OpenAI and Jony Ive's AI super-gadget

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Hello and welcome to our Shast, the flagship podcast of Alex Heath and I trying to talk to Sergey Brent and being deflected at every opportunity. It was rough. It was bad. Hi, my friend, Alex Heath is here. Hey, what's going on? David Pierce is here. Hello. So Alex and I were at I.O., at Google I.O. That's big news of the week. Google I.O. has a bunch of stuff. We're going to talk about it when there was this moment.

where Sergei was in the AI sandbox, like the demo area. He was there last year too, and he like talked to reporters for a long time, just riffing about AI. So he was there at the end this year. And I kept describing it as, like, the sword in the stone. Like, all these reporters kept on trying to talk to him. And just, like, not failing. Including me.

Including both of us. This makes me think somebody must have given him a speech not to talk to reporters. Because the other thing that Sergey Brin likes to do is just say some truly wild stuff that is not helpful if you're Google. But he likes to talk to people. So I assume somebody gave him a stern speech not to talk to reporters. No, I don't think it was that, actually. He was working on a demo.

He was in the demo, right? He was playing with the stuff, right? And it was Flow, the new video tool that Google released that runs on VO3. It's like iMovie for AI video, right? And he was trying to get it, I think, to make himself.

like he was prompting it to make himself i missed that that's what i heard like secondhand but he was i i mean i watched him using it and say out loud like this isn't working the way it should and then someone else you know then all the googlers were like this isn't working and he looked He was very locked in on whatever. And then someone else told me that... It's not supposed to make Sergey Brin, so he's trying to make it make Sergey Brin. That's amazing.

So he was totally focused on this thing networking, which is why he wasn't talking to anyone. And then he went over to do the glasses demo. Is that the AI executive of Googling yourself every once in a while? train the new model, and then see how successfully it can replicate you. And that's your model of how big a deal you are. Yeah, probably. I mean, how often do you think Cinder and Google Smith?

That must be crazy making because you are the one person who can actually just change the search rankings and be like, like Sunar Pachai is supercool.com is going to be the first result. Everything is an episode of Silicon Valley. Every single thing. I mean, it was just very funny because everyone saw him. He was just like in the middle of the room.

And I had just failed. I walked over and I was like, hey man. And he was like, whatever. And I just like left. And then like three other reporters on that experience and Alex. You know? Star reporter Alexei is like, super confidently saunters over there. And I was like, he's going to try to pull that sword out the stone, man. It just didn't happen. The eye roll that I got from a Google communications executive as I approached Sergey was really good. But later he crashed.

he crashed another keynote. Yeah. Like, Dennis Asabas, the CEO of Google DeepMind, was doing, like, a keynote interview type deal, fireside chat, and Sergey just, like, came on stage with him. And I was like, there I am. And then he did, in fact, say just bonkers things. Yeah, including like, I just get to tell this guy what to do. And we may be in a stack of simulations. There's a lot.

Yeah. His answer to do we live in a simulation was if you think we live in one simulation, then the people who made that simulation also live in a simulation, and you have to deal with that. Yeah. Neil, you've been going... You've been going to IO for longer than me. Did this feel like a return to early IO for you? I heard a few people be like, especially the Sergey talk, but it just felt like 10 years ago. I don't know. Do you see what I'm saying there?

I do. It was different. Google is just more corporate now in that way. We'll come to it. I think it was very confident and I think that's what people were picking up on. Google's feeling itself again in a real way that we should talk about.

yeah they're like we can do stuff and they haven't felt that way like for like the past several years like here's what we've done we've added one feature android and samsung is going to use it and that has been io and this was very different there was a lot of confidence they said we should go off that we're going to come to that in a second i think we have to start with Johnny Ive and Sam Altman.

trying to upstage I.O. by announcing a company called I.O. literally the next day. Before we get into all the news, we're going to talk about that. We're going to talk about, like I said, Google I.O. There's lighting around. Brendan has Brendan'd. Two pieces of housekeeping. One.

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Is that how you sell anything? Doing great. Eli's on three hours of sleep, guys. I just want to say that going into this show. My flight was delayed coming home from IO, and so it effectively turned into a red eye, and I'm just super loopy.

I'm drinking coffee during the afternoon Vergecast for the first time in years. So we're going to get through it. It's going to be great. Okay, let's start with Johnny Ive in his arms. I mean, that's what they announced. They announced Johnny Ive's walk. Right? Sam Altman, Johnny Ive released the video. I think they got scooped a little bit, Alex. I think the Journal and Bloomberg kind of had it.

And then they put out this video to announce it. That's my sense of it. They had some embargoed stuff. Johnny and Sam Altman did a couple interviews. They did one with Bloomberg, one with The Times. And then in a very good spot, people saw Johnny actually filming this video that he did with Sam on May 2nd. That's what it means.

So this video was done almost a month ago. So there's this announcement. The basics of the announcement, as near as I can understand it, is that Johnny Ives started a new company that is staffed by a bunch of his star former Apple designers. That company is called IO. Very funny because this company lasted for two minutes. And it has been sold to OpenAI for $6.5 billion in OpenAI stock, which is also a very complicated idea. And then Johnny Ive himself is not going to go work at OpenAI.

he is going to stay at his design agency love from which will now have no other clients except for At some point, yeah. The only tick that's more complicated than that is that OpenAI's investment firm, I believe, was associated with Bye y'all. But OpenAI will tell you that OpenAI's investment firm is not part of OpenAI. Yeah, fun fact. A thing I found out this week is that the OpenAI startup fund is not part of OpenAI.

None of this makes any sense. It's all pretend. The thing to remember at the beginning of this is all the money is pretend. Like all the money that Sam Altman can raise is always pretend. All of the different machinations of how the money moves around is pretend. Whether OpenAI is or is not a for-profit company is pretend. This new company they created is pretend. Like it's all made up. And the products that they've announced, the most pretend of all. Yes.

So they announced this deal. They're going to work together. They're going to make a new generation of hardware products. I think the first are coming next year. I would say announced at the end of next year and shipping in 2027. But what they really shipped was this video. Yes. And I think the reason my adult, my sleep-deprived brain is like, the video was, lots of people saw them making this video in early May. And I think everybody understood something was...

And the fundamental thing they announced in this video is that Johnny Ive walks around like he owns the place. Yeah. You just have to watch it. It is literally one of the most confident walks in history. It's very good. And it's this very, you know, grandiose thing. And it looks like they're just walking through San Francisco, you know, with a camera following them. And, you know, it's just the normal city street on a given day.

and then you see people shooting when they were actually filming, and people were filming the set, and it's all staged. Everyone walking across the intersection with Johnny with his arms swinging. It wasn't made by AI, but it also wasn't. Yeah, it does have a lot of vibes. Lots of people on various social platforms are counting the wine bottles behind them.

i saw one person fully crash out being like the cups are moving from shot to shot and it's like yeah it's because it's a lot of different shots they edited together It's fine, you guys. Anyway, the video is those two sitting in a restaurant having little cups of espresso together, basically saying that they love each other and that there's a new class of computing devices to be made with AI. And then Johnny is going to do that. in some way with OpenAI. That is the sum of... The announcement.

Also, San Francisco is awesome. There's a lot of love for San Francisco and just generally like, what if we change the world? It's just this big idea of two guys changing the world. I mean, who doesn't love that? I think the only specific thing I can think of that comes out of it is there is one device that already exists in some form. They have made a thing together. And there's been reporting that these two have been working together on hardware for a long time now. So...

Something exists. I don't know how many of them there are. I don't know how finished it is. But like. It is clear that there is one product in actual honest-to-God development, but their plan is to build a whole family of devices.

Yeah. So Altman actually says in the video that he just took the prototype home. So this was in early May. He just got to take the first device home. I think we should talk about the recording on the device and how it may or may not work. I just want to really quick through... really quickly run through how this whole thing came about, because I think this probably surprised a lot of people when they saw this.

I've talked to OpenAI and Love From now, and the rundown is basically that two years ago, Sam and Johnny were introduced. About a year ago, actually almost exactly a year ago, they decided to start a new division inside Love From to work on AI devices together. And that division includes a bunch of legendary early Apple design leaders that worked under IVE, including Evans Hankey, who ran the industrial design group at Apple after he left. And then she left in 2023 and went to love for him.

And they were doing this for several months and then employees at OpenAI were starting to come in and work at Love From together with them. And then towards the end of last year, Love From was thinking about raising a lot more money for IO, this division of the company, doing hardware. And that was when Altman was like, what if we just buy you guys fully? So they had already invested in this love from subsidiary through the OpenAI startup fund that is not owned by OpenAI.

and they just bought the rest of it. And so now a team of about 55 People who are a lot of early Apple design people are going over to OpenAI in a new hardware division that's rolling up directly to SAM. And Johnny is staying at Love From with his design team, but will now also oversee all of design and open AI, not just hardware. And Johnny also works with Airbnb. He helps Brian Chesky on high-level design stuff. He works with Ferrari. He's actually designing the first-ever electric Ferrari.

and I think he wants to keep doing other things, but I think once there are projects that they're doing end, they're going to be almost fully devoted to OpenAI, but he's also staying independent. Pretty unusual. Because if you're Johnny Ive, the idea that you will ever have another boss has to just not even... Yeah. It's just like not a square on the bingo card that exists.

yeah but also like nila your point about the thing that they made is this video is the thing right like this is this is the cachet that OpenAI literally couldn't buy for any amount of money except to give it all to Johnny. There is like, this company is desperate to convince people that it can make good, interesting, cool products and that it is not going to get lapped by big tech companies as all of the like science behind this stuff gets closer and closer. And,

The way to win here is to convince everybody that you're Apple and that you're going to do the hardware software services thing. And boy, is there not a better way to do that than to put Johnny Ive and his confident walk in your video. I frankly would be shocked if at the end of all of this, Johnny Ive is like day-to-day involved in making products with OpenAI.

It doesn't matter. This, this, today, it was, like, the announcement was the thing. And that's, that's all you need from Johnny. Yeah, we literally just need his voice in their keynote, right, for, you know, being like, plastic is inevitable. And, like, it's fine. He'll be, he'll be fine. But before we get into the device, because there's some reporting on what it might be, we have a lot of guesses over what it might be.

The idea here is that Sam Holtman is Steve Jobs, right? Yep. It's very clear. Like, even in that video, he's like, everything in my life has led to this moment. Altman... makes reference to the iPhone and the MacBook Air, and he's like, we're going to build the next version of this. And they just spend a lot of time looking deeply into each other's eyes and talking about working together in California. And you're like, oh, I know exactly what they want people to take from this.

Right? It's just very clear. They want to be Apple, and they hired Apple's legendary design team, and then you're going to position Altman as the next Steve Jobs, and Altman revere Steve Jobs. He's best friends with Brian Chesky, who also revere Steve Jobs. Chesky was just on Decoder. He talks about Apple as though he...

is like the world's foremost PhD student of Apple. It's very funny. Also, that episode doesn't come out. It'll come out next week by the time you're listening to this. I asked Jesse very directly about IVE and Allman, and all I said was, I'm very proud to have introduced them. Good dodge. I congratulated him on that dodge. But...

