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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.
Tim Sweeney was taking a victory lap. I I sort of missed this. This was last Thursday. Basically, the Ninth Circuit struck down, you know, Apple trying to do something else in the Apple tax battle with the epic game. So a quick quick refresher on this.
Speaker 1:Tim Sweeney says the Apple tax is dead in The United States. This particular nail in the coffin comes from the Ninth Circuit. These things are never fully over, I've learned. Like, it's just it's just there's there's a class action lawsuit, then there's another lawsuit, then there's this one, then there's appeals, then they go to the Supreme Court, then they go back to the Supreme Court. It's always up and down.
Speaker 1:Like, you know, like, that's just the nature of these things because the stakes are so so high. Exposure seems a little hot on that. What's going on there? Basically, the court had had said that Apple could not charge 30% if a developer routed an app customer to their own payment page. And so Apple was like, yeah.
Speaker 1:Totally. We're cool with that. How about 27% plus 3% for payments and 27 for, like, IP licensing? And so, like, the end result was exactly the same. It was literally 30%.
Speaker 1:It was just, like, structured slightly differently. They just changed the language. This was contempt. It's like we told you not to do this, and you're still doing it, Apple. And so now they're not supposed to.
Speaker 1:Of course, the weird takeaway here is like these big momentous things happen, and then the stock moves like not at all. My conclusion from digging into this was that the fundamentally like consumer behavior has built up over almost two decades now. I mean, the App Store was launched, I believe, in 2007. This whole saga starts in 2011. This guy, Robert Pepper, he sues Apple along with three other plaintiffs.
Speaker 1:Mister Pepper. Mister Pepper, alleging that he was overcharged for iOS apps. It's funny to imagine a guy just saying I'm coming for you, Apple. You know what? Flappy bird?
Speaker 1:I was charged $2 for it. Should have been a dollar 70 or something like that. A dollar 20. And and taking it all the way to the Supreme Court.
Speaker 2:I mean, if he's a flappy
Speaker 1:Very fair.
Speaker 2:Whale and he spent millions
Speaker 1:True. True.
Speaker 2:Tens of millions of dollars in the app. Yeah. Yeah. But yeah. Yeah.
Speaker 2:The the economics are a bit wouldn't normally see somebody like that suing Apple because they're like, I Of course. You overcharged me by $2,000 across a lifetime, and I'm suing you for damages. And it's like a lawsuit that But will
Speaker 1:with the class action lawsuit, obviously, you get a couple plaintiffs who are exemplary of the problem. Then when the settlement happens, it's like billions of dollars paid to everyone who ever purchased an app. And you see these things before, like, do you have did you use Facebook between 2016, 2017? You may be entitled to, like, five Obviously, massive economic incentives for the for the lawyers who fight them. Anyway, the court ruled that Apple can't do that anymore.
Speaker 1:They can only collect fees that are in line with actual costs of facilitating links. Hanging across the system.
Speaker 2:About costs for one link.
Speaker 1:I know. I know. It's crazy. And the They're like, actually,
Speaker 2:need to use AI for this. And we need
Speaker 1:to No, no, no. That's actually what's going happen. So basically, right now, it's like like, if I'm the App Store, I'm Apple, I have the App Store, you have your own app and you have your own Stripe account and you want to pay, you want to accept payments your way. Apple says, well, you know, even though we're yes. You are checking out on your payment rails.
Speaker 1:It's your app. Like, I created the link and the technology that creates links within iOS, and that is helping you. So you got to pay me an IP licensing fee. Typically, it was like 27% of whatever you make, which doesn't make any sense because obviously, my as Apple, my my costs don't scale proportionally to your revenue. It's linear with regard to my cost.
Speaker 1:So, like, yes, if if Apple probably
Speaker 2:These are pricey links, John.
Speaker 1:These are
Speaker 2:pricey links.
Speaker 1:Like, you're laughing. But like like, realistically, like, the the iOS team that has been working on just just links, like, they get paid a lot. It's probably in the millions.
