Speaker 1: All Zone Media, Hello and welcome to better Offline, I'm
Speaker 1: your host, and generally optimistic man ed Zeitron. What else?
Speaker 1: Last week, Apple announced Apple Intelligence, the suite of features
Speaker 1: coming to iosat and that's the next version of the
Speaker 1: iPhone software, in a presentation that Fast Company called uninspired,
Speaker 1: futurism called boring, and Axios claimed failed to excite investors.
Speaker 1: They did not even check the stocktic anyway. The presentation
Speaker 1: given at Apple's Worldwide Developers Conference, usually referred to as
Speaker 1: WWDC and where Apple usually announces its next software updates,
Speaker 1: felt remarkably demure in comparison to May's Google IO conference,
Speaker 1: which is Google's equivalent, where CEO Sandhar Pashai and Head
Speaker 1: of Search Liz Read hype the next generation of Google
Speaker 1: products and search updates that absolutely nobody asked for. Historically,
Speaker 1: what WHDe Developers Conference is where Apple announced major updates
Speaker 1: to both its product and software lineups. A WWDC two
Speaker 1: thousand and five, the late Steve Jobs announced the company
Speaker 1: would move from IBM designed and Motorola manufactured power PC processors,
Speaker 1: allowing for faster and more power efficient computers, as well
Speaker 1: as the ability to duel boot Windows, a huge moment
Speaker 1: for Max that was met with rancorous applause from people
Speaker 1: that really should have known better. Fifteen years later, Tim Cook,
Speaker 1: now CEO, would announce Apple's shift away from Intel stagnating
Speaker 1: X eight six architecture to Apple's homegrown ARM based processes,
Speaker 1: starting with the M series processes that have now become
Speaker 1: ubiquitous across MAX and iPads, one which was met with
Speaker 1: the bombastic promise that these were the most powerful chips
Speaker 1: ever created. I should add, by the way, the M
Speaker 1: series processes are actually probably one of the better things
Speaker 1: that's come out in the last ten years. The average
Speaker 1: MacBook Air is insanely fast now, like I have a
Speaker 1: MