that he'll make a deal for numbers that range from like five dollars to like three trillion dollars like just numbers yeah like me like just a range of numbers that's none of that's the real reason but i think to keep trump from firing him or making a deal or undercutting this populist antitrust movement that is pretty bipartisan he's got to say this is about censorship

Or Andrew Ferguson has fully converted to MAGA like our buddy Brendan Carr, and it's about censorship. Like, I don't, I truly don't know, but that's just the weird uncertainty inside all of this. He is very much doing the thing you have to do no matter how you feel about it. Like, whether he is just a zealot who wants to win this case or is just actually purely in it for the politics, that's...

you would do the same thing, which makes it weird. Like that is the speech you give on Fox business, no matter how you feel about actually what's going on in this case. Yeah. I mean, he tells the world that it's to keep, you know, J six, you know, Trump getting kicked off from happening again, but like inside the courtroom, there was nothing about censorship, nothing.

It was not in any of the FTC's arguments because it's not, you know, private companies can do whatever they want as it relates to speech. That's the constitution. That's how that works. Yeah. At least for now. And like me, we censorship never came up once in the three days Zuckerberg was on the stand.

Interesting. Yeah, because the case is fundamentally about did you perceive Instagram to be a competitor and buy it to preclude competition? Right. Did you perceive WhatsApp to be a challenger and buy it to preclude competition? And they absolutely did. I've been covering this company for a long time. Some of the emails they were showing and internal documents, like I actually like...

Scooped back in the day. It was actually wild to watch like internal documents that I remember first publishing being shown in this courtroom like and it was all about that and it's totally true that yes, they saw Instagram and WhatsApp as competitors. They weren't direct competitors, but they foresaw them becoming that and

To the point that there's words like neutralize that Zuckerberg said, these famous emails that have now been out for a while. I was expecting the FTC to show some new evidence. And there were a couple things. I would say the only time inside the courtroom where you could feel...

the meta trial team bench kind of just like set up a little bit was when, um, they started reading, they started having Zuckerberg read this memo to his exact team in 2018, where he said, I think we should spin off Instagram and literally said that companies tend to do better after they've been spun off. I'm telling you, man, do it before the government does it for you. If you think you're so much smarter than all these government flunkies,

You probably are. Mark Zuckerberg, smart guy. Do it in a way that meets your interests, that makes everybody money, before the people you perceive to be dumber to you do it to you on behalf of the American people. Just do it first. I continue to believe that is the smartest answer for most of these companies, to do it in a way that satisfies the optics of all these people, but preserves the business. And I don't think they will learn that lesson. I think we're going to see a bunch of weird breakups coming. But it's just very funny that Mark saw it.

Yeah. He was like, oh, I should spin this out and let it become its own thing. Yeah. Because it'll go faster. Yeah. I mean, you can't deny when you look at these lengthy, like, exec memos he writes inside the court. Like, he's a brilliant strategist. And in 2018, ahead of the Biden administration, he was writing to his team. I think, especially with a Democratic administration, big tech's going to get broken up. We should be thinking about this seriously and planning for it. And...

um, you know, he saw this coming. And so at the same time though, he's like grinning and saying, I would totally buy WhatsApp again. It was awesome. Like, um, and that's the tension, right? Is like you have him acknowledging and the FCC presenting evidence that he knew that the company was going to face these calls to get broken up. And then I'm sitting in the courtroom and I'm watching the argument for doing it.

And I'm looking over at the meta people and they're literally like sometimes high-fiving as they walk out on breaks. Like they feel like this is a layup, like they're just going to crush this case. And that's,

It's a bummer. It's a bummer for taxpayers. It's a bummer for holding power to account. There is actually power here that needs to be addressed in some way. I think there's more interesting arguments to be made around interoperability. Why is there so much energy around the Fediverse? It's because people feel the actual cost of these platforms, which is taking your speech and your network with you. Should a platform as large as Meta have to allow interoperability? That's something I would love the government to look at.

But instead, they're like, you're competing with MeWe. It is very strange because I'm so torn between my principles and how I feel about technology and the internet. And I would like using WhatsApp more if it weren't owned by Meta. That's just how I feel. A lot of people feel that way. Yeah. And yet, every single thing I have seen and read about this trial...

makes me agree with Meta. And there's just so many moments, like so much of this discussion seems to have been basically the FTC saying to Zuckerberg and the other witnesses, like,

you bought these companies because they were threats. And, and they're sort of like, well, sure. Like we, we thought that they might be, but also they are only as successful as they are because they are part of this company. And I, I like, again, I hate how compelling I find that argument. The evidence is it's irrefutable. It is. And, and I think that the WhatsApp piece of it is, is my absolute favorite because there, there was a bunch of evidence presented that, uh,

the WhatsApp guys were just happy. They were just like, they remind me of like when Microsoft tried to buy Nintendo and Nintendo was like, what do we want with your money? Like, leave us alone. We're having a great time over here. But the, the basically like you heard this more than I did, Alex, but my, my impression was basically like Zuckerberg goes to talk to the WhatsApp co-founders and he's like, he's like, don't you want to have lots of features and sell ads and take over the world and you're going to be huge. And they were just like, not really. No, they said they wanted to be Craigslist. Yeah.

Which, like, hell yeah. More of us should want to be Craigslist. And then the judge is like, how does Craigslist work? And Zuck is like, well, Bozberg feels like a Craigslist guy. I have to say, if I had to pick...

one platform for George Boasberg, it would be Craigslist. Yeah. And Mark was like- Or Nextdoor. And Mark was like, I didn't want them to be Craigslist. I saw this being a billion plus user platform. And he literally called Yong Koon, the CEO of WhatsApp, unambitious after he met with him the first time. And that really cuts at the FTC's argument because intent alone does not prove you did something to become a monopoly. You actually-

As far as I understand it, the government has to show that Meta degraded the marketplace by buying competition. That basically these apps, these services got worse. Prices went up. They can't argue that because it's free, right? Although they're trying to make some ad load argument that's not really even sticking as they're saying it in court. And then Zuckerberg can just say, no, like...

And they're showing the board decks where they projected to get to X user milestone. They way surpassed it way faster. Nearly 3 billion people use WhatsApp now, which is the first time I've heard a WhatsApp user stat in years, something Zuckerberg said on the stand. Instagram, he was like, Kevin Systrom and I, we thought we could get to 100 million users. And if we did that, that would be a success. And it got to a billion within a few years. And so...

