Why OpenAI Killed Sora, Did Apple Just Save Siri?, Meta’s Big Loss

OpenAI is giving up on video generation. Here's the real story behind it. Apple is going to make a bunch of AI assistants available in Siri and Meta loses a landmark court case that could spell even more trouble ahead. That's coming up on a big technology podcast Friday edition right after this. Fiscally responsible, financial geniuses, monetary magicians. These are things people say about drivers who switch their car insurance to progressive and save hundreds because progressive offers discounts for paying in full, owning a home and more. Plus, you can count on their great customer service to help when you need it so your dollar goes a long way. Visit progressive.com to see if you could save on car insurance. Progressive casualty insurance company and affiliates, potential savings will vary, not available on all states or situations. Welcome to Big Technology Friday edition where we break down the news and our traditional cool headed and nuanced format. We have a great show for you today. We're going to talk all about why OpenAI killed Sora and really the bigger story about what it means for the company's ambitions. We're also going to talk about a couple new models coming out from OpenAI and Anthropic that has people on the inside buzzing. This new upgrade for Apple and Siri is going to amount to anything we'll touch on that and then finally Meta lost big in court this week and that may be news that will harm it in the future. Joining us as always on Friday to do it is Ron General, of Margin's Ron John. Welcome. Sora is dead, erotic chatbots are no more. Apple might be fixing Siri. This feels like a good week. I'm currently in Park City, Utah and there's no snow. So I'm not very happy about that, but I'm happy about all this news. So, well we will dig into it and clearly the side quest era is over and the biggest casualty so far has been the death of Sora, the video platform that we talked about so much that went to number one on the App Store not long ago and not only that but the API as well. This is from the Wall Street Journal. OpenAI is planning to pull the plug on its Sora video platform, a product that released to great fanfare last year and has since fallen from public view. The move is one of a number of steps OpenAI is taking to refocus on business and coding functions ahead of a potential IPO as soon as the fourth quarter of this year. Sam Altman announced the changes to staff on Tuesday, writing that the company would wind down products that use its video models. In addition to the consumer app OpenAI is also discontinuing a version of Sora for developers and won't support video functionality inside chatGPT either. Ron John, let me just throw, let's look at it micro and then we can zoom out. Let me throw a couple ideas at you in terms of why Sora died. One is maybe it's just that the appeal of video AI isn't that great. Like there's an initial thrill when you generate a video but maybe most people just want to watch instead of create. And then secondly, maybe it's just that all the videos ended up looking the same. Right? You take AI, it generates the average of averages and that's what you've got. And then all of a sudden the utility of this just knows-difed. Yeah, I think separating out Sora specifically from just the promise or kind of current state of video AI is important here. I have to say, I mean given I'm talking to retail consumer goods type people on the marketing side all day long, video is still very interesting and everyone has been vio from Google seems to be kind of becoming the industry standard. So everyone is actually very interested in it, especially from like a true production standpoint. So I think video, I don't think like I still am surprised that they're actually completely seeding that area and not even making it available via API anymore, not making any video functionality. But Sora the product, I mean, I don't know, I have not opened it in a long time. I, what were your greatest Sora hits to date? It was me and Jake Paul walking old lady across the street. Very enthusiastically. I went through actually just in memoriam of Sora and so my son out actually who's seven years old like we would out ask him to give me prompts and I had like a chicken and a horse running around a toilet bowl was one of them. It was basically a lot of stuff like that. And it was funny and his friends they would all get a good laugh out of it. I guess that was not necessarily the market validation one needs to address the tam of whatever they're going to have to pitch investors for the IPO, but some seven year olds are going to be unhappy about this. Yeah, you burned an entire rainforest just to get the horse running around the toilet. Running around the toilet bowl. Yeah, but that joke really goes to the heart of the matter and I actually do have some intel on the real reason why Sora has been shelved. And I will say this week I'm in San Francisco and yesterday it was meeting with Greg Brockman, the president of OpenAI. And we have an hour, 10 hour, 15 long minute hour and 15 minute long interview coming next week. So stay tuned for that on Wednesday. And of course, we begin with this sort of new pivot to enterprise and coding. I won't give it entirely away, but I will share this bit from Greg about why video generation became deprauritized and was looked at as a side quest within OpenAI. So first, I'll say I thought this was and I spoke about this last week, I thought this was a consumer enterprise thing. So maybe they thought that the Sora app was more consumery and they're really focusing on businesses. It's actually not what it is at all. So basically, OpenAI has seen that these GPT-style models are working and there are other ways to try to pursue the most powerful AI and that most famous other method right now is the world models. So models that actually understand physics and that is part of what was baked in Tassora. And so I spoke with Greg and said, well, what's going on here? And he said the important thing to realize is tech technologically that the Sora models, which are incredible models, by the way, are a different branch of the tech tree than the core reasoning GPT series. They're built in just a very different way and to some extent we're really saying that pursuing both branches is very hard for us. So I think this is needed and very interesting focus that we're seeing from OpenAI where they're basically like we want to build the strongest powerful most powerful models as well that we can. We're seeing the results in these tech GPT-style models that do all the things that call the tools that do the reasoning, that do chain of thought, that are getting things accomplished. And we have to decide where to put the compute and to do that in a world model way would really limit the company's ability to progress, to make progress in the area they see as most promising. And that is why Sora is being deprioritized. My goodness, that is focus. That is real