WEBVTT - Let Tim Cook 0:00:02.480 --> 0:00:07.880 All Zone Media, Hello and welcome to better Offline, I'm 0:00:07.920 --> 0:00:20.279 your host, and generally optimistic man ed Zeitron. What else? 0:00:22.960 --> 0:00:26.480 Last week, Apple announced Apple Intelligence, the suite of features 0:00:26.520 --> 0:00:29.280 coming to iosat and that's the next version of the 0:00:29.320 --> 0:00:33.320 iPhone software, in a presentation that Fast Company called uninspired, 0:00:33.720 --> 0:00:38.720 futurism called boring, and Axios claimed failed to excite investors. 0:00:39.040 --> 0:00:42.840 They did not even check the stocktic anyway. The presentation 0:00:43.080 --> 0:00:46.320 given at Apple's Worldwide Developers Conference, usually referred to as 0:00:46.400 --> 0:00:50.839 WWDC and where Apple usually announces its next software updates, 0:00:51.120 --> 0:00:55.920 felt remarkably demure in comparison to May's Google IO conference, 0:00:55.960 --> 0:00:59.600 which is Google's equivalent, where CEO Sandhar Pashai and Head 0:00:59.600 --> 0:01:02.320 of Search Liz Read hype the next generation of Google 0:01:02.320 --> 0:01:06.800 products and search updates that absolutely nobody asked for. Historically, 0:01:06.840 --> 0:01:10.200 what WHDe Developers Conference is where Apple announced major updates 0:01:10.200 --> 0:01:14.200 to both its product and software lineups. A WWDC two 0:01:14.240 --> 0:01:17.120 thousand and five, the late Steve Jobs announced the company 0:01:17.120 --> 0:01:21.320 would move from IBM designed and Motorola manufactured power PC processors, 0:01:21.640 --> 0:01:24.400 allowing for faster and more power efficient computers, as well 0:01:24.440 --> 0:01:27.600 as the ability to duel boot Windows, a huge moment 0:01:27.640 --> 0:01:30.960 for Max that was met with rancorous applause from people 0:01:30.959 --> 0:01:34.880 that really should have known better. Fifteen years later, Tim Cook, 0:01:35.040 --> 0:01:39.399 now CEO, would announce Apple's shift away from Intel stagnating 0:01:39.600 --> 0:01:44.200 X eight six architecture to Apple's homegrown ARM based processes, 0:01:44.280 --> 0:01:46.840 starting with the M series processes that have now become 0:01:46.959 --> 0:01:50.920 ubiquitous across MAX and iPads, one which was met with 0:01:50.960 --> 0:01:54.080 the bombastic promise that these were the most powerful chips 0:01:54.120 --> 0:01:57.680 ever created. I should add, by the way, the M 0:01:57.800 --> 0:02:00.680 series processes are actually probably one of the better things 0:02:00.720 --> 0:02:03.280 that's come out in the last ten years. The average 0:02:03.320 --> 0:02:05.800 MacBook Air is insanely fast now, like I have a 0:02:05.840 --> 0:02:08.799 MacBook Pro. It's phenomenal. A lot of you say, I'm 0:02:08.840 --> 0:02:12.000 not positive, Okay, these are things I like. Here are 0:02:12.040 --> 0:02:14.840 things I like. Are you happy now? I am kind 0:02:14.840 --> 0:02:19.320 of anyway. WWDC is where Apple has unveiled every new 0:02:19.480 --> 0:02:22.640 version of the Mac operating System OSX. It's where the 0:02:22.680 --> 0:02:25.840 original Mac Pro, FaceTime and the iPhone app Store were 0:02:25.840 --> 0:02:29.360 introduced to the world. This is the conference where Apple 0:02:29.560 --> 0:02:32.960 flexes its muscles and boasts about how powerful and important 0:02:33.000 --> 0:02:37.320 Apple is. Now you can understand why this year was 0:02:37.440 --> 0:02:44.240 just so strange. Gone was Apple's trademark bombast, It's propensity 0:02:44.320 --> 0:02:46.440 to tell the world how good it was at everything 0:02:46.680 --> 0:02:50.600 and how important its next big thing was. Instead, we 0:02:50.680 --> 0:02:53.680 got this weird juxtaposition between we're putting AI on your 0:02:53.680 --> 0:02:56.120 phone and it's totally fine. It's not big deal. You 0:02:56.160 --> 0:02:58.360 shouldn't be scared at doors. It's not that big a deal. 0:02:58.400 --> 0:03:01.959 Please don't be mad at us. Despite this ostensibly being 0:03:02.040 --> 0:03:06.239 Apple's big artificial intelligence play, CEO Tim Cook and SVP 0:03:06.320 --> 0:03:10.280 of Engineering Craig VEDERIGGI spend far more time explaining how 0:03:10.320 --> 0:03:13.800 much they love privacy and shareish your