It's hard to argue that Instagram and WhatsApp became meaningfully worse. Now, I know everyone is listening and going, come on, what are you saying? I hate Instagram. I love it, but I hate it, right? And that's the tension of the case is that people do feel strongly that these apps could be better if meta and its incentives weren't behind them. But if you look at the marketplace, it's like there was a lot of time spent on path, right? Right.

which like I had not thought about path and so long. I was just going to mention path path caught so many strays in this trial. Oh my God. And it was because Zuckerberg also looked at buying path and path is an example of a startup that he didn't buy and it died and

And it's been lost to the, you know, to tech history. And he talked about it in exactly the same way, which is I think why Meta kept bringing this up, that it was like, it was the same, like, this is growing. People really love it. Maybe it's a threat. Like he talked about it in the same terms he talked about Instagram. And it's like, look at the one that they bought and look at the one that they didn't. And it is, uh, I'm not saying those two things are like predictive, right? Like correlation causation, but, uh,

one is Instagram and one is not. Well, okay. So I will, I'm going to try to use Zuckerberg's own argument against him. Okay. Cause it is true that Zuck's strategy memos, even if it's like dashed off emails where you like emails a random engineer and it's like, I had this idea and the engineer is like,

help, you know, like the ideas are always really good because he's smart and he's ruthless. And he, there's an email. It's one of the emails you scooped back in the day, Alex, where he's like, my insight is that every generation comes up with a new sharing mechanic and I need to buy the sharing mechanic. Yeah. So we had friends and family updates on Facebook and,

Instagram is photo sharing. And then he clearly saw that messaging was the next one with WhatsApp, right? And this tracks everything Facebook and Instagram say about themselves. All the action is in the DMs. They say this all the time. So you just see Mark was like, okay, I had this mechanic. I see the next one is going to be photo sharing. I'm going to buy that mechanic. What's the hottest thing there? Okay. The next one is obviously private messaging. I'm going to buy that mechanic. What's the hottest thing I can buy there?

and he just did it and i could not tell you what that thing is as it relates to path

Check checking into like what, what? I don't even remember what it was, but it wasn't something where I'm like, oh, there's some core mechanic here that will undercut the entire promise of Facebook. I think it was their idea that the graph would be artificially limited because path was like, you could only add so many people. They based it on that. There was like a theory sharing dynamic, right? That was past theory. And even by Zuckerberg's own like framework, it would never be a thing. The location-based check-in thing was, was real. That was four square.

I know, but it was like it was all sitting right there. Right. This like sort of real life geographic thing was like it was almost that. Sure. I'd like to bring back path, David. You could check in on Facebook. Federated path. It's the future. You can have six friends and all of them are like, why am I here? But the next turn, the one that they almost missed was what if we show you videos from people you don't know? Truly, that was the next turn. That was a tick tock.

And they immediately, they could not buy TikTok. And they even said there were all these like Chinese issues, Chinese ownership issues of why we couldn't buy music. Again, he looked at it before anyone else. He met the founder before it was even in the US because he knew this was coming. And he was like, I couldn't do it because of the China stuff. And they had to hard pivot Instagram and they had to compete. Yeah. Whatever you think of Instagram Reels, it is a better competitor to TikTok than YouTube Shorts, right? Yep.

Because they absolutely had to compete and they are worthless and they're very good at it and they'll just do it. And that's the market distortion that the government hasn't been able to articulate. Like if Facebook had actually had to compete with an Instagram that actually had this new dynamic that Mark Zuckerberg had identified, things would be different. Both of those companies would be competing with each other. Yeah. But that's – it's still illusory. To David's point, you will never know. And Matt's argument on the other side is pretty good, which is, well, I don't know. It's Instagram. Here it is.

I am not an expert on the edge cases of antitrust law enforcement, and maybe the FTC will finally get something through throughout this trial that makes sense. I have looked at an absurd amount of internal Facebook documents over the years and their data analysis, how they view the market and not stuff that like it's been PR sanctioned, like stuff leaked to me. I feel like I actually have a under the hood, real assessment of how they view the world. They think most,

maniacally about time spent about they talk like they're the un it's like population density it's like we are at x density in x country they're thinking so much broader than the ftc they're thinking like how can i suck time away from netflix etc right it's like the reed hastings quote is like i'm competing with sleep who was on the board of facebook for like 15 years

That's how these companies operate because that's the business model. And I don't think the FTC understands how the business model informs the strategy, which is that if you're an advertising business model, really all that matters is...

eyeballs and getting as much of those eyeballs for as long as possible. And the only real monopoly meta has is its network, is its network effects. And the thing Zuck is constantly trying to fight is a new thing coming in and eating into those network effects, whether it was Google Plus back in the day, which got an insane amount of airtime in this trial. It was very fun. I really felt like I was getting like a

like a Stanford business like seminar, like Silicon Valley tech history class. It was really fun. Google plus path, like,

OpenAI, which we'll talk about in a little bit, Snap, these things that come in and potentially siphon people away from the network, which leads to a thing called network collapse, which they did talk about in the courtroom. He just, like you said, he recognized these formats and goes, I can graph this onto my bigger network. I'll scale it faster, and that will make sure that the startup that invented that form, whether it's Stories or whatever, can't reach a billion users. He kept saying over and over, he's like, once you get to a billion users, like,

uh the world is your oyster like he's like he's like i really like there's very few companies that do that very few do it on their own he's like he actually made the case that none have done it on their own that they all have big parent companies youtube tiktok with bite dance snap is close to a billion yeah i feel like is this more evan spiegel shade like you can't get to the magic number it was around the snap uh acquisition questions yeah is when he said this um

And that's, he knows that's his competitive moat and that's, it's, it's strong and it's durable and there are monopoly questions there, but it's not like time. It's not like what Google does with its products where it, it's just like, he recognizes if he can get to something and strap it onto his scale, he'll kill it. And he's done that very well over the last 20 years. We'll see what happens with this one. I, and again, I don't want to overdo it on the, on the like legal inside baseball piece of it.

but you got like a dozed up ftc that fired everybody run by a guy who has to be a fire breather on fox news to please his boss who has absolutely shown that he will come right up to the edge of the law and ask the supreme court to overturn a hundred-year-old precedent and fire people that he's not supposed to fire like that's not a recipe for great lawyering

Right. And like, I think the DOJ under Biden can't earn specifically like having talked to him about how he ran what was effectively a law firm. I was like, oh, they're doing good lawyering. I think they had a they had better cases to deal with because Google does have all these deals. I very curious. The DOJ has the Apple case, which has the same dynamics as meta here in big ways. Right. It's just Apple. They're just like, well, we have the iPhone. We just do whatever we want. I message here it is, but it's done. We'll see.

Right. A lot of this is once you have once you own a platform, how dirty can you be? And is that illegal? Right. And some of the stuff with Apple is like we all know it. App developers like they call me and yell at me to start in-app subscriptions because that's where they make the money from.

I don't know. But that was started under one administration and now it's come to this one and Pam Bondi is going to pursue Apple. Like there's just an element of that, which is like, is it the government's case? Is it the law that's bad? Is it that Meta's legal or Apple's legal? Or is it?

Just a bunch of doge kids don't know what they're doing. And they're up against Meta's lawyers, right? Yeah. And I think there's also an element, they're leaving DC and talking to a lot of the Meta execs, you know, because they're all there and it was off the record. But just the vibe I got is like, I think there's a consensus that Trump is going to be harder on all these companies than they thought. And that if they thought, if they could just kiss up, that things would be easy.

And I think Trump is a little smarter than they maybe gave him credit for in terms of leverage. And I think meta would have very much liked to settle this case, not necessarily because they were worried about losing it, but because it's a, it's a massive pain and it's a,

It's a, you know, bad headlines. It's Zuckerberg's time, a ton of money, et cetera. Um, the discovery process, which is very embarrassing. Um, but yeah, I, I would hope, I would think that, and you know, the journal had a great story about this, that how Zuckerberg pushed to, to, you know, settle this, um,

I think he probably thought that he would, might be able to, because of the, the January stuff that we talked about, all the MAGA changes that they made and Apple's going to go to DOJ. And like, I, I think all these CEOs are in for a kind of a leopard face moment in the next year or so.