There's some big foundational things to point out about wanting to be the next Steve Jobs with AI as the foundational technology for the next device. And I think the most important one is that the AI systems don't work well. like you just have to acknowledge it right like Ive and Jobs together, the first thing they made was the iMac, right? That's the first big hit product that those two combined to make.

And the iMac was an all-in-one CRT. It was a piece of hardware. The big innovation was that it was blue. And the thing that made it a hit was that the web... That was the whole thing of the iMac, was there's a new application, there's a new killer app for desktop computers, and we're going to sell you this blue one with a handle, and it's easier to set up than the Windows PC. And that rejuvenated app.

And the technology bet was that people wanted to get on the internet. And that worked. That was just there. It was happening. The next one was the iPod. And it's easy to forget now, but the technology bet there was John Rubenstein went and found a tiny Toshiba hard drive. And Phil Schiller invented the click wheel. And they were able to package that together into the iPod. But the core technology was Toshiba made this little hard drive and they don't know what to do with it.

And you can go read Stephen Levy's book. It's called The Perfect Thing. That one's called. But it's literally like, what are we going to do with this hard drive and the music player? The iPhone was like, we invented multi-touch. And that is a thing. We're going to make a whole phone out of it. And you just keep going on and on. There's these big core technologies that I was able to package into new kinds of products with a visionary who was like, I know what kinds of technologies.

will lead to products. Like the iPhone, for example, they were doing the iPad first and Steve Jobs was like, no, make a phone. Then we'll come back and do the iPad. That's the dynamic between the two characters here. AI isn't that product yet. Like this is like I made an iPod and sometimes the hard drive just lies to you. Right? Like, that would be weird. I invented the iPhone, but the screen sometimes tries to bang Kevin Rue.

That is the level of capability that the core technology they're trying to build these products. And I find myself just like utterly full of skepticism that OpenAI as it's presently configured, having lost a bunch of its research people and its product people. can turn the corner. Maybe I'm just like very sleepy and more cranky than usual, but I'm just like all of the hit products. had a core technology innovation that definitely worked.

And people are really skeptical of some of them. People are really, really skeptical of typing on a multi-touch keyboard. And the thing they were able to do was design their way through that and make it good.

I mean, I think that's a lot of credit to give to the first generation of all of those technologies. Like the first iPhone was not good. It was, like, fascinating and cool, but it was, like, it was bad at a lot of things. But multi-touch worked. Multi-touch worked. I think, so, okay, here's what's wild to me, and I think this is going to be a theme of today's episode, is

I think your assessment of how good AI is is correct. And I think most people don't care. I think most people think AI is very good. And I increasingly don't know what to do with that.

The approval rating of ChatGPT is actually very, very, very, very... whether or not it's any good or lies to you or not is, is, relevant but also in a weird way sort of beside the point at this point like people are so enamored with this stuff that they're willing to look past all that stuff and so maybe it doesn't matter and i'm like this is where i'm so torn on all of this that like

The big question about all of these AI devices, right, is like, A, do people want another device that they have to buy? I think the answer to that is yes. Like everybody always wants another device to buy. Like,

That's fine. Yeah, point-and-shoot cameras have made a comeback, David. Yeah, but people got on board with smartwatches when there was a reason for smartwatches. People got on board with wireless headphones that are really expensive. People will keep buying new gadgets if there's a reason for them. The question is, is there an AI specific thing to do? And I think

To me, that is both a like, is the tech any good question? And is there a UI for this that makes sense question? The UI for this that makes sense, I think is still a wildly open question. But like, is the tech good enough for people to want to use it all day every day?

I think the answer is yes. Whether it should be or not is a different question, but I think it is. The UI is voice. And I think back to Neely's point, there was a key tech bet of how people wanted to use it with each of the things that...

Johnny did with jobs. I think here people do want to talk to ChatGPT. They want to do advanced voice mode. and they don't want to have to configure the action button on the iPhone and wait three seconds for it to load up and connect to the internet to actually work. I think if you had an always-on, listening, ambient, aware thing that you could have a conversation with.

I think people would do that. I mean, my wife told me yesterday, she was like, I just said, thank you back to chat GPT. And it made me feel very strange, like unprompted, you know, like people are building. I mean, we were hearing this at IO afterwards, like people are having real almost relationships with these AIs.

And yeah, if you introduce something that you can just talk to all day long, it's the Her concept, which Sam Altman is obsessed with, the Spike Jonze film. And what I've heard about this product and the form factor is a little mushy. is basically the idea is that bike demo we saw at IO this week where a guy's trying to fix his bike and he's talking to the AI throughout it and it knows what he's looking at and it's guiding him through it.

If it does work, if it's not hallucinating, that is just fundamentally a more human way to use technology. It's just like talking to it and it's helping you. Yeah, does it lie? Does it get things wrong? Yes. Does it matter and will it be good enough? Maybe. Yeah. It's very funny how many tech demos at every stage of technology involve trying to fix something.

Like my first ever Microsoft HoloLens demo, they had me change a spark plug in an ATV. And this is the future of changing these spark plugs. And like, we're just doing it again. And lots of people have changed lots of spark plugs without data centers in overdrive. Yeah, there's only like three ideas, right? It's like every new technology is for playing Assassin's Creed. fixing your car more successfully and buying elaborate vacation plans. That's Spanish. 100% Spanish.

Yeah, those are the three. Which one is it? You just tell me which one is it. I get all that. My skepticism on AI is not, do people like it? I've really come around to there's a widening gulf

between how people talk about how much they hate AI online and then people using it in real life and how much they use it, how much they like it. You can sense it. There is a turn. Sundar at IO on stage said we're entering a new phase of the platform shift. And what he meant was the products are coming out now. We're not just talking about model scores. Here's a bunch of new products.

I think ShotGPT is that product for OpenAI, but ShotGPT as it is currently configured will never return on the massive amount of investment that OpenAI has taken. Correct. They need to be... They need the iPhone. They need the app economy of the iPhone. They need to be the richest company in the world. Literally, that is the only target that makes sense for their level of innovation.

That's a big problem. And I'm just, again, I'm just coming back to, does the core technology let them do the thing they want to do? Or is it people just like it so much that they will skip over the fact that it's brittle?

What Ive has traditionally been successful at is designing to the limitations. right he makes he makes the limitation the most successful part of the product it's a little hard drive the whole thing looks like a little hard drive and we're going to talk about how many songs it has uh remember unapologetically plastic like these are his moves

Like he says, I made it feel inevitable. And the thing that's inevitable is the limitation of the technology is the product. And you don't feel the limitation because it's designed to make that the thing that makes the product. And you might think that I'm just like a sleepy man who's rambling, but think about the first iMac. and how it was translucent so you could see the CRT display.

That was the limitation of the product. They had to build it around this giant vacuum display, and he made it the centerpiece of the product so that over the lifetime of the product, they made that plastic clearer and clearer. That was the investment in the material. was to do the appropriate EMF shielding in the plastic itself to be transparent instead of just translucent. And so the CRT became the center of this. That's odd.

Like, at the highest level, that is Johnny Ive. We're going to make the antenna the band of the iPhone 4, so you can't, if you hold it wrong, the signal drops. That's Johnny Ive stuff, right? How do you design to the limitation of AI as it currently exists? I think the question of how much credit for that kind of stuff Ive gets is going to be one of the pieces of this that is really interesting. Because if you look at the Johnny Ive era at Apple after Steve Jobs,

It's a lot less of what you just described. Yep. And it is a lot more of Johnny Ive pursuing things that are aesthetically lovely. for the sake of making things that are aesthetically lovely. And that's... fine. That's a perfectly good approach to doing a lot of things. That's also how you get the butterfly keyboard. And it's how you get laptops that literally just stopped working for people. They just made a series of bad decisions about laptops in order to make pretty laptops.

That's how you get a mouse that you have to charge. That's just the thing that happened. And I think about even the Apple Watch, which was a true Johnny Ive-led project. Johnny, I've decided to build a watch and then work backwards towards the Apple Watch. And they landed in the wrong place. They landed in a place that I think is really fascinating, but it took like two pivots from the first idea before Apple had a hit product. And so I think...

This question of like, Johnny's capability to make... beautiful things is like beyond question well we'll see he's doing the electric Ferrari we'll see how good that looks I mean nobody's perfect every time right but I think like in terms of I would bet I would bet a lot of money on whatever they make looking and feeling great. Yeah, I think that's the bet. That has to be the bet. I mean, look, so Sam Allman had this meeting inside OpenAI that was reported on by the Wall Street Journal.

And he told them that this $6.5 billion acquisition... has the potential to add $1 trillion in value to OpenAI. which is just like, you know, making up numbers. You can just say things. But like, this is where he started to talk a little bit about those limitations, you know, that you're talking about. He said the device isn't going to be a pair of glasses. And then it's something to wear, although it sounds like they're not going to want to call it a wearable. And then...

You know, he's saying we're not going to ship 100 million devices literally on day one. Duh, but he does think they'll get there faster than any company ever. And the almond is just, he's great at hype, right? Obviously, he's hyping this up to employees who are like, why did we just give? Johnny Ive, $6 billion, and he's not joining us.

So this is from the meeting. He said the product will be capable of being fully aware of a user's surroundings and life, will be unobtrusive, able to rest in one's pocket or on one's desk, and will be a third core device a person would have after a MacBook Pro and an iPhone. So here we go. This is like a better humane pen. I mean, not for nothing, the humane pin.

was designed by two former Apple designers who regretted their work on the iPhone. Many of whom were called legendary when they started this company. Imran Chowdhury, as legendary as it comes, coming out of Apple. Did you get... Altman gave them millions of dollars in funding. he was the single biggest investor in the company. Like, It's just, we're doing humane again, but now it's Johnny. I did say that humane pin was a poor product, which tracks with your review, David.

Yeah, and the truth. That's right. Good call by Johnny. I would say that I called out watching the first Denon video, The Humane Pin. And maybe I've lost some friends forever because of that. I've also called the rabbit a poor product, which I think Jesse, Lou, and rabbit loved because Johnny Abbott knows who they are. And they released a long statement being like, we love that the pie is growing.

Let me read this. Jesse sent us a statement. It's actually amazing. He says it's an honor to get mentioned by Johnny Ive and Sam Altman. However, we don't like to be put side by side with Humane, a company that stopped trying, got acquired, and shut down. That's very good. That's brutal. You can call us shit, but don't compare us to Humane. That's very good. That's really good. Yeah.

You can tell that he wrote that, not the robot. You can tell when it's like, that's human. Don't compare me to humane. But those are the products. And there's a million of them. David, you read a bunch of note-taking products. Right, like, I'm going to have a microphone that's talking, like, recording all the time. Yeah. Last time I saw Joanna Stern, she was wearing a wristband that records everything.

And the lights were backwards. It was red when it was off. It's called the Bee. V-Song reviewed it for us. It's a delightful and terrible product. Right. I mean, there's just like a million of these devices that's like, what if we just feed input into an AI and then it does something, summarize or talk to you or whatever. And that's what I mean by the limitation. The limitation of those products is very, very obvious.

