Limitless: An AI Podcast

Time to dive into the impact of Google's TurboQuant algorithm on memory stocks, enhancing AI performance while shaking market valuations. We analyze OpenAI's challenges with Sora and its strategic pivot towards AGI Deployment. 

We also discuss a potential $2 trillion SpaceX IPO and Apple’s restrictive App Store updates affecting AI innovation. Finally, we touch on Meta’s ambitious market cap target amidst layoffs and Josh’s surprising new role as an AI music producer.

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TIMESTAMPS

0:00 AI Market Shock
1:14 Google's TurboQuant Breakthrough
4:40 Memory Market Reactions
6:35 OpenAI's Sora Shutdown
13:49 OpenAI's Focus Shift
14:58 SpaceX IPO Rumors
17:52 Apple vs AI Vibe Coding
24:59 Google and Apple's Strategic Moves
27:13 Meta's Ambitious Goals
28:19 Unveiling Josh's Music Secret
34:17 Future of AI Music

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RESOURCES

Josh: https://x.com/JoshKale

Ejaaz: https://x.com/cryptopunk7213

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Not financial or tax advice. See our investment disclosures here:
https://www.bankless.com/disclosures⁠

Creators and Guests

Host
Ejaaz Ahamadeen
Host
Josh Kale

What is Limitless: An AI Podcast?

Exploring the frontiers of Technology and AI

Ejaaz:
Google might have just popped the AI bubble. They released a new algorithm yesterday,

Ejaaz:
which shrinks the requirement of memory needed to run an AI model,

Ejaaz:
which isn't great news for the top memory stocks, which had billions of dollars

Ejaaz:
of their market cap wiped out over the last 24 hours.

Ejaaz:
We're looking at SanDisk is down almost 7% today.

Ejaaz:
Micron is down 18% over the past five days, the majority of that yesterday.

Ejaaz:
And SK Hynix, another major memory provider is down 6% today.

Ejaaz:
It's absolutely decimated the market. We're going to get into this story and

Ejaaz:
so much more on this episode.

Josh:
Yeah. And some important context to know before we get into this is the reason

Josh:
why these memory stocks are so high is because memory has been the single largest

Josh:
constraint in the world of AI.

Josh:
If you have ever tried to build a PC or buy a PC in the last 12 to 18 months,

Josh:
chances are it's almost doubly as expensive as it was the previous 18 months. That's because AI.

Josh:
It's what happened when crypto stole all the GPUs. AI is taking all of the memory

Josh:
and memory is the limiting factor memory is what serves inference whenever you

Josh:
ask chat gpt or anthropica question,

Josh:
When it serves you the answer, that uses inference, that uses memory.

Josh:
So memory has been the single crux. It's the reason why companies haven't been

Josh:
able to scale as fast as they want, because the costs have been out of control.

Josh:
This algorithm changes things a little bit. This changes the math here just

Josh:
a smidge, but enough to make it scare the market entirely, right?

Ejaaz:
Yeah, it changes it in a huge way. And the wildest part is the Google research

Ejaaz:
team made this public and available for everyone to read the blueprint of.

Ejaaz:
So it's called TurboQuant, and they're describing it as a new compression algorithm

Ejaaz:
that reduces LLM key value cache memory by six times and delivers up to 8x speedup.

Ejaaz:
So let me translate what that means.

Ejaaz:
When you type or speak to an AI model, it has a short-term memory.

Ejaaz:
Think about like humans, they kind of hold things in their head for a bit,

Ejaaz:
and then they go to bed, and then they commit some of those memories for long-term

Ejaaz:
memory, and some of those they kind of discard. But LLMs work in a similar way,

Ejaaz:
and it's called the cache memory.

Ejaaz:
Now, the issue with LLMs are that cache memory, as you talk to an AI more and

Ejaaz:
more, gets really quite big and bloated, which means that AIs are very expensive to run.

Ejaaz:
That's why we spend so much money on GPUs. That's why these data centers cost

Ejaaz:
billions of dollars to build out.

Ejaaz:
It is part of the reason when you inference a model.

Ejaaz:
Now, what Google did was they released an algorithm which said,

Ejaaz:
hey, yeah, you know that thing that bloated up your AI model?

Ejaaz:
We can cut that down pretty massively by six times, actually,

Ejaaz:
and save you a ton of money.

Ejaaz:
So the world is going crazy with this new research, because if you could scale

Ejaaz:
this up to Claude or ChatGPT, you may not need as many GPUs as we originally

Ejaaz:
thought to serve Frontier AI models to anyone.

Josh:
Yeah, it's a really big deal. Like you mentioned, every time you message a chatbot,

Josh:
the model stores your entire conversation in that KV cache.

Josh:
And on a large model, like the 70 billion parameter model, if you run a long

Josh:
conversation, that cache will eat up to like 40 gigabytes of space on your GPU,

Josh:
which is more than the actual model itself.

Josh:
So that's why this is such a huge issue. And the big breakthrough here is that

Josh:
Google can do so without any loss functions.

Josh:
If anyone's a Silicon Valley fan, the TV show, the crown jewel of the entire

Josh:
show was this middle out compression algorithm that didn't have any loss function.

Josh:
You can just compress the data without losing any of the quality.

Josh:
And Google's announcing that they've actually done this.

Josh:
They've actually solved this problem. And that's why the memory market is freaking out.

