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Technology's daily show (formerly the Technology Brothers Podcast). Streaming live on X and YouTube from 11 - 2 PM PST Monday - Friday. Available on X, Apple, Spotify, and YouTube.
GPT four point o four o. There's a debate over whether or not it should be sunset, whether it should be taken out back because people are not happy with how OpenAI has sunset four o and then brought it back. And then other people who don't use it think it's gotta go. It's one shotting people. It's making them crazy.
Speaker 1:I see dozens of keep four o posts a day. I respect this group's tenacity as I respect all friends co exploring the singularity. To them, know that I too miss parts of four o, know that I too dislike modern alignment's imprecision, know that we are trying to fix it. We don't think any current chatbot is optimal. Know that my colleagues and I are up at 3AM on Sundays babysitting runs.
Speaker 1:We want to make a delightful robot friend. We're we're obsessed with it. We're not there yet, but the work will continue. I wanted to dig in a little bit into what was actually going on there because it feels like a big deal. It feels like a crazy thing that they brought it back.
Speaker 1:It's not a huge community of people that are there. There's some. I was looking at the hashtag keep four o. Like, who else is posting? There's a couple posts with 10 likes, 50 likes.
Speaker 1:There's a couple with a 100. Just to give some backstory, it's been eighteen months since four o was introduced. It's been three months since it was initially removed, but then it was quickly brought back. And now it's, and now it's tucked in under that, modal, so you have to enable legacy models. I always thought that they should just remove it, but I wasn't I wasn't even saying that because I thought it was one shotting people.
Speaker 1:I just thought, hey. Let's clean it up. Like like, consumers don't need to know version numbers for models. And my example is
Speaker 2:always Google. Consumers disagree.
Speaker 1:Some consumers do disagree. The question is how many consumers. When you think about Google as a consumer, you don't care what version of the rank ranking algorithm you're on. You might have a worse experience one day. You you Google something.
Speaker 1:It you don't find it. The next day, you go, hey. They found it for you. They probably changed the algorithm. But there and there have been big updates to the algorithm.
Speaker 1:And I'm not saying OpenAI shouldn't share model numbers and version numbers with their enterprise customers or with their b to b customers or API customers. In the actual ChatGPT app, don't tell people what they're using. Just improve it, and and let them complain a little bit all over the place when you're making minor changes.
Speaker 2:If they do that, they lose the companion market. Maybe. If you're going to fall in love with the model, make sure it's open source.
Speaker 1:Not your server, not your girlfriend, right, or not your waifu not your waits, not your waifu. That's what they say. Now, Tyler, you had a take on this. You think that GBT OSS just isn't at the level of four o?
Speaker 3:I mean, it's like a fine open source model.
Speaker 1:Why?
Speaker 3:It's just not But
Speaker 1:it's been eighteen months.
Speaker 3:People don't like four o just because it's, like, super smart. It's because it has, like, the personality.
Speaker 1:It has the texture, the flavor. Yes. That's correct. And it's been a year, and so there's a there's a one year gap where the open source community should be able to cap catch up to four o's ineffable qualities. It's.
Speaker 3:My my whole take on the four o thing was like one shotting four o is like not a good thing. Mhmm. But if if you completely kill it, how many of those people will then go to open source models that are like totally unfiltered where there's no kind of oversight? Yeah. And that seems much worse because then if if if someone is saying like super dangerous stuff, then you can't step in at all.
Speaker 1:Where do you land on it?
Speaker 2:So ChatGPT latest numbers are eight eight hundred million weekly actives. Yeah. 20,000,000 of those people pay. What percentage of the 20,000,000 that are paying are using it for this companionship functionality? And that is like a huge unknown right now.
Speaker 2:The question is It's really did they bring it back because because people just were really upset? Or did they bring it back Yep. Because they were about to lose? And and remember Yeah. The the two days after every single Reddit post Yeah.
Speaker 2:At least every other was like, I could just cancel my membership. Yeah. Like, I don't need this anymore.
Speaker 1:Yeah. I I was I was thinking about the the Sydney Sweeney American Eagle thing. Like, that got a really powerful negative reaction. The stock is up. And, like, sales are up presumably because, like, it got a negative reaction, but it also got a positive reaction that was bigger.