The AIs can't take actions for you. The agents don't work yet. Maybe they will. We'll talk about that with IO. There's a lot of activity around how to make the agents work and go do stuff for you when you ask them to do it.

They don't actually know a bunch of stuff. The search features don't work as well as they should. There's just a bunch of stuff where the limitation of the product... is so obvious because the interface is so good i'm just going to talk to this thing and it's going to talk to me and then everything beyond that is like a house of cards and i just

Yeah, okay, maybe we can make a more beautiful humane pin and we won't call it a pin. Maybe we can make earbuds that talk to you like her, which Altman really has been obsessed with for a long time. What's it going to do that makes it valuable? Yeah, I do come back to that Google bike demo. I think the idea is just always on AI that can be your girlfriend, boyfriend, or your assistants. On the device itself, Ming-Chi Kuo is a pretty reputable analyst. He covers Apple.

He's saying that mass production for this is expected to start in 2027. The current prototype is slightly larger than the AI pin with a form factor as compact and elegant as an iPod shuffle. And then one of the intended use cases is wearing the device around the neck. It will have cameras and microphones for environment detection, no display. It's expected to connect to smartphones and PCs.

So yeah, it's one of these just always-on listening AI devices, but made from brushed aluminium. Yeah. And Eli, to your point, this is everybody's idea, right? Like, this is the thing.

everyone is is pushing towards i have i have four of them on my desk right now that are like a little thing with a microphone in it that you wear on a lanyard that goes around with you and i think in a lot of ways that is actually probably the correct format for this kind of stuff right now if the goal is just like lots and lots of ai input especially if this thing is going to have a camera which i think it has to to come even remotely close to what

sam and johnny are talking about here sure like a little thing on a lander makes a lot of sense i will say i went back this morning and watched the the intro to the original ipod shuffle uh which was from 2005 and steve jobs like shows off the thing does a

great reveal the whole thing and then they have this giant set of promotional photos of people wearing it around a lanyard like apple really wanted to make this the thing that you would wear it they had a white lanyard it was like the cap for the usb port was also the cap for the lanyard It looks so stupid. And just looking back, I'm like, I don't think I ever once saw a person in the wild wearing an iPod shuffle around their neck. The shuffle became like a pocket device.

And the problem with the humane pin, maybe not above all else, but one real problem with the humane pin was that it sat right here. It was a thing you had to look at all the time and it was looking at you all the time. This is very similar to that. I think you have to do it if you want to have a camera. But that's just a high bar to clear for any of these kinds of products.

yeah also anything that size does not have a battery or a chip in it that can do any of the things that they want it to do i will say i think if you there there are a lot of ways to do this and one of them is just to like offload a ton of that onto your phone and just do all the work over like bluetooth and local wi-fi and not worry so much about it which is like that's what meta's glasses do

humane didn't do it and it was a huge mistake uh and i suspect anyone who is doing this going forward will learn that lesson of like this thing actually isn't ready to be a fully self-contained device but i think if you just take it as like a pure input system and do all of the work on your phone I can sort of see how you'd get a battery that could last. So you're selling 100 million Johnny Ive designed microphones. that require an iPhone to use.

You know what it makes me think of? Do you remember the Google Clips camera? Yeah. It's going to be that with a microphone. I mean, there's, you know, there's a couple of players in there who have a vested interest in not letting Johnny Ive supplant their product. One of them is Apple. They're stumbling around lately, but... I think after this video in which Johnny Ive referred to his own products as legacy devices that are 10 years old and should be replaced.

are not going to show up and be like, yes, you can have preferred Bluetooth access to it. You're always on chat. Like, good luck. No watchmaker in history has gotten access to it. ios and maybe you know maybe governments around the world will shatter apple into a thousand pieces and let this happen but you've now made a one trillion dollar bet on that so good luck well the deep irony of all this is that is the exact

thing that OpenAI and all these other companies are desperate to get around. They're like, we have to build the next platform so that not everything is, you know, intermediated by your phone and these two operating system makers. And yet... They all are going to have to be completely intermediated by your phone. Otherwise, the hardware is going to be bad. Right. And then the other one is Android, which is more open and would allow many, many more of these things to happen. But Google is

as we'll talk about in the next segment. Pretty ferocious competitor to OpenAI when it comes to AI products. And then your market in the United States is people with Android phones. Good luck, Johnny. There's just a problem there to solve. Either all the compute is in the device, which is what Meta is pushing towards,

And, I mean, we've heard Zuck, I think Zuck has said it to you, Alex, like, he's furious that Apple won't give him access to the Bluetooth stack on the iPhone. Yeah. And the glasses are worse on the iPhone than on Android. I don't think Altman's going to get that deal. Again, I'm just like, what are the limitations? Johnny has great success, and maybe he did a better job of it when Steve Jobs was there than after. But his great success is designing to the limitations.

Making the limitations feel like they're not there because they're so apparent. And having covered Apple for all of that time. Right? And like gadget blog days where we would obsess. We would write thousands of words about screen radius on LCD screens. Like, we did it. And we are immersed in the culture that that developed, but it's now the design culture everywhere. Part of the problem for IVE, in a big way, is every product company has a design culture that is his design culture.

Why is that a problem? Because he has to do something new. He has to stand out. His moves are... When I was learning to play the guitar, my guitar teacher was trying to teach me how to play Guns N' Roses in Van Halen. And I was like, this stuff is whatever. It's garbage. It's so cliche. And he was like, that's because they invented it, and now everything is this. That's Johnny Ive. Johnny Ive is Eddie Van Halen.

You listen to Van Halenau, you're like, this is some campy stuff. At the time, it was a revolution. It's because it's everything. It's the foundation for everything. He's got to reinvent some moves here. I'm focused on... there are some real limitations to these products and making the limitations the strengths. Maybe he'll do it. I'm not a great designer, right? He's the legendary designer. But we've seen a lot of shots.

Yeah, I am going to remain cautiously optimistic about this just because of The fact that I do think a lot of people would talk to ChatGPT in a device like this if it worked, if it was a good-looking version of the Humane Pen that actually worked.

that didn't take five minutes to load, that didn't also, like, blow up after five minutes because the battery doesn't work. Like, if all of that is fixed, which is a huge if, and you get access to the leading ChatGPT models, and it syncs with your ChatGPT account that, by the way, already knows everything about you because you are saying thank you to it, even when you don't need to.

That's interesting. And, you know, one of the things that Altman said in this meeting that really stuck out to me was he said, we both got excited about the idea that if you subscribe to ChatGPT, we should just mail you new computers.

Sure. And he actually said something else at a VC conference I caught a couple weeks ago where he said the goal for OpenAI is to now be the core AI subscription for your life. So my prediction, and this is an informed prediction, is that ChatGP subscribers will just get these devices, or they'll get them heavily subsidized, and he's going to build a subscription model around not just software, but hardware, which everyone has tried. Apple has tried it. Didn't really work.

I mean, they have the installment program, but they wanted to bundle everything more, and that program never got off the ground. We'll see if they can make it work. Do you know why that program never got off the ground? Because the cell carriers wouldn't let them get it off the ground. Ah, there you go. The cell carriers want that recurring revenue. And that's another thing is like, do they need cell carriers for this, right? How does that change things? TBD.

Probably. A different set of gatekeepers who are even worse to deal with than Apple. The question of how ambitious this thing sets out to be, I think it's going to be just as interesting as anything else. Alex, to your point, there are a lot of pieces of the puzzle here, and OpenAI and Johnny Ive together control more of those pieces than anybody else has, right? Like, in terms of being able to actually make the whole stack work together. That's a lot of the stack, but it's not all of the stack.

And a lot of the stack is either out of their control or will require like... honest to god like physics breakthroughs that no one has made yet. If there's no display, the physics breakthroughs are probably not as bad as we think. I mean, they probably have disassembled Humane and figured out exactly everything they did wrong and are going to learn from it. And Sam saw that as like a...

I'm going to invest in this thing to see how it doesn't work. I'm going to do it the right way with Johnny. We'll see. I mean, Humane was not

full of dumb people no like the cautionary tale of humane is it's like like one of the things colonel o'brien always says is it takes a lot of really smart people working really hard to make a bad movie uh And like the humane pin is, is the perfect version of that to me. It's like a lot of people doing their best who are very smart and very capable and have really long track records who made a horrible project.

And there's like, that's such an easy way to go. Yeah, we should not beat up on Humane too much more. Disagree. I think you should read the Jesse statement again, actually. But like, if by the end of next year... There's an option in ChatGPT to get this, you know, Johnny Ive Pokedex mailed to your house for an extra $20 a month in your pro subscription, and it'll automatically hook into everything ChatGPT already knows about you.

and it's an always-on listening device for talking to chat GPT. Do I think people will want that? Yeah. I think a lot of people would want that. I totally agree. We'll see. If you're Sam Altman, you've looked at how many people happily ponied up $200 a month just to use your cool stuff. And I think...

The subscription is whatever they want it to be for this kind of stuff. I think it is where they're headed. All right, we should wrap this up. I will say that I can already hear the people furiously writing us tweets and emails about the iPhone upgrade program, which it currently exists. what we are talking about

Just to be 100% clear, is that Apple wanted to bundle getting a new iPhone every year into Apple One, and they were not able to do that. Also, subscription hardware is a bad idea, and everyone should feel bad about doing it. Do you remember when Logitech said a forever mouse and we laughed at them? This is a forever mouse. Sam Altman's forever mouse sounds like an incredible movie. I would go watch whatever that is. That's a stage spectacular that I would absolutely go on.

I don't know what it is. It feels like one of those places in London that's next to the wax museum. Sam Lottman's forever mess. Like, whatever. Ask chat if you need to render that and email that to us instead of your angry emails about the iPhone. There we go. I beg of you. All right, we have to take a break and we're going to talk about the other side of IO, which is actually Google IO. See what I did there? What? Support for the show comes from Mercury. What if banking did more?

Because to you it's more than an invoice. It's your hard work becoming revenue. It's more than a wire. It's payroll for your team. It's more than a deposit. It's landing your fundraise. The truth is, banking can do more. mercury brings all the ways you use money into a single product that feels extraordinary to use visit mercury.com to join over 200,000 entrepreneurs who use mercury to do more for their business Mercury, banking that does more. I'm back!

We gotta talk about Google I.O., which, if not for... Johnny, Ivan, Sam Altman, literally trying to upstage Google I.O. with their own company called I.O. would have easily been the only thing we talked about because so much happened there. I do feel a little bad we allowed OpenAI and Sam Altman to get away with this by putting it first in the show. They did it again.

By the way, I want to be 100% clear that was David's decision. Yeah, I did that and I stand by it and I am deeply annoyed that I'm giving Johnny and Sam what they want. It was interesting timing because Google had a great I.F. like by all accounts i think they announced a bunch of stuff that people were excited about the demos are all really good they announced a bunch of stuff that is shipping soon like we got to try a bunch of the stuff

including the glasses, which are, you know, they're just more prototype air glasses, but they were there and people got to try them. There's a video with V wearing them. And they Googled just everyone from Sundar on down, just full of confidence. David, run us through the big news and let's get into it. Oh, boy. Okay, so I think... The overarching story of Google I.O. is Google is absolutely convinced it's winning at AI.