That photo that everybody has of all the CEOs standing on the dais behind Trump at the inauguration is going to end up being iconic for reasons that none of those CEOs like. Exactly. Is my ongoing thesis. Actually, can I respond to that in just a slightly different way? I agree. That photo will be very embarrassing for all of them because the leopards are eating all their faces. It's happening. Trump wants these wins and he wants to win the trial so that he can negotiate the settlement that ends the appeals. Right. That's.

That's what you do. The tariffs on China are 5 billion percent. And then we're going to make a deal. Trump. The thing that kills me at that is the expectation they had going into that photo was corruption. Right. Tim Cook is going to personally donate a million dollars to Trump's library and that'll take the DOJ case away from Apple. Naked corruption. That is a nakedly corrupt thought. There's nothing about that's fine in the sense that like a lot of people believe the government is corrupt.

And so like Trump being even more corrupt does not offend them, but it's not fine in the sense that like, even when we were covering the Google case today, people on blue sky were replying to me being like, they'll just buy them off. What? Like that, that means that the system is collapsed. Like you don't believe in it anymore. And maybe you didn't before, but like the level to which we have accepted the

That just naked corruption is how this works is a little more dangerous than I think people are giving it credit for. Like if you believe that Google can do like, ah, screw it, write him a check and it'll go away. And that is maybe you don't think that's right, but you think that is possible. You are. It's gone. You have to not believe that's possible. You have to actually hold everybody to account and say, actually, that's corruption.

So not saying call your Senator and tell them to break up Google, just an idea that you could do. Um, I'm saying, I'm saying you can't, if you give into nihilism that the corruption is already one you've, you've just given it, like you should not feel helpless. You should feel outraged that the expectation of that photograph was corruption. And there's talc said there's a little glimmer of hope that it hasn't been just overt corruption from the jump. Like they at least have to go to trial.

I don't know what's going to happen after that, but they at least have had to go to trial. I think Trump is more savvy about power and leverage than the CEOs thought and knows that the moment he just starts taking- Or most of his staffers, as we will come to. Yeah. Yeah. And the moment you just start taking any check to kill anything, you've lost power. And I think Trump cares about power. Yeah. All right. We got to take a break. We're going to come back. We're going to talk about OpenAI, which is also making some moves to scare Mark Zuckerberg. We'll be right back.

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All right, we're back. David tells me that we just spent an hour on antitrust news. So we got to talk about products and rumors and stuff now, right? Like things, not ideas. No more ad tech for the rest of this episode. I promise. I'm not making that promise, Dave. All right. In the middle of all of this, Alex, you and Kylie delivered a pretty big scoop about OpenAI.

They're going to build a social network, which I will not say people reacted to with warm thoughts. Tell us what is going on here. Yeah, I would say it was mixed. I saw a lot of the obvious like, oh, great, more AI slop stuff. And then I actually, you know, I think people who work in tech get it and understand what's happening here. But yeah, OpenAI has been for the last several weeks, uh,

showing off this internal prototype that is a kind of X-like social feed with a bunch of AI stuff in it. Apparently they're calling the post Yeets, which for early Blue Sky users was the name for posting on Blue Sky affectionately before Jake Webber killed that. Well, no, they were Skeets on Blue Sky.

Oh, wait, they were skeets, not yeets. Which is worse. Somehow slightly worse on Blue Sky. No, it's not slightly worse. It's horrible. It's a joke that is fully out of control. Oh, my God. And people still call them skeets, even though I believe Blue Sky would prefer you didn't. No, Liz Lopato calls them skeets. No one else calls them skeets. More people than you want call them skeets. Does yeet come from something else, though? Yeet's like a gamer term. It means like throw a thing into the ocean. Yeah. Yeah, yeah, okay, yeah.

So they're yeeting and... I'm going to yeet myself off this podcast. That's right. See, that's... You understand what I mean.

No, so Sam Ullman has been going around to conferences and private dinners, etc., and talking about how he wants to compete with Elon and X. And they have a prototype. And we scoop some of the details. It's very early. It's early, but the way OpenAI works is something that's very early could actually ship within a few weeks. So...

especially after I think the reaction to this and all the headlines. And I think the story, uh, got a lot more attention than maybe we even expected. So maybe that pushes them to, to ship faster. I saw Kevin wheel there, CPO, who was the former head of product at Instagram, um, gave an interview to Bloomberg shortly after the story saying like, we need to find a way to let people share, uh,

that they do with ChatGPT more easily. So they're already starting to hint at it. This puts them on like a direct, you know, collision course with Elon, obviously, but also Zuckerberg, who is adding a feed like AI social network to its assistants later this year. They're actually going to turn the Meta Ray-Ban app, the companion app into the Meta AI app. So you'll still have to have it to pair with the glasses and they're going to ship new glasses later this year, but they're going to have a feed as well in there.

So this is like a Grok and X merged, right? They're the same company. If you're on X, you'll see Grok, you know, suggesting things and their responses. It's everywhere in the app and now the product teams are merged. So this trend is happening across the industry. So it kind of makes sense for OpenAI to go here. You know, ChatGPT has been a, you know, a single player experience. And I think OpenAI recognizes that too much.

You know, they're probably not thinking about this this way, but really to justify this incredible valuation they have and all this money that they've raised. They need to make money beyond just selling ChatGPT subscriptions, though I don't think they're going to do advertising anytime soon. I think this would be a natural. This is why I said we may still talk about ad tech. What's the money if they don't do advertising? They start a social network and there's advertising. What's the money? What's the money? Yeah. Just running ads in the feed.

So it is advertising. But it's not advertising in ChatGPT. It's advertising in SocialGPT or whatever. In the feed that will probably... They may do a standalone app. The prototype is standalone, but they may just merge it with ChatGPT. Their CFO, Sarah Fryer, was the CEO of Nextdoor, which sold ads in a feed. They have a lot. I mean, they could do this. It would make sense. And it begins to explain to me...

Why Zuckerberg has been so focused on them beyond just the model competition, I think. And he was, it was kind of interesting, like publishing the story when I was in the courtroom, like the same day, I'm like watching him on the stand saying like, look, once you get to a billion users, you know, really like it's, it's very hard to compete and you can fan out and spread out, I think was his words and do a lot of different things.

And I think he probably saw this coming. So OpenAI is approaching a billion users. They'll probably hit it this year. And they're just in this huge expansion product mode, right? So they're going in a bunch of different directions, but I think the social piece really makes the idea of changeable.

of ChatGPT being more than just a Google killer. Potentially now they also want to be a meta killer. So this is like the kind of ever-expanding ambition of Sam Altman, I think. This runs into one of the big trends right now that I find completely befuddling, which is that everyone is now convinced that lots of people really want endless feeds of AI-generated content. And

maybe they do. Maybe I'm the one who's wrong here. But like, you know, listening to Mark Zuckerberg sit on stage and say people really love ads. People love ads so much that we've actually considered at one point having a feed of just ads because people like the ads as much as they like the content, which to me reads not as we have great ads, but we have shit content is like that's you should take that as an insult, not a compliment. But anyway, and then like

Everybody's building these creative tools so that it is easier and easier to make stuff with AI and share it on your feeds. And we're like running headlong into all of my social feeds are going to just be absolutely overrun by AI content. They already are. And it seems to me what's happening is OpenAI looked at like the Studio Ghibli thing, right? That like took over the internet for

two days and everybody was sharing the stuff they made in chat GPT somewhere else. And they look at that and they're like, okay, no, we need to own this whole cycle. And to me, I'm like, no, it's just AI all the way down. And this is a disaster. And so I'm like, I'm so, I don't know, I'm just lost between these two different things that both seem to be happening. And it doesn't not seem like a thing anyone should want.