Josh:
It's like, oh my God, wait, if we can get six times the compression,

Josh:
eight times faster on the same GPUs, surely there will be less demand for memory.

Ejaaz:
Well, despite these stocks being down massively, I think the market is kind of overreacting.

Ejaaz:
This is a good thing for AI in general, and it will lead to more consumption of AI.

Ejaaz:
It's great that the AI models become cheaper to inference and that it frees

Ejaaz:
up space for us to compute other AI prompts and queries.

Ejaaz:
Jevon's paradox is going to occur here in the same way that people were kind

Ejaaz:
of crapping on GPUs and saying these things are too expensive and aren't going to get cheaper.

Ejaaz:
The same thing is going to happen with memory here. It's not going to result in less demand.

Ejaaz:
It's going to result in even more demand. The demand for AI products right now

Ejaaz:
is insatiable, and I don't think this changes anytime soon.

Ejaaz:
The other part is, I think that what Google has created here

Ejaaz:
is something that's going to take time to scale out. This is not going to happen tomorrow.

Ejaaz:
This is a research paper, which you and I were actually joking about before

Ejaaz:
we started recording, was released 11 months ago.

Ejaaz:
But because the paper was so complex and had so many algorithms and mathematical

Ejaaz:
formulas, it didn't actually surface to the public until yesterday.

Ejaaz:
And everyone was like, wow. So it takes time.

Ejaaz:
Since those 11 months, we haven't scaled it out to major models just yet.

Ejaaz:
This only applies to small to medium models.

Ejaaz:
But I can imagine the scaling to frontier models at some point,

Ejaaz:
which will be a win-win for both sides.

Josh:
I mean yeah there's there's no reason why you wouldn't be focused solely

Josh:
on this right it's like if you can serve six times the inference on the

Josh:
same amount of gpus or tpus or whatever gpu accelerator you're

Josh:
using that's a huge breakthrough for any company and it also

Josh:
extends past the cloud it moves to local inference as

Josh:
well it's like if you're running a mac mini or you're even

Josh:
on your iphone the amount of intelligence you

Josh:
can run on a model that is six times more efficient

Josh:
eight times faster and has zero

Josh:
loss function is a really big deal and i think google

Josh:
may be moving towards this what i see this trend happening with

Josh:
google is i mean they have the tpu they're building their own stack

Josh:
they have the partnership with apple to get into all of the iphones they have

Josh:
their like kind of android division they're they're publishing their research

Josh:
publicly to disrupt the market as they go it's a really noteworthy strategy

Josh:
from google and it seems like as always they're leading on the thought leader

Josh:
front right they've always been the top tier of research we'll see how they

Josh:
can implement this into actual products

Josh:
But it seems like the market's wrong. I can't imagine a world in which there

Josh:
is less memory demand as a result of this.

Josh:
Like, as you said, there will only be more. If we get six times more intelligence,

Josh:
we will gobble that up so quickly. So market seems like it's wrong.

Josh:
Maybe it's just an excuse to dump because the stocks have gone up so much over the last 12 months.

Josh:
But I wouldn't be too worried about this if you are a owner of any sort of memory.

Ejaaz:
It's actually very bullish Google stock, in my opinion. I actually bought a

Ejaaz:
bunch more when this came out because I was like, oh, this is going to result

Ejaaz:
in massive efficiencies for AI.

Ejaaz:
Another thing is like, lest we forget, Google has been like the pioneer of a

Ejaaz:
lot of these different AI trends.

Ejaaz:
Like one of the earliest LLM formations was from a bunch of Google or ex-Google researchers.

Ejaaz:
TPUs they've been working on for over a decade now. So they saw the GPU trend

Ejaaz:
like way, way, way in advance. And now they're doing the same here.

Ejaaz:
My question to you is, why do you think they publicize this for everyone to see?

Ejaaz:
Surely this, like i saw a few comments about this as well like surely they should

Ejaaz:
have patented this because this is a pretty sick algorithm that now like any company can use

Josh:
Yeah i don't think the patenting thing really works anywhere

Josh:
at all because a lot of this stuff is just a couple lines of

Josh:
code it's like andre wrote auto research and it's

Josh:
600 lines of code it's like someone will take it

Josh:
someone will use it the the race is far too powerful

Josh:
far too there's far too much of a monetary incentive to

Josh:
do this and you could think of it almost like google's deep

Josh:
seek moment where deep seek created this unbelievable

Josh:
research dropped the bomb they got all the publicity but

Josh:
then the rest of the market kind of rushed to tackle that this is google dropping

Josh:
their their deep seek moments and i think it's it's noteworthy it's really impressive

Josh:
for google google has been kind of at the forefront of all this stuff and they're

Josh:
proving that their research team really are super impressive and have the ability

Josh:
to continue to lead the frontier forward.

Ejaaz:
So speaking of companies that are at the frontier, one of those companies are

Ejaaz:
falling behind this week, Josh.

Josh:
We got to do a little victory lap, slam dunk. I'm not really sure how to frame this.

Ejaaz:
But this is about Sora. Yeah, let's start with the victory lap, I guess.

Ejaaz:
So Sora, for those of you who don't know, is one of OpenAI's winning consumer apps.

Ejaaz:
It is their AI video generation app that functions very similarly to TikTok.

Ejaaz:
You kind of scroll through Reels, but all the videos are air-generated.