And especially I talked to a bunch of the folks over there ahead of IO, including Demis Asabas who runs DeepMind and all their AI stuff. And they are like really feeling themselves with Gemini 2.5. and are convinced that not only are they ahead, but they might be ahead in a way that is hard for others to quickly catch up.

which I think is fascinating. And so now Google is like, okay, We have what we perceive to be the best model. We have vast distribution everywhere on the internet, and we are going to put AI in front of you in every single imaginable way, all the time, everywhere. So there were a bunch of things. There were new models, new Imagine and VO models to make images and video.

which were like not super impressive. I don't know how they felt in the crowd at Shoreline, but like watching some of those on YouTube, it was like, this is like, not as cool as you think it is you're talking about the video stuff yeah oh no i disagree some of the video stuff was cool but the part where they demoed the like the the woman the filmmaker who made a video about herself being born

And it was called Ancestra. And I was like, this is a horror movie. Do you know that you made a horror movie? It's Darren Aronofsky, yeah. I agree that what they showed on stage was not as compelling, but the stuff I've seen on acts that people have been making with this is mind-blowing. It's like full-on reality-is-over stuff. Yeah, no, some of it is very good. So anyway, so there were a lot of like...

new things coming to existing products, sort of improvements inside of Gmail. But I would say the... Biggest things we heard a lot about were AI mode, which is the new tab inside of search that is basically just a full AI experience next to...

traditional search in a way that is messy and complicated and we should talk about. There's also Gemini is now being baked into Chrome, which is fascinating in the context of everything else going on with Google, which may or may not have to sell Chrome at some point in the very near future. the gemini app continues to get better so that google has set it up so that there's project astra which is it's like

They called it a concept car of an AI assistant. And that's where they try all their like truly wild stuff. And it was Astra where they're showing off all of the like... wild demos where it's like watching you do stuff as you live your life and then can speak up. Uh, but as stuff gets better from there, it all graduates into the Gemini app, which got a bunch of new stuff. There's new features for Gemini live. There's now like some of the live stuff is also in the search app.

It's very confusing. You were saying this like it makes sense and it does not. No, none of it makes any sense. There's one little part that makes sense, which is Google has figured out a vocabulary. for what things are. shipping mainstream products and what stuff is weird Google ideas. Yes. So there are projects of which there are too many and all of their names are confusing because it's Google. The projects are like, here are the demos.

But here's this thing. Project Mariner is the tech demo of we're going to let our agent go click around the website. And then the verb, which David just used, is that stuff graduates to the actual product. and then there's like weird hybrids where search has the new ai mode tab which is not a project but an actual thing that rolled out to everybody in the united states but eventually things in ai mode will graduate to the main search experience so they've just introduced

I'm not saying it's great. I'm saying they've introduced a verb to make sense. of like how Google does stuff? which is instead of shipping products, they now just graduate. Right. Oh my God. Like you graduate from preschool. It's very simple, guys. Project Astra is the Google lens to Gemini's AI mode. Jesus, that's true. I hate that. Yeah, it's a lot. But that little, once you understand that Google needed a way to make people stop asking when the thing would become the real thing.

And they came up with the word graduate. Like some of it clicks into place. And then everyone at Google would be like, yeah, it's still pretty bad though, right? The important thing though is that there are essentially two places that really matter to Google. One is the Gemini app and one is search. And so every other thing it's working on is at some point... moving towards one of those two places.

And the Gemini app is designed to be your assistant, right? Like that's the thing. It's trying to be what ChatGPT is for lots of people. It's competing with Claude. Like it is the all-in-one operating system for your life thing that Google is trying.

Search is search. And AI mode and all this stuff is a big bet in a slightly different direction that it can be what search has been for 25 years but like much better and i think gemini and search are actually they overlap in sort of how you can use them but they are different things in google's mind but those are the two places that all of this is designed to end Gemini is the big agentic assistant.

that goes and does things for you that's the demo right alex has been talking about the bike demo if you go watch the video of that demo in particular it's the guy's got his phone open He's looking at his bike. He says, pull up the instruction manual. Gemini goes and does a search, gets the PDF of the bike's instruction manual, and he says, scroll to the page about whatever breaks. And it finds that. You have to believe that Huffy has produced an OCR-capable.

pdf but like whatever there's a lot of steps in there but it scans the manual finds a thing you watch it literally scroll the phone in the background it calls the bike shop and has a whole interaction on the phone with the bike shop that's agent stuff like big hairy agent stuff And then search is like the vision for AI mode is that every search result page you get is a custom built application.

All the way down to, like, we can build charts for you. We might actually build custom code apps You ask a question about stats in the NFL, and we will build a data visualization app for you on the fly and show that to you as a search result. Which was a big, a huge idea.

but not an agent right and at some point they're going to overlap gemini can do that this is what i don't understand i mean the reason these products are separate is because Google makes all of its money from search. And they're shipping their org chart quite literally, which is like, Demis has his fiefdom of DeepMind, and now the app, and he's brought product into his org, so now he controls the app fully. He doesn't control search. That's a whole other org that is...

10 times as large that is the most profitable software business in the history of the world. And they cannot disrupt that to the degree that they're willing to do wild stuff in Gemini. And should these be one product? Like, does OpenAI say, no, we have a separate app for you to search with ChatGPT? No, they don't. It's just one big product.

And it's actually, it's way simpler to understand. And Google's struggle, I think, was that from this IO is that, yes, they have the best models. They suck at product. They suck at making it work holistically and making it simple for people to understand.

And that's still something they're working through. That's Google. Google loves to ship it to our truck. It was even on, like, a parent on stage at I.O. where, like, different executives got to announce the same product in different ways. Yeah. Because everybody needed a bite. You know, like, this stuff happens.

But from the product perspective, what I actually saw was all of their big bets, that they've taken over time and all of their data about people is now resulting in products that look like they might Which, again, has been my criticism of AI for a long time. I don't know if they're actually going to work. But they have Gmail.

Yeah. They just have Gmail. And so a lot of their, like, personal context boils down to, well, we're just going to read your email, right? Like, we know when your flights are because it's in your email. So we don't have to do anything else. Like what if we were just better at reading your email to you is like an incredible product for you to solve. And now Google has all this like research and the models to do it. And then you can just productize that. And I think.

The search piece of it, yeah, I do think there's two different workshops, and that's all their money, so they can't screw with it too much. But there's a world in which you would make that decision anyway. Because... You don't want every search to be agentic. Sure. You do just want some information presented back to you without the emotional package of your agent, like reading your email to you. And I don't know where that line is, and I think it's actually useful for Google.

to know like on some timeline they converge but not know when or how and just see how it plays I also think if you're Google, there is Very little evidence to suggest that you need to overhaul search. Google, like, everybody is like, oh, you have to cannibalize your own product or somebody else to do it. Google just continues to destroy everybody at search. And everybody's like, oh, you know, Zoomers use ChatGPT and Google is just like, show us in the market share, friendos. Like, so.

They are playing games with their metrics. Yeah. Pretty flatly. Because, you know, Eddie Q was at the search remedies trial and he said look you don't need to do this search is already under threat searches in iOS Safari have gone down for the first time in 22 years. And Google's, and we talked about this, Google's stock price dropped like that day because everyone was waiting for the pin to drop, right? So Sundar is on Decoder. You'll hear it on Monday. And so I asked about that directly.

We'll just play the clip. Eddie Q on the stand in the trial the other day said search in Safari for last month dropped for the first time in 22 years. That's a big stat. Obviously your stock price was affected by it and there was a statement. Is that trend bearing out that the standard Google search is dropping from devices and different kinds of searches are increasing?

now look we've been very clear we're seeing overall query growth and search um you know it looks but have you actually seen the drop in safari We have a comprehensive view of how we look at data across the board. There can be a lot of noise in search data, but everything we see tells us we are seeing query growth, including across Apple's devices and platforms. And specifically, you know, I think we quantified the query growth from AI overviews and what's healthy is that the query growth.

It's continuing to grow our time. So first of all, children, if your parents ask you how you did on your report card, you should just say, I have a comprehensive view of the day. That's good. That's really good. Incredible answer. That whole interview coming Monday was a good one. But Alex, you weren't laughing because he keeps saying query growth. Yeah.

And from what I have gathered from our conversations over the past couple of days, you're very skeptical of this. Well, so two things can be true. So overall queries for Google can be growing, but the growth rate can be declining. So yes, do I think that queries in Google products or across everywhere that search touches have just like literally gone negative like year over year? No, like in aggregate, is it probably growing? Yes. Is it growing as fast? Google will not say. And also like...

Are the amount of searches done per person growing? Or are fewer people doing more searches? There's a lot that they are not saying. And they're just trying to fly out, say like broadly query growth is growing because the moment you drill down into what's actually happening, maybe you learn, oh, wait, like maybe in North America in a key cohort for advertisers, which is like, you know, 20 to 35. A significant chunk of people are doing increasingly commercial intent searches on ChatGPT.

And that's like if you actually try to drill down into how search works, which they don't want to do, and they want to just talk about it at a high level, you maybe learn stuff like that. And we saw that reaction in the stock price because I think investors are so on edge. And you can see it in the way Google just how the stock is traded. It's heavily discounted relative to its peers because there is this fear, not only of will the company be broken up, but is...

ChatGPT and these other AI products actually eating into search in a meaningful way? And so far, Google's answer is, Our types of queries are expanding. People are using search in deeper, new ways, which, yes, that's true. That's how these AI products work. You want to thank it and have a conversation with it. That doesn't mean that overall query volume is growing like it did. I'm just not sure there's any evidence to suggest either way, right? Like, that all we know... is that

people like ChatGPT, right? I mean, no, there is. I mean, there's the fact that like 500 million people use ChatGPT every week. And people also use all these other AI chatbots. There was like a bunch of things that did not exist three years ago that now exist that directly... do what google used to do and like we all see it and i bet a lot of our listeners feel it like in their daily lives you think all 500 million of those people every week are firing up chat gpt to do web search

I think I'm getting answers from ChatGPT that I would normally use Google for. Whether it's like searching the web or not, it could be like... do a math equation for me. It could be like, what is a time zone conversion? Like, there's a ton of things you use Google for. And yes, ChatGPG doesn't do the commercial shopping stuff especially yet, though I think they will. And that's when it really gets potentially scary for Google.

But yeah, do I and my family members and my friends, are we using ChatGPT like we used to use search? Absolutely. And I think a lot of people are.

There's also other search replacements. Yeah, perplexity. Last year we talked about TikTok a bunch, right? Like people just search in TikTok and TikTok has search surfaces. Whether or not they're useful. I think TikTok search has dramatically declined in quality since all these other products at the scene. I think the point is to connect this to there's Gemini and there's Cirque.