focus right there. I have to say, because just on last week's episode, we were half joking about now all you have to say is world model. And it's kind of the trendiest term and it's and meta is making a big deal about it, Google is talking about it, like that's definitely I think going to be one of the buzzwords of 2026. So for them to actually acknowledge that that is not going to be another area of investment, I think that that is a pretty big deal. Right, so that is the logic and I think that makes total sense. And of course Greg and I will speak about it more next Wednesday. So folks please tune in for that. But now it sort of goes to something interesting, which is like, what does this race look like? Because guess who else hasn't really done world models? Guess who hasn't done the side quests of image generation and video generation? It's anthropic. And so you're starting to see a race. So if you the race is taking a very different shape than it had not long ago. Remember it used to be that well, Chatshipy T, opening AI, a Chatshipy T and it was winning consumer with all these images and videos and the chatbot. And anthropic was enterprise and it was sort of doing the enterprise thing with coding and business and all these these applications. Well, what's happened now is that both these companies have centralized on the use case. Maybe you could call it the open claw style use case, which is what they both seem to be going for, which is that you give the AI access to your desktop, to your phone, whatever it might be. And if you're at work, you have it do work for you. If it's in your personal life, you would organize your personal life and take action for you. And I think they do see that this and I'm going to hand it to you again, this potential, a genetic use case where the tech goes after what you need, whether it's consumer or business, it's the same thing. It's centralizing in this sort of one stack, so to speak. And now it's just like almost like a battle to the death here between the two of them to get this right and go after it. Well, I made one listeners cannot see, but maybe on YouTube, you'll see me smiling right now because Alex is it always feels good to be recognized. But I have to admit, when I said this kind of autonomous knowledge work, and this is what we started seeing at writer when we started building this last Jews. and it was that magic moment of pulling files from one place, doing something to it, pushing it to another system, and then thinking about how that applies to absolutely everything, I will say when I made that prediction, I think in October, it's probably to start. I did not think OpenAI ahead of an IPO would actually be consolidating its entire strategy around that. So I'm going to take the win on this. One thing I'll note, this isn't two players, and I'm saying that again, self-interested, because this is what we're working on at Ryder. But more and more so, Sierra, just this week, released something called Ghost Ryder. Notion is going into this space. It really, I mean, I'm seeing this very closely firsthand. Everyone is going after it. So I think everyone has recognized that's the prize. So it's not just OpenAI and Anthropic on this. It's even more traditional SaaS companies are trying to go in this direction. So I think it's definitely clear that I was right on this one. Yes. But now I am wondering, image generation in video, does it, especially on the consumer side? See, I still think there's going to be a big difference between enterprise and consumer. And it does meta-start making moves in here and start filling the gap. Does Google just kind of own it? Because to me, those kind of functions are still going to be very important in consumer. Right. Well, this is the thing like Nano Banana has been a UJ asset for Google, their image generator. And by the way, something that was interesting, I want to give away too much of the Greg interview, but I think this is important. I'm not going to push you too hard. Because it's newsworthy. Newsworthy. Guess what's not going away is image generation in chat, GPT. And when you think about that, what's your initial response? Well, OK, so creating images doesn't take as much compute as creating video, which is true. But what Greg says is basically like it is-- the image generation is being done with the same GPT style technology, whereas the video generation is done with this completely different technology. So that-- and it goes to the generality of the models, where they can do text, they can do image generation, video generation, they can't. But I think you're right that there is this big opening for somebody to do video generation well. And clearly, there are some startups like Runway. But Google is in great shape here. I'm kind of rooting for Runway in this. I don't know, like three years ago, 2023, I had started testing every single generative AI tool available. And I remember Runway was probably the first place that I actually did an image generation. And this is back in the six finger days of like four legs, all of that. And then even video, they might have been the first place I started testing and playing around with video. So maybe this opens the door. But yeah, I think one other note, though, is image generation. Also, it's not just like create an image of a cat. I don't know. Actually, one of the best Sora's I saw that was circulating around was, I think it was a cat with a shotgun shooting a ring doorbell. I don't know. That was Sora at its finest. I don't know if you saw the tweet, but it was from them. And it was like, we will give credit to everyone who made videos that matter. It was animals running around toilet bowls and cats shooting ring doorbells. But I think there's also image generation, even in the enterprise, generating diagrams and slightly, it's still visual communication. In many ways, it's not just make me a funny image. So I think it makes sense too that they still have to play in that that they still, it's still important. - Right. And I think the important part also is that it is along the same tech tree, as opposed to something completely different. But you're right, even if it was different, you'd probably want it in your suite of tools. I want to go back to something you said, actually, that it's not just open AI and Anthropic. Yes, there are others, but a lot of these companies are working with OpenAI or Anthropics technology underlying. So there's a good chance that they'll see the benefit no matter what, even if let's say it's Sierra that ends up being the one that deploys this for business. - Well, you're coming into my world right now, Alex. I think so, at Ryder, we have our own family of foundation models, the Paul Meyer family. So for us, and actually there was like a very interesting intercom, which now has thin, they announced this week as well that they basically have trained their own foundation model. So I think starting to see some kind of combination of using, whether it's like cursor using deep seek, which they just