data and would 0:03:13.800 --> 0:03:16.080 never share it with anyone, and listen to all the 0:03:16.120 --> 0:03:21.000 ways we're keeping it private, before casually sauntering into a 0:03:21.040 --> 0:03:25.080 series of product updates that appear to actually use AI 0:03:25.320 --> 0:03:29.280 for a purpose and kind of useful and hardly suggests 0:03:29.280 --> 0:03:32.480 that Apple is intentionally trying to distance itself from the 0:03:32.560 --> 0:03:37.920 AI hype train. And while it's integrating CHATGBT intoosaighteen, which 0:03:37.960 --> 0:03:41.119 don't worry, I'll get to later, it's doing so an 0:03:41.240 --> 0:03:44.480 arms length approach, with most of the day to DAAI 0:03:44.640 --> 0:03:47.800 work done by the company's own models and actually on 0:03:47.840 --> 0:03:52.840 your device these AI integrations, which arrive some time in 0:03:52.880 --> 0:03:55.640 the fall to the iPhone fifteen Pro and iPhone fifteen 0:03:55.680 --> 0:03:59.400 Promax that's autumn for my British readers and listeners, along 0:03:59.440 --> 0:04:02.280 with iPad and MacBooks with M one or later chips. 0:04:03.440 --> 0:04:06.200 They're fairly straightforward and don't do anything we haven't really 0:04:06.200 --> 0:04:09.120 seen elsewhere, which is kind of the Apple game. Apple's 0:04:09.120 --> 0:04:11.840 AI can generate transcripts of cause, but not before warning 0:04:11.840 --> 0:04:15.000 participants that it's doing so, generate images through a tool 0:04:15.040 --> 0:04:18.240 called image Playground, help write and rewrite emails kind of 0:04:18.240 --> 0:04:22.000 like grammarly does, and perform distinct actions across multiple apps, 0:04:22.480 --> 0:04:25.240 like adding slides to a presentation or opening a web 0:04:25.279 --> 0:04:28.160 image with the photos app where you can edit it. 0:04:28.440 --> 0:04:31.320 The last items a little bit fuzzy is it extends 0:04:31.360 --> 0:04:34.000 to both Apple's own apps and other third party apps, 0:04:34.000 --> 0:04:36.840 and the functionality itself is expected to roll out over 0:04:36.880 --> 0:04:39.800 the coming year or so, and as ever, take any 0:04:39.839 --> 0:04:43.000 promises made without a demo with a big grain of salt, 0:04:43.279 --> 0:04:45.400 which I guess is just a regular grain of salt 0:04:45.400 --> 0:04:48.799 when you think about it. Apple also says that Siri 0:04:48.920 --> 0:04:51.039 will soon have an awareness of what's on your screen 0:04:51.040 --> 0:04:54.360 and be able to respond appropriately. In one of their demos, 0:04:54.560 --> 0:04:56.719 you're filling out a form that asks for your driver's 0:04:56.720 --> 0:04:59.520 license number. Siri can then look through your photo library, 0:04:59.560 --> 0:05:02.200 identify any pictures of your license, and grab the pertinent 0:05:02.160 --> 0:05:05.200 information for you. Equal parts useful and creepy and also 0:05:05.279 --> 0:05:07.720 I really do not recommend having a picture of your 0:05:08.000 --> 0:05:11.159 driver's license saved on your phone. But thanks to the 0:05:11.200 --> 0:05:14.120 power of artificial intelligence, you can now generate your own 0:05:14.160 --> 0:05:17.799 custom emojis, a feature that screams, we have to fill 0:05:17.920 --> 0:05:21.320 a few minutes of this goddamn presentation, But nevertheless they 0:05:21.360 --> 0:05:25.400 were quite excited, more excited than the open Ai integration, which, 0:05:25.440 --> 0:05:27.840 as I've said, I will get to you later as 0:05:27.839 --> 0:05:29.919 it requires a bit of space for me to laugh. 0:05:31.200 --> 0:05:34.160 Apple claims that many of these features run entirely on 0:05:34.200 --> 0:05:37.120 your device, and those that don't use something called private 0:05:37.160 --> 0:05:40.800 cloud compute, where Apple claims in a lengthy privacy statement 0:05:40.800 --> 0:05:43.640 I'll link to that at no time will anyone ever 0:05:43.680 --> 0:05:46.440 have any access to any of the data that's being 0:05:46.520 --> 0:05:50.839 processed on their servers, even and I quote during active processing, 0:05:51.200 --> 0:05:54.960 meaning when Apple's servers are handling the request. Apple has 0:05:55.040 --> 0:05:59.120 also offered security researchers the opportunity to personally verify the 0:05:59.160 --> 0:06:03.039 