They need search to remain competitive and vital. Yeah. And that's why you don't make your big bet on Gemini. Because then you are head up against chat GPT and perplexity and whatever else. Right. But you're saying, oh, actually, this thing is just really good. You don't need to open this other app. Google search is now just incredible.

And when assistance happen we're gonna have one The real fear for Google here I think is less about how sort of meaningful a competitor chat gpt is right now and how good a brand chat gpt is like the the thing that no one has ever been able to touch with google is like a sheer awareness Uh, and ChadGPT is like running at it really fast in terms of like, when I need to do something, where do I go? The answer for 20 years,

has been Google. And the Omnibox in Chrome was the most important surface on the internet for two decades, and chat gpt is is pushing at that about as fast and hard as you could possibly imagine and like chat gpt is a is a terrible business and has many limitations as a product but like again it is it is hitting that like mainstream Kleenexization

like kind of at record speed and i think if i'm google that's the thing i'm afraid of and that's the reason neil to your point that's why you don't bet on gemini because your brand is google and so what you what you want everybody to think of is you want to think of google as the thing that is like chat gpt not gemini Gemini is off here doing other stuff. But I really think the confidence we saw from Google this last week is because it's there. Like they have a lot of products.

that are good, not just ChatGPT. Sora is not a great video generator yet. Sora doesn't exist. It's around. Some people have used it sometimes. VO3 is just like, you can just screw with it. I watched Sergey Brin try to generate his own face for a while. At least that's what I was told. Like, it's just people are using it today and it will lead to some outcomes. I think some of those outcomes might be like...

negative for the film industry like who knows but the products exist and the changes are going to happen around them some of the agentic stuff I just literally watched a live demo of Project Mariner look for jobs, and it was just clicking around a remote desktop Chrome session.

And, you know, I have a lot of questions about that. Like, why would any of those services agree to that? Like, I don't know. Is that pretty brittle? And like, should you just use some of these new technologies like MCP? Like, I don't know, maybe. But it works, like it's there. And the rate of improvement... is so fast that Google is like, oh, we're going to do it.

Like this is definitely just happening for us. They have the best models and that is a tremendous advantage. I was talking to someone who works in another big AI lab and they were saying, Model quality impacts usage of the product more than anything. We don't think it does, but if you release a shittier model in a chatbot, people use the chatbot less. People can feel how these models react.

and what they want to get out of them in a way that maybe we just broadly discount and how we cover them. And Google is objectively leading in model quality right now. And that was like the first thing Sundar came out on stage and talked about was like, we're number one on all the leaderboards. That is true, but is everyone talking about Gemini? Is Gemini the thing I hear when I go home for Memorial Day weekend? No. No one even knows Gemini has an app, except early adopters and certain pockets.

ChatGPT is the Kleenex of all this. And that's a problem for Google. unless we hit AGI like Demis once, and none of this matters anyway. Yeah, and Demis, the only one left standing, just openly being like, I'm doing AGI. That's what this is all for. I'm on stage with Sergey Brin being like, the AGI moment is coming.

We're taking bets on whether it happens before or after 2030, and they were six months on either side of the line. Every other company has stopped talking about it because they have to make some products to make some money to justify all this huge investment. And Google's like, yeah, we did it. I think Google, maybe last year, particularly two years ago, was incredibly insecure about having done all of the research investment.

Like, we've been joking for years now that if you say ChatGPT, a Google Cons person, like, leaps out of a bush and is like, the T in ChatGPT was invented at Google. Like, they're over that. Right. They're like, OK, we're we caught up like we're going to ship products that are good. But I think the interesting part of that, Alex, is.

Maybe ChatGPT has the brand name. Google has the distribution. Yeah. Right. So they're loud about AI overviews being the single most popular generative AI product at scale. You could remove popular and used. Do people know what they're using? Do they know that Astra is the lens to DeepMind's AI mode? No.

That's the problem is like, yes, I think it's more of an ego thing, honestly. And I think it's a recruiting thing. And I think for Google, yeah, they're seeing metrics that are not as bad as everyone thought, but... this race, this perception of the race, this perception of how far ahead ChatGPT is, and just

consumer mindshare is it it's an ego problem for them it's maybe a long-term strategy problem and i think it just hits them more in that realm i don't think it actually it's clearly not hitting them on the business and that's what you and i were feeling being on site but like Is it still a problem for them and that they are not winning at it all? Yes. I met, I was with a Google exec who's been there forever at one point yesterday and they were like,

Yeah, you know, just like a thing we really have a problem with is like not being first, you know? And that's like every company, but I think Google for so long just had this perch that was untouchable, right? They just ran the internet. And now they're getting challenged on all sides. And I think that just, that messes with the ego a little bit in a way that makes, it seeps into the products. It seeps into the decisions they make.

But yes, is the business maybe doing better than we thought? Yeah. I mean, I thought it was crazy. Like at the very end of the keynote center mentions Waymo for like 30 seconds. It's like. They may have a trillion-dollar company in Waymo that has solved self-driving and is now doing more rides in San Francisco than left.

That is happening in one part of Google. YouTube is unshakable. YouTube is probably going to eat the entire entertainment industry. So they have all these products that are just huge and dominant. And I think they were filming that. Yeah, at the end of the keynote, Sooner just casually mentioned their satellite constellation to detect fires.

And he literally was like, it will be fully operational by your side. And I was like, that's how they announced the second Death Star. Those are the words they used for the Death Star, too. And he was like, come get out, everybody! Also, I think they're feeling really great because, you know, Dieter is more famous than Giannis. That's true. Dieter got the single biggest cheer at the IO keynote. Shout out to Dieter. It was very fun seeing him. as a popular Google executive on that stage.

Also, when he came out, we were all sitting next to you while I'm vlogging, and V just goes, theater! It's like totally quiet, right? She just screams, Teeter! Incredible moment. That was very good.

There's the distribution, right? We have AI overviews. Everyone's using them. Is it popular? Does the brand work? On some timeline, it doesn't matter because they're just there and they get really, really good. And then you just, you know, the next new person never even thinks to get trashy.

And that feels like a big part of this bet, right? That's where AI mode really comes to play, where you've got this big new search experience, and over time, things will graduate to the main search experience, and then maybe no one's ever using. trash gpt because yeah the people who have yet to experience ai are just like whatever google just does this like i'm looking at this other

You want me to use this app that's doing the thing that's already happening? It could be like stories. It could be like how Meta copied Snapchat, and yeah, Snapchat got big, and it's still big, but it never became a multi-trillion dollar company.

Because a company with tremendous scale just copied it quickly and leveraged its distribution. Yeah, that definitely could happen. This is where Google shipping its org chart, I think, is hurting it pretty badly. Because the thing I can't figure out... and that no one at Google will give me an honest answer to is, do they care about Gemini as a public-facing brand? Is it important to Google

that we know and care about Gemini. Yes. It's funny they wouldn't tell you that. I think it's because they know they're nowhere near where they need to be, and they don't want to say it on the record. I mean, they all say yes, but I don't... believe them. No, it's actually Sundar told employees at the beginning there that it's the top goal for the company is that Gemini wins the chatbot race. I believe that, but I think if it were...

If Google were a different company where it was easier to succeed by making things good and not by launching new things. Would it have made a lot more sense to just do all of this work?

inside of ai mode from the very beginning yes and you go back to how can we make google.com the most important thing on the internet again forever and you you just you pull this thing from a tab slowly into search like the thing i think they're doing with ai mode makes a lot of sense and the fact that it's not called gemini doesn't make any sense and so i'm just lost on this thing about like google is actually

trying to point you in so many places that I think it is risking diluting the actually interesting work that it's doing. It's because it's the money. Search is the money. They can't do this. They can't disrupt. This is classic innovator's dilemma. This is what OpenAI is attacking head-on, is that Google cannot change its business fast enough. for the consumer awareness and just attention sucking that ChatGPT is doing right now.

And yeah, that is exactly what it should be. Gemini should be searched. There should be no distinction. The problem is, is that Google isn't a company. It's a combination of like 14 companies, their own CEOs, you know, and... Yeah, should Westeros run at all? Probably. Would things run smoother? Yes, but there's a lot of lords. I mean, I even think about there's a Google app.

seamless Game of Thrones reference. That was really good. But like there's a Google app in which you can either do Google search or with one button go to Gemini. And then there's also a Gemini app. And in no sane world do both of those things need to exist. No. I cannot believe I am the person who is saying this. I don't think any of this shit matters. I really don't. It might not. Like, I think the main search experience is going to get better.

people are going to see the words AI mode and click it because it just says AI mode. And that is a clickier thing than the word Gemini, which means nothing. then they're going to be like, wow, people are using AI mode, and that's going to become the main thing. And at some point, they will do the thing that Google is uniquely capable of doing and say, click this link to download the Gemini app. and they will just get Gemini distribution. And that will all just...

happen. They are uniquely capable of doing that. And yes, the innovator is still no problem. They can't burn down the most lucrative business. in favor of the cheap, disruptive thing that's almost good enough but works better for some people, right? Like, yeah, they got that problem. I think their other problem is They're basically gonna... torch the web like along the way the web as we know it is coming to an end and they are

You know, what Sooner will tell you, it's not a zero-sum game, that the web is growing, they're crawling more web pages than ever. You'll hear that in Decoder next week. Every Google executive there is like, more stuff is happening on the web. There are more and better applications on the web than ever. Like the web is the place where you deploy a new app.

high point, like maybe of all time. Because of all this app store ruling and the Epic case, the web is a place where you go to buy stuff about to become incredibly important. right and all these apps are going to kick you out of in-app purchases to the web and we're going to all be buying stuff on the web because you don't have to pay the apple tax like it's all that stuff is great but like the web is a media platform where the new information is it's like

It's already under pressure from all these tools, right? It's already dying because of these tools. You can see it every day. All that new information is on, I mean, you're listening to this in your podcast player on YouTube. It's in these other weird platforms. It's on TikTok. And Google has to figure out how to get that information. Or it has to figure out how its agents can go and look at all those databases and make that worthwhile for people.

And I don't know if that stuff makes sense yet. I don't know if it makes sense for OpenAI, but at least they're the upstart. Right? Like, yeah. If their core business fails, like, Sam Altman will just let a bunch of money on fire, and that's kind of what we expected him to do. If Google can't pull it off, like, a lot of things go wrong. But they have to work that curve of, like...

The web is the place where the information is. It's quickly getting abstracted away to the web is the database that the new AI Google search synthesizes for. Yeah, I heard that too at IO. I heard execs saying like, no, like the content on the web is bigger than it ever has. We have more to crawl than we ever have. And I just was thinking, like, wait, isn't that all AI slop? Like, isn't the reason you have more to crawl is because your models are producing a bunch of garbage?

And I really think they view data like sand. Like it's just like the beach has gotten bigger. And it's like, yeah, but there's like a bunch of dead animals in it. That's kind of how they view data. Look at the amount of rubble we're standing on. It's like, well, you blew up the city. So like, yes, in aggregate, is there more data for them to crawl? Probably.