I mean, Eli, what you said on blue skies, right? Everyone wants their own distribution. I don't think they want, yeah, these images and the value and attention around them being just monetized by Elon Musk, who is actively suing them and trying to literally, uh, keep them from existing. Dude. Why won't Sam Altman quit X and join blue sky? Like you want to compete with Elon. You've got this big problem. He's still on his platform every day.

Like just do it. Stand up your own Mastodon server. I don't do something other than that. The open eye people are constantly complaining about Elon. I'm like, you're just giving him training data. Like your entire company is posting nonstop on X all day long. And as a result, the AI industry is very active on X. Like X has lost a lot of audience, but I would say the AI industry remains one of its core audiences. And I do think open eye would have a pretty,

pretty compelling pitch to take that audience with them on a different surface. And it could end up being like even more split, right? Where you just have like people who like Elon's version of AI on X and the audience's fracture even more. I think we're just going to continue to see this constant fracturing.

Yeah. I just like, it's, it's funny to me. Like you can stand up your own social network. You can, you can do all this stuff or you could just stop using the one owned by the guy who hates you. Who's your competitor, but you still got to eat. Where are you going to eat threads? Like anything like find some obscure European mastodon server and be like, I live here now. And like a bunch of people will come with you because you're Sam Altman.

Here's where the news is going to be. Yeah. Right. Like here's where I'm going to lower case sad boy tweet of how no one liking, like you can do it anywhere you want, but like he chooses to do it at X for some reason. And I'm assuming that reason is the absolutely bizarre relationship between those two men. I think it's also network effects. It's what we were talking about with meta. It's just the AI industry is there. It's where companies still announce news tech tech companies, especially, um, and, and,

I think OpenAI sees an opening because they are the hottest tech company in the world right now to take that audience. And I think the idea that if you're Sam Altman, people will follow you to your obscure Mastodon server, I'm not sure that's true. And I know for sure that if you're Sam Altman...

You're not sure you want to find out. If you have the confidence to just like roll up to, to roll up to the richest people in the world and be like, here's what I need, a trillion dollars. Like you should find out if people will follow you to a mass transfer. Like there's one person who has the sheer audacity to be like, I need a billion, I need a trillion dollars to buy every GPU in the world. I mean, Elon Musk spent $44 billion to make himself cool on Twitter. Like it's, it's, it's a harder thing to do than you think.

Stargate is just to fund the biggest Mastodon server in the world. There's this quote in your piece, Alex, it's by somebody who runs a different AI company. They're anonymous. The Grok integration with X has made everyone jealous, especially how people create viral tweets by getting to say something stupid. The next thing I said was about to be this quote. It's very good. It's the funniest quote I've ever read. It's an incredible quote. It has just made me think about AI art and how people react to it and the feeds being full of art and why people are into it.

it and the in we've written a lot about this like addy and i have like spent a lot of time being like ai it's like why are we it's very much like someone telling you about their dream

like that's how i always feel like has someone ever excitedly told you about a dream they had you're like cool and it's like the most important thing that's ever happened to that person and just the disparity in experience is just too vast to be overcome like you were you riding a dolphin great like that's like how i feel every second i see ai art it's like very good and i think the studio ghibli stuff hit

Because of the incredible juxtaposition of the art style and the creator hating it. And then you're making Guantanamo Bay memes with it, right? Like there's something in there that was wrong. Like on a fundamental level, the thing itself portrayed the great conflict of our time.

And then you turn to the next one and you're like, oh, you made an action figure of yourself? Is that, oh my God, is that your MacBook? Who gives a shit? Like, who cares? And I think the AI industry has really misconstrued what the interest was.

It's not people talking about their dreams. It's people stealing artistic expression and that driving a wave of conflict and then people being able to participate on either side of that conflict in ways that drive the conflict forward or amplify it. No one was outraged when people

made their weird action figures. Like, no one felt bad about it. No, it's just boring. It was just like, here's some stuff. There's even diminishing returns on the outrage, right? Like, you can't run the Studio Ghibli playbook over and over and over again. And I think, like, I'll be honest that the novelty factor of

I asked chat GPT to do something and look at this wacky thing. It came back with has lasted a lot longer than I expected. Uh, it's still very much there. This is the thing that a lot of these companies are trading on is like, people think grok is silly and they, they like that. And maybe that'll last forever. No, but the, even, even the grok one, the conflict with grok is really obvious, right? Grok is often like, yeah, yeah, you know, it's pretty racist and that's hilarious. Right. Like,

It's subversive. But it's not. Like, I too can type Elon is racist into a text box and then screenshot it. But you're not a robot controlled by Elon. Like, there's nothing subversive about us doing it. We just do it all the time. Right, but is that going to be funny forever? Like, this is my point. I just, I don't know how many versions of that thing we're going to get before this just stops being interesting. I mean, okay.

OpenAI's user base doubled after it launched that chat, the upgraded image generation. So you can argue... Wait, can we say that differently? A lot of people went to a website after that happened. That's what happened. A lot of people went to a website. It's just not the same thing. There are a lot of people, and the numbers are crazy. I absolutely agree with that. But a lot of people went to a website. Yeah, I just...

I, I too have a problem with like, uh, the studio Ghibli thing in particular, like the fact that they picked the style of the guy who called, what did he call AI? He said it was like a, the studio Ghibli founder. Didn't you say something about how it's like a crime against humanity? The fact that that was the style that went viral feels, feels wrong. Um, but I don't think we can discount the interest people have at scale with this stuff.

and OpenAI sees it in their numbers. Sure, maybe it's like fleeting,

or maybe it's a gimmick that can only be replicated so many times, like you're saying. But I think, look, I think we're professional writers and we- I'm sorry, insult to life itself. Insult to life itself, yeah. We're professional writers. It's our job to say things on the internet. I think most people look at X or Threads or Blue Sky or whatever and they don't really know what to say. And I think the tech product view of this

just talking to the people inside these labs is that we see a demand for people who want to engage and don't necessarily know how to or are scared to, and AI will help them. AI will give them ways to express themselves that they could not before. And it's reflected in the metrics of how people are gravitating towards these products. So yeah, I think the culture class is going to continue to have

you know, a lot of like hand-wringing and like rightful criticism of how these companies approach things like IP. But I also think we can't deny that this is a trend that is here to stay. I at least think so. I do buy that. But I think that's actually a really great definition of

AI as a tool, you know, in a way that I really like, like AI is an enabling tool for lots of things I think is actually really exciting. Yeah. But what I see so much of the bet here being is that AI is going to keep being sort of the main character. And again, it has been for much longer than I expected. So maybe I'm just wrong. And maybe this thing is so funny and silly and weird and unexpected that people will keep wanting to interact with it forever. Yeah.