claims it's making, and in general the news it seems 0:06:03.080 --> 0:06:06.120 to have been well received, though some, like Chief Privacy 0:06:06.160 --> 0:06:09.440 Officer Steve Wilson of EXABEAM told Dark Reading, worry that 0:06:09.560 --> 0:06:13.160 threats in generative AI are poorly understood and that despite 0:06:13.200 --> 0:06:17.080 Apple's best efforts and no doubt heavy policing, some will 0:06:17.080 --> 0:06:21.240 slip through the cracks. On some level, Wilson is being 0:06:21.279 --> 0:06:24.039 a little alarmist, with his only criticism being that we 0:06:24.080 --> 0:06:27.279 don't know everything about this thing generative AI, and thus 0:06:27.279 --> 0:06:30.839 should be scared about what we don't know, which isn't wrong. 0:06:31.920 --> 0:06:34.440 On the other hand, he's right in so far, and 0:06:34.560 --> 0:06:37.960 that we are relatively early days into the mass scale 0:06:38.040 --> 0:06:42.120 use of large language models like Apples, like GPT, like 0:06:42.160 --> 0:06:46.320 anthropics Claude. Apple has chosen, albeit cautiously, to take the 0:06:46.400 --> 0:06:49.159 risk of integrating these models into devices at a time 0:06:49.200 --> 0:06:51.960 when companies like Google and Meta have proven that one 0:06:51.960 --> 0:06:55.159 cannot simply trust that a multi trillion dollar company will 0:06:55.160 --> 0:06:59.240 maintain the stability and privacy of a product, or for 0:06:59.320 --> 0:07:03.200 that matter, can guarantee the accuracy of its outputs. Also 0:07:03.279 --> 0:07:06.039 really doesn't help that Apple CEO Tim Cook told The 0:07:06.120 --> 0:07:09.520 Washington Post that Apple's AI is short of one hundred 0:07:09.560 --> 0:07:12.800 percent when it comes to hallucinations, which, as a reminder, 0:07:13.000 --> 0:07:16.800 are when these llms tell you something authoritatively that isn't true. 0:07:17.240 --> 0:07:19.760 And this is a little bit worrying when we're talking 0:07:19.840 --> 0:07:23.440 about an AI model that's taking actions across your apps. 0:07:25.320 --> 0:07:27.880 These features are predominantly running on Apple's own models, like 0:07:27.920 --> 0:07:31.400 I've said, so, not on GPT or claud or anything, which, 0:07:31.480 --> 0:07:35.040 according to Apple, are trained using licensed data such as 0:07:35.120 --> 0:07:40.160 images licensed from Shutterstock, data selected to enhance specific features. 0:07:40.440 --> 0:07:43.560 No idea what this means, but it's from licensed data 0:07:43.600 --> 0:07:47.160 at least, as well as publicly available data collected by 0:07:47.200 --> 0:07:51.000 Apple's WebCrawler Applebot, which Apple allows publishers to alpt out 0:07:51.000 --> 0:07:53.840 of using a rule added to their website's code, which 0:07:53.880 --> 0:07:56.000 I should add, does not solve the bloody problem if 0:07:56.000 --> 0:07:58.760 Apple has already used the data for training purposes, which 0:07:58.800 --> 0:08:02.240 is bordering on impossible to confirm, I should add, I 0:08:02.320 --> 0:08:05.040 have added this code to my website. You're not getting 0:08:05.080 --> 0:08:09.880 my blogs, mister Cook. And the thing is, if Apple 0:08:09.920 --> 0:08:13.760 already has done this, if they've already scraped this stuff, 0:08:13.800 --> 0:08:17.040 if they've used publicly available, which could mean any website 0:08:17.080 --> 0:08:21.320 on Google, for example. It's indicative of some really shady, shitty, 0:08:21.400 --> 0:08:25.560 underhanded behavior. Well, it's fair to say that Applebot the webscraper, 0:08:25.680 --> 0:08:28.120 isn't you. It arrived at some point in twenty fifteen, 0:08:28.440 --> 0:08:31.200 it wasn't really publicized that much, save for a few 0:08:31.280 --> 0:08:34.480 posts on Apple rumor sites speculating that the company was 0:08:34.520 --> 0:08:38.440 working on a replacement to Google Search, which by the way, 0:08:38.520 --> 0:08:41.400 had never happened because Google pays over ten billion dollars 0:08:41.440 --> 0:08:45.280 a year to Apple for that monopoly Jesus Christ. Prior 0:08:45.280 --> 0:08:48.440 to the launch of Apple's generative AI features, Applebot's sole 0:08:48.559 --> 0:08:51.280 stated purpose was to provide data for Siri and Searchlight, 0:08:51.320 --> 0:08:54.120 the search built