How much of that is human? How much of that is high quality? We know, we feel this as people in the media business. All of the best content is going behind paywalls. It's going to be hard for agents to get to this stuff. And how does that work? How do you solve the fundamental business tension of people who make the good stuff cannot support what they do on the web as it exists today?

Well, actually, let's take a tiny detour into MCP, because David wrote about it in the context of Microsoft Build this week. We had Kevin Scott, Microsoft CTO, on Decoder this week. MCP is like a phenomenon, right? It's a standard from Anthropic.

that is basically, here's how an agent shows up to a website or a database and interacts with it. It's basically just an API replacement. It's not more complicated than we made some APIs for agents to go do stuff. And if you just run it all the way to the end... it's kind of like, oh, you don't need websites anymore. You just have, you need auth and maybe payments to databases.

And then the agents can just go and API into the databases and come back and give you stuff. And I don't know how that business works. But David, you wrote about it this week. I mean, I think built into the way that you're talking about it is the assumption that everyone will access every part of the web via some chatbot, which is what a bunch of these companies would like you to believe, but I don't think is true and I don't really think has ever been true.

The theory is that what we can do in one of two ways is help plug AI into the web. Right. And I think that's like MCP stands for model context protocol. And basically the idea is it's like a structured way for me to say, I have a bunch of information on my website. Here is how to give the model access to that information in order to be able to do things.

Fine. Microsoft is also working on this thing called NLWeb that I think is very cool, which is basically an open version of a protocol like that that says, okay, what if I could actually run all of that AI stuff on my website?

And so now instead of going to chat GPT to talk to my website or go to Claude to talk to my website, you come to my website to talk to my website. And that is like, as somebody who believes in the open web, that is a future I'm much more interested in over time. But I think...

To Alex's point, I don't think these companies care about the information on the internet. Like, I think a lot about a thing Mark Zuckerberg has said a few times, which is that, like, everybody talks a lot about news content on facebook and that is like a vanishingly small portion of what people do on facebook and so eventually they just stop caring like this is no longer worth our

time and investment and energy to care that much about what happens with news content because it doesn't matter that much to our platform and i think most of these companies feel the same way that actually most of this is just headache and what people come to google for is to like

find Adele music videos and chocolate chip cookie recipes and not read politics news. And there are all kinds of terrifying downstream effects from the fact that they don't really care, but I think they don't really care. And the idea that what they're going to do is set up

a world in which everybody who owns a website has to stop thinking about Google distribution and go build themselves into a destination people go to on purpose, and that that's going to require reprogramming 20 years of behavior of how we do the internet. It's a mess and it's going to kill a lot of the web. And I just don't think these companies care because there's new stuff to do. I think Google wants you to believe that it cares.

But on the longest timelines that Google thinks, it does not. So I would say it the other way. I think Google cares a lot about the web and very little about websites.

Like, making sure that websites that exist today get to continue as they exist today, I don't think Google cares that much about that. Oh, sure. No, we're agreeing. But I think Google cares about the web is just, like, really... the web is a miracle like i just like straightforwardly the web is a miracle we have in the world a giant interconnected interdependent mostly open application That's weird. Thank you, government spending. We just horse-powered this thing into existence.

Because honestly, Marc Andreessen got a bunch of government funding in the middle of the country. Like, that's a thing that happened. Like, that's Mosaic. And it turned into Netscape. And like, here we are. It's all here. And now Figma exists. And like Johnny Ive, legendary designer, probably opens a web app to do a bunch of design. That's crazy.

He uses pages for everything. Yeah, it's funny you brought up Andreessen. I actually talked to OpenAI to their MCP lead this week because they joined the steering committee for MCP. So they're now working with basically every AI lab has agreed that this is the new standard. And I actually came away thinking we are actually still pre-Netscape on agents as it relates to the actual plumbing.

that it takes to hook them together. So this OpenAI lead was like, there's still no registry. Like there's no discoverability mechanism for a developer to even know who has an MCP server. Like we know there's a few of them. There's like Stripe and... or whatever, but no one's even built the interface for then the developer to go, okay, X model, go make this happen with this server.

And that will happen. It'll probably happen this year, but we're not even at the browser point. This is funny to be talking in these words because like, yes, agents are supposed to like replace browsers, but like we are not in the browser phase of agent building yet. This has not even been connected in that way. It's still very, very early and it will be enterprise and very developer focused first. It's not like we're going to be getting some...

all-powerful agent that can just go and order a bunch of stuff for you and talk to a bunch of apps anytime soon, even though Google showed that off. This is going to be a developer replacing function calling with telling a model to go talk to an API. Yeah, and that's really interesting. That's interesting. Yeah, exactly. You can see there's a new web you would build on that.

And that's what I mean. I agree with David. I think they care a lot about the web because this big interconnected application platform where you can instantly deliver complex applications to a runtime like Chrome is a miracle. And I think Google is very invested in that particular miracle. I think as a media platform where you read a bunch of text,

And they don't care about that at all. And I know this because Alex and I were sitting in the audience for the Dennis Osadis and Sergey Brin fireside chat with Alex Cantrowit. And Kantrowitz asked, what do you think the web is in 10 years? And Sergei was like, who knows? Right? He was like, the world will have hit the singularity. Like, I will be one with the sun. Like, off in space.

And Dennis said, it's a good question, and then, quote, I think the web in the near term, the web is going to change a lot if you think about an agent-first web. Do the agents have to see renders in things that we need to see as humans?

Do we need to actually render webpages? Do we need websites? That's the question. And he's, I mean, his answer clearly is no. His answer is no. And then I asked Sundar a riff on this question. I read him that quote. And he was like, what is the web in a series of databases?

which, first of all, is the verge-iest verge answer of all time. Yes. Like, I literally started, you're going to hear him, I just started laughing. I was like, thank you. Like, I feel very validated. Like, why are we but a series that's going to dine out on that one for a while? But if you re-conceptualize the entire interconnected application environment of the web, it's just a bunch of databases that you can go ask for stuff.

And some of those databases have Toyota Camrys in them. And some of them have vacation houses in them. And some of them have sandwiches. It's like, oh, those are just businesses that are going away. Or the businesses that get funded through API calls instead of ads on their webpages. Will the incentives figure themselves out because do agents need things to do? Yes. So if everything that an agent...

would talk to suddenly goes away because its business model is destroyed. Like, guess what? Agents don't work. So will this get figured out? Will it be super messy? Will a lot of companies go away? Will whole new categories of companies get invented? Yes. Yes, that's all true. But do I think like the fundamental building blocks of

the plumbing of the web, like content and things that an agent could do will go away? No, because then there's no agent. And what Google and ChatGPT are both racing to be is the interface to interact with all those databases on your behalf, which is like the greatest... abstraction of technology I think maybe we've ever seen in our lifetimes, if that happens at scale. And the value that will accrue to the interface is arguably greater than the value that Google gets now from running ads on.

I mean, this is the funny thing. It's like, Alex, you and I have now spent a lot of time on this podcast in the last week talking about display ads. But the fundamental question here is what happens when display ads don't work anymore? What is the business of the internet without display ads? for the people who have traditionally relied on display ads. Paying $250 a month for Google Ultra. Maybe that's the answer. Maybe Google, maybe the end of this is Google and OpenAI.

pay websites directly. I don't love that, but that is one possible outcome of this. But if the web is a series of unrendered databases The whole business of the web is suddenly immediately gone. Ben Thompson, by the way, wrote about this this week based on MCP. and he was like this is what stable coins are for and like a like full body groan basically is yeah i i boy i hate that oh man like this is the idea that we'll have these like crypto microtransactions, pegged to the dollar in some way.

that make all that happen? I would just say we have, if one more person says microtransactions are the answer, I'm going to send everyone a thousand links to all the times we've tried microtransactions and it didn't work, and then I'm going to heave myself out of a window. I will, again, full body cringe in reading that stablecoins are the answer, but he did make one good point. Ben Thompson made it at one particularly excellent point here.

in that the web already runs on thousands, if not millions, of microtransactions every second because that's how the ads work. Yeah, but it's not me giving ads or microtransactions. Sure. But it's there. You just hate stable corns, I get it. Whatever those are. Sure, all of that exists, but if you made me type in the IP address of every website I wanted to go to, that doesn't work either. Making the users do it falls apart.

go order me a sandwich and it's gonna be like or or you have some uh subscription to one of these centralized indexes that needs to get built And that subscription has the weird Spotify model where it's like... you get a penny and you get a penny and taylor swift gets most of the pennies and like maybe that's how it plays out but you can see just at io in the conversations they're having The web we have today is

is reaching its termination point, and this new other kind of web is definitely the thing they all want to build. It's a thing Microsoft wants to build. That's why they're doing NLWeb. It's a thing Google is just sort of openly talking about. It's what OpenAI needs to have happen to make its dreams realized. If you wear your Johnny Ive iPod Shuffle and it can't do anything, you're kind of stuck, right?

It needs that whole ecosystem to be developed and built and for the money to all work for that product to be as useful as they want it to be. And I think this is a marker. I think part of Google's confidence is they think they can horsepower a new existence.

while sort of preserving the best of the old web and bridging the revenue into the future. I will say publishers are furious about this. They're super mad. We have a statement on our site from the News Media Alliance Disclosure, Vox Media, and the News Media Alliance along with Conde Nast.

It's the business side of the company. But we're also taking money from OpenAI. Oh, it's true. We have an OpenAI deal. It doesn't even occur to me. I also made a Netflix show. You should watch it. It's great. That's relevant, right? That's not just me bragging. Google wanted to buy Netflix. That's true. Google announced that Google wanted to buy Netflix at one point.

But the publishers are like, the whole point of this deal was us getting traffic and now that's gone. And then they called it that. That is what the publisher industry, the news industry is saying about AI mode. And I think Google is like, well... It'll be sad when you're dead. Like that's kind of how it feels. And I think that will get litigated even harder. Not to mention the fact that they might have to sell Chrome.

Which, I don't know what will happen at this. I don't think they're going to have to sell Chrome. I got no vibe that anyone was worried about Chrome at I.O. But what are they going to, they're not going to like wander around their own party being like, well, this is going to suck. No, no, no. But like, you know, like when you're, when you're actually like having a drink and you're staring at someone's face a few feet away and you ask them, like, are you worried about Chrome?

yeah, you're trained, but like you do it enough and you kind of get a vibe. And I did this on a few topics and like, I was very curious, like, are they worried about this? like up and down the chain And I think they know they're going to have to stop just like mafia style buying out search distribution. Like that's going to go away.

but do they think they're still the best search engine? Yeah. So I don't think they think they're going to have a divestiture. And that's another topic. I mean, on the website thing,

I'm curious what you guys think about this. Our website's just going to become like driving a vintage car. It's going to be this thing you do because it's a luxury. It feels good. It's like a really bespoke, unique, like visceral experience. It's not as efficient, but you do it and you spend more money. I kind of feel like that's the direction websites are going to go. I do like thinking of TheVerge.com as a cranky vintage Jaguar. Yeah.