Ejaaz:
But the coolest part is you can feature yourself in them.

Ejaaz:
You can feature your friends or any kind of IP or characters.

Ejaaz:
This week, they announced that they were sunsetting the entire project.

Ejaaz:
Sora, which six months ago wasn't a thing, is now dead.

Ejaaz:
Some fun stats from Sora's very short but mighty reign.

Ejaaz:
Within the first day, they achieved over 5 million downloads, which is just insane.

Ejaaz:
I don't think any other app has done that before. they also hit

Ejaaz:
number one and stayed at number one of the apple app store and i

Ejaaz:
think the android play app store as well for a number of different

Ejaaz:
weeks but it wasn't without any kind of

Ejaaz:
grimace the public was split hollywood is basically uh how do i say um dancing

Ejaaz:
on their graves uh open ai is shutting down its ai video slot making platform

Ejaaz:
sora and if you look at the comments from different people it's just like did

Ejaaz:
we just win uh people are like saying like this is such a big W.

Ejaaz:
So people are generally happy outside of their AI sphere. But I don't know,

Ejaaz:
Josh, how do you feel about this? Are you happy?

Josh:
Yeah, well, this was just a failed experiment in the way that Meta did.

Josh:
I forget. I don't even remember Meta's. What was it?

Ejaaz:
Vibes?

Josh:
Vibes perhaps vibes where they tried to do the same thing it

Josh:
was tiktok but for ai and open ai tried tiktok but

Josh:
for ai again but through the sora platform and i

Josh:
am i mean we said this was stupid i haven't opened the

Josh:
app since the week of i think there's there's a

Josh:
harsh reality that open ai is learning that they perhaps don't understand

Josh:
just due to the nature of them being a new company sam really

Josh:
this is his first large company that he's run but i mean

Josh:
it seems like a very predictable outcome when you just look

Josh:
at what standard consumer behavior is and you kind of compare to other platforms

Josh:
because when you think about a platform like

Josh:
meta right it has two billion users or something like that and particularly

Josh:
on instagram how many people of those 10 billion actually want to create content

Josh:
maybe 10 million maybe 0.5 percent of the people would actually be serious creators

Josh:
and the reality is is that almost every single human just wants to scroll and

Josh:
zone out instead of spending energy like conceptualizing and editing these complicated things,

Josh:
The novelty factor of it was very fun, but people don't want this and it's not that good.

Josh:
And I think that novelty wears off. It's like we created those videos that show

Josh:
us and you in them, and it was really cool for like two hours,

Josh:
but creating a dedicated application where you have to go and download it and

Josh:
you have to use it outside of the ChatGPT OpenAI universe is very annoying.

Josh:
Had they rolled this up into the same app that everyone's using every day with

Josh:
ChatGPT, maybe that's a different story, but it's, I don't know,

Josh:
it's tough to kind of reason why they would have gone through with this in the

Josh:
first place the way they did.

Ejaaz:
Let me try and argue the other side. I think what Sora did really well was they

Ejaaz:
made it really easy if you were super lazy, but you kind of had an idea for

Ejaaz:
a piece of content to make that content.

Ejaaz:
Just write it in words, takes a couple seconds, maybe max a minute.

Ejaaz:
And then a couple of minutes later, you have a fully fledged video.

Ejaaz:
Now, obviously, Sora v1 wasn't that great.

Ejaaz:
Sora v2 started to improve and become much better. Sora v3 was way better,

Ejaaz:
but there was still some AI cringiness around this. I do think this improves

Ejaaz:
with a bunch of now other AI models that still exist to do this.

Ejaaz:
CapCut actually yesterday released their own version just as Sora was sunsetted

Ejaaz:
that uses Seed Dance 2, which is a Chinese AI model.

Ejaaz:
And my God, the content that creators can now create just through words looks insane there.

Ejaaz:
And then you have Grok Imagine on the ex-AI side under Elon Musk,

Ejaaz:
and they're piling so many millions and millions of dollars to try and improve that model.

Ejaaz:
So there is something there. I just think that a lot of this reason behind OpenAI doing this is

Ejaaz:
One, they're constrained on cash. They've spent a lot of money on GPUs,

Ejaaz:
Stargate. They had to sunset that.

Ejaaz:
And now they're figuring out that they need to focus all their cash and resources

Ejaaz:
on building the best LLM to beat Anthropic and the best coding AI to beat Anthropic,

Ejaaz:
who is, quite frankly, eating their lunch right now.

Ejaaz:
But there is another bit of news, which I didn't realize immediately.

Ejaaz:
But then I noticed Disney.

Ejaaz:
OpenAI had signed a $1 billion deal with Disney through Sora.

Ejaaz:
And the idea here was Disney would invest $1 billion in OpenAI,

Ejaaz:
and OpenAI would also get access to Disney's IP and characters and make them

Ejaaz:
super famous on Sora via the AI-generated type of video medium.

Ejaaz:
It sounds like Disney didn't even know.

Ejaaz:
I've seen multiple tweets like this, where on Friday, they were signing a deal

Ejaaz:
with OpenAI, and then on Wednesday of this week, when they decided to announce

Ejaaz:
the news that they were shutting down Sora, the Disney team had no idea.

Josh:
It's tough. I think this is a good lesson. there is this quote from Johnny Ive

Josh:
that I love that I think would be nice for Sam Altman to hear when he was asked

Josh:
about what Steve Jobs taught him about focus.

Josh:
And he says, this sounds really simplistic, but it shocks me how few people

Josh:
actually practice this.

Josh:
One of the things that Steve would say to me was because he was worried that

Josh:
I wouldn't focus. He would say, how many things have you said no to?

Josh:
And I would tell him, I said no to this and I said no to that.

Josh:
And he would create these sacrificial things that he was saying no to.

Josh:
But focus means saying no to something with every bone in your body you think is a phenomenal idea.

Josh:
And you wake up thinking about it, But because you are focusing on something

Josh:
else, you can't work on that one thing.

Josh:
And OpenAI does not have that focus.

Josh:
OpenAI is creating these sacrificial things. They are not deeply focused on

Josh:
one thing. And that's why there's

Josh:
four different apps you have to download to use all of their tools.

Josh:
There's just all of these spread attempts at creating virality,

Josh:
at manufacturing virality through TikTokification of it, through this like image

Josh:
generation of the Studio Ghibli stuff.

Josh:
None of it is just building their core thing. And I think when you look at Anthropica,

Josh:
when you look at OpenAI, and the difference between the two is that one has

Josh:
focus and one does not. When you look at OpenAI...

Josh:
You see five different product SKUs. They're all kind of all over the place

Josh:
with different intentions.

Josh:
When you look at Anthropic, they're the best coding model in the world. And that's it.

Josh:
Everyone can converge on that one point. And therefore their velocity is so

Josh:
fast. That's why we just filmed an episode yesterday.

Josh:
Everyone should go watch about the eight updates they published in eight weeks

Josh:
that basically entirely replaced OpenClaw.

Josh:
They have the focus. And I'm hoping that OpenAI can now kind of shift this focus

Josh:
into this singular place and start to move towards this new organization that

Josh:
they are calling AGI Deployment.

Josh:
This is crazy. They're preparing for AGI already.

Ejaaz:
Yeah, so the team is basically getting reshuffled under a product organization

Ejaaz:
within OpenAI called AGI Deployment.

Ejaaz:
And this kind of harkens to a wider strategy that OpenAI has assumed for the

Ejaaz:
last couple of months now, which is to build the best LLM, build the best coding

Ejaaz:
AI model, and also the best world model, which is actually where the Sora team

Ejaaz:
researchers are moving to.

Ejaaz:
They're going to focus on building a world model, which basically helps AI models

Ejaaz:
see the world and understand the physics of the world. the advantage of this

Ejaaz:
is you get to better understand how humans perceive and interact with the world,

Ejaaz:
which is something that LLMs can't do.

Ejaaz:
Think of LLMs as an AI model that sits in the library and reads all the books,

Ejaaz:
but doesn't actually experience the world for himself.

Ejaaz:
World models actually help you understand the world. That's what the Sora team

Ejaaz:
is going to focus on right now. And that's super exciting for one major reason, which is robotics.

Ejaaz:
Robotics is going to be a huge thing.

Ejaaz:
OpenAI teased robotics in one of their major announcements a couple of weeks

Ejaaz:
ago. So we know that they're going to focus heavily on that.

Ejaaz:
And I do think that's a smart move.

Ejaaz:
I'm bullish OpenAI after all of this. But just to recount, this isn't the only

Ejaaz:
major pivot they've made over the last week.

Ejaaz:
Over the last couple of weeks, they've done quite a few things.

Ejaaz:
So they've sunsetted Sora.

Ejaaz:
They've announced that their Stargate project, which was like their major project

Ejaaz:
to scale GPUs across the globe, is now canceled one year later due to funding issues.

Ejaaz:
And Altman said that like, you know,

Ejaaz:
I'm never going to release ads on the platform. He ended up doing that.

Ejaaz:
In-app shopping completely failed and flopped. And now they've got to redesign

Ejaaz:
that entire thing but it's been put on pause for now until they focus on all

Ejaaz:
this other stuff all of this to say

Ejaaz:
I think OpenAI is going to IPO soon, Josh. And I don't know what you think the

Ejaaz:
odds are for this, but we should probably like bet on that.

Josh:
Well, if only we had a marketplace for it. And thanks to our friends at Polymarket, when will OpenAI IPO by?

Josh:
And the answer is kind of surprising where there's only a 36% chance that they'll even IPO this year.

Josh:
And I think earlier in the year, this would have been a little bit different,

Josh:
but it appears as if there's been some trouble in paradise for Anthropic.

Josh:
Maybe that is moving over to OpenAI.

Josh:
The reality that we're starting to see now is SpaceX might be the big one, and that might be it.

Josh:
Um which is a little disappointing because i was hoping this would be

Josh:
the year of all of the ipos but according to polymarket 36 chance

Josh:
and if you think it's happening this june there's four percent chance so that's

Josh:
absolutely not happening spacex is going to be the one that will be taking that

Josh:
crown uh polymarket thank you very much for sponsoring this part of the episode

Josh:
and maybe we should just go right

Josh:
into spacex and their ipo which now is rumored to be filing next week,

Josh:
confidentially this will not be public but they will do their confidential s1

Josh:
filing later this week, early next week, which would point them to a public listing,

Josh:
around the first couple of weeks of June. This is a really big deal for the

Josh:
world because, I mean, this is likely to be now over a $2 trillion IPO.