Speaker 2:If you're a successful mobile developer, you've been paying millions of dollars to Apple And you're talking about millions like relatively fixed OpEx for Apple that, again, doesn't
Speaker 1:And they make $30,000,000,000 a year or something like that. The idea is justifiable costs should be like $10 maybe like $100 for reviewing an app and just saying, okay, we ran our software. We understand the the, you know, is this is this violating any rules? We maybe had a human stop pop by and look at it for, you know, a couple minutes, make sure that this is compliant with the App Store. And then there are obviously the other costs, but, you know, should it be millions of dollars?
Speaker 1:Should it be proportional to revenue? Should be 30% of revenue? A lot of people have been arguing no. But, of course, this will go back and forth, and Apple will probably try and make the the the the fee as high as possible, of course, because they have every incentive to. Oh, the the other interesting thing is that in in Pepper versus Apple, there was this question of, you know, like, in the chain is the monopoly pricing having an effect?
Speaker 1:Like, where is it increasing the the price of the good? This Illinois Brick Company versus Illinois, the state of Illinois. This was in 1977, and the the Supreme Court held that only direct purchases of direct purchasers of illegally priced goods had standing to sue. So the the Illinois Brick case, this is pretty interesting. He says, the value chain was very straightforward.
Speaker 1:Concrete block makers, including the eponymous Illinois Brick Company, great name for a company that makes concrete blocks.
Speaker 2:Yeah, Illinois.
Speaker 1:They were accused of colluding to fixed prices of concrete blocks, which were bought by masonry contractors. Masonry contractors in turn submitted bids to general contractors for construction projects, which were ultimately paid for by the state of Illinois. And so the state of Illinois sued for damages alleging that the higher prices resulting from the price fixing had been passed through to the state of Illinois. So even though the masonry contractors were like, okay, yeah, like, the Illinois brick company is is is with all the other brick companies, they're jacking up prices. It doesn't really matter because they just passed that through.
Speaker 1:And so there's a question about like, well, you didn't actually pay the higher price directly
Speaker 2:Yeah.
Speaker 1:State of Illinois, but it was passed through. And so that that harm gets passed through. And so, you know, he says in this value chain is obvious who the direct purchasers were, masonry contractors to the extent the state of Illinois suffered harm. It was indirect pass through harm. Thus, the Supreme Court ruled that the state of Illinois did not have standing.
Speaker 1:So the so the state of Illinois could not sue then. If every party in the value chain were to sue, the infringing party could be the subject of duplicative recovery for damages, and parsing out the share of damages would be extremely difficult. In Apple versus Pepper, there's this question of who is harmed by Apple's alleged monopolistic practices. According to the plaintiffs, the value chain looks the same as the concrete block manufacturers. Basically, there's developers who sell their apps to Apple, who sell those apps to consumers.
Speaker 1:But Apple said, woah, woah, woah, no. We're not a retail store even though it's called the App Store. It's not a real store. We don't buy apps.
Speaker 2:We don't buy inventory.
Speaker 1:And sell them. Yeah. Exactly. We're more an we're an agent. The developer agreement confirms that Apple acts as an agent for app providers in providing the App Store and is not a party to the sales contract or user agreement between the user and the app provider.
Speaker 1:Respondents concede that the direct sale is actually between developers and consumers facilitated by Apple as an agent and conduit. And that sort of makes sense. You go to a grocery store, they buy the apples from the farmer, they sell them to the customer, they take possession. A real estate agent facilitates a transaction Takes
Speaker 2:a fee. A If Apple was actually going and buying licenses and then reselling them, you know they'd be negotiating like crazy, too. It'd be like, we'll give you $1 and then we're going to sell it for $10 You could argue it'd be even worse for developers in that situation.
Speaker 1:The interesting thing about this, just how much the reality of the shape of the App Store and the business of the services narrative changed the entire financial story of Apple over the last, I guess, decade and a half. Look at the price to earnings ratio. Because back in 2011, it was 9.7. Let's call it 10x price to earnings. Today, it's 37x.
Speaker 1:So obviously the business has grown, but the value of the earnings is so much higher. Why is that? It's because it's so much stickier. And it's because they've developed this services monopoly essentially. It's a
Speaker 2:toll road for your life.