Right. It's kind of always broken, but you love it. It's going to be great. Yeah. I don't know. There's other kinds of web. Like, you know, Substack and Ghost are web properties. Blue Sky, like App Protocol, built on a lot of web ideas. And the thing about Google is that all of these websites are effectively addicted to Google's distribution. That's why SEO has polluted the web so badly. There wasn't another choice.

And so, yeah, maybe agents are going to turn everyone into databases. I think if you're a retailer, if you are Walmart or Target or Macy's or whatever, and you're looking at Google's new try-on mode, which looks very cool. The promise there is that once you've tried on the clothes virtually, the demo was you set a price, and then at some point, Google just buys the clothes when it hits a sale. If you're a target, you just totally got disintermediated.

Now you're just doing high-frequency trading with a Google bot. Like, this is a really weird business to be in. And Google's not an answer there. It's like, oh, we'll talk to them and make sure that we show some of their webpages sometime. And I said, well, what's that negotiation going to look like? And Google was like, it won't be a negotiation. It'll be a conversation. This is ice cold, right? Like there's a whole universe of businesses.

that are going to have to get reconfigured. And a lot of them are going to want to say, well, actually, we don't want anything to do with this at all. We want you to come to our site. Substack, for many, many faults, is a web property. It's expressed on the web. There's not like a Substack desktop app. And the innovation is they've solved distribution inside of their own little network.

And that is really, really lucrative for a lot of people on Substack. All of that is the optimistic case, right? The pessimistic case is yes, websites die and everything becomes

the high frequency trading, you're essentially fighting for Google scraps. The upside is for the first time in two decades, everybody's going to have to care about their website because it has to be, I mean, this is, this is the verge bet, right? Like this is, this is the thing we've been talking about for a while that like,

The bet is we have to make something that you come to on purpose or else we can't be that upset when nobody comes. I think maybe that's a place we're going to land. And a lot of that's going to make things harder for a lot of the way. There's going to be a lot of pain along the way.

if if we do this correctly uh i think and the the this guy guha who i was talking to about all of the nl web stuff he's like the fact that the web trends towards centralization is bad. And it has been bad several generations in a row, and we have to stop it. And the only way to stop it is to distribute the good technology everywhere.

And I think the way we think about the federated social networks, the way we think about MCP, the way we think about NLWeb, bringing some of this AI stuff to websites is like... maybe there's a chance that actually this ecosystem gets bigger instead of you just going to google.com, landing on a webpage you've never heard of, and then never going back. Because like...

That's what we've been doing, but you could argue that's not the correct outcome. But it's an outcome. What is this index of MCP servers? Except incredible centralization on the web that will reemerge, right? Right. I mean, there's a reason the AI labs are the ones doing this. This is not Tim Berners-Lee being like, this is great for the internet. This is Anthropic being like, this is how we get internet access.

Yeah, because their first shot at it was, what if we click around your website? Which is just incredibly brittle. That is never going to work. That will be the backup plan for all of us, and MCP will be plan A. We'll see. Again, we walked around Google I.O. and they were all feeling it. They were riding high. Their theme, they kept saying, was research into reality. And it's like, what they mean is, you didn't believe us for a long time.

that we had all this stuff in the labs that we were working on it that was coming to fruition and now here all like all at once here's all of it and you know so it has to ship and you know people are i'm confident we're gonna get feedback on this part of the episode that's like they're stealing our jobs and boiling the ocean

There are some really weird downsides to all this stuff happening. Yeah, both of those things are true, by the way. They're true. They are true. But the weirdest one is that we're staring at the beginning of a wholesale re-architecture of the internet. Yep. And I... We should probably pay a little more attention to that to make sure it's good this time.

Because last time, like, four people just got to be in charge of everything. Yeah. And, like, I might take the trade-off if you can actually decentralize a little bit more. We'll see. All right, we've got to take a break. We're going to come back with Lightning Round. Whether you're a startup founder, navigating your first audit, or a seasoned security professional scaling your GRC program, proving your commitment to security has never been more critical or more complex. That's where Vantica...

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Alright, it's time for the lightning round. Unsponsored? For flavor. I said it with a question mark because I actually don't know if it's unsponsored. There are rumors that we have a sponsor. There are rumors that we have a sponsor, but I believe it's not today. And I wouldn't even know because the whole point is no one can tell me what to do.

That's why Verge subscriptions are 40% off this week. Next week it'll say sponsored for flavor. And we'll make new t-shirts. It's going to be Doritos. It's going to be great, you guys. Actually, does anyone know anyone at Doritos? We should reach out. Yes. I will eat Doritos constantly through an entire first cast if Doritos would like to pay for that. It's funny, you know, our great rivals for podcasts within a podcast.

My brother, my brother and me. They were once sponsored, I believe, by Tostitos Pizza. They were. They made a whole Totino's episode and it was excellent content, if I may say so myself. We've got a lot to live up to on that front. We do. We will never do that. I just want to be clear. You can't pay us money to tell us what to do. That's where the flavor comes from. I guess in this case, this would be Brendan Carr as a dummy brought to you by the FCC.

Speaking of which, it's time, David. Let's do this one more time. Just for this week. And then hopefully never again. Every week I root for it to be the last version of Brendan Carr as a dummy. For a lot of reasons. And every week it is not. It is time once again for 2026 Webby Award winning podcast within a podcast. Brendan Carr is a dummy. Neil, you've slept for three hours. I expect this one to be very, very good. There's only two items in this one. The first one is so stupid.

like so so stupid and the other one is so disappointing and that's really the heart of Brennan Carr as a dummy right how can you disappoint me in ever more stupid ways so this week Brennan Carr America's number one censor who continues to make such a splash as a would-be speech cop that more and more profiles and coverage of him emerge.

Politico wrote a profile this week. John Oliver did an entire segment that is basically Brendan Carr as a dummy. Thank you to John Oliver for validating us, and thank you everyone who sent that in. He is a real test of all press is good press, our buddy Brendan. It's not. You're a traitorous moron, Brendan. And I know this because this week he has started to open an investigation into NBC over Kamala Harris appearing on Saturday Night Live.

Disclosure, NBC. Investor in our parent company, Vox Media. Just putting that out there. You can do that what you will. Again, I remind you, no one can pay me to say anything. But our subscriptions are on sale. Hey, do you guys know who won the election? Do you remember who it was? It doesn't matter. I forget. Do you remember who lost? Definitively lost and is not the president? Do you know who that is? It was Kamala Harris. I believe that she lost.

Right. She did not win. We can agree that she is not currently the president of the United States and the other guys. Okay. Well, Brendan, here in mid-May of 2025, has decided the most pressing speech issue in the country. is whether Saturday Night Live violated the equal time rule for broadcast television stations by having Kamala Harris appear on the show. Do you know what I also know definitively? Is that Brendan knows they didn't.

But yet, he has decided here in May of 2025 to reopen an investigation which was closed. into whether NBC and Saturday Night Live violated the equal time rule by having Kamala Harris and Saturday Night Live. The equal time rule is like an archaic broadcast rule that says if a broadcaster that uses the public airwaves to broadcast content...

gives time to one candidate, they've got to give equal time to the other candidate. It's a little more complicated, but that's right. It's called the equal time rule, which NBC did the next day. NBC had Donald Trump on the next day. He got a bunch of time during the NASCAR race.

I reported on this while it was happening, right? Because Harris showed up on SNL. There was a bunch of like MAGA tweets. And then Brendan was Brendan before he was auditioning for the job. So he was like, I will arrest everyone when I make the FCC commissioner. Great. I reported it out at the time. And what I heard from sources in the FCC was The only...

program that regularly deals with this is Saturday Night Live. They are the best at it because politicians are always showing up on Saturday Night Live. Oh, interesting. Like, they have the infrastructure for dealing with the equal time rule because no one else gives a shit.

So of course they filed their equal time notice to the FCC. And of course they were offered Donald Trump time the next day because they're good at it. Like this is a thing Saturday Night Live is the best at of all of the shows on all of the broadcasts. And so, sure enough, Brendan, his emails were FOIA'd because he was threatening this investigation before he was ever the FCC commissioner. And he emailed Fox News producers, here's an equal time request.

from NBC and Saturday Live. I know he knows it because I'm reading his email saying he knows it. They comply. Former FCC chair Jessica Rosenworcel looked at this and dismissed this because they had complied. And I know they complied because Trump was on the air during the NASCAR race the next day. Equal time was given. Well, here we are. May 2025. Election has been won. We have accepted a jet from the government of Qatar. We're definitively past

Saturday Night Live booking Kamala Harris having any effect on anything that happens in this country. And Brendan is running around trying to punish NBC. for violating the equal time rule, finding ways legally to reopen this investigation just to put more pressure on NBC. for its alleged coverage of Donald Trump being lost. This is just speech police stuff. Like, it's...

It's over. Like, the election is over. Whatever harm you may have felt that Trump campaign felt, that Carr felt for his boss and buddy Donald, it's over. They won. Like, the harm has passed. Right. But the opportunity for that to have swayed the election has come and gone and it didn't work. And he knows we can see his emails. We reported on his email.

that he knows that they didn't break the rule. And yet he's trying to reopen. I mean, this is just moronic, right? Like he's doing it to be a cop, to chill the speech of these news divisions that are reporting on Donald Trump. Maybe because NBC owns MSNBC. Even though Comcast is spinning that off into a new company called Versant, which I haven't even talked about yet. But like, that's why he's doing it. So stupid.

We'll put it in the show notes. We have his emails where he's telling Fox producers they complied with the rules. And yet he's going to reopen this investigation just because he wants to be a cop. He's not even trying to hide the fact that this is what it's about. It's very straightforward. It's very straightforward.

So that's one. That's very stupid. Here's the very disappointing. We've talked a lot about how Brendan threatens deals that are in the pipelines and tries to get companies to comply with whatever he wants, whether it's their coverage, which he says is biased, whether it's DEI policies, which he says are not racist enough, whatever it is. He gets what he wants by holding up deals. So last week, Verizon completed its acquisition of Frontier, another fiber provider, and it got that through the FCC.

by sending a letter to Brennan Carr saying it was walking back all of its... Super disappointing, right? That Verizon just rolled and said, we're going to give up on our D.I.F. This is Brendan at work. He went and threatened the business over something that's nothing to do with the business.

And Verizon caved, like just straightforwardly caved and said, this is a government regulation that we're going to deal with, even though the FCC telling us who to hire and fire is kind of a straightforward infringement of its right. And the thing that is particularly disappointing to me is that whenever the FCC has tried to do something good to Verizon, they have fought it tooth and nail. They're the primary legal antagonists of net neutrality for a decade. Every court case.

Every challenge, Verizon was there. Whenever you talk about increasing broadband access, Verizon fights that stuff tooth and nail. Verizon takes money and promises Fios will be rolled out. in New Jersey, and they just never do it. And then they get sued, and they fight it tooth and nail. We had the CEO of Verizon Wireless on Decoder. I don't know why enterprise software CEOs or telecom CEOs show up on the show, but they came on the show, and I asked him.