Speaker 2:In this case, it it could have been that four o was effectively a product that was generating hundreds of millions of dollars of annual annualized revenue. Yep. That was now was just gonna go away. It was just It's not really gonna just gonna upgrade to a new model. It was like, you killed my friend.
Speaker 2:Yep. I no longer need to pay for this.
Speaker 1:The original Reddit thread of, like, bring back four o is, like, a couple thousand people. It's not actually, like, protesting in the street millions of people. Like, it hasn't spilled over all the play all over the place. Like, it's not that big. It but it does I I will agree with you that it is crazy that they even said yes to it.
Speaker 2:Yes. What percentage of their paying users do you think are paying for the product because it's a companion to them?
Speaker 1:Because it's four because of four o specifically. Like like, how bad would churn have been? How bad was churn? Well, it was clearly bad enough that they that they did something about it, which is the crazy thing. Do you like the zombie ant fungus analogy?
Speaker 1:Jake Jacob Rintimaki was, was posting this. There's this very weird dynamic where, specifically, humans are using four o to protest the deletion of four point zero. And so it's very much like the AI is using the human as a host. Yeah. Like, the a the human is the bot for
Speaker 2:This is why I think it's overall under discussed.
Speaker 3:I I don't actually think churn was that high because the the reason four point was originally deprecated was the GPT five release, which was August 7. Yep. And then the tweet of Sam Altman saying, we're bringing back four point was August 8. So it was one day later. Yeah.
Speaker 3:So unless, like, a massive amount of people quit that day, which I I mean, maybe that's very likely.
Speaker 1:I think that's what happened. Why would you bring it back so fast if you didn't see, like, fast
Speaker 3:Twitter were saying
Speaker 1:sell sell off.
Speaker 2:It'll be interesting to if there's, like, five years from now. Yeah. It's like, here's the five most popular friends that are models. And there's four o, and there's some others. Yeah.
Speaker 2:And and people end up well, like, we'll see.
Speaker 1:Jeff Bezos is back in the arena. Jeff Bezos creates an AI startup where he will be co CEO, and it's called Project Prometheus.
Speaker 2:In The New York Times, Jeff Bezos, the founder of Amazon, is throwing his money and time into an artificial intelligence startup that he will help manage as its co chief executive. Anyways, the company project Prometheus is coming out of the gates with 6,200,000,000.0 in funding partly from mister Bezos, making it one of the most well financed early stage with authority.
Speaker 1:That is a massive round.
Speaker 2:Strong
Speaker 1:6,000,000,000 out the gate. Let's go.
Speaker 2:Congratulations. This is the first time mister Bezos has taken a formal operational role in a company since he stepped down as chief executive in of Amazon in July 2021. Though he is deeply involved in Blue Origin Mhmm. His official title at the space company as founder since leaving Amazon, Mr. Bezos has received as much attention for his personal life as his businesses, including an extravagant celebrity filled wedding in Venice this year.
Speaker 2:He has also become more closely involved in Blue Origin and has shown increasing interest in the race to build artificial intelligence. His new company now firmly plants him in the middle of that competition. Project Prometheus is entering an increasingly crowded AI market with smaller companies trying to carve out niches in a race with industry giants like Google, Meta, Microsoft, and pioneering companies like OpenAI and Anthropic.
Speaker 1:Do you think he's doing what Steve Jobs did with Next, where Steve Jobs was fired from Apple? Obviously, Bezos was not fired from Amazon, but he did retire. And it'd be weird for him to jump straight back in to the to the CEO seat at Amazon. But Steve Jobs founded NeXT and then was acquired into Apple, and it kinda made for a more smooth transition back into the driver's seat. Could that be what Bezos is doing?
Speaker 2:I could see it. He's 61.
Speaker 1:He's he's young. He's got the whole third he's in peak physical condition.
Speaker 2:That's right. He's having stacking up win win after win. There's more details here. Project Prometheus is among a wave of companies focused on applying AI to physical tasks, including robotics, drug design, and scientific discovery. Mhmm.
Speaker 2:Last year, Bezos invested in physical intelligence, a startup that is applying AI to robots.
Speaker 1:Apple launched a sock. It's a fashion accessory, and everyone's debating it. When a company releases something that is so obviously underwhelming, then the natural question is, did no one at the company see how bad this is, or did no one have the courage to speak up? I'm not sure which is worse. Look.