basically didn't say that they were doing, but then were, but is actually a very thoughtful approach to this. I actually think more and more, people, the companies are going to start taking this approach is not just going to be an API call to open AI or Anthropic. So I do think like the, and I say this with the notions and the cursors and the Sierra's of the world that like, more and more, it's that, I think a lot of tools to date, it was just that API call. I think more and more people are going to start either customizing or fully training on the foundation model side. - Prediction. - I'm going to come in skeptical here, and if I have to eat crow again, I'll do it. But I do think that the foundational model companies are going to be, well, without a doubt, they'll be big players here. Let me take this to you again. If the battle between opening an Anthropic shapes up to be, not the way that it was previously, but like going head to head on the same use case, which they hadn't been previously. Claude was happy to not have lots of consumer users. And opening, I was happy to not go after enterprise. Now they're really going head to head. What do you think that means for this race or how do you see that shaping up and who do you think is going to win? - I don't think this is the right idea for open AI. I think like they had a foothold and consumer. I know the business model for consumer has not been figured out yet, but that was still where they had the edge. Like they could start to go after this. We talked about last week, what that means between them and Microsoft is a very big question in my mind because when you say enterprise, this is Microsoft's world. And already there's tension around open AI starting to do deals with AWS and like potential rumors the FDA reported on a potential lawsuit. So like it just puts them in such a different space than they have been. And it's honestly kind of surprising to me that it's like basically we want to be anthropic is what they're saying. Everything they're doing is let's just try to catch up to anthropic. And yes, anthropic had a very good year. But like, remember a year and a half ago people were leaving anthropic for dead. Maybe that's an exaggeration, but we were even pulling up charts of declining consumer usage and joking that we're no longer clawed heads and we were Gemini guys. You know, like there was this moment and then they really nailed and we called this. We said it was a risk and a bet but going all in on coding meant something very different. But I just don't think, I think it's too late for them to make this switch and it's reactive rather than we are our own unique business. We have 800 million users. We're gonna get to a billion. We're gonna run ads. People are gonna search about everyday life and there's a lot of ways to monetize that. I just, yeah, I don't know. I need to see this in action versus just being reactive. - That is interesting, but let me put the counterpoint to you here, which is we all saw the open claw moment, right? And I think many of us still are having fully, including myself, have been fully wrapped our heads around what that can be applied to elsewhere. Because open claw is basically like, you're gonna put your, you know, creative virtual machine or get a Mac mini, put this AI agent, allow it to control that machine for you, plug it into a couple of services that you use, and then basically have it be a assistant with persistent memory that gets stuff done for you. And so think about, let's say, and again, I think it's important to say that this is not gonna be a breakdown of like, you know, that opening eye goes after enterprise and not consumer. Think about this type of use case. Imagine you're like dealing with a hospital, right? Or dealing with an insurance company, right? And you're trying to get something covered. Or you're trying to understand your, you know, your, what your data looks like compared to others. To have this like always on assistant with persistent memory that can go out and negotiate on your behalf with the insurance companies, or go out and monitor your health situation. Like, is that a consumer or is that an enterprise? That's consumer, but it's still in this agentic world. So maybe to sit that out, which seems like it's a bad business decision. - Okay, I mean, fully agreed given now, you're the one saying that kind of like coming up with these broad agentic use cases and visions. And again, remember like, I think this is the exciting part why everyone's so fired up is like, once you feel that power, just imagining all the possibilities and I think you put it well, like always on connected to your data and able to take action. That those are kind of the three foundations of this whole thing. And again, we don't know what, no one has named it yet. I've been like, racking my brain, it's like autonomous knowledge work. Open claw, I don't know if it's going to stick. Maybe that could be the open claw, but like, that is the work. Harnessive, harnessive is the, let's take over. I think, but I do think, yeah, it's, I fully agree. It's not consumer versus enterprise. Every person, I think, will have a lot of things that they will be able to build and do with it. So I agree it's this central part of the battle. I just mean more, like, and we're going to get into the shutdown of the erotic chatbot. But like, even the advertising business, I was just at shop talk in Las Vegas all week, open AI, ton of talk around commerce. Again, it becomes like one of those interesting things that it's consumer. It's also enterprise because you have the retailers, but you also have the end consumer who will be shopping on it potentially. So I think, I agree there, but I just think that overall as an organization to start cutting these very consumer friendly things, are you going to be able to focus on and advertise a large advertising business when you're trying to do everything else? That's where I think there's issues. I think you will be. I mean, chatbot, he's already at a hundred million dollar annualized run rate. Oh, that one killed me. It's been out for six, can I make one? Do it. No one ever say annualized recurring revenue when a product has been out for six weeks. Like it's just not ARR at that point. Let it, don't make us extra, don't do the extrapolation. Just say it's been out for six weeks and we've made what would that be like nine, ten million dollars or whatever it is. That's just, that's all it is right now. And it could be much bigger and I'll be, I'll be, that'll be great for them. But reporters, please don't use ARR unless there's some kind of meaningful trend. I think I'll keep doing this, doing it on this show just to annoy you, Rajan. But I, I messaged her loud and clear. Let me, let me end this segment with one thing, which is this all sounds good in theory, but the problem that I have and the problem that many people have is a trust problem where I want the AI to do all these cool things for me, but I do not trust it to have access to my Gmail