But that just does not feel right to me. I don't know. I don't think the OpenEye social network is going to be just like an endless feed of only people's CEO Ghibli photos. I think it's a jumping point to build an AI-native social network that uses AI throughout the entire posting and editing and publishing and recommendation process that every other established company is now trying to retrofit. Yeah.

And OpenAI has this insane, highly engaged user base that I think they think they can fan out and take this opportunity, especially with what Google's going through, like we were talking about, and the fact that these other companies seem to just not get product in this way. So yeah, I think it's going to be a disaster, but it's also the future, which is like kind of AI and NHL. The verge, everybody. Yeah.

There's other stuff going on in AI world. OpenAI debuted GP 4.1. And then Sam was like, I promise I'm going to clear up these names. God, they're so bad. What is going on here?

Like it's better, right? I personally feel so vindicated by this because I've been complaining about the names on this show and elsewhere for forever that when you go, it's like a drop down of nonsensical numbers where they don't even go up in order in the way that you think that they should. And so to have Sam be like, yeah, we know the numbers are ridiculous. Please make fun of us. We're going to fix it. Made me made me feel a lot better. Something else OpenAI and Google share besides their bitter AI rivalry is a horrible naming convention. Yeah.

But Alex, am I crazy or is OpenAI on like a pretty wild product run here? Like it's really, there was DeepSeek and then they were like, oh, we're going to launch some stuff. And like, boy, have they. It seems unprecedented to a degree where it's like hard to even keep up as someone covering it. My understanding is this model architecture is their first product.

And I still feel like I'm trying to understand really what this means practically, but like a Gentic model that is now, it's the first one that does the deep thinking stuff, but also can hook into all of the ChatGPT products. So it can pull in web results, do multimodal. It can like, a

apparently like do really interesting weird things with images and like edit them and turn them around. And like people are dropping an image into like have it reverse engineer where it was taken. So like the YouTube, like Google earth guy, like viral stuff, but like with AI. Um, so it's just a, it's a smarter model that now hooks into all of the product. Whereas the models have so far been fairly sequestered to certain aspects of chat GPT and what it can do. That's my understanding of it. But, um,

They're on such a tear, it's really hard to keep track. I mean... It's interesting because the tear seems to be more related to making better products out of all the products. Yeah. Or like attaching capabilities between products to each other to...

get to the next step as opposed to here's the next new model, which is smarter than the last model by however many percentage. I do wonder if that's because Kevin Weill's there. He's the product guy and he's like, make the products good. But there's also a part where it feels like

the frontier model is not going to get so much better that it drives usage. You actually have to like make products. Yeah. I've been writing about this for a while. The, the competitive nature now is that the product layer, not the model layer, the models are commodifying. Yes. Like they still feel different. Like when you use a new one, but yeah,

I think chat GPT, they're trying to make it like an operating system for your life. I think they want to be Google meta, um, you know, all productivity software. It's this, it's, it's one of the grandest visions I've ever seen. And like consumer tech in terms of like, we are going to use AI to try to do everything. Uh, and, and then he's working with Johnny Ive on hardware, right. That like you, you tie that into your own hardware over time. What if humane, but good, what if you made the good.

I mean, and to be clear, this is the story you have to tell in order to raise the amount of money that they have raised. It is. But you look at what they're doing to chat GPT and that is clearly the goal is like to encompass more of your everyday life. Yeah. I mean, there was the was it this week that they announced the thing where it'll remember all your past conversations? Yeah. I feel like that didn't get talked about enough that that's like all of a sudden, if you can have this thing be sort of accumulating over time as you use it.

The possibilities of stuff it can start to do for you is really powerful. It's lock-in too because it knows more about you and it's way harder to want to switch to another product because Chachi Petit knows everything about you. Totally. I realize I'm saying this as a guy who's been on a podcast for 15 years, has made a lot of YouTube videos. I just don't want to be perceived in this way.

I don't want the computer to know me. It already does. No, thank you. It's already showing you ads for random car stuff. Oh, man. My computer so believes that I'm going to buy a Volvo EX90. Whatever's going on in here, it knows one thing, and it's going to sell me a goddamn Volvo EX90. I feel like your computer's wrong about that. It's so wrong about that. It's not correct. Also, Range Rover. It really believes...

that what I'm going to do is probably Range Rover Sport. That feels closer. It's not. I've looked at the reliability records of that vehicle. I just want to like, do you guys use the voice mode on ChatGPT? All the time. I was actually just looking at my history to be like, what would this thing think about me? And it will think that I'm a six-year-old girl who occasionally asks for pickled red onion recipes. And that's like, those are the two things that happen.

When I was in DC, I was like, before I was the first day of court, I was like laying in bed and I was like, I'm going to court tomorrow. This court, like, I'm not exactly sure how it's going to work. Like, what do I need to know about going in? Like, what can I not bring? And like, it was, it was amazing. Like, it was like, this is, I can't believe it just, it works. Was it correct? Yes, it was correct. Yeah.

And that's like, I don't know if they're doing better grounding with like real data that they're stealing or what, but it's, excuse me, buying licensing. Now I have to disclose that OpenAz is a licensing deal with our company. Somewhere on the back end, it's there. It has nothing to do with us. Yeah. But no, I think like the combo of like the desktop product really starting to encompass like all the productivity, the voice being very good, and then them doing hardware with Johnny, I think is like this.

insane play for everything. The vision is really big. And I think you're right that it is. The shift has really happened away from like we I think pretty quickly we're going to start to have conversations internally at The Verge about whether we cover new models.

because it's rapidly getting to the point that it doesn't matter that much. It's like covering new versions of AWS software. Like it's just not meaningful to most people in these specific ways. I don't think we're there yet. We could just do a story stream where it's like new model came out. Yeah, like new model came out. It's 4% better. Well, I mean, you got to cover the new models because they're all cheating on the benchmarks and that's actually the story. Well, yeah, agreed. Agreed on that front. But yeah, we are very much...

moving toward like what can you build to have people do with these things and that's going to be the only thing that matters i continue to believe i mean the whole industry has been chasing what is the new input paradigm that overtakes multi-touch forever like even apple has been chasing we i'm constantly joking about apple introducing the apple watch to the digital crown because they in their head they have like a system like an equation that makes good products

And they just learned it from watching old Steve Jobs keynotes. Like they reversed engineer to Steve Jobs keynote. And he's like, well, he did a click wheel. He did, U2 was there and he said it was small. And then they got to the Apple watch and like, okay, it's got a wheel. U2 is here and it's small. Like that's just how their brains work, you know? Yeah.

Everyone has been trying to move on to say, okay, this is the new input. This is the new user interface paradigm that's going to drive the next form factor. That's going to drive the next wave of apps, whatever it is. And it is true that with AI in particular, what you have is natural language voice. You can just talk to the computer. It'll talk back to you. It's very compelling. And then,

We still don't know how any of that's going to make money. And then at the same time, right, there's the big cursor deal, which seems like a really big deal. Yeah. And then open as going to potentially buy this company called Windsor for $3 billion. Yeah. There's this whole enterprise set of applications that has kind of nothing to do with, is this a new input paradigm? It's much more, oh, we're going to make everybody vastly more productive in this specific way. And that's where all the money is. And that does feel like where all the money is. Yeah. Yeah.