Speaker 1:Apple has a lot of fumbles. This is not one of them. They knew exactly what they were doing and exactly who would buy it. Also, it's okay. Fashion accessories are not for everyone.
Speaker 1:It's called the iPhone Pocket, a beautiful way to wear and carry iPhone. Not carry the iPhone. Remember, they you don't say the iPhone. You say iPhone. IPhone Pocket features a singular three d knitted construction designed to fit any iPhone.
Speaker 1:A lot of tech bros prematurely dunking on this release because they don't get why it's a big deal. So let me translate. You're not the only consumers Apple designs for. This is a huge designer and the mind behind Steve Jobs' iconic black turtlenecks. I didn't realize that.
Speaker 1:What do you think?
Speaker 2:I feel like my mom would love this, to be honest.
Speaker 1:I think most people would look at this and be like, okay. It's a sock, like but it's from Apple, so it's probably, like, $30, maybe $50. Some people were surprised that it was a little bit more expensive. But, you know, it's from this famous designer, and it's this interesting status symbol. Will this become actually like a very, very popular form factor in America, specifically?
Speaker 2:Ever since the the AirPods AirPods early on looked really silly
Speaker 1:Mhmm.
Speaker 2:I could see this becoming a popular form factor for accessories. Accessories. Yeah. Yeah. And I could see Apple seeing like, hey, there's a world where we not only sell a case with every iPhone, we can sell a a sock thing.
Speaker 1:It's kinda nice.
Speaker 2:And it's kind of a crazy weapon.
Speaker 1:Defense weapon.
Speaker 2:Yeah. Self swing it
Speaker 1:around and smack people in the face of it. Speaking of socks
Speaker 2:We gotta talk about
Speaker 1:Cook is stunning in some what are these? New shoes? Travis Scott's new fragment a j one lows. These are Nike shoes, I suppose. Everyone's saying he low key got aura.
Speaker 1:And so congrats to Tim Cook on looking great.
Speaker 2:Mean, releasing this photo is more than a comment. It's a statement.
Speaker 1:I like reading into it.
Speaker 2:He's like
Speaker 1:Just being like, oh, really? Oh, really? Financial Times? So the Financial Times has this article that says, Apple intensifies succession planning for CEO Tim Cook. The I iPhone makers board preparing for its longtime leader to step down as early as next year.
Speaker 1:John Turnis, Apple senior vice president of hardware is widely seen as Cook's most likely successor, although no decisions have been made. So, basically, everyone's been leaking this, whether it's Bloomberg, whether it's the Financial Times here. And and, of course, Apple is not commenting because they'll they'll talk about who they're going they'll move the market when they decide their next CEO. If they even if they don't even stick with Tim Cook Tim Cook. They might stick with Tim Cook for another two decades.
Speaker 1:Who who knows? But I like the idea that this photo came out being like, yeah. I'm not leaving.
Speaker 2:No comment, but I'll make a statement.
Speaker 1:I'll make a statement. No comment, but I'll make a statement. Something is rotten in Cupertino, all about the failure of of Apple intelligence. And when we talked to Mark Gurman, we saw like, Gurman was also saying, like, yes. Like, Cupertino really was shook by the like, dropping the ball on on Apple intelligence by missing AI.
Speaker 1:But I I still wonder if all of this is is there's all these rumors. Oh, Tim Cook's gotta go.
Speaker 2:Imagine if you post that picture if we see a real correction in AI. Yeah. Just post caption, do nothing, win.
Speaker 1:Get ready for the fake news hour.
Speaker 2:Peter Thiel sold his Steak. Entire stake Everything. In video. And 76% of his friend's company, Tesla.
Speaker 1:So this is from one of those 13 f's disclosure form with the SEC from Teal Macro. Zero hedge sort of sums this up where he says, Peter Thiel net worth 20,000,000,000. Teal Macro AUM 75,000,000. Like, what's going on? What make it make sense?
Speaker 1:It's almost certainly because of disclosure rules. Like, what needs to be disclosed, might only be a fraction of what's actually going on there. I think the reason why this made headlines is just because it feels like something that might happen. Like like, if if instead this headline had been, oh, like, Peter Thiel went on a podcast and said that he thinks the AI bubble is top has has reached the top. Everyone would just be like, oh, yeah.