into Mac OSX that scours both the 0:08:54.200 --> 0:08:56.760 user's hard drive so that it can pull data out 0:08:56.840 --> 0:08:58.679 so say you're looking for a file, or it can 0:08:58.679 --> 0:09:01.360 search for something on the Internet. Generally a useful feature, 0:09:01.559 --> 0:09:06.720 but an entirely different one to a generative AI one. 0:09:06.760 --> 0:09:09.840 If Apple is already training its models on data scraped 0:09:09.840 --> 0:09:13.960 by Applebot, it will be immensely deceptive, using a tool 0:09:14.280 --> 0:09:18.439 way beyond its intended purpose, or at least its advertised one. 0:09:18.480 --> 0:09:20.800 If this came to pass, those unwilling to have their 0:09:20.840 --> 0:09:23.880 content repurpose this training data for a trillion dollar take 0:09:23.960 --> 0:09:26.800 company would really have nowhere to go. What are you 0:09:26.800 --> 0:09:29.640 going to do? Getting an AI to unlearn something isn't 0:09:29.760 --> 0:09:32.839 exactly straightforward, and Apple has yet to explain how that 0:09:32.920 --> 0:09:35.880 might work. I've reached out to Apple for comment here, 0:09:35.920 --> 0:09:39.000 but it's unclear exactly how it intends to fulfill this 0:09:39.120 --> 0:09:41.720 promise that you can opt out of being included in 0:09:41.760 --> 0:09:45.160 their training data, especially if the applebot crawler has already 0:09:45.160 --> 0:09:48.319 allowed said data to be fed into the model. If 0:09:48.360 --> 0:09:50.320 I hear back, it'll be a little bit of a 0:09:50.360 --> 0:09:52.640 pain in the ass, but I will update that here. 0:09:53.120 --> 0:09:56.079 And because I love you all, I love you all 0:09:56.120 --> 0:10:09.439 so much. Though Apple has done a better job than most, 0:10:09.520 --> 0:10:15.480 it's gross. It's disgusting, especially for the generally the best 0:10:15.520 --> 0:10:18.000 of the big tech companies to do the thing that 0:10:18.040 --> 0:10:21.120 all these people have done. It's disgraceful that, yeah, another 0:10:21.200 --> 0:10:23.960 big tech company has seen the open Internet as its 0:10:23.960 --> 0:10:29.000 personal property, despite publishing a remarkable amount of information about 0:10:29.000 --> 0:10:31.640 their privacy standards and how their models are trained. Apple 0:10:31.800 --> 0:10:35.080 likely hopes that this privacy focused media blitz will hide 0:10:35.080 --> 0:10:38.079 the fact that it's ripping off everybody's work, just like Google, 0:10:38.360 --> 0:10:42.280 just like open ai, and just like Anthropic and Meta, 0:10:42.360 --> 0:10:44.199 except it's doing so in a way that's a little 0:10:44.200 --> 0:10:46.160 bit easier for the media to swallow, because the main 0:10:46.200 --> 0:10:49.480 selling point of its AI is not vomiting out oodles 0:10:49.480 --> 0:10:53.280 of anodyne business bullshare. Unless you're using the smart reply 0:10:53.400 --> 0:10:56.800 feature in mail, which drafts a response to an email 0:10:57.640 --> 0:11:00.400 for you. I'm just I really don't understand people need that. 0:11:00.440 --> 0:11:03.120 I'm sorry if you can't email someone back with your 0:11:03.120 --> 0:11:07.720 brain words, what's going on? Seriously, what's going on? But 0:11:07.840 --> 0:11:12.920 it sucks, though, It really sucks even for the smallest 0:11:12.960 --> 0:11:16.760 feature to have to steal people's work, especially when you 0:11:16.840 --> 0:11:20.880 have what two hundred billion dollars in the bank. Just 0:11:20.920 --> 0:11:24.200 a complete mark of disrespect against anyone who isn't an 0:11:24.200 --> 0:11:26.760 Apple user, and plenty of people who are. This is 0:11:26.800 --> 0:11:30.360 particularly worrying when you consider Apple's image generation features, which 0:11:30.400 --> 0:11:33.760 will function similarly to chat GPT and stable diffusion and yes, 0:11:33.800 --> 0:11:36.840 I'm getting to chat GPT. Well, I'd love to believe 0:11:36.880 --> 0:11:39.960 that Apple has only used licensed content to train its models. 0:11:40.280 --> 0:11:42.319 It really isn't the case. And if their version of 0:11:42.360 --> 0:11:46.960 publicly available includes things from Google or DeviantArt or social networks. 