Speaker 1:It's not a toll road. That's a great that's a great thing. It's a there is a difference between a toll and a tax. And a toll is something that you pay that is directly linked to the to the service that you're getting.
Speaker 2:Okay. So you're you're thinking it would be more like a toll road now? Now.
Speaker 1:Yes. Now it will be a toll road, and we should celebrate that, or developers should celebrate that. Tim Sweeney should be celebrating that because a toll road is something where it's like it's like, I'm paying for $5 to drive down this road. That money goes directly towards this road.
Speaker 2:Yeah. The tax structure applied to a toll road is like, economic value are you creating
Speaker 1:by Exactly. Driving down the
Speaker 2:We're to charge
Speaker 1:you 30% of that. Exactly. Oh, you're transporting a shipment of televisions on this road? Those are high margin. Or oh, you're a rich person driving
Speaker 2:You have some GPUs. You're hiding your trucks. GPUs on your truck,
Speaker 1:are you not? Yeah. Yeah. Oh, you can certainly break us off more. As opposed to saying, every time someone drives on this road, it takes $1 of depreciation.
Speaker 1:We need $1,000,000 to repave it every year. And so we need to link cost of using the service with the actual underlying cost of operating that service.
Speaker 2:My question with these changes is what is the what is the consumer experience gonna be when trying to cancel subscriptions? Because the one aspect of the App Store that I've always appreciated is the ability to one click cancel Yeah. From within Yeah. The App Store. And so I do wonder, as soon as you let payments live outside of the App Store, everyone has experienced any type of software retailer making it hard to figure out how to cancel a subscription, will Apple keep that kind of one click cancellation ability within the app?
Speaker 2:Or will they actually have to
Speaker 1:No.
Speaker 2:Let
Speaker 1:I mean, this already exists. Because you can go put your credit card down in Fortnite. The thing is that I think the subscription revenue is not as much as you think. It's not as much of a driver. Like, the in app payments, the the the one off clicks, like, those are much The whales.
Speaker 1:A much bigger driver of overall economic activity. But I don't know. On on the subscription side, it would be interesting if there's, like, some sort of reaggregation at, like, the Stripe level or something like that. The interesting thing is that, like so Apple's price to earnings goes from 10 to 40, basically, like massive run up. And this is all on the back of, like, the services narrative that Luca Maystry, the CFO, sort of outlined in, I think, 2016.
Speaker 1:He said, each quarter, we report for our services category, which includes revenue from iTunes, the App Store, AppleCare, iCloud, Apple Pay, licensing and some other items. Today, we would like to highlight the major drivers of growth in this category, which we have summarized on Page three of supplemental our materials. The vast majority of the services that we provide to our customers, for instance, apps, movies, TV shows are tied to our installed base of devices rather than to current quarter sales. And so he's saying like, you need to stop thinking about our financial performance as driven by how many phones do we sell this quarter. You need to think about just how many users we have broadly and start valuing us more like Google, more like Facebook.
Speaker 1:So Luca Maestri went on to say, for some of these services such as content, we recognize revenue based on transaction value. For some of these services such as App Store, we share a portion of the value of each transaction with the app developer, and we only recognize revenue on the portion that we keep to fully comprehend the scale of the services that we are delivering to our installed base and how fast this business is growing, we look at purchases in addition to revenue. When we aggregate the purchase value of all the services tied to our installed base during fiscal twenty fifteen, it adds up to more than 31,000,000,000. Basically, what's going on is Luca Maestri is the CFO of Apple, and he's he's having trouble in the market because it's 2015, and what's happening? You're eight years into the iPhone.
Speaker 1:Twenty two thousand seven, the iPhone comes out. It's expensive. It doesn't have three g. It's got a lot of rough edges.
Speaker 2:Doesn't have copy and paste.
Speaker 1:But it's cool, and it's interesting, and there's lines out the door for them. And and it's and people at the higher end like, a cell phone back then was like a $100, or you'd get it for free. You you get it you get it as part of a, you know, every Yeah. Yeah. Yeah.
Speaker 1:Every two years, you'd get you get a new you get a new phone, and and it was free, basically. Then the iPhone comes in. It's $600 very expensive, very upmarket. Then a year or two in, they start figuring out how to bring down the price. It comes down to like $300 $400 There's these incentives for signing up for a yearlong plan.