encounter and desktop and all these things. And obviously like some of the leading models, like are the leading providers, even Opel cloth, like we don't recommend you, you do this without, you know, some precautions like running on a separate machine. Do you think that that trust barrier is ever going to be overcome? Yeah. 100%. I mean, I, I see it myself. Well, actually, oh, that, and to add nuance to it, like I, I have something that just 7 PM every day, here's all the emails that you have not answered that are like a, from today and then greater than 24 hours old. And here is a suggested response based on your entire Gmail history. So I get this. I don't have it, send it the email yet. Like so that, so I've not gotten to where I'm actually like press button, send the email to everyone. But as you start seeing it, start actually kind of like tweaking the, how you want to response is structured, I do think there is a world where I would just have it send the response. So I think that they're like the trust comes with time and quality. And like the more you start to see it and the more you also start to understand what questions not to ask or where data is going to be bad and you're going to get like a subpar answer, that is kind of going to be one of the most, I think, important skills, but also that's how people will build trust. This is why I always get emails from you at about 7, 10, 7, 12, right? The clause like that's wonderful. Come on, Ron, let's make sure to schedule at this time. Well we're about to find out really where this is going to go because we have two major models coming from both one each, one from open AI and one from Anthropic. Well, start with Anthropic. There's a very interesting story and fortune this week. Anthropic acknowledged test, acknowledges testing, a new AI model representing step change in capabilities after accidental data reveals, data leak reveals its existence. Anthropic is developing and has begun testing with early access customers, a new AI model, more capable than it has released previously. The company said following a data leak that revealed the model's existence. Anthropics spokesperson said the model represented a step change in AI performance and was the most capable we've built to date. The company said the model was currently being trialled by early access customers, a draft blog post that was available in an unsecured and publicly searchable database prior to Thursday evening said the model is called Claude Mythos. The company believe it poses unprecedented cybersecurity risks. Mythos has also been called Capibara and a document and the topic says, "Capibara is a new name for a new tier of model larger and more intelligence than our opus models, which were until now our most powerful. Compared to our previous best model, Capibara gets dramatically higher scores on tests of software coding, academic reasoning and cybersecurity among others." Wow. So, we could be seeing a new class of model, you know, Anthropic of course has its three, and it opus and what's the other one? High coup. High coup. So now we might be getting Capibara. We might be getting Capibara. What's your quick take reaction to this? I mean, I am a step change in models now that when we've been talking about this all episode that now we all kind of know what the battle is, I think we'll be very, very interesting to see. Like again, but it's still hard to understand when you both worry about say that you're worried about cybersecurity or recognizing these risks, but then say it gets dramatically higher scores on tests of software coding, academic reasoning and cybersecurity. It's still just, I don't know, kind of difficult to actually parse out where they're going with this. What do you think? What's your prediction on what it will feel like the first time? You crank out some work on Capibara. Well I have been thinking about this because we've been sitting here and we review every update that seems incremental. Right? Oh, it got a little bit better with this. It got a little bit better on this. And it's starting to feel like it compounds. You know what I'm saying? We started with ChatGPT in 2022 and it had all these sorts of flaws. And over time, they've been patched up in a way. And so I just started to think about it this week in terms of all the AI CEOs say that there is this exponential happening. And maybe that's just the way that you get that exponential. With interest for instance, there's 6% on your investment and then another 6% on your investment and that 6% that you got last quarter. And then almost certain that starts to really grow. And it seems like that might be what's happening with these AI models. Maybe I'm being overly optimistic. No, no, no, but that's not even optimistic. That's realistic. That's like compounding the cruel of value coming is actually the way this is playing out. But the marketing was done before that like GPT-3 and GPT-4. Like that everything had to be revolutionary in a step change. And then people were disappointed when it wasn't. So I do think that could be the right way to look at it and people don't. And maybe it is just a marketing limitation that they have to make a big deal. But it would be kind of nice if everyone actually just spoke about it like that. Here's our release notes. It's definitely a little better. And then you can do a lot more and that's all we should really focus on. They will never ever speak that way. No, of course not. No, of course not. Here's another one, open AI, new model. It's coming out called Spud. Open AI CEO Sam Altman said the company has completed the initial development of its next major AI model code name Spud. He told staff that the company expects to have a very strong model in a few weeks that the team believes can really accelerate the economy. He added things are moving faster than many of us expected. You know what's interesting? It's like just as the, and now I'm going to really sound optimistic and I'm trying to check myself. But like, just as the world implements today's models and is starting to find that they can do things with them that they really couldn't do with the previous generations. And that's leading to this like explosion of possibilities. It's like wait and they're building better models than these. Some that they say are sizable. It is one of those moments where you sit back and just go, this is crazy. I mean, it feels, it definitely feels like that. But sorry, I just have to stop for a moment and say the name Spud did not jump out to you as what the hell is going on. And I'm sorry, anthropic sitting on mythos and capybara. I don't know. I'm like, but Spud is the code name for their model. Where is this coming from? Not exactly inspiring. No, no, he's literally a. The team believes can really accelerate the economy. He's not even saying like, you'll be able to do a little bit more multi-step reasoning. He's being, again, as we were just talking about, everything has to be grandiose and can really accelerate the economy. And it's