Are you going to fight Brendan Carr and these weird regulations as hard as you have fought net neutrality? Just run the clip. I want to be very clear, very explicit about this. When the government passed net neutrality rules, it wasn't we have to follow the rules of the land. It was we're going to file lawsuits for a decade.

to get out of these rules because we think they're dumb. And in this case, you're saying Brendan Carr, who has been openly censorious, openly chilling of speech, openly hostile to companies because they have diversity initiative.

You're saying you just have to follow his rules. We have to follow the rules of the land. I don't think those are his rules. Those are rules of the land and administration. Are you going to file a decade worth of lawsuits about these rules? We don't know. We're going to work constructively with them.

to follow rules that are needed. But at the end of the day, look, our role is to our stakeholders that we have. You know, my stakeholders are my shareholders, my customers, my employees and society at large.

We have to manage and we are going to deliver for those stakeholders what's needed for us. And we will do whatever is needed with the administration to deliver to all the stakeholders. It's a balance when you run a large company our size. You have to balance the different stakeholders. And we will balance those stakeholders. We've done it.

extremely well in the last 25 years that we've been Verizon and we'll continue to do that going forward. Yeah, the balance of stakeholders, guys. We have a comprehensive view and we have balancing the stakeholders, and you can get out of almost anything. That sucks. That is 60 seconds of him being like, when he says those aren't Brendan Carr's rules, those are the rules of the land, that sucks.

That's a, I mean, that's straightforwardly a lie. Those are Brendan Cards rules. He said, I'm going to hold up this deal. unless you walk back your DIR initiatives. And Verizon, instead of fighting, which they always do when it comes to consumer protection or broadband deployment, they always fight. here they rolled and it's it worked and the thing that kills me is it doesn't have to work like if you stand up to these bullies in particular they tend to roll over

And Brendan getting a win is just like the most disappointing outcome. And it's particularly funny because it's Verizon always fighting. Verizon looks at government regulation and is like, no, no, no, no, no. One decade. And here they rolled. I just think it sucks. I'm incredibly disappointed that it worked in this way. I'm also, you know, not for nothing, it's another merger of ISPs and it will result not in greater service and lower prices.

You know how it's going to go. We all know how this is going to go. I was wondering about this in the context of, there was news this week that AT&T is paying, I think, $5.75 billion to buy Lumen's fiber business. and a bunch of cities all over the place. And the timing of this is so suspicious to me because it really seems like AT&T looked at this and said, oh, all we have to do is write a letter about DEI and this will get done.

And I'm like, I hope that's not how this goes, but it sure seems like AT&T is about to just run the same playbook in order to get this thing done. I think there's a renewed sense that some mergers are allowed to happen. There was a lot of excitement. Even in the tech industry, right? The deals are back. Biden and Lena Kahn were not going to let any deals happen. And now the deals are back. And that actually wasn't the case early on.

Like Andrew Ferguson, the new chair of the FTC, is kind of a trustbuster. He kind of hates big companies. He hates big tech. Brendan is just like, give me an ounce of blood. just bloviating away moronically. These deals aren't happening, and I think people are starting to figure out there's a path forward, and it involves trading your values to get the deals. Right. And over and over, they're doing it. They're so happy to do it. I think the next one we're going to see is CBS.

and paramount settling their case with donald trump over 60 minutes to get the skydance deal done and that will be a dark and sad day for american journalism yep to the point where it's like oh that's over you shouldn't trust that network anymore That's brutal. As always, Brendan, if you're listening, and I super know you are. You can come on the show.

You know, I got your press release today. I wrote back to your people and invited you on. He put out a press release about how much more spectrum he's opening for satellite networks. He loves it. It's his favorite thing to do. Congrats. Come on. You can defend this stuff. The fanciest CEOs in the industry, telecom CEOs, come on Decoder and answer their questions. Because they can defend themselves.

Sompath, the CEO of Verizon Wireless, he gave maybe the single best answer to the decision-making question I've ever had, even though I completely disagree with we have to manage our stakeholders. They can defend themselves. They're smart. I think you're stupid, so you're not going to show up. But if you want to, you can. We're available. You can get me on this show. You can get me on Decoder. But for now, that has been Prennicar Sidemi, America's favorite podcast.

It's beautiful. I've decided to take a comprehensive view to Brendan Carr. I'll get back to you on what that looks like. Can I offer you some breaking news as a palate cleanser? Mark Gurman.

from Bloomberg just published a big story about Apple with two very interesting pieces of information that I think are germane to what we've been talking about. uh thing number one is he reported that apple uh has been working on smart glasses and has like really ramped up its effort to sell smart glasses and hopes to do so by the end of next year uh and he He cites one person, presumably inside of Apple, who said they will be similar to the meta Ray-Bans, but better made.

which is terrific uh so yeah presumably he called tim cook and tim told him that and here we are uh so that's piece of information number one is that uh apple smart glasses which we have been hearing for a while were sort of being pushed further and further off may have been pulled back up and the roadmap And the other one is that we've been hearing for a while about the idea of an Apple Watch with an integrated camera, and that is apparently shut down.

and that will no longer be a thing which is a shame because I wanted to know very badly how any of that was going to work in the real world but This is Apple pushing on the same kind of stuff, right? Like multimodal AI assistance is the name of the game here. And Apple seems to be on the smart glasses trend along with, at this point, kind of everybody other than OpenAI and John AI.

Yeah, and I can tell you why they're doing it. It's because these smart glasses are hitting decent scale. They're doing single-digit million sales a year, the meta-ray bands are. They may get to double-digit millions. They're also good and people like them, which I think is an important piece of it. Oh, I think everyone's super confused, most of all meta, about why people like them.

Oh, that's true, but they are good and people do like them. Yeah, people are good. They are, but what people like is having glasses with a camera in them. Sure. And a shutout. But that's also, if you're Apple, that's a core competency, right? Like, that's a reason to do it if you're Apple.

But that's not, I don't think they're an AI distribution platform the way that Meta wants them to be. No. But they don't have a display in them yet. And that's what everyone else is demoing. Apple smart glasses. If they don't have a display, they're one kind of product.

If they do have a display, they're a very different kind of product, and no one has cracked that display problem yet. At least on Google, the one we saw, the Android XR, It is so a prototype. Yeah, Heath, you saw these, right? I'm going to talk to V a bunch about all this stuff on Tuesday in the glasses, but I am curious. You got to try them, right? Yeah, just really quickly. It was like a five-minute demo, and it was basically Gemini on your face.

The weird thing about these prototypes is the waveguide is very small and not high resolution, but it's in the dead center of the lens. Whereas I was expecting like a heads up to the side thing. Yeah, the like glassy kind of like up here. Because it's literally, yeah, it's literally just a Gemini icon and then it reads back what it's saying to it and what you're saying, which is like, I don't.

I don't need that. The best thing was the map stuff where like you could turn your head down and it would show where you were. Your pin would move like it had GPS and tracking and who knows, maybe the room was like set up for that. But, and then the other thing was like, oh, you, when you take a picture with it, you see the picture.

like you can see how you're framing it because it shows it to you whereas the meta ray bands obviously you have to take your phone out to see what you shot that's cool uh the hardware is not super compelling yet the software is very bare bones i think they will actually start shipping these next year, and they got Warby Parker.

and carrying, which makes Cartier and like Gucci glasses. And they got another cool, the name escapes me, another cool glasses company out of Asia that V was very excited about. They got them on board. So basically Meta has hitched its wagon to elsewhere Luxottica. which makes Ray-Ban and Oakley and a bunch of other brands. And Google tried to get that deal. I reported that they tried very hard and they failed.

And now they're going for basically every other eyewear partner that they can to get Android as the platform instead of Meta. So I think we're going to see this AI platform, smart glasses battle between Meta and Google with their partnership. strategy. Gemini's a better AI. Meta has a head start. We'll see how it shakes out. The demo, though, at IO was kind of mad. I do want to quickly say, though, a demo that was awesome.

and that I'm very excited about and we have a great video about that I did with Viren is Beam. which was Project Starline, and is basically Google's answer to what if virtual meetings suck less. Starline has been one of those ideas that Google has had that seems to get cooler every 18 months, but also...

less and less likely to ever be a real thing. It was really cool. They invited Vera and I to the lab where they made it. We were the first ones in their labs, hardware, prototype room externally and got to see how they moved all the tech into basically what is It started as like it filled a room five years ago, and now it's basically a DVD player, and everything is streamed through Google Cloud. So they built this proprietary volumetric 3D AI model.

that makes you look like a hologram, basically, through a 2D. Very fancy. I tried to get the Mili to really explain the panel. It's a highly customized panel that's doing a bunch of fancy... pixel work um but i couldn't get a lot of detail out of it but it's a reference design now that hp will actually start deploying into offices later this year so they've got salesforce deloitte some other companies that have committed to installs and i asked i was like

is this expensive because companies will not buy this if it's not just as cheap as their existing video conferencing software? And they're like, nope, that's why we did the AI work. It's on the cloud and it costs about the same as the video conferencing setups you see in offices today. So I think there's a real chance we start seeing Beam and people who work in offices start seeing Beam over the next couple of years.

And it is wild. Like, go watch the video. It's on our YouTube. Viren got to try it for the first time. I had done it a couple times because we had it at Code, and then it was at IO a few years ago, and it was Starline.

and Viren tried it and it's just this like holy shit moment every time someone tries it for the first time I mean Neela you remember I do and yeah it's cool it's like one of these classic Google things like it reminds me of Waymo they just toil away as like with the resources that only a company like google can to invent this wild new thing and then five to ten years and they're like it's ready and it's like now the cars are driving themselves now we have holograms that we're like

putting into deloitte offices like it's just happening so that was pretty cool yeah my understanding of the screen by the way is the reason they're not talking about it in detail is It is more standard lenticular display than not. I think there is a lot of custom stuff going on there, but usually when you have the big tech innovation, you talk about it a lot. And the reason they're like, it's a secret.

It's kind of a 3D display. And all the actual happening is in the camera. But eventually these are going to be out there. Everybody can go look at them and figure it out. But it is very exciting to see that out. On the glasses... The display is not solved. Meta Orion, like they spent billions of dollars on the wrong technology and it didn't scale to make those displays, right? Turns out growing crystals doesn't work at scale. Yeah.

We're just crystal farmers out here, guys. I don't know. I mean, I don't know who's going to build this place. I don't know where they're going to come from, but no one's cracked it yet. It's just one of these things. What is the core technology that's going to enable this next generation of products? You need the displays to make the smart classes. Or you don't. Or you're Johnny Ive and you make a fancy aluminum Pokedex.

uh all right that's we are way over i'm i'm i'm so sorry to everyone for for the rambles today what did we expect like this week after an hour We got a lot on the site. Tons and tons of coverage. V is going to be back next week to talk more about the Glasses demo. She just published a story trying to guess what Johnny is doing. So way more coverage on the BirdCast from her. Coming up, Sundar on Monday. Get ready.

It's not as tense as it was last year, but there are some moments. I think you're going to like it. All right. That's it. That's for sure. and that's it for the verge cast this week and hey we'd love to hear from you give us a call at And that's it. We'll see you then.