0:11:48.240 --> 0:11:51.360 Apples just part the problem. They just part the pillaging 0:11:51.400 --> 0:11:54.120 of the Internet. They are stealing, just like all the 0:11:54.160 --> 0:11:58.040 other big tech companies, and there's just this is a 0:11:58.080 --> 0:12:00.760 time when I feel a little helpless forever. I don't 0:12:00.760 --> 0:12:03.880 know what you do here, and I don't think we're 0:12:03.920 --> 0:12:06.640 going to hear anything back from them. But as I mentioned, 0:12:06.720 --> 0:12:09.040 I've requested comment from Apple about this, and I hope 0:12:09.080 --> 0:12:13.400 that I get an answer. Apple's approach to PR doesn't 0:12:13.400 --> 0:12:16.120 film me full of hope, though. It's almost as contemptuous 0:12:16.120 --> 0:12:19.440 as testless. They only really provide comment and interviews or 0:12:19.440 --> 0:12:23.240 review samples that those journalists they've deemed worthy, and only 0:12:23.280 --> 0:12:25.800 really on certain subjects. It's a style that mirrors the 0:12:25.840 --> 0:12:28.679 kind of haughty, snooty image it crafted in the mid 0:12:28.720 --> 0:12:32.560 two thousands with those goddamn I'm a mac ads, with 0:12:32.720 --> 0:12:36.560 reporters divided into worthy and unworthy camps, meaning, by the way, 0:12:37.280 --> 0:12:40.240 those who would bend the knee to mister Jobs and 0:12:40.280 --> 0:12:43.560 his company and those who would not. And by the way, 0:12:44.280 --> 0:12:49.200 there weren't many who wouldn't. But okay, if you can 0:12:49.240 --> 0:12:53.200 put these very real concerns aside, Apple's AI announcement feels 0:12:54.400 --> 0:12:58.680 equal parts useful and extremely strange. These are not world 0:12:58.800 --> 0:13:02.800 changing integrations. They're useful ones transcriptions, a better SII that 0:13:02.960 --> 0:13:05.319 works like it's meant to, that can take actions across 0:13:05.400 --> 0:13:07.280 multiple apps and know what you're talking about based on 0:13:07.320 --> 0:13:10.280 what you're doing on the screen theoretically at least, a 0:13:10.320 --> 0:13:13.720 better photos app with better search, which is already in 0:13:13.760 --> 0:13:16.240 the product already, and the ability to edit photos with 0:13:16.600 --> 0:13:19.880 AI and remove things and backgrounds. These are cool features. 0:13:19.960 --> 0:13:22.400 These are the kind of things that Google would staple 0:13:22.480 --> 0:13:24.439 onto a pixel phone to pretend you're going to buy 0:13:24.440 --> 0:13:26.880 one instead of an iPhone. And these are all things 0:13:26.920 --> 0:13:28.920 that a user could foreseeably want to use in their 0:13:29.000 --> 0:13:31.960 daily lives without being told that they're in the future, 0:13:32.240 --> 0:13:35.320 in large part because they are not. In fact, I'd 0:13:35.440 --> 0:13:38.720 argue that Apple's biggest generative AI push is in trying 0:13:38.760 --> 0:13:41.600 to sell us back the idea that Siri can actually 0:13:41.600 --> 0:13:45.679 do stuff, years after most users accepted that it was 0:13:45.800 --> 0:13:48.800 kind of a voice controlled roulette wheel that occasionally understood you, 0:13:49.240 --> 0:13:53.880 and for my Scottish, British and other people with accent friends, 0:13:54.480 --> 0:13:59.000 that's very occasionally. What's weird, though, is my Apple TV 0:13:59.040 --> 0:14:01.440 remote can understand me every time I say like the 0:14:01.440 --> 0:14:04.959 Imaginarium of Doctor Parnassis, and it will pop up immediately. 0:14:05.000 --> 0:14:07.960 But I tell my phone, hey, can you play this 0:14:08.080 --> 0:14:11.000 song on this home pod? And it just freaks out. 0:14:11.320 --> 0:14:17.000 It has a complete conniption. It's so strange. Nevertheless, putting 0:14:17.080 --> 0:14:20.640 all my jokes aside, looking at everything here, I just 0:14:20.720 --> 0:14:26.440 can't get over how reserved Apple is being about artificial intelligence. Well, 0:14:26.480 --> 0:14:30.040 Google has desperately tried and completely failed to convince Wall 0:14:30.080 --> 0:14:32.880 Street that it's building and selling the future by putting 0:14:32.960 --> 0:14:36.640 generative AI into search and making it worse. Apple's almost 0:14:36.680 --> 0:14:39.640 desperate to explain how boring and normal your iPhone and 0:14:39.640 --> 0:14:42.360 Matt could be, and how Apple intelligence is just another 0:14:42.440 --> 0:14:45.200 feature that will make you want to keep using Apple products, 0:14:45.280 --> 0:14:48.040 rather than the reason that Apple should be worth forty 0:14:48.400 --> 0:14:53.440 trillion dollars and keep growing forever. I like how wireds 0:14:53.440 --> 0:14:55.520 Will Knight put it. He said that AI is a 0:14:55.560 --> 0:14:59.360 feature rather than the product. And this is what's really 0:14:59.360 --> 0:15:02.080 interesting about this. Apple really doesn't feel like they're selling 0:15:02.200 --> 0:15:05.120 us the future. They feel like they're selling us the present. 