called Spud. I don't know. Maybe you imagine your job and you manage your walks over and they're like, "God, I tell you, we're replacing you with Spud." That would hurt my feelings, but it might happen. Maybe do you think this is so bad that it actually makes me, I will never forget the name versus mythos and stuff? Maybe it'll just kind of fall into a high coup. I couldn't remember off the top of my head. But Spud. You'll remember. Don't even call it GPT-6. Just come out with our new class of models. Just Spud. And Spud. Spud. But look, let's be clear here, it's just a code name. It's not like OpenAI is going to release Spud. I'm saying they show it. They show it. And then I had code name, but again, most tech project like code names that have ever come across, they're been part of, everyone has a somewhat ambitious name or like it's kind of like strong grandiose big name. So that's why this one really jumped out at me. But I kind of like it now. The same people who are branding the Pentagon operations have come and started to code name. No, but the OpenAI products. It's not epic fury would be more in line with mythos. Spud. I don't know about that. I don't know. Well, you'll find out soon enough. All right, folks, if you are enjoying seeing Ron John riled up, well, just wait till the second half where we talk about Siri. We'll be back with hopefully some better news about Siri's direction, but I can't promise anything. We're back right after this. I've interviewed a lot of great tech founders on this show. And once surprisingly universal challenge comes up again and again, finding the right domain name. It's something I ran into myself with launching big technology. The names you want are often taken and it's tempting just to settle and move on. But the founders I respect most don't settle on fundamentals and your name is one of them. It should immediately signal what you actually build. That's what I appreciate about.tech domain names. It just makes sense. It tells the world your customers, your investors, anyone Googling you that you're building in technology, clean, direct, no qualifiers. And I'm seeing more serious startups lean into it. Nothing. One x.tech Aurora. CES. Ultra. Alice. Neon. Play. Pi. And so many more. If you're building something tech first, don't settle. Secure your.tech domain from any registrar of your choice and make your positioning obvious from day one. More back here on big technology podcast Friday edition. Siri is on a way on its way to a new improvement. This is from Bloomberg. Apple plans to open up Siri to rival AI assistance in iOS 27 update. The company is preparing to make the change as part of a Siri overhaul and it's upcoming iOS 27 operating system update. The assistant can already tap into chat GPT through a partnership with open AI, but Apple will now allow it allow competing services to do the same. The company is developing new tools to allow AI chat bots installed via the app store to integrate with the serious systems. The chat bots will also work with an upcoming Siri app and other features in the Apple intelligence platform. I'll just quickly share my perspective here and then you know, let you riff off it, run on. People were and I initially took this as maybe Siri is saved. But then I realized that it's just going to be the same disappointing user experience that you use to find chat GPT in Siri. So in other words, same Siri, new stuff you can access with it, not a Siri that is actually you know, a distilled version of cloud or something like that. And that just makes me even further disappointed in what we're going to get on the iPhone in terms of AI assistant. I will refrain and try to remain calm, but this was this made Spud look like pure poetry of a name because when I'm reading this now, I agree. There's been a lot of like very promising things about Siri that have made me question my hatred for it and think there is a possible future again. Like this got even more confusing because Gemini being the kind of base foundation of Siri and actually making it valuable is kind of exciting. This not like when's the last time you actually use the chat GPT integration in Siri. I don't use it. I mean, why would I do anything but go to the chat GPT app? Yeah. Yeah. So, but then like the actual technology here, like Siri actually having connected apps or kind of I think they called them maybe skill. There was something for many years like trying to actually integrate specific functionality within apps has existed within Siri. So like just having that as the query, I guess it will be a little less friction if it means that Siri will then be able to directly read out the answer to you or have it appear rather than opening up the target app. But like, I don't know, this is, yeah, I agree. This is horrifying. Like if this is still where there has Siri has to be able to be good enough to compete with those apps, like that it just has to. I should not trigger some other thing. And I thought that's what they're working on. So the fact that this is going to be some kind of thing and actually the last line, this approach should allow Apple to generate more money from third party AI subscriptions through the app store. That was the most depressing part. That if this is just like, well, buy your Gemini through the app store and then we're going to take a cut. This is, this is troubling. And what we'll see, I'm still, I'm going to give them, give them a chance here, but not positive. Two months till WDC. So let's see, but let's see. Not very enthusiastic right now about what's going on. Although, go ahead. I was going to ask, do you think WDC they're going to have like a well fleshed out vision of what Apple intelligence is, what series? No, I wouldn't be surprised if we didn't hear anything about Apple intelligence this year as well. Well, but even the Siri overhaul and stuff, right? Like you think they're nothing. No, maybe a few minutes. They have to release products. They have to let the products do the talking. They cannot tell us again about what's coming. That seems to be. I agree. I agree. Yeah. Okay. Agreed. So, I think we're going to have a couple of friends over here in Silicon Valley, Meta and YouTube. This is a pretty big deal actually. The case court in California found them both liable for harming a young user with their futures, with their futures. This is for the New York Times, Meta and YouTube found negligent in landmark social media case. It says Meta must pay. So yeah, they they the landmark decision could open up social media companies tomorrow. Lawsuits over users users, well being meta must pay 4.2 million in combined compensatory impunitive damages and YouTube must pay 1.8 million. The bell, whether cage, which was brought by a now 20 year old woman had a who had accused social media companies of creating products as addictive as cigarettes or digital casinos. And they led to anxiety and depression and the court found in this person's case. And there are thousands more of these lawsuits coming through. Now, I was on CNBC just as this happened and I was like you don't want to lose these cases because you're going to have others. And the other panelists that was with me was like basically, you know, this is a win for them because the amount was so small. It was only I think just a few million dollars, 6 million total. But when you lose, you open the door for other losses. And some might see the award and say if they got that, we can get even more and low and be old. Metastock has just tanked over the rest of the week. So how do you read this, Ron, John, in terms of the potential for successive liability for meta after this problem? After this loss. But, but I'm trying to because I had also seen that they're ordered to pay 375 million in civil penalties. Yes. So that's a separate case. I was on the loss this week in New Mexico, which for some reason wasn't talked about as much. And I have a theory as to why it wasn't talked about. Okay. Well, walk me through because I had just a note like Andy Stone, the head of comms over meta, I'd seen a tweet where like basically he was like, it's not that much. It's a fraction of what the state sought even for the 375 million, which was just terrifying to me. The state saw 2 billion. The point is that like if you lose, you open yourself to, self up to further losses. So that's that's to me. So I guess I can sort of give my perspective here. The issue here is that the ruling is basically telling them that you can't use section 230 as a shield anymore. It's not necessarily that you're being sued over the content on your platforms. You're being sued directly over the way that you design them. The courts are finding that yeah, that you can't hide behind section 230, which protects like forum owners from the content that people put on top of them. And now we could potentially see thousands of similar cases. That is a problem. Yeah, I think. I mean, And honestly, this is something since 2015, '16, I've been hoping would be recognized. So it is, I mean, 10 years late, but still I'm very positive about it. But I think, like, especially, you have the, it not only being liable, opening the door, the fact that the, the smaller case still found that, and it said like the reporting, the finding validates a novel legal theory that social media sites or apps can cause personal injury. I mean, that's a huge deal. Like it's, it's that the actual being liable, not like for the actual injury side of it, I think gets really interesting. Where, how do you see this playing out? Like, for, for, how many, for at least a decade, every one of these has come and gone, and meta keeps meta-ing. So, an Instagram, every single person I know, just all day long, scrolls on it, like they're still, they're still doing what they've always done, and they've been doing a very good job at it. So how do you see this? Do you see this actually affecting their business? I saw a great interview with a law school professor this week where the law school professor, and his name escapes from his topologies, was basically like, meta has to appeal this, and they will appeal this, because this is effectively, effectively setting precedent in the country for whether section 230 can work to protect you or not. And the court just found no. So, the way that this professor sees it going is that it goes all the way to the Supreme Court, and then the Supreme Court rules, specifically on the boundaries around section 230. And if the Supreme Court, and I'm just saying, like, let's say it goes out the way that this guy thinks, if the Supreme Court rules that section 230 is not protective, it's not just the thousands in action now, it's could be even more that come in. And I mean, I guess that's somewhat concerning in terms of like, all right, if you're a content business, are you not liable? Like, we have the discord, and luckily everybody's pretty well behaved and happily contributing there, but like a mine not liable for everything said, in our discord instance, it just opens up, this Pandora's box that could cause damage to the internet, and especially to Metis Business. And on the Metis Business, I just one more thought here, they are spending a lot of money this year, 115 to 135 billion on AI infrastructure, and the reason why the market has, quote unquote, allowed them to do that, is because they're making all this money. If you start seeing your margin trimmed by a, like sort of, death by a thousand needle poaks from these lawsuits, then all of a sudden, your ability to spend on innovation goes down because your margin comes down, and the market doesn't give you the leeway that it might have otherwise. So that's a potential problem there. - Okay, so a couple of other thoughts. See, I guess it's just been so long where they have not been affected, that it's just still, it's almost unbelievable for me to think that they will or could be. I mean, that's just, it's been years and years of, when was Mark Zuckerberg in front of Congress way back? Well, that was like 20s. - 2018, 2017. - 2017, 18, yeah. Like, remember, good memes back in the day. But like, I think-- - I was there. - Oh, you're okay. So, yeah, it was so long ago, but I think, a couple of things that jumped at one, the cigarette analogy is interesting to me, 'cause like, I saw some interesting, you know, like, is that really the right analogy? I think there was an op-ed in the New York Times on this. Basically, the idea is like, there is good and there's bad. So, it's not like cigarettes, which, I mean, maybe you can argue, there's good. But like, in general, I think most people are not even pretending there's any true good out of it versus like social media can be a net, so societal positive. It can also be very negative. To me, though, and I've written about this a lot, like, the algorithm is the cigarette or the tobacco. Like, it's not the content, it's not even like, the core technology of posting a photo. It's just algorithmic based content. And I think if this finally gets people back to talking about that as a danger, I'm very, very happy about it. I think it's good, but yeah, oh, just like fixing Siri, I'll believe there is a material impact in meta-business when I see it. - I know we haven't been in the courtroom, but let's just, I'm curious if you agree with the verdict here, because the meta-argument is, "teen mental health is complicated, "it doesn't come down to one app. "You cannot blame everything on a single app." I mean, obviously, in some cases, they're contributing to teen mental health issues, but then again, there is some merit, I think, in saying that, like, there's a combination of factors and not just one culprit. What do you think? - So I will say, and again, this has been a long, long rant, I think. It was like 2019, we'd written the margins five ways to fix social media. One of them I still loved, which we'll never get, but the timeline should be reverse-pronological by default, so there's no algorithm suggesting the content, 'cause to me, there is one culprit. It's the