But I the part where Johnny Ive is like, I can take the new input paradigm and make the next great product. It's even if it's Johnny Ive, even if it's Sam Altman, even if they have direct access to the next model from opening up, it's still uncertain because it hasn't been proven that that's what you want to do all the time. I'm actually very excited about this next moment because I wrote a feature for Wired like 10 years ago now.

basically proclaiming the beginning of the voice era. You were a little early. I was right and I was wrong. It happened. Everybody started doing voice, but in much more limited ways than I think I was expecting. But we're now at the point where the tech works. It's not perfect, but it works. The basic, can I speak and be spoken to with a computer in a useful way? It works. And now the open question is,

So what? What do we do with that? And no one has good answers to that yet, right? It's fun and interesting, but we're sitting on more. And if there's going to be more, it's coming. I think we're going to be talking about the Johnny thing with Sam Altman in the coming year to two years. I really do. I think Johnny's biggest funder for his new company is Lorene Paljobs. And he's hired all of the original Apple team design team,

If you're going to bet on anyone coming in as like a wild horse and doing something interesting, I would be paying attention to that. Yeah. And meanwhile, Apple is going under whatever serious shuffles it's undergoing, right? Like who knows? Who knows if they can pull it off? But, you know, Apple – we started by talking about opening a social network. Apple still has the most important distribution of all. Yeah. Right? It's just like in your pocket. Like Oprah at the Apple TV launch being like a billion pockets. Yeah.

If they can get it together, like maybe they'll get there. But it's interesting that they're wavering and Google is wavering. And then Sam Altman's like, I need a trillion dollars. Yeah. And I just don't know how. All right. We got to take a break. We're going to come back with a wedding round. We'll be right back.

How do you navigate an entire career change after losing everything? This week on Net Worth and Chill, I'm chatting with Lewis Howes, the host of the School of Greatness podcast with over 500 million downloads. Lewis went from rising professional athlete to broke after a career-ending injury. I believe self-doubt is the killer of dreams. When we doubt ourselves, it doesn't matter how talented or smart you are. You're going to limit yourself on what you're able to do.

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companion for the NBA postseason. Join me, Kenny Beecham, for new episodes of Small Ball throughout the playoffs. Don't miss Small Ball with Kenny Beecham. New episodes drop in through the playoffs, available on YouTube and wherever you get your podcasts. Looking for a political show that doesn't scream from the extremes? Raging Moderates is now twice a week. What a thrill!

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We're back. It's time for lightning round, which as always begins with America's favorite podcast within podcast. David, we're doing this. We're like 19 hours into the Verge cast. We've talked about ad tech and now it's time.

for what everyone is here for. One of the two best podcasts within a podcast. And we've gotten a fair amount of feedback that suggests that we are number two. And I'm not interested in that feedback. It's time for Brendan Carr as a dummy. It does feel like we should say thank you to everyone who voted for us in the Webby Awards. Oh, yeah. There's not a category for podcasts within a podcast, but we have issued a stern letter to the Webby people. And we're coming for you. If it comes up next year, it's going to be us against Munch Squad, and it is going to be a battle to the death.

It's pretty good. All right. It's time for Brennan Carr's dummy. Brennan Carr, real dummy this week. Brennan Carr is the chairman of the FCC. He was a regular old commissioner under Biden. He wrote the Project 2025 chapter about the FCC. Trump made him chairman of the FCC. Yeah.

He's been dumb for weeks. He's just not a smart man, but he is a naked political animal. Like that's what he is. That's what this segment is about. Every week, this man does something nakedly political to curry favor at Donald Trump and threaten the speech of Americans. Those are the two things that he does every week. And this week it is particularly bad, like particularly bad.

So Brandon loves to threaten or even file what he calls news distortion cases, where the FCC, which licenses the nation's airwaves to broadcasters, can say to various news organizations, the broadcast news organizations, NBC, CBS, Fox, hey, you're distorting news. You're taking the spectrum we're giving you and doing something misleading with the news on it.

They are not supposed to do this in most cases, right? The First Amendment protects those broadcasters and you can air what you want to air as long as you're not being willfully misleading in particular ways. And it is true that Fox owns a bunch of broadcast stations. Sinclair Broadcasting, very conservative, owns a bunch of broadcast stations. And yes, NBC and CBS and ABC also own a bunch of broadcast stations. So you can see already Americans have choices.

But this week, the Trump administration is under tremendous amounts of criticism and controversy because it mistakenly deported a man to El Salvador, Kilmar Abrego Garcia. It did this with basically no evidence. It has admitted to the court that it had no real evidence and that this was a mistake. I call it an administrative error. And instead of...

bringing a man back, which the Supreme Court ordered it had to facilitate, it has doubled down now on calling him a terrorist and a gang member. The evidence, by the way, of this man being a gang member is that he was wearing a Chicago Bulls hat and a T-shirt with dollar bills on it, or a sweatshirt with dollar bills on it, where the presidents on the bills had their eyes covered, their ears covered, and mouth covered. And somehow that indicated that they were in a gang. I don't know, man.

That's the evidence the government has proffered this week for evidence that he's been in a gang. It's not great. It's nothing, is what it is. It's nothing. It's nothing. I mean, this is a—he was in the country illegally, but he had a court order saying he couldn't be deported because he was in danger, if you want to tell Salvador, from other gangs there. So the Trump administration has mistakenly deported him. They've gone up to the Supreme Court, which has ruled it has to facilitate his return.

They've gone to the court again. The court is very angry with him, with the Trump administration. Now, I don't know how this is going to play out, but news organizations around the country have been covering it and covering in particular fact that there's no evidence that this man was actually an MSN 13, like not like none at all outside of a hat and one confidential informant that nobody has ever. You were good at none at all. That was, you were, you were set there. Yeah.

So, Brendan, this week, has decided to threaten Comcast. Disclosure, Comcast is an investor in Vox Media, but truly they dislike me. He decided to threaten Comcast this week. He said, Comcast outlets have spent days misleading the American public, implying that Abrego Garcia was merely a law-abiding citizen, just a regular Maryland man. When the truth comes out, what is the truth, Brendan? They ignore it.

Comcast knows that federal law requires its licensed operations to serve the public interest. News distortion doesn't cut it. Abrego Garcia came to America legally from El Salvador, was validated as a member of the violent MS-13 gang, a transnational criminal organization, and denied bond by immigration court for failure to show he could not pose a danger to others. Why does Comcast ignore these facts? Because they're not facts, Brendan.

They're just not facts. And actually, the job of news organizations, we run one, is to question the government, is to take the political figures of our government, to take the attorney general, to take J.D. Vance and say, is that true? Is it true what you're saying? We've given you the power to jail people.

The state has a monopoly on violence in this country. You have that power. Are you using it well? Are you using it with justification? Are you using it in the name of justice? They're not. Like, whatever you think about this case, whatever you think about deportations, in this case, they have not given this man due process. They shipped him off to El Salvador. And the only evidence they have actually proffered is that he is wearing a bull's hat.