0:15:05.680 --> 0:15:08.520 And maybe that's a good thing. Maybe it's good that 0:15:08.560 --> 0:15:12.000 Apple isn't rushing, but also the fact that Apple isn't 0:15:12.080 --> 0:15:16.440 rushing kind of says something about the wider AI movement. 0:15:17.280 --> 0:15:21.520 It suggests that outside of what they're offering, they don't 0:15:21.560 --> 0:15:25.120 really see much value to it. And now we reach 0:15:25.200 --> 0:15:28.320 the funny part. Quietly stapled onto the end of the 0:15:28.360 --> 0:15:31.800 announcement of Apple Intelligence was integration of open AI's chat 0:15:31.840 --> 0:15:35.880 GPT in arguably the vaguest least consequential way that I've 0:15:35.920 --> 0:15:39.240 ever seen a product launch. After spending an hour and 0:15:39.240 --> 0:15:42.440 a half, actually more so talking about how great its 0:15:42.440 --> 0:15:46.400 own AI features were, Craig Federighi mentioned that and I quote, 0:15:46.560 --> 0:15:49.400 there are other artificial intelligence tools available that can be 0:15:49.480 --> 0:15:52.840 useful for tasks that draw on board world knowledge or 0:15:52.840 --> 0:15:58.600 offer specialized domain expertise just fuck just completely stupid anyway, 0:15:58.960 --> 0:16:01.480 saying that Apple wanted users to be able to and 0:16:01.520 --> 0:16:04.760 again I quote, use these external models without having to 0:16:04.840 --> 0:16:08.720 jump between different tools, integrating them directly into Apple's OS. 0:16:09.400 --> 0:16:13.600 Starting with the pioneer and market leader, open Ai. Apple's 0:16:13.600 --> 0:16:16.760 integration with open ai, the supposed big dog, the big 0:16:16.800 --> 0:16:19.720 swinging dick of the tech industry, in the biggest announcement 0:16:19.760 --> 0:16:22.920 for the company in years, was explicitly advertised as the 0:16:22.920 --> 0:16:25.760 first of multiple integrations with multiple models, and not even 0:16:25.800 --> 0:16:27.680 kidding literally that was the end of the announcement. It's 0:16:27.760 --> 0:16:31.400 very funny. And even then, chat GPT's integration with Siri 0:16:31.480 --> 0:16:34.760 is entirely opt in, with certain requests that they were 0:16:34.880 --> 0:16:39.000 very unspecific about, occasionally prompting Apple to ask you if 0:16:39.080 --> 0:16:41.720 you'd like to run them through chat gpt, like I 0:16:41.800 --> 0:16:44.320 have these ingredients, what meal can I make? And other 0:16:44.400 --> 0:16:48.520 questions that tens, maybe even hundreds of people will find useful. 0:16:48.800 --> 0:16:51.320 Or having chat gpt write a bedtime story for your 0:16:51.400 --> 0:16:54.360 kid if for some reason you lack books or creativity, 0:16:55.160 --> 0:16:57.480 or you feed into this weird thing with AI people 0:16:57.520 --> 0:17:00.160 where they think everything has to be about you and 0:17:00.200 --> 0:17:02.280 that you must be the star of every story. That's 0:17:02.320 --> 0:17:06.080 a separate podcast ed put it away. Chat gpt can 0:17:06.119 --> 0:17:09.960 also generate images and summarize documents, features already available in 0:17:09.960 --> 0:17:14.480 Apple's own AI. This underwhelming addition to an already placid 0:17:14.480 --> 0:17:17.240 announcement ends with Apple adding that it intends to add 0:17:17.240 --> 0:17:20.359 support for other AI models in the future, before moving 0:17:20.400 --> 0:17:24.520 on to how developers can integrate Apple's own AI. The 0:17:24.560 --> 0:17:28.040 deal that would supposedly cement Sam Mortman's hold on Silicon 0:17:28.119 --> 0:17:30.680 Valley and Open Ai ended up being a two minute 0:17:30.720 --> 0:17:32.880 long sidebar at the end of a near two hour 0:17:32.920 --> 0:17:36.720 