Speaker 1:Like, that's the the it it feels like people have been waiting for someone to call the top, and so they're really, really, like Yeah. Digging in for top signals and top calls. The other three holdings are still big tech companies. So it's not, like, super bearish. It's like there's some Microsoft in there.
Speaker 1:I think there's some Apple in there.
Speaker 2:Yeah. And the Teal Matt the Teal Macro team is trying to generate the greatest returns that they possibly can.
Speaker 1:They go viral. They're trying to go as viral as possible.
Speaker 2:So They don't care about IRR. They just wanna go viral. They just wanna go viral. Trying to create headlines.
Speaker 1:Situational awareness 13 f for q '3 dropped Friday. Nick Carter broke it down. Massive new $500,000,000 position in CoreWeave. Big adds to core, c o r z and iron, added some new miners. Intel Intel calls remain unchanged.
Speaker 1:Trimmed Broadcom, a couple other names here, And, Nick is giving it some, some context. All these numbers are as are are as of 09/30. Many of these names sold off since then. Portfolio value counting notional value of options doubled from 2,120,000,000.00 to 4,150,000,000.00, mostly due to 1,500,000,000.0 of new cash. So
Speaker 2:Let's give it up for new cash injection.
Speaker 1:We gotta ring the
Speaker 2:Situational awareness had a half a billion dollar new core weave position as of basically the October.
Speaker 1:You told me like, oh, yeah. Like, the the the company that really is, like, the most indexed to the AI wave, is down 46%. I'd be like, wow. So this is, like, the total popping of the bubble, complete pop. It's over.
Speaker 1:When the metaverse bubble popped, when, you know, when when crypto bubbles pop, like, Bitcoin trades down 50%, 60%, like and then it's over, and then you start rebuilding. Right? And yet the overall market feels nowhere near popped. Right? Like, you would you would expect NVIDIA to be maybe, like, you know, selling off more.
Speaker 1:CoreWeave is just in a is is just in a unique position.
Speaker 2:Yeah. The question is, like, are like, is it gonna be a true hedge fund? Like, it gonna make money?
Speaker 1:In a down market?
Speaker 2:In a in a in a correction.
Speaker 1:Blue Owl investors faced hefty faced hefty losses as credit fund blocks exit ahead of merger. Blue Owl has blocked redemptions in one of its earliest private credit funds as it merges with a larger vehicle overseen by the asset manager in a deal that could leave investors with large losses. They could lose about 20% of their holdings. The deal underscores the risk that retail investors have taken in pouring hundreds of billions of dollars into private debt funds carrying limited liquidity rights. It comes as scrutiny builds on the valuations and returns on private credit funds, which have caused publicly listed debt funds to sell off and trade at steep discounts to the stated value of their assets.
Speaker 1:And so we we we talked about this, I think, on Friday, but Blue Owl has been selling off, this year, and they said we should be performing better than everyone else. But it feels like a little bit of the narrative might be around liquidity here. Good luck if you're hanging out in Blue Owl Capital. Today, we're announcing a new $40,000,000,000 investment in Texas through 2027 to build cloud and AI infrastructure and support thousands of new jobs. Yeehaw.
Speaker 1:This includes new data centers in Armstrong and Haskell Counties and a major investment to strengthen energy resilience and abundance. We're also providing funding to more than double the projected pipeline of new Texan electricians
Speaker 2:There we
Speaker 1:go. To power the AI era.
Speaker 2:The golden age of being, the golden electrician age where you
Speaker 1:get Yes.
Speaker 2:Flown around in private jets to different data centers.
Speaker 1:Yeah. You do. You do. That's right. So $40,000,000,000 investment, thousands of new jobs.
Speaker 1:That feels like a higher ratio than what what was the other example you kept quoting? Something like 500 jobs for some anthropic Yeah. It was it was center or something?
Speaker 2:It was the anthropic data center. They were like, we're investing 50,000,000,000. Wall Street blows past bubble worries Oh, yeah. To supercharge AI spending frenzy. And they say firms such as Blue Owl Capital have raised trillions in investing firepower.
Speaker 2:The the AI build out is a perfect match. The warning signs are flashing. Not long ago.
Speaker 1:Have better PR or worse PR than Ares? Because they seem to be quickly becoming the main name that everyone knows in private credit. And to my knowledge, like, they are not the only firm in the category.