Like, great. That is a controversy. You can cover it the way they're covering it on Fox. You can cover it the way they're covering it on Newsmax. You can cover it the way they're covering it on MSNBC. But the government doesn't get to go threaten the news organizations covering it. Brendan Carr doesn't get to show up and say news distortion doesn't cut it. And the only reason he's saying it is because NBC owns some broadcast licenses and he has the authority to say it.

He can't say to us, we're on the internet. He can't say it to MSNBC or Fox, which are cable stations that he doesn't have control over. This is just naked political posturing because some of these stations run over the broadcast airwaves. And even in his mentions, I will point out, even in his mentions, people are calling him an idiot. This is just wrong. It's wrong for the person who runs the nation's communications infrastructure to say that not supporting the administration's lies is news distortion.

Actually, what he was saying is, I support our vibrant broadcast networks, which reach most Americans, pushing hard on the truth. Whether or not you agree with mass deportations, whether or not you agree with the Trump administration coming down really hard on everybody who was illegally in this country, fine. You can think what you want. But in this case, the lie is obvious. In this case, the evidence has not been produced and it is not news distortion to say the government has not produced this evidence.

He's such a flunky. It drives me bananas. It is nice that people are starting to calm out on it. I will say that. But it is just obvious that just like Andrew Ferguson, there are things he has to say and there are lines he has to accept from the rest of the administration in order to preserve his job. And Brendan does it with such glee that he's

You have to just accept that he wants to. I think that gives him too much of an out to say these are things that he has to say. I think all evidence about Brendan Carr suggests that he is oh so, so happy to be saying and doing all the stuff that he is saying and doing. He's like, Mr. I'm out here having the time of my life guy. Wearing the head of Donald Trump. Yeah. None of this is making him sad on his insides. So then here's the loop closing, which I think is even more dangerous.

Yes. As he does, President Trump was watching television late at night. It's a thing he does. Yeah. Presidents, they're just like us. He watches 60 Minutes a lot, Donald Trump, it appears. So this week he's watching 60 Minutes and he gets real mad and he posts this long rant on Truth Social about how they're talking to Kamala Harris again. They mentioned the word Trump and they're not nice to me. And at the end of this long rant,

He says they should lose their license. Hopefully the FCC is headed by its highly respected chairman, Brendan Carr, will impose the maximum fines and punishment for their unlawful and illegal behavior. CBS is out of control and they should pay a big price for this. When you become the flunky, the president of the United States can say, I want to punish the speech of this company and my guy is going to do it for me.

That is just a violation of the First Amendment, straightforwardly. No matter how you think about the legal mechanics of who owns the broadcast licenses, the president watching TV, getting mad at the coverage, and then directing his flunky to punish the company is not how it's supposed to work. Like, at all. They work for us. Like, when I watch these press conferences, the thing that I want some reporter to say sometime is, do you realize that you work for me?

Because they've all forgotten it. Brendan has forgotten it. He works for us. And I think it's probably time someone reminded him of that. And, Brendan, I would be happy to do that if you just want to come on Decoder or the Verge cast. As always, the door is open. I don't think you can do it because I don't think you can take the heat.

I know people are starting to tweet these segments at you. It's pretty good. So if you think you can do it, if you think of the intellectual rigor to show up in a show and justify your actions, you're welcome. That's been Brennan Carr is a dummy, America's favorite podcast within a podcast. Jingle TK. It's funny. Like I'm just becoming like an angry talk radio shows, you know, but that's, you got to fight fire or fire. It's okay. I like to think we just need to get it out of your system once a week. It makes you like a happier person afterwards. The, the number it's like,

What you want most of all is just feedback from the audience. You know, like anybody who makes something just like is desperate, you know, like read my novel. And now we get a lot of the feedback, but the feedback only enrages me because it's just stuff Brendan has done that other people notice.

I did the feeling of like you work for me. I had in the Meta trial earlier this week when like Ferguson was like looking down at all of us, like who were there with the press and like would not make eye contact with us. And then his like comms lead who used to, I think work for the Washington examiner, uh, was also like just pretending we didn't exist when we were standing right in front of him and trying to like ask basic things. It's like really bad for the comms people, right? It's like, you know, like that's what you're like. I mean like the highest level.

Donald Trump works for you, whether you love him or you hate him. That's the whole point. He works for us. We get to fire him at the end, right? Like this whole administration completely forgotten. It's like very important piece of the puzzle. But that said, Brendan isn't smart enough to make it through the whole four years. So we'll see what happens.

All right. Pallet cleanser, David. Okay. We're going to skip right over tariffs because that doesn't count. That's a pallet cleanser. And also, nothing has changed. Tariffs happen. They don't happen. The numbers have changed, but it doesn't matter. Yeah, but who cares? They'll change again by the time this podcast goes up. The numbers have changed. There you go. That's the news. We figured out the G7X story, Eli. Allison Johnson went and answered our question.

There's like two answers to this question, and one of them is so confusing, and the other one is also confusing in a very different way. Okay, so I want you to explain this story because actually this story originates with you. Fun fact, I did the final edit on this story, and I made Allison take out the line where she says, I'm writing this story because Nilay made me do it. Yeah.

We definitely put up a Liz story today that contains like a very similar line. It's great. That's what being an energy is about. It is true, however, that other people on our staff also saw the story. Okay. So the Canon G7X III, a camera from 2018 that has gone totally viral. You cannot get this camera anywhere. If you can get it, it's even like a used one is selling for like $300 over MSRP.

This is not normal. Like there's lots of pocket cameras with one inch sensors that do a good job of just taking photos, but it's gone viral on TikTok. And so it's sold out everywhere. And there are TikToks now about how to get one, like when in the middle of the night to wake up and like power refresh the target website. So I see all this, Allison and the crew and I talk about it. And we had the first idea, which is we should buy one and see if this camera's any good. And then Allison was like, it's been three weeks and I can't buy it.

Like I've been trying to buy one. Like many people have been like setting up weird bots for her to buy. Like Antonio to bed at NO and our team was like, I'm really good at buying stuff. Like I'll help you. So we, we could not get one crazy. If you have one, let us know if you like it. But then she talked to all the creators who are using it. And it turns out one, it's just an answer, which is fascinating.

Right. There's still enough choice in that market that just an answer is useful. Right. So yes, you could just buy an RX100. Yes, there's like various Fuji cameras that like do the job. But this is just the answer. Yeah. Like it takes it takes pretty good video. It takes pretty good pictures. It's a reasonable size that you can carry around with you. And it looks cool, which is important. Sold. Yeah. And then so that part is like confusing in the sense that like who knows how things become the answer.

Do you know what I mean? Like, and it's not a Canon has stepped up production. It's just, here's this thing everyone wants. And Canon's like, it's a five-year-old camera buyer, new camera instead. Like very much. Canon's like, would you like to buy the new camera? And people are like, no old camera. One of the things Allison found is that there, there is like a newer camera in that line. I think it's called the power shot V one that,

Like just relatively recently came out. You can buy it so easily. It's just right there. You can just have it. But no one wants it. They want the five-year-old one. Yeah, because it's just the answer. So that's confusing in the sense that like why do things become popular? You know, it's like some art and science. Confusing. The more confusing thing is the reason people like it is because apparently it shoots great flash photos.

So all the tips for using it are like open the flash, even in like broad daylight, just like fire that flash out. It's, it's 1999 again. It's great. I love it. I haven't, I started popping the flash on my RX 100 to be like baby rave. It's like a good time. Wait till these kids figure out how to shoot with slow shutter. So you get the nice background and the flash.