Josh:
That's the biggest IPO by far. This is going to be the largest thing to enter the market.

Josh:
It's going to be larger than the GDP of some countries, and it will just go

Josh:
live on the New York Stock Exchange or the NASDAQ sometime in a few months from

Josh:
now. We're getting close.

Ejaaz:
What a sequence of events to get us to this point. we had the rumors of SpaceX

Ejaaz:
and XAI emerging and then it happened.

Ejaaz:
Now we have rumors of SpaceX and Tesla merging. But first, I think we're going to get the SpaceX IPO.

Ejaaz:
Rumors also say that they're going to be raising $75 billion in this listing,

Ejaaz:
which is just absolutely insane and probably the largest raise that's ever been

Ejaaz:
done on an American public stock market.

Ejaaz:
The other thing is this comes off the back of Elon announcing some pretty ambitious

Ejaaz:
projects for SpaceX itself.

Ejaaz:
They're going to be launching a TerraFab. We made an episode about this.

Ejaaz:
Definitely go check that out, which is a gigantic AI chip factory.

Ejaaz:
They're going to be launching 80% of those chips into space via SpaceX.

Ejaaz:
So it's going to become this whole monopoly of like AI in space,

Ejaaz:
which I can't wait to see. Mass drivers on the moon.

Ejaaz:
Definitely go check out that episode earlier this week. But yeah,

Ejaaz:
it's going to be one of the biggest IPOs, Josh. Are you buying it? Absolutely.

Josh:
I cannot miss it. I currently own SpaceX. It's the only private company I own. I'm ready to buy more.

Josh:
I think it's going to be the most valuable company in the world. rolled in with tesla and

Josh:
i could not be more bullish more optimistic more excited for the future with

Josh:
these companies if elon's predictions are right we'll be seeing nvidia at 10

Josh:
trillion and spacex and tesla will be right there with them um the companies

Josh:
are going to grow quick i think the spacex ipo is very much the starting gun

Josh:
now there is another gun that's been fired and it's been a not not a good one

Josh:
from apple not a good because they have been,

Josh:
banging out all the applications of everyone who

Josh:
wants to get in the app store now there's been a recent issue with the app store

Josh:
is now the fact that anybody can make apps means that a lot more people are

Josh:
submitting apps so for the larger companies and the smaller companies like if

Josh:
you have an app in the app store it's taken a lot longer to get your app approved

Josh:
whether it be for just a normal update or to release an actual app and now it

Josh:
appears that apple has stopped,

Josh:
allowing updates for popular Vibe-coded applications?

Ejaaz:
Yeah, they've basically put a

Ejaaz:
not official, but unofficial halt on anyone launching AI Vibe-coded apps.

Ejaaz:
And I'm confused about this for a few different reasons.

Ejaaz:
Number one, if you look at a chart of app launches on the App Store over the

Ejaaz:
last year, before Vibe-coding became a thing, it had completely plateaued.

Ejaaz:
No one was making apps anymore. And that was becoming an issue for the Apple

Ejaaz:
app developer ecosystem. They're

Ejaaz:
actually kind of trying to encourage developers to build more things.

Ejaaz:
Then AI vibe coding came along and suddenly they had a flourish of different

Ejaaz:
vibe coded apps. Now granted, 90% of them were crap,

Ejaaz:
10% of them were pretty good. We got the replets of the world,

Ejaaz:
which helped other people kind of build apps just by typing words or talking to an AI on your phone.

Ejaaz:
And replet as a company is worth, I think, $9 billion. As of last week,

Ejaaz:
they did another massive raise.

Ejaaz:
So we aren't talking about small fish here. These are pretty big fish.

Ejaaz:
Apple just cut them at the head this week or last week over the last seven days

Ejaaz:
by saying that they are not going to encourage AI vibe coding anymore.

Ejaaz:
And it just signals that monopolies like Apple, which have a chokehold on the

Ejaaz:
app ecosystem like this, that take a massive 30% cut off of fees.

Ejaaz:
We saw this happen in the crypto world as well, where people wanted to allow

Ejaaz:
transactions. Apple said, we'll allow it for a bit and then we don't want this.

Ejaaz:
They're now doing it with Vibe coding. I don't get the issue for them unless

Ejaaz:
there's like major security exploits. I just don't think this is a good move in general.

Josh:
This topic actually makes me pretty sad as an Apple fanboy, not because of what

Josh:
they're doing to the developers, which is messed up.

Josh:
And i don't like but the idea that apple is going

Josh:
to exist as the king as it stands now

Josh:
is just an impossibility in this new world when you

Josh:
think about how easy it is to generate one of these apps and how easy it is

Josh:
just to sideload them onto your phone like anyone with a

Josh:
test flight account can vibe code an app of whatever you've ever wanted an iphone

Josh:
app to look like you can send it direct to your iphone you can't put on the

Josh:
app store but you can send it directly to your iphone and you could have your

Josh:
own version of your dream app and it can do whatever functionality you want

Josh:
and you're one prompt away from updating it and editing it and changing it to do whatever you want.

Josh:
And the fact that it's so accessible now, and Apple is...

Josh:
Clearly not leaning into adopting this new paradigm shift, there's this clash

Josh:
that's happening. And we're seeing it here with this vibe coded apps.

Josh:
They're not the good guy anymore.