Speaker 2:They have the.com. They have blueowl.com.
Speaker 1:Blueowl.com.
Speaker 2:Not long ago, Blue Owl Capital was an upstart investment firm that lent money to a mid sized US companies such as Sara Lee Frozen Bakery. Woah. These days, the firm is financing massive data centers, costing tens of billions of dollars for the likes of Meta and Oracle, a sign of just how quickly Wall Street has become the enabler of America's AI boom. Fund managers such as Blue Owl amassed trillions of dollars of investing firepower and have been hunting for big deals where they can put that money to work. They found slim pickings for years until a perfect match appeared in AI, which has provided a bigger target than anything in history due to the vast sums tech companies need to ramp up computing power.
Speaker 2:Does it even matter if you keep counting after you get to 1,000,000,000,000 of capital expenditure in the next couple years?
Speaker 1:This is insane. You
Speaker 2:Does it even matter?
Speaker 1:You really undersold this.
Speaker 2:Does it even matter? While David Getta DJ, the Blue Owl executives cut a deal to acquire IPI Partners, an investment firm that owned and operated big data centers for Amazon and Microsoft. Blue Owl already had close ties with the organizer of the treat, Iconic Capital, which manages the personal fortunes of Silicon Valley Elite, including Zuckerberg, and was a part owner of IPI. The purchase gave BlueOwl a seat at the table to bid on mega AI financing. Let's give it up for mega AI financing.
Speaker 2:Not long after, it got arranged it got picked to arrange a $14,000,000,000 package for an Oracle and OpenAI data center in Abilene, Texas. Then last month, BlueOwl raised about 30,000,000,000 to build an AI data center for Meta in Louisiana, putting in 3,000,000,000 of its clients' money and borrowing the rest. Silicon Valley's biggest players are flushed with cash and are able to fund much of the initial AI build out from their own coffers. As the dollar figures climb ever higher. They're turning to debt and private equity, spreading the risks and potential rewards more broadly across the economy.
Speaker 2:Some of the financing is coming from plain vanilla corporate bond sales, but financiers are making far bigger fees off giant private deals. Virtually every Wall Street player is angling to get a piece of the action from banks such as JPMorgan and Morgan Stanley to traditional asset managers like BlackRock. Investor appetite for data center debt is so strong that some money managers have booked billion dollar gains in a matter of days. Let's give it up for booking billion dollar gains in a matter of days. People say there's no such thing as free money, but kinda seems like it could be in a kind of a free money situation here.
Speaker 1:We do know for certain is that the big tech companies that want the world to spend trillions have huge financial incentives to be believers. If you haven't noticed, Wall Street is also being paid a lot to promote the story.
Speaker 2:And this is this is the line that stood out the most because like on the West Coast Yes. You have the labs Yes. Which are effectively every single person as well as the investors Yes. Are incentivized to keep keep the the current, you know, AI super cycle narrative going. Yes.
Speaker 2:And then on the East Coast, you have Wall Street who is getting paid to effectively do the same thing. Mhmm. So you have, you know, these two centers of power that are both incentivized to keep the party going. In that same letter Mhmm. Einhorn and Greenlight said, basically, way it is today, consumer business spends $1 on a ChatGPT subscription, which is OpenAI revenue.
Speaker 2:Yeah. Then OpenAI provides the service by spending $2 on Microsoft AI infrastructure, which is Microsoft revenue. Then Microsoft spends 60¢ leasing GPUs from CoreWeave to handle the compute load, which is CoreWeave revenue. And then CoreWeave spends $2.40 on chips from NVIDIA and and another $2.40 Yes.
Speaker 1:But you're completely discounting exactly how addicted the four o user is. They will pay any amount.
Speaker 2:His final investing decision was to buy Google.
Speaker 1:This is amazing.
Speaker 2:I think that's beautiful.
Speaker 1:He doesn't even need to say who he's talking about. It's, like, so obvious. It's Warren Buffett. Not enough people are emotionally prepared for if it's not a bubble. It's a good post.