Speaker 1:There's a whole variety of things that make it the App Store comes out. There's just more functionality. You no longer are like, well, my BlackBerry still does this, but Apple doesn't. It's like, no. They do the enterprise stuff.
Speaker 1:They've checked all the boxes. And so it's growing, growing, growing. But eight years in, everyone who has one, like, they won the game. And so device like, actual the device install base, device sales are starting to flatline. Then they need sort of the new a new narrative for the stock because it's sort of getting beat up because Apple's basically winning
Speaker 2:the Sold everyone an iPhone.
Speaker 1:But it's over. Like the trade's over. Right? It's like, yeah, we get it. Everyone has smartphones now.
Speaker 1:IPhone revenue is basically or unit sales are slowing significantly. Of course, they're able to raise prices still because people are locked in. Like it's a good business, but it's not this like incredibly high growth thing anymore. So Luca Maestri needs to come in with a new narrative, and that's the services narrative. And so the services narrative is is saying, hey.
Speaker 1:For a long time, you've been looking at this bucket of basically, like, other revenue. We have device sales, which you've been obsessed with as the investor Yeah. As the Wall Street. You've been obsessed with, you know, how many iPhones we're selling, how much we're selling them for, our margins on those iPhones, how how many we can make, all of that. And then we've had this other bucket, which is like iTunes, App Store, Apple Care, iCloud, Apple Pay, license.
Speaker 1:There's a bunch
Speaker 2:of other reading it like this storage feature on the iPhone where it's like, hey. You have, like, photos and these other things that are taking it in apps. Yeah. And then, like, don't worry about other.
Speaker 1:Yeah. Don't worry about other. Don't worry about other. We're just
Speaker 2:gonna throw everything in there.
Speaker 1:Don't worry about other because we don't really know how it's growing. Is it that high margin? We don't know. Then all of a sudden, it became like, don't just not worry about other. Like, in fact, focus entirely on tap.
Speaker 1:Because it is the best revenue that's super high margin, and it's growing really fast. And, oh, by the way, if you zoom out and you look at the economic activity that is driving on top of the App Store, yes, our take rate is 30%. But on top of it, just in 2015, it's $31,000,000,000 of economic activity in that ecosystem. But Ben Thompson was not a fan of it. I mean, he was a fan from the stock price perspective, but he had some really, really harsh words.
Speaker 1:He said at the time, it seems incredibly worrisome to me anytime a company predicates its growth story on rent seeking. It's not that the growth isn't real, but rather the pursuit is corrosive on whatever it was that made the company great in the first place. It's like, woah. It's sort of like, okay, they're going like private equity mode, like the beautiful art, the creativity is gone at this point.
Speaker 2:Tim Cook has effectively done Yes. Exactly
Speaker 1:Going forward, the growth story of Apple has been someone else innovates, someone else creates an app, and we'll take 30%. And we don't need to do the innovate. The innovation, that doesn't need to happen here. Yep. And that's a big shift in the narrative.
Speaker 1:Whereas before, all through seventies, eighties, nineties, February, it was like the innovation comes from Apple.
Speaker 2:They're like, we're gonna make the iPhone 1,700. It's gonna be newer, lighter, better, faster, stronger, and they're gonna buy it. Then we're gonna take take our cut from everything on top
Speaker 1:of it. Exactly. Exactly.
Speaker 2:Megan in the Wall Street Journal has a scoop. OpenAI ended a policy earlier this week that required employees to work at the company for six months before their equity vested. A few months ago, xAI shortened their waiting period known as a vesting cliff from twelve months to six.
Speaker 1:Change to the vesting cliff announced by applications chief Fiji Simo is designed to encourage new employees to take risks without fear of being let go before accessing the first chunk of equity. Interesting. So so they had a problem where people would come in and say, okay, I got to just do politics for the first six months because I don't want to get fired before. That's like that's a crazy culture, I feel like.