long announcement, one that requires users to agree every single 0:17:37.000 --> 0:17:40.160 time they interact with it, with no specifics about how 0:17:40.240 --> 0:17:44.680 often that a user would actually see chat GPT. Despite 0:17:44.840 --> 0:17:50.600 the insane romanticization of Sam Wrtman's incredible technology, Apple's approaches 0:17:50.640 --> 0:17:52.879 one that begins and ends with them saying do you 0:17:53.080 --> 0:17:55.879 really want to use this? And a remarkable lack of 0:17:55.920 --> 0:18:01.000 excitement or trust While it remains to be seen exactly 0:18:01.000 --> 0:18:03.520 how often you'll be prompted to use it. Chat GPT's 0:18:03.560 --> 0:18:06.760 addition to Apple products feels far more like something cooked 0:18:06.800 --> 0:18:09.640 up to police Wall Street, and it worked, briefly, making 0:18:09.680 --> 0:18:13.119 Apple the most valuable US company, beating Microsoft just for 0:18:13.160 --> 0:18:15.680 a minute, or without having to invest billions of dollars 0:18:15.720 --> 0:18:21.240 into another company. Now, quick side note, there's undoubtedly here 0:18:21.359 --> 0:18:25.720 a level of cya covering one's ass here. If Apple could, 0:18:25.800 --> 0:18:29.560 it would undoubtedly monopolize AI on the iPhone, much like 0:18:29.600 --> 0:18:32.720 it has without distribution and browser rendering engines. That's the 0:18:32.720 --> 0:18:35.879 bit of the web browser that turns HTMLCSS and JavaScript 0:18:35.920 --> 0:18:39.040 into a web page. From the beginning, Apple has saw 0:18:39.119 --> 0:18:42.520 absolute control of the iOS and its derivatives ipied os, 0:18:42.560 --> 0:18:46.520 tvOS and watch os ecosystems, using user safety as a 0:18:46.560 --> 0:18:52.720 justification for well, they're kind of benevolent dictatorship. The problem 0:18:52.800 --> 0:18:56.240 is the line between protecting users and anti competitive behavior 0:18:56.280 --> 0:18:59.840 is thin, and indeed, regulators, particularly those in the European Commission, 0:19:00.160 --> 0:19:03.439 aren't convinced that Apple's iinclad control of the iPhone is 0:19:03.560 --> 0:19:07.280 entirely altruistic. And that's why you can access alternative app 0:19:07.280 --> 0:19:10.479 stores in the European Union and even install apps directly 0:19:10.520 --> 0:19:13.080 from the web. And it's why you're no longer tied 0:19:13.119 --> 0:19:15.960 into using the Safari WebKit rendering engine, even if you 0:19:16.000 --> 0:19:20.560 install an alternative browser like Brave or Safari or Firefox. Indeed, 0:19:21.080 --> 0:19:24.399 if Apple iced out open AI or Anthropic, they both 0:19:24.440 --> 0:19:27.560 could conceivably complain about Apple to the European Commission, who 0:19:27.640 --> 0:19:29.600 might rule in favor of them and order Apple to 0:19:29.640 --> 0:19:33.080 start supporting their models, in addition to levying a huge 0:19:33.160 --> 0:19:36.440 multi billion dollar EUROFIE. And so Apple chose to save 0:19:36.480 --> 0:19:39.760 itself the hassle and the cost and buried open Ai 0:19:39.880 --> 0:19:54.080 and the rest of them in the back. One might 0:19:54.160 --> 0:19:57.600 imagine though, putting aside by cynicism, this is still a 0:19:57.640 --> 0:20:02.800 big deal, right, Wow, Chat GPT on every iPhone, well, 0:20:03.359 --> 0:20:07.240 iPhone fifteen pro and so on. That's millions, hundreds of 0:20:07.240 --> 0:20:09.800 millions of people, tons of M one and M two 0:20:09.840 --> 0:20:12.639 and M three mags. It's a huge deal. Each time 0:20:12.960 --> 0:20:17.359 that someone interacts with chat gpt. Even though they're not profitable, 0:20:17.640 --> 0:20:21.640 that's still a sliver of revenue. They're still paying chat gpt, right. 