Josh:
They're not the person who is helping developers do what they want,

Josh:
empowering them for this new paradigm of engineering.

Josh:
They are the bottleneck. They are the like hammer who is stopping people from innovating.

Josh:
And that to me makes me really sad. And that has always throughout history been

Josh:
a losing formula. So I hope they turn it around.

Josh:
We just got a WWDC announcement, which is happening in the next month,

Josh:
I think. I forgot the dates.

Josh:
But that's going to be their time where they're going to showcase all of the new AI stuff.

Josh:
That's when they initially announced Apple Intelligence. It was the biggest

Josh:
flop of all time. They're going to try to do it again.

Josh:
Hopefully, they'll come out with some new policies to address this.

Josh:
And hopefully, they'll have a chance to turn the ship around.

Josh:
But that is their last chance.

Ejaaz:
So something tells me, Josh, correct me if you think I'm wrong,

Ejaaz:
that this may not be an outlandish move by Apple.

Ejaaz:
It might be a strategic one because we also got some other news that broke this

Ejaaz:
week, that their deal with Google,

Ejaaz:
the deal with Google, where they pay Google $1 billion and get access to Google's

Ejaaz:
Gemini AI models, what we originally thought was going to be some kind of licensing, right,

Ejaaz:
actually is Apple getting full access to Google's Gemini model weights,

Ejaaz:
which means that they can fine tune and build the model in any way that they

Ejaaz:
want, they get full access to a model that Google spent hundreds of millions

Ejaaz:
of dollars training years training just for a billion dollars a year.

Ejaaz:
I don't know what's going on here. And it just means that Apple's got an absolute

Ejaaz:
steal of a model, a Frontier LLM from Google, and they can now run with it and

Ejaaz:
build their own AI apps, which is presumably what I think they're going to do.

Josh:
This is a huge win for Apple. And we have to ask the question,

Josh:
why is Google doing this? And I

Josh:
I think it kind of pairs to that first topic that we spoke about,

Josh:
which was that research paper where they're kind of democratizing intelligence

Josh:
as best they can with TurboQuant, right?

Josh:
It's like they're increasing the efficiency, they have their own custom TPUs

Josh:
to make the price per token down.

Josh:
And when we consider what the most existential threat in the world of AI is,

Josh:
it's that edge inference and local inference gets really good so that you don't

Josh:
need to generate tokens from these megacloud providers.

Josh:
And I think the reality is that it's becoming more and more true because we

Josh:
have now these turbo quant models that are going to be six times more efficient.

Josh:
We have Apple who is taking Gemini models which are leading edge and distilling

Josh:
them down into something that runs on your iPhone and the majority of the people

Josh:
don't need world-class intelligence.

Josh:
They don't need the bleeding edge stuff that is solving new physics and math.

Josh:
They just want it to solve the day-to-day stuff and this

Josh:
is possibly a hedge against that for Google is they're

Josh:
creating the problem by throwing out papers like turbo quant

Josh:
but then they also have access to the solution which is apple i

Josh:
mean when we think about where the most local inference is held it's just

Josh:
on the entire apple network on your laptops on your iphones you can run these

Josh:
unbelievable models and now apple has the ability to do that with gemini and

Josh:
i think it's strategic it makes sense they're collecting a paycheck they have

Josh:
a great relationship with apple they've been doing it with the browser forever

Josh:
and this is just a natural extension of that apple.

Ejaaz:
Has all the distribution.

Ejaaz:
They have 2.5 to 3 billion live Apple devices active in the world right now.

Josh:
The Mag 7 stocks too. When you look at the Mag 7 stocks who've been like suffering

Josh:
the most, Apple suffered the least.

Josh:
It's just out of the race. It's right there unaffected by all of it.

Ejaaz:
Yeah, they stayed number two market cap in the entire world for a company without

Ejaaz:
touching a single GPU expenditure, without a single AI CapEx expenditure.

Ejaaz:
Just insane strategy from them.

Ejaaz:
They hold a very rich and important moat. But looking at Google as well,

Ejaaz:
they're smart because they know that Apple won't win any of this AI stuff unless

Ejaaz:
they get access to a major frontier LLM.

Ejaaz:
Google's bet here is compute plus data equals the best model in the world.

Ejaaz:
Apple does not have the compute. They do not have the model.

Ejaaz:
Google can supply that for them. And something tells me that whereas Google

Ejaaz:
might not be getting paid as much by Apple, they're going to exchange or broker

Ejaaz:
a deal where they you get access to some of Apple's user data,

Ejaaz:
which they can then use to train a better model, and it becomes this synonymous thing.

Ejaaz:
But now, if the future is actually locally run edge compute models that run

Ejaaz:
on your laptop that are frontier, then Google's shot themselves in the foot,

Ejaaz:
maybe shot themselves in both feet at this point. But it's a bet they're making.

Ejaaz:
And I think, I don't know, I think Google might have this one, if I'm being honest.

Josh:
Yeah, I'm rooting for them. I'm also rooting for Meta now, who has this like

Josh:
unbelievable pay package that I just saw.

Josh:
$9 trillion is the valuation they need to exercise all these pay packages.

Josh:
Like, okay, Elon, okay, Tesla board. I've seen this before.

Josh:
What's the deal with this milestone package here?

Josh:
Because a $9 trillion valuation for Meta, that seems like a lot of money.