Speaker 2:I think this has to be more reactionary to Meta than obviously some of the other
Speaker 1:OpenAI has its vesting period for new employees to six months from the industry standard to twelve months in April. Let's see. Elon Musk's x AI and OpenAI competitor made a similar change in late summer. People familiar with the matter said, the decision to loosen or do away with restrictions meant to ensure new hires stick around reflects the frenzied competition for top tier technical talent within AI within the AI industry. Tech companies typically have a one year vesting cliff that's what I'm certainly familiar with for new employees preventing them from having to give away stock to hires who leave quickly or don't work out.
Speaker 1:But with AI companies including meta platforms Google, Anthropic, wooing top researchers with pay packages can that be worth a $100,000,000 or more, researchers and engineers have been able to hold out for the most attractive terms and in many cases have been quick to leave jobs they have found not to their liking.
Speaker 2:I also could see it them trying to kind of rehab their employer brand. Do you remember there was a bunch of this was probably six, eight months ago at OpenAI this had a bunch there were there were some articles surrounding they they had some like really restrictive exit agreements.
Speaker 1:That's right. And so right. Yeah. That that A lot of people that was frustrated around that. Feel like that was over a year ago.
Speaker 1:That was Maybe. If you left and did maybe didn't sign a agreement or NDA Yeah,
Speaker 2:if you didn't sign it, they could claw back It
Speaker 1:could claw back equity.
Speaker 2:Your equity. And then they were saying That was important during the whole like Ilya Ousting thing. Yes. Because a lot of the employees left after that, then they couldn't talk about it.
Speaker 1:I always thought that like the bull case for that was, well, if you're going to be whistleblowing on something that's like a true AI doom scenario, well, money doesn't matter, so you shouldn't matter about them clawing back your equity.
Speaker 2:Company expects to spend 6,000,000,000 this year on stock based comp, almost half of its projected revenue. A company that creates however many hundreds of billions of dollars in value in a year and then has 6,000,000,000 of a non cash expense. It doesn't seem that crazy.
Speaker 1:The the SpaceX IPO, if they raise 30,000,000,000, will be lower than the 40,000,000,000 that OpenAI
Speaker 2:Raised and offered. Yeah. In this private market.
Speaker 1:In the private markets. And so there's been this big question about, like like, are the private markets tapped? It appears it's the David Goggins thesis of the market.
Speaker 2:There's always always thesis for life.
Speaker 1:I mean, you went back, you know, like, I don't know, five years and you were like, yeah, like, do you think you could raise $40,000,000,000 in the private markets? Or would you have to go public for that? They're like, you know, the Saudi Aramco level funding? Like, yes, you'd have to be public. But turns out you do not have to be public.
Speaker 2:Finn Barr says, okay, but seriously, why is everyone leaving Meta? People are speculating in the comments. No. Jane says vest. Finn says, but if you stay longer, you vest True.
Speaker 2:Someone else says, no direction for the company. Several major unannounced RL project canceled. The 100,000,000 boys reportedly do zero work because they know that if Zuck fires them, he'll look foolish. I don't know. I think I think some of these $100,000,000 men and and women Yeah.
Speaker 2:Just that do they are about that life. They do wanna pursue greatness. They do wanna be do the biggest run. Yeah. So who who knows?
Speaker 2:I'm I'm sure there's some instances of that. Zuck, you know, overpaid for talent is to try to catch up.
Speaker 1:Yeah.
Speaker 2:No PMF on their consumer AI products even though they forced everyone on Instagram to see it. I think we gotta wait a little bit for the Christmas season Yeah. To come and go and see how see how these things are selling.
Speaker 1:Is a tough position to be in because they don't have a, like, a public cloud. They don't have a cloud service, even though they are hyperscaler. With Google, like, even if they even if Google gets completely smoked by OpenAI and ChatGPT, and ChatGPT winds up being, like, truly like the the, you know, the the Facebook of of chat apps. And it's like 99% people use it captures 99% of like the consumer AI value. It's like having a Gemini API is still extremely valuable because like you have cloud services.
Speaker 1:Brett Adcock. Okay. What's going on with
Speaker 2:Brett Adcock? A party over the weekend Yes. With Deadmau5. He posted earlier today that that figure is looking quite cheap
Speaker 1:Yes.
Speaker 2:Now in comparison to SpaceX.