algorithmic recommendation of content. That's it. Whether it's on YouTube, whether it's on Facebook, whether it's on Instagram, TikTok, that's the entire platform. That's what radicalizes people make some feel bad. So I do think there's one culprit here. I think it is interesting, like-- - Wait, hold on. You're saying that this person's mental health issues, you would say, are entirely due to the algorithm. - I mean, that's like saying, is smoking responsible for lung cancer? Or could obesity or environmental factors and air quality and come on? We all use social media. We all, like, everyone, it's just, I don't know, I guess, I do love a lot of the times I have friends who are like, I am not influenced by social media. I'm not influenced by the ads. The posts don't actually make me feel like I'm missing out on something or I need to improve my vacation. But to me, I don't know, is that not the most centrally clear thing to you? - Well, I guess this is sort of, I see your point. It's like the kind of argument to meta-s argument is it's not that smoking cigarettes lead directly to cancer. It's that smoking cigarettes are a known carcinogen. So you're odds of getting cancer. And then therefore, in many ways, the cigarette companies are liable for sort of the additional cancer cases that they cause, even though you can't draw. A straight line, one to one. And maybe there's a similarity with like, are more kids depressed today because of social media. If you can prove that and it's tough, then I'm just again, talking through these arguments. - Yeah, yeah, I think it's a target through it. - Like, causality is very difficult to prove, which actually now that we're talking, I do think makes this really a big deal. Now, cause causality, it is, especially in this case, with mental health, feels nearly impossible to prove. I don't know, maybe you could, like based on their usage statistics, somehow start to like draw more of a direct correlation of that specific user, especially if you're looking at individuals. But I mean, anyone who is clicked on the YouTube right rail of like recommended videos, it's anything like it just exacerbates, exaggerates, like radicalizes in many cases. I mean, it's just designed to make you feel and the easiest way to make people feel and stay engaged is to make them not feel great. - Maybe, but they keep coming. But you, let's say, yeah, people keep coming back. I don't know. I wanna, I call it doom scrolling and I want to doom scroll. - That's my choice. - That's what a good addictive, if you wanna sports gamble bet on sports, if you wanna vape, if you wanna smoke cigarettes or whatever your advice of choice might be, like it's similar to me. I don't know, do you wanna know one of my hot takes? This is a, so Twitter change from reverse chronological by default in the spring of 2015. And to everyone's default feed was algorithmic. - Right. - And what happened through 2015 into 2016, or hold on, let me get the exact same thing. - Yeah, that is responsible for the political climate globally right now. - Yes. - Okay. First of all, a couple of things. Number one, the, what you described, somebody smoking and vaping and sports gambling and spinning through reels, that's basically my weekend where I've got the vape in the, (laughs) - Got a fully marked 10-year-old kid. - Got a fully marked 10-year-old kid. - Bad M.G. (laughs) - No, look, one thing I'll say about the whole algorithmic thing is that's always gonna be weird for me personally because I was a reporter at Buzzfeed at the time, and I got the scoop. that Twitter was moving to an algorithm. That was on like February 2016. So even more in line with my theory here, February 10th 2016. Well, I mean, look, you could say that Trump, I mean, out of all the candidates, he played social media well, but I think the thing that really put him in office were those debates where he just, I mean, Shane Gillis has like a pretty good bit on this, just that like, you know, he's like, braw, you know, one candidate's like, I'm Rand Paul and I believe in schools. And then Trump was like, you're a complete loser and everyone's like, you could do that. No, but it traveled more because of the time. Yeah, and then it traveled because you're right. That's interesting. Yeah, it's possible. I'm not saying people, people, people, people who made our election year also, I mean, not to bring us all the way back to it, but like, I definitely, you know, when I was also at BuzzFeed, I did some reporting on Trump rallies and, you know, got retweeted by this Tennessee GOP account that was like, you know, the mainstream media will never show you this. And which was funny because like I was part of, I don't know if you call it the mainstream media, but the media at the time and be that that account Tennessee GOP, which was massively followed and influential, during the election was run from St. Petersburg. But that's a different story like we can talk about another time. What a time. Good, good times. Good times. So I got that scoop that there was going to be this Twitter algorithm on Friday. And then there was a big thing that happened. It was called rip Twitter. I don't know if you remember that. Like a million people tweeted RIP Twitter over a weekend after my story came out. And that led Jack Dorsey to say we were never planning to introduce an algorithmic feed next week. And then my mentions flooded with people saying you're a liar, your career is over. How does it feel to have no credibility? And I thought I was totally gaslit. I thought I was done. And then they made the announcement that Tuesday, the following Tuesday. Yeah. Just a minute, just a minute reporting on that company. That was crazy. All right. Yeah. So that's that's my theory. I'm sticking to it. Okay. Should we talk about the text docs? Very rough week for the text docs. This from CMBC, the text docs suffer. They're worse week and nearly a year driven down by war worries, metal eagle woes. I mean, Microsoft is 30% off. It's it's it's high. 30% do you think this is just war or is it like a a growing uncomfortableness and unease around the spending and the lack of near-term profits from AI for these guys? So I do, I do think it is very important this week. What's happening. And I I think that the kind of like headline side of it is, yes, like the market's been getting cream this week. Like, text docs have been on like epic runs anyways. So like giving a little back feels a pretty like a pretty natural thing. But to me, because of all the circular financing that's at the foundation of a lot of what's happening in AI right now, because of all the kind of like follow on effects of just if the tech giants start actually being in a little bit of trouble, what does that mean for the industry? We're at large. So so I think like and again, Microsoft, I think could be a whole other segment is in terms of why are they not doing as well as the others. But I do think second on Microsoft. Well, I mean, I think it's it's clear there they have fallen behind. And