It's so funny. Yeah. Flash was just like you, it was, it was embarrassing to need flash for so long. Oh yeah. And, but it was cool before that. It's the trend. And now it's cool. And this one camera, like literally the, the conversation, the discourse is you need to buy this camera because of its flash.

That means all these kids are like looking at their parents' photos from college being like, oh, that's so vintage. And those are the pictures they want to take. And I'm realizing those are the pictures that I have from college because I'm 100,000 years old. So when we were like early 2000s, moved out to Chicago, we were in the bar every night. My friends and I had those like Canon PowerShot Ls.

And they only worked with flash in the bar. Like they do not have low light capabilities. And those flashes are really harsh and really direct and really cold. And we would always hold our Miller light bottles in front of the flash.

And shoot through those because they would both diffuse the flash and then tint them like Miller Lite's brown, you know? That's pretty good. And then people were like, oh, my God, what if we use a Heineken bottle? And they're like, we should sell filters for flat. And this idea died. Like the iPhone came out the next day. We're like, well, that's over. But that's how we solved the problem back in the day. We just held the beer bottles in front of the camera flashes. I have a lot of very weird photos taken that way from about like 2004 to 2007.

I love this for you. It was great. Anyway, the mystery is solved and the mystery is it's just the one. Like it just became the one. It's just the thing that's popular and the thing specifically popular about it is the Flash. Right. Yeah.

Yeah, it is like the virality has fully taken hold on that thing. And it's like it can happen with anything. It can happen with a weird Fleetwood Mac song with a guy drinking cranberry juice. And it can happen with five year old cameras. No one knows. And it can literally happen to anything at any time. Do not turn on the flash on your smartphone. No, it's not as good.

I just, I need to tell you this. Do you think we can make the phrase yeeting the flash happen when you pop up the flash? You're yeeting the flash? No. Unless you ripped the flash off the camera and like threw it into another room. No, that's not, that's not what that word means. Bro, let me get a picture. Just let me yeet the flash real quick. I feel like we can make this happen. Is yeet going to be in the title of this episode? We can't do this. We can't do this. It's going to be. I'm going to yeet this podcast. Yeet is already old slang. It's like five-year-old slang already. And now we're just talking about like a bunch of old dudes. Like,

Yeet this, is what I'm saying. How about Yeet the Monopoly? That's the new title of the Verge cast. All right, we'll accept Yeet the Monopoly. Do you have one more palette cleanser, David? Yeah, should we talk just for a second about...

Phil Spencer saying Microsoft really wants to support the Switch 2, which a bunch of gamers that I know and talk to found a mix of very exciting and sort of odd. Like basically what he said is, you know, Microsoft's whole plan is they want to have Xbox stuff everywhere, including on the Switch 2, right? And they've like, they're launching these games for the PS5. I think Indiana Jones comes out

Like today, as you're hearing this on the PS5, which would be very exciting for some people. But he said he was like, we want to have our franchises, our games on the Switch 2 also.

Seems like great news. Lots of gamers are like sick. This is one of the reasons people don't get things like the switch to is because it can't play some of those games. So the idea that it might, it's very exciting. Uh, but then there was an interesting backlash to it of people being like, Microsoft is just gonna, you know, squeeze Nintendo and ruin this beautiful console for capitalism. Uh,

And I just think it's kind of funny, like the way everybody talks about all of the gaming industry that isn't Nintendo is increasingly sort of ruthless and brutal and not beautiful and artistic. And then Nintendo is this just like beautiful flower child over here that we cannot allow to be ruined by these other companies. Well, I mean, Nintendo is the only company that can look at something like Zelda and be like, yeah, it's done. We're done. The story's over. We have no more story here. We're going to start a new story over here. Like,

Very few companies can look at Breath of the Wild and be like, yep, this version of this has come to its conclusion. Most companies are like, have you heard of DLC? There's more of it. And then I think for Microsoft in particular, they lost this console generation. I don't know what they're going to do with the next one. They're like, we bought all these studios. We're going to monetize the games with advertising. Yeah.

so we're going to put the games everywhere so we can get multiplayer it's kind of like network effects so you want big multiplayer games full of advertising you just need a lot of players so of course you're gonna switch and i think that's the thing gamers in particular are responding to is like every game is becoming some like open world advertising paradise full of things to buy yep and nintendo games like would you like to have fun

Yeah. And that's the end of that. Like, yes. Yes, I would. I will play tennis with Bowser for five hours. Yes. Thank you. I think that's why people, we've been playing a lot of Astro Bot. Nice. Like, that game is great. I don't feel like someone's going to ask us for money while we're playing it.

Like there's very few of those games left and when they come out, people love them. But I think, I think Microsoft has to put advertising on the Nintendo switch. I think that's what people are reacting to. Yeah. The other funny switch thing that happened this week was a switch. Nintendo had another event just to show off more of the new Mario cart game, which looks sick. Like I'm so excited about that game. And the whole chat in the whole thing was just about the price. A bunch of people were like,

A, like, tell us what the actual price is. Why won't you let us buy this? Lower the price. How dare you? And then a bunch of people being like, ah, games are expensive. And it just all anyone cares about at this point is like, what is this thing actually going to cost? And when are you going to let me buy it? And anytime Nintendo does anything else, that's the only question left. And that is also the question I have because the preorder date has come and gone. They have not even announced when it's going to happen.

I would like to throw my money at a Switch 2, please. It's going to end up costing like $1,500 to buy the Switch 2. Honestly, you can either wait a year and get it at normal price or buy it now for $1,000. It could happen. There's all the high-minded, like Trump really began with Gamergate and to have it come full circle to you can't buy Nintendo is very funny.

I'm just going to – I just needed to say it on our show one time. I think Nintendo will figure out a way to get this thing on sale. I actually really –

I talked to the CEO of a very large company that makes a lot of stuff this week. And he was like, I don't think anyone understands. We're all going to solve it with smuggling dead serious. Just like Tim Cook, like flying planes, like out of like Vietnam. Like we're going to all the parts will like all the parts will go to Mexico for final assembly. Yeah.

And that final assembly is like a sticker that says made in Mexico. And then that will come in through that tariff regime. Like the amount of that that is going to start happening. The thing specifically that was described to me is you have all these export controls in these various countries that like you have to check the list. And he's like, yeah, we just set up 15 shell companies so that it completely obscures where things are going. All those people get to make money, but that money is less than the tariffs.

And I was like, is it smuggling? And he was like, yeah, smuggling. It was just very direct. So do we pay tariffs or do we pay bribes? Yeah, he was very straightforward. It was like, yeah, we're just going to do smuggling. So I'm excited for Nintendo to figure out smuggling. It's the next great Switch 2 game. Smuggle a Switch 2. Yeet the Switch 2. I would play that game. We're done. That's it. That's the Varchess, everybody. Rock and roll.

And that's it for The Verge Cast this week. And hey, we'd love to hear from you. Give us a call at 866-VERGE-11. The Verge Cast is a production of The Verge and the Vox Media Podcast Network. Our show is produced by Will Poore, Eric Gomez, and Brandon Kiefer. And that's it. We'll see you next week. ♪