Speaker 1:Okay.
Speaker 2:Right? Because there's a there's a new biggest line on the private markets charge.
Speaker 1:He drinking on here? What is he drinking?
Speaker 2:I think he's having a I think he's cracking open some cold one. This is crazy. So my theory is that they have done billions of dollars in sales.
Speaker 1:Okay.
Speaker 2:And this is kind of their way of signaling Signaling. If you know you know. Because of course, it would be absolutely insane to have a party like this Yeah. If you still hadn't shipped a product, you still were Yeah.
Speaker 1:Yeah. Yeah.
Speaker 2:Kind of a a sort of I don't know if they're pre revenue, but certainly being valued on Vibes. There's no way they would throw a party like this if
Speaker 1:Because they were SpaceX has have $30,000,000,000 in revenue, right? So and it's going out at $1,500,000,000,000 So it's at like 50x revenue. He probably trading at like, what, 20x revenue, something like
Speaker 2:that? That was my theory at least. And then what's So they're at last around 40,000,000,000 They're at around 40,000,000,000
Speaker 1:So yeah, they could be doing like 2 to 4,000,000,000 in revenue potentially. This is very much a On a price to sales ratio.
Speaker 2:A wink wink moment because seriously, know, no, I don't think any CEO would throw this crazy of a party if you weren't So really expect an announcement soon.
Speaker 1:I would. Data centers in space, it might not be economically rational, but it might be physically possible. I'm trying to bring some quantitative structure to a conversation that's been mostly big number of vibes. So we have sort of dueling dueling math equations at this point. What is he this is vibe coded from public from so maybe we need to have a debate.
Speaker 1:Maybe we need to have them both on. But he says, TLDR, the analysis is actually far more favorable than I thought. It's a close thing. I desperately want a Kardashev level civilization, but we've got a lot of work ahead of us. Deli has been saying like it's impossible.
Speaker 1:It is not gonna happen anytime soon. It's not gonna it's not gonna not gonna be a thing. But Andrew McCallop says there just might be a chance.
Speaker 2:Gus says, my dealer. I got some straight gas. This train called space data centers. You are gonna effing fry. LOL.
Speaker 2:Me. Yeah. Whatever. Twenty minutes later. Dude, WTF, we just need to radiate the heat and then we can totally bypass terrestrial regulations.
Speaker 2:My friend, pacing. I should buy magnet stocks to get ahead of all the rail guns. What is They're smoking space data centers, John.
Speaker 1:I'm Anthropic has ordered $21,000,000,000 worth of TPUs to train large clawed. Is that really what they're calling it? Text is from yesterday's Broadcom's earnings call. The scale at which we see this happening could be significant. As you are aware, last quarter, q three, we received a $10,000,000,000 order to sell the latest TPU Ironwood racks to Anthropic.
Speaker 1:This was our fourth custom that we mentioned. In this quarter, we received an additional $11,000,000,000 order from the same customer for delivery in late twenty twenty six. Kaiju fights are the best kind of fights. From October, this is from Andrew Curran. He says, Anthropic is in discussions with Alphabets, Google, about a deal that would provide the artificial intelligence company with additional computing power valued in the high tens of billions of dollars according to people familiar with the matter.
Speaker 2:Fermi, which is the energy company that went public at a $20,000,000,000 valuation. They talked about getting getting their kind of facilities online, I think, in the twenty thirties, and people were a little bit bearish about that. Mhmm. They've they've traded down almost 75% since their IPO. So it seems like, yeah, we've we've basically seen this kind of rolling correction across every single AI pure play.
Speaker 1:You could even say
Speaker 2:that we But nobody's done volcano data centers. No one
Speaker 1:has done those.
Speaker 2:Where are you gonna where the chat's asking, where do you put the heat? Just shoot it up into the air. That's what's Yeah.
Speaker 1:The volcano data center is just funny because immediately they're like, but don't you want the chips to be cold? You want the you need cooling, not heating. Yeah.
Speaker 2:The heat dissipates with the lava.
Speaker 1:It would be great to just hard light. But the heat's free. Heat's heat's free. Data centers are And in this one, we're getting the heat for free. What happens after a correction?