Speaker 1:Like, is it a bubble if if, all the big tech companies rip and there's, a couple neo clouds that trade down a little bit? Like, there's, like, you know, one or two application layer companies that burn a bunch of VC dollars, but there's still a new hyperscaler that's born. Like, kind of. I guess it's a bubble, but it's a survivable bubble. Still crazy to me that Steve Jobs slash Apple invented the word podcast, and that it's a mix of iPod and broadcast.
Speaker 1:And apparently, this isn't true. A BBC journalist, Ben Hammersley, coined it in a 2004 Guardian article, but then it got ported back to Apple and the word and the term podcast was adopted. It's always felt like a very boomer term. Yeah.
Speaker 2:And it makes sense. I I never Radio show? I never knew that it was it was a combination of
Speaker 1:Oh, you didn't know. It was iPod plus broadcast. Yeah. Yeah. What else?
Speaker 1:Who actually makes money when robots work? Looking into some of the venture funding that's flowing into humanoid robotics. He is trying to create a field guide for separating the real companies from the grifters. Talks about one x. The home robot costs $220,000 upfront or $4.99 a month.
Speaker 1:The website looks like every other VC funded d to c brand from 2015.
Speaker 2:Who actually makes money though when they work? Is it the call center operators?
Speaker 1:I would not bet against Elon on this. I believe that the the hardware manufacturer will ultimately be the one that makes money in the long term. I think that the everything else is more commodity in the stack, but there is going to be a, a compounding advantage to actually having the manufacturing capability to build the robots at scale. Now this is years away, but I'm certainly AGI built in the sense that the the teleoperation become will become less and less important and the Tesla model of having a a economically producible product will be very, very important.
Speaker 2:Shenzhen based company, UB Tech, claims to have completed the world's first mass delivery of humanoid robots. And the Shenzhen based company has secured apparently over a 112,000,000 in Walker s two orders this year. Look at the reflections on this bot and then compare them to the ones behind it. The bot in front is real. Everything behind it is fake.
Speaker 2:If you see a head unit reflecting a bunch of ceiling lights, that's a give that's a giveaway. It's CGI. He's putting UB Tech in the truth zone, and then Christopher comes over the top and puts him in the and then says, such an embarrassing post for a CEO at this level to make. Do you want a million robots in in American homes that could have, you know, the the sci fi scenario where you have a backdoor. Yeah.
Speaker 2:And
Speaker 1:But the argument against DJI was always like, well, you know, if some tiny drone is in your bottom, you know, soft door, like, what's it gonna do? It's not just gonna bust out of there. But, like, a humanoid robot will just bust out of the whatever you put them in. Unless you store them and you're like, you're gun safe or something. Walking gun safe.
Speaker 1:Okay. UB Tech Industrial Walkers, they've been pumping these out. Feels like the question has never been, can China make a lot of these things? Like, obviously,
Speaker 2:they can't. In the bio, they said they said it looked too perfect to be real. Yeah. And then they used some chatty bitty slot. But perfection isn't fabricated.
Speaker 2:It's delicately engineered.
Speaker 1:It's so good. You know you know, for a long time, people were saying that, there was no way to watermark, AI created content with because, like, oh, how would you do it? You you change one. It's like, actually, all AI content is watermarked. It turns out.
Speaker 1:It's just perfectly watermarked. Yeah. This looks real to me. I I don't know. It also could be c c
Speaker 2:I honestly. It's pretty funny to see Brett say this was all faked.
Speaker 1:Yeah. It it looks it looks real. I mean, it would be way they could have done so much better to make this look real. Put a bunch of humans there, touch them. A lot of the hard part in CGI is the handoff between the CGI character and the human character.
Speaker 1:And so what you should be doing is you is you should have a human who takes, like, a smoothie and pours it on top of the robot and then, like, wipes the robot off clean with a towel. And you're seeing how the fluids interact with the robot, interact with the person. And, like, that was that was not actually that satisfactory. I don't know. I think I don't know.
Speaker 1:I'm not calling it fake, but it could be fake because CGI is really, really good. Like, CGI just is at that level where that's possible. Anyway Yeah. We know the we
Speaker 2:know the caption or the the description of the video was AI generated.
Speaker 1:That is hilarious that they they had to use caption.
Speaker 2:It's like I mean
Speaker 1:It's like AI on it. And it's like, after all, is an AI company. Like, it would be on brand. Thank you for tuning in. Great show today.
Speaker 1:Have a good evening. We'll see you tomorrow.