0:20:21.880 --> 0:20:25.400 They're not just stapling this on, Sam Altman isn't doing 0:20:25.440 --> 0:20:30.280 this for exposure? Is he? Yes? He is. This is 0:20:30.320 --> 0:20:32.840 not a coup at all, at least not one for 0:20:32.920 --> 0:20:37.440 open Ai. As reported by Bloomberg's Mark German, Apple didn't 0:20:37.440 --> 0:20:41.040 give open Ai any money to integrate Chat gpt, paying 0:20:41.080 --> 0:20:44.320 them in distribution. As I said, for a tool that 0:20:44.440 --> 0:20:48.960 loses the money on literally every transaction, Apple doesn't appear 0:20:48.960 --> 0:20:53.200 to be paying anything. German also reports that users will 0:20:53.200 --> 0:20:55.520 be able to upgrade their chat GPT accounts to chat 0:20:55.520 --> 0:20:59.600 gpt Plus through the integration. No idea, I'm sorry, it's 0:20:59.720 --> 0:21:03.879 far you get more requests, I get, who cares? But 0:21:03.960 --> 0:21:07.080 the important thing is that upgrading to chat gpt plus 0:21:07.200 --> 0:21:09.600 will likely operate on the same terms as every other 0:21:09.640 --> 0:21:12.159 digital good and iOS, meaning that open ai will be 0:21:12.200 --> 0:21:15.720 paying thirty percent of that take to Apple unless the 0:21:15.840 --> 0:21:20.159 user upgrades directly on chat GPT's website. This is not 0:21:20.280 --> 0:21:23.399 good for this company, to be clear, In most cases, 0:21:23.440 --> 0:21:26.840 companies integrating chat gpt pay them on a per thousand 0:21:26.920 --> 0:21:30.560 token basis, meaning that open ai will, while unprofitable, still 0:21:30.600 --> 0:21:33.679 generate revenue of some kind when people ask them stuff. 0:21:34.200 --> 0:21:36.920 Yet Apple's deal doesn't appear to pay them at all, 0:21:37.920 --> 0:21:41.879 meaning that every single time that someone uses chat gpt 0:21:42.240 --> 0:21:45.640 on their iOS device, they will be bleeding money. The 0:21:45.640 --> 0:21:49.879 more popular or it is, the more money it's going 0:21:49.920 --> 0:21:54.560 to lose them. It's a terrible deal, folks. This deal 0:21:54.640 --> 0:21:58.359 is equal parts perilous and hilarious. It's so funny, and 0:21:58.400 --> 0:22:01.359 it's something that could genuinely end up hurting open Ai, 0:22:01.720 --> 0:22:05.080 all while insulating Apple. In the event that this integration 0:22:05.240 --> 0:22:08.399 actually sees adoption by Apples hundreds of millions of users, 0:22:08.520 --> 0:22:11.040 It's going to cost open ai incredible amounts of money 0:22:11.040 --> 0:22:14.160 thanks to the fact that generative AI is both compute 0:22:14.160 --> 0:22:18.359 and energy intensive unlike any other piece of tech, especially 0:22:18.359 --> 0:22:20.800 as I imagine most users will ask it the occasional 0:22:20.880 --> 0:22:23.240 question and find no reason to opt into the twenty 0:22:23.240 --> 0:22:26.800 dollars a month Chat GPT plus subscription. Why would you care? 0:22:27.200 --> 0:22:30.000 What is the use of this? On some level, it 0:22:30.040 --> 0:22:34.480 also shows a remarkable amount of disdain from Apple towards 0:22:34.560 --> 0:22:37.840 open Ai. Most deals that hinge on the vast reach 0:22:37.880 --> 0:22:41.320 of the iOS ecosystem involve some kind of exchange of money. 0:22:41.680 --> 0:22:45.560 In twenty twenty two, Google paid roughly twenty billion dollars 0:22:45.640 --> 0:22:48.639 to be the default search engine on iOS. And just 0:22:48.680 --> 0:22:52.240 to be clear, that deal very clearly a mob style thing. 0:22:52.280 --> 0:22:54.280 That's just Google saying, look it would be won't please 0:22:54.280 --> 0:22:56.040 don't build a search and please don't please don't build 0:22:56.040 --> 0:22:58.320 a search engine. Our search engine's really bad. Just slim me, 0:22:58.600 --> 0:23:02.400 let me pay you man. Really gross stuff. But given 0:23:02.440 --> 0:23:04.639 the cost of running chat GPT, and the fact a 0:23:05.000 --> 0:23:09.400 large language model query is inherently more sophisticated and computationally 0:23:09.400 --> 0:23:12.920 expensive than a simple search one, you'd expect the opposite 0:23:12.960 --> 0:23:15.320 to be true. Right, the Apple would pay open ai 0:23:15.480 --> 0:23:20.080 something to defray its costs, but no, no money's changed hands. 0:23:20.600 --> 0:23:23.400 And if open ai makes a sale directly on the iPhone, 0:23:23.920 --> 0:23:26.640 it'll undoubted least be subject to the same Apple text 0:23:26.640 --> 0:23:30.040 as every other company. Like I said, this is possibly 0:23:30.080 --> 0:23:33.000 one of the worst deals I've seen in my life. 0:23:33.080 --> 0:23:36.280 It's a terrible deal, of folks. And I'd also speculate 0:23:36.320 --> 0:23:39.360 that Apple likely requires some level of service level agreement 0:23:39.400 --> 0:23:42.960 for its partners, meaning that open ai has to dedicate 0:23:43.040 --> 0:23:46.640