Ejaaz:
Okay. So two things have happened over the last week, which are at extreme odds at each other in Meta.

Ejaaz:
Number one, they are closing down their metaverse division and rumored to be

Ejaaz:
laying off up to 20% of the company. Now, these employees range from low-level

Ejaaz:
product employees, engineering employees, all the way up to senior director roles.

Ejaaz:
But this week, news also broke that they are going to be rewarding or they've

Ejaaz:
offered very attractive comp packages to their top executives to the tune of

Ejaaz:
$800 million for one person, their CFO.

Ejaaz:
But it's under one premise and condition, which is over the next five years,

Ejaaz:
Meta needs to hit a $9 trillion.

Ejaaz:
That's with a T, dollar market cap. Just for context, no company in the history

Ejaaz:
of the world has ever hit that market cap.

Ejaaz:
In fact, the biggest and largest and most important company in the world right

Ejaaz:
now, NVIDIA, is currently sitting at $4.5 trillion.

Ejaaz:
So we're talking about a 2x for that. And for Meta, who is currently sitting

Ejaaz:
in, I don't know where, are they still in the Mag 7 at this point?

Ejaaz:
If so, I think they're like six or seven. They've got a long way to go,

Ejaaz:
but it's interesting seeing the incentive design that Zuck is setting up. He spent

Ejaaz:
I think upwards of $30 billion hiring 200 people this year and hasn't released a single AI model.

Ejaaz:
Llama, their open source model is dead in the water. All the apps that they've

Ejaaz:
released have been crap.

Ejaaz:
So Meta is kind of making a big bet here. And I don't know if they're incentivizing

Ejaaz:
the right people, if I'm being honest.

Josh:
I'm rooting for them. I hope it works. I mean, in five years,

Josh:
there will be a $9 trillion company, possibly multiple of them.

Josh:
So there is a world in which Meta can achieve this. The problem is that they

Josh:
haven't actually done anything to make progress towards that recently.

Josh:
Like they've spent all this money, they've hired all this talent,

Josh:
they haven't released anything compelling.

Josh:
They haven't actually proven that the money that they're spending is working.

Josh:
In fact, the counter argument to that is true, where Meta, the company,

Josh:
just crushed the division that was responsible for renaming the company Meta.

Josh:
So clearly there has been a series of big swings that haven't worked,

Josh:
and we've yet to actually see a big swing that has worked, everything's failed.

Josh:
Like you said, the open source models have failed. The pivot to the metaverse has failed.

Josh:
Everything besides the core product of Facebook, which is their,

Josh:
algorithm and their home feed and their social media platforms hasn't worked

Josh:
out. Even the hardware sucks.

Josh:
So they have a lot to figure out if they want to make this work.

Josh:
But I'm rooting for them.

Josh:
Zuck's an amazing CEO. I am like very hopeful that he can figure this out.

Josh:
And this incentive structure is the right way to do it. You want to incentivize

Josh:
people to bring the value. I hope they can bring the value.

Ejaaz:
Now, for the last story of this episode, I want to introduce the listeners and

Ejaaz:
watchers of this show to a secret, a secret within Limitless that none of you

Ejaaz:
have ever known or has been publicized before.

Ejaaz:
And this secret is about our co-host, Josh. Josh is a part-time music producer,

Ejaaz:
and he releases absolutely banging tunes for the world to hear.

Josh:
Yes. And this part-time skill actually originated about two weeks ago with the

Josh:
advent of Google Lear A3.

Josh:
And the fact that now I can make music with a single prompt,

Josh:
maybe a sentence or two. So that's what I did today.

Josh:
I said, generate me a three minute song about the Limitless podcast and how

Josh:
it's the absolute best number one podcast in the world. There's nobody better.

Josh:
The AI is scared of our show because it's so good. This just sounded like an

Josh:
R&B hip hop type vibe. And we've spoken about Lyria 3 before of the show.

Josh:
Lyria 3 is the music generation software from Google where you can prompt it,

Josh:
you say what you want the song to be about, you say if you want lyrics or not,

Josh:
what type of lyrics you want to sound, or you just let it run wild and choose everything for you.

Josh:
So that was all the instruction i gave and it generated me

Josh:
a song named no logic for the soul

Josh:
which is very elegant i love i love the artwork it has like this cloud and these

Josh:
roots and it's it's very good but the song is good so i want to play you a little

Josh:
clip here of this song i'm not sure if you've had a chance to really enjoy the

Josh:
full thing neither of us have so we're going to experience it for the first

Josh:
time together but this is our new original no logic for the soul enjoy okay.

Ejaaz:
That has to be a new outro song,

Josh:
Josh. That is a banger. It's unbelievable how good this music is. So good.

Josh:
The lyrics, not only do they make sense, but they rhyme. They have the right timing and cadence.

Josh:
The chorus is great. They had a full horn section in there.

Josh:
I mean, it's amazing, right? Because you think about the previous generation

Josh:
and how they enjoyed music.

Josh:
We had the Rolling Stones, the Beatles, the Grateful Dead.

Josh:
These were generation-defining artists and musicians.

Josh:
And the reason they were so powerful is because there was convergence around

Josh:
them you go on the radio it's playing their music you talk

Josh:
to your friends they have their cds and their vinyl records you go

Josh:
on the street this is what's being played because this is what's available and

Josh:
it was great but it was really the best that was available and everyone could

Josh:
kind of converge on that fact the idea that you can now generate good music

Josh:
not great music but good music and good enough for people who don't really care

Josh:
to seek out great music implies the fact that we might never have anything like that again.