Speaker 1:You're corrected. I I I think we're corrected. I think it's possible that the market is cracked. It's Yeah. Perfectly valued.
Speaker 2:I saw somebody saying that the the PG two interview with Sam may they they were claiming, like, it's very possibly helped us avoid a 02/2001 style.
Speaker 1:For sure. It could yeah. Things could've gotten a lot crazier.
Speaker 2:So maybe that was Brad's play the whole time. He was like, hey, we just need a little reset.
Speaker 1:He's a hero. He's a hero.
Speaker 2:I'm gonna look like I'm gonna look like, you know, I'm gonna look like maybe a bad guy for two weeks, but now he looks like a hero.
Speaker 1:I mean, I even even in the moment, he didn't look like a bad guy.
Speaker 2:No. No. He asked questions. If he didn't ask that question Yeah. There would have been, I think, some rightful criticism.
Speaker 2:Was wondering. It was an important question to ask. Jim Perry offered to return his $20,000,000 grinch salary and was going to quit the movie amid panic attacks over the makeup. Then a guy who trained the military on enduring torture was hired to help him. Woah.
Speaker 2:Richard Marcinco was a gentleman that trained CIA officers and special ops people how to endure torture, Kerry told Vulture. He gave me a litany of things that I could go that I could do when I began to spiral, like punch myself in the leg as hard as I can. Have a friend that I trust and punch him in the arm. Eat everything in sight. Changing patterns in the room.
Speaker 2:What? If there's a TV on when you start to spiral, turn it off and turn the radio on. Smoke cigarettes as much as possible. There are pictures of me as the Grinch sitting in director's chair with a long cigarette holder. I had to have the holder because the yak hair would catch on fire if I got too close.
Speaker 2:Later on, I found out that gentleman had trained me to endure the Grinch, also founded my only kind of question here is, I feel like all these things, if you're being tortured, they wouldn't exactly be like, oh, let him turn the TV off and on again. Let him turn the radio on.
Speaker 1:Oh, yeah. That is interesting.
Speaker 2:So I think I think these are probably great things to do if you're not getting tortured and you're just developing anxiety attack. Yeah. I did I did resonate with this because when we had the the Halloween makeup Well,
Speaker 1:mean, to be very, it could be it could be like metaphorically being tortured like in a foxhole as a member of TEAL Team Six. Like, oh, you're you're you're staking out some place and you're in a mud pit and it's a hole. You're not actually being directly tortured by like an enemy, but you have to deal with a really hard situation. And so you sit there chain smoking. And I don't know why you have a TV in this scenario.
Speaker 2:This just resonated because when we had when we were three hours into our Halloween episode and I started to realize
Speaker 1:It didn't resonate for me.
Speaker 2:I was like, am fully it felt like very suffocating having, you know I was fine with two centimeters surrounding everywhere. Brown says ChatGPT is the only consumer app with regular pop ups asking if I wanna downgrade my subscription.
Speaker 1:This was hilarious. It's a testament to the
Speaker 2:They're they're running this as AB test. They're like, we tell people they can pay less and they don't. They enjoy giving us money.
Speaker 1:Maybe the pro plan results in more permanent churn. And so this is actually LTV a downgrade is actually LTV positive. No way to prove that that's true. But it would be very funny if that was the case. The polish around the product is potentially the way you win consumer.
Speaker 1:I really think we're in the era of productization more than the latest model.
Speaker 2:The product managers are the heroes now. I want to see a product manager getting a four year $1,000,000,000 package.
Speaker 1:It's not completely over for the AI researchers. Like, the models are important. They do get better. And there's functionality under the hood that's research driven that's valuable. But if you believe in the Ilia, we're in the age of research, then what is the AI researcher doing?
Speaker 1:Like they are doing experiments that you have no idea of the timeline. Like you're not just doing engineering. You can't just put one foot in front of the other and get easy wins. It's actually going and doing science and discovering new ideas, new ways to create new capabilities. And so in the age of research, the researchers should be off doing research.
Speaker 1:And the user experience designers are the heroes, basically. Goodbye.
Speaker 2:We love you. See you tomorrow.
Speaker 1:Goodbye. See you guys.