so there's nothing exciting coming out. They have the install base of everyone using co-pilot, but people are not paying up and converting to paid subscribers in any meaningful way. They just replace co-pilot leadership. So like on the whole AI thing, it is pretty crazy that they had like open AI. They were the the partner at the beginning very early. And now still, they're not really anywhere notable. Like what's what's the last exciting thing for Microsoft in AI that you can think of? Bing. I mean, they had been like they actually they were the first to they could have pushed this through. Yeah, I think everyone's kind of coming around it. And maybe it'll just be a good wake up call. I'm sure given their install base, given their like who they are, if they figure this out, they will be a force. But I think like I think there the market is recognizing it a bit. Okay, let's end this week with one of our traditional products slash feature funerals. And ladies and gentlemen, we're gathered here today to pay our respects to the short and and quite eventful life of the open AI adult mode, which has left our world indefinitely. It doesn't seem like it's coming back anytime soon. For the financial times, open AI has shelf plans to release an erotic chatbot indefinitely as it refocuses on core products following concerns from staff and investors about the effect of sexualized AI content on society. Sam Altman startup has already delayed the release of its adult mode amid a internal discussions over whether to scrap the mile entirely the sexual chatbot face growing pushback over how it could encourage unhealthy attachments to AI systems and expose miners to problematic sexual content. Rest in peace adult mode on chat GPT. Perhaps our planet is is better off that you never saw the light of day. How do you feel about this Alex? Companion chip has been one of the cornerstones of the Cantorate School of the Future of AI. Well, I don't want to be the morality police sensation be able to like have cyber sex with your chatbot. But speaking of businesses that open AI shouldn't be in. This seems like one of them. It just opens up the sole can of worms. I think this is the right choice. What do you think? No, the unquestionably the right choice. Like we've brought this up when the moment they said enterprise, I was like, you cannot have erotic chatbots running around and like then still pretend that people are going to trust you. But but again, I don't know, maybe they could have done something interesting. Maybe this focus all the creativity in the industry. Are we losing the the weirdness of Sora and potentially erotic chatbots now that everyone's just making claws? Well, speaking of like you know potential competition like it does open up the door for other chatbot providers to use some of the underlying technology and make this erotic chatbot of their own. Just because you can't use it within the chat to be T interface, maybe you can use like a GPT based adult mode chatbot and you can make a pretty good pretty good startup that way. Question. And with the disclaimer that we are not lawyers and will not pretend to do so, but given the idea around liability in the social media use case, should AI company be responsible for the end content created with its VA PIs? They have control over the, and again, I mean actually this ties back to the pentagon and the war question, but like like should they be responsible? For adults, no, like adults should sign off that they don't know where this is going to go and they shouldn't be liable. But for kids absolutely, what do you think? Well, then you're saying open AI if some other service is calling their models VA API. And then it's adults having erotic chatbots, is that is open AI delivering that service and content? Should they be responsible for whatever happens? And yeah, definitely if then kids are using this, that's a whole other thing. And should the service be liable? Should open AI also be liable? Okay, so two separate questions. Yes, that's great. That is a great question because it's a little bit different than like the comparison is cloud hosting, but it's a little bit different than cloud hosting, right? Because it's like cloud hosting is you store your stuff here and that enables you to do what you want to do. Whereas like chatbot is like you're using this technology to do what you want to do. No, and this actively generating new content. I think it's the person, sorry, I think it's the person that deploys it. I don't think open AI should be liable if somebody else uses their technology. I think they should have terms of service because they want this technology to have a good reputation. Remember, they're the polling issues, but I don't think they should be legally liable if somebody else deploys it in this way. Okay, then in the terms of service, do you think they're going to kind of like prevent to others from creating erotic chatbots? Probably not. I mean, because if you think about Are you thinking I'm thinking do we have to call it like make make our own version of this? No, no, no, no. Maybe maybe but if we do you know what we're calling it. Wait what? What chat? Oh, no stops. No. No, no, no, no, no, no. I was gonna say something in a whole different direction about, imagine if it's a brilliant maneuver that they could actually see a ton of API-based revenue of basically everyone else creating erotic chatbots, and then put that under the umbrella of enterprise revenue and have hockey stick charts about look how fast or enterprise and API business is growing, because that's technically enterprise, but I can't thank any more because I mean it would be diabolical, a diabolical plan. I just, you have to explain to anyone who missed, I think you have to explain to anyone who missed last week's episode, the context of this this app name. All right folks, so last week at the end of the show we talked about dry chatting, which is where you practice a conversation with a chatbot before you go in and do it live with a real person. And so of course the, not if you don't do that or the actual live chat with a person wouldn't be called a dry chat, it would be called, it would be called a wet chat and it's just disgusting to think about that. But I'm just saying it would be a good name for a total chatbot app. I've gone over the line. I think this, I think we should make this our second episode that ends with that term that I just cannot bring myself to say and and then and then hope next week it doesn't. Yeah, that will be our biggest hope as we can end and then that the set without bringing that up. But if I had to bet, I would say I doubt it. All right, Ron, John. Thank you so much for coming on. 50, 50. All right. See you next three week. Amen. All right, everybody. Thank you for listening and watching on Wednesday Greg Brockman, president and co-founder of OpenAI is going to come on and share lots of new information about OpenAI. Don't miss it. Thank you again and we'll see you next time on Big Technology Podcast.