Josh:
There might never be another Grateful Dead, another Rolling Stones,

Josh:
another generational defining artist because it's so accessible.

Josh:
If you look at the top charts on Spotify, it's the top trending tracks on TikTok.

Josh:
And there's this direct correlation between the two. And it's stripped out a

Josh:
lot of the humanness of artistry. It creates a whole different paradigm.

Josh:
And listening to this really hits hard. I'm like, okay, yeah, it's actually over.

Josh:
The fact that I can do this with a two-sentence prompt. I did this in 30 seconds.

Ejaaz:
How long is the track, Josh, as well?

Josh:
And the track is three minutes long. It's two minutes and 57 seconds.

Ejaaz:
That's a regular song. That's a song that could go viral and like take over the Spotify charts.

Josh:
And like if we did some prompt engineering, if we really refined the prompt

Josh:
from more than two sentences to like a proper setup where there's many,

Josh:
many paragraphs, many, many details, you kind of outline the lyrics and you

Josh:
outline the cadence and what you want.

Josh:
You can get unbelievably detailed with this and it sounds good. That's a good song.

Josh:
So it's tough. I mean, this is one of those bittersweet moments where you're

Josh:
like, holy shit, this is amazing, but holy shit, this is pretty powerful stuff.

Ejaaz:
Now, I know there are a bunch of audiophiles listening to this thinking,

Ejaaz:
God, Josh and Ijaz have no taste.

Ejaaz:
May I just remind you, this is the worst this model will ever be.

Ejaaz:
It's the worst. It's only going to get better. And there's already been a bunch

Ejaaz:
of AI soundtracks that have gone completely viral.

Ejaaz:
In fact, last week, Spotify had to shut down an AI music band,

Ejaaz:
which they didn't realize was an AI music band, because they just didn't like that it was AI.

Ejaaz:
But it was absolutely plugging through a bunch of streams. I think it gathered

Ejaaz:
like 300,000 streams over the last month.

Ejaaz:
Just insane. So these things aren't going away. Another thing I wanna point out is

Ejaaz:
OpenAI just sunsetted Sora, which was the video generation of AI video generation version of TikTok.

Ejaaz:
And now we have Google Liria, which is kind of doing a similar thing for music.

Ejaaz:
So I don't think artistry and that type of medium is going away.

Ejaaz:
There is an insatiable amount of demand.

Ejaaz:
It helps music producers themselves kind of express the type of sound or song

Ejaaz:
that they have in their head. So I think as a medium of translation,

Ejaaz:
these AI tools are really valuable.

Ejaaz:
But to your point, Josh, we are going to end up in a world where maybe everything

Ejaaz:
sounds kind of beige and consistent.

Ejaaz:
But I'm going to take the optimistic side of that, which is I think it's going

Ejaaz:
to force humans and AI alike to be even more creative and come up with better

Ejaaz:
soundtracks. I'm excited.

Ejaaz:
And to your point around the Grateful Dead, you can now, I don't know,

Ejaaz:
technically license their IP and create a never-ending album of their music.

Ejaaz:
So maybe that's an angle as well.

Josh:
Deadheads are not liking this at all. Oh man, this is going to disturb a lot of people.

Ejaaz:
But it's here.

Josh:
And like you said, it's the worst it will ever be. It's up only from here.

Josh:
The quality will get better.

Josh:
Of all of these tools, as Meta goes to $9 trillion, as Google disrupts entire

Josh:
industries, it's all happening so fast.

Josh:
That is another week fully covered in the books. If you've made it this far

Josh:
in this episode and you've listened to the three previous episodes from this

Josh:
week, you are now fully caught up.

Josh:
There's nothing you need to know that you don't already know you can

Josh:
go enjoy your weekend go touch some grass go hang out with a friend with um

Josh:
do some analog stuff maybe that's kind of cool because i'm sure

Josh:
everyone's just been in the trenches on um on their

Josh:
devices watching the war zone all week but

Josh:
yeah thank you guys so much for watching as always if you enjoy this episode

Josh:
don't forget to share it with your friends who might also enjoy it uh subscribe

Josh:
to our newsletter which is awesome it comes out twice a week we publish on x

Josh:
all the time pretty prolifically now we're getting lots of action here's our

Josh:
handles that you can find on screen right now Each has any final party thoughts

Josh:
before we head off for the weekend?

Ejaaz:
Um yeah i want a few of you to generate uh both josh and i individually and

Ejaaz:
together our own songs and jingle let's see if you can come up with the best

Ejaaz:
limitless intro outro song and maybe we'll feature it on a

Josh:
Future that would actually be cool and send it to us on on x

Josh:
because you can embed it in the post and we could just save it

Josh:
from there so if you generate something tag you guys and

Josh:
i on x and we will listen to it and maybe find a new intro outro track that

Josh:
would be kind of that would be or a theme song i love a theme song we'd be like

Josh:
superheroes we could have a theme song before we get on on camera that'd be

Josh:
sick well anyways i know this was a long one so if you made it through i mean

Josh:
40 minutes of this show thank you you're a real one much appreciated as always

Josh:
have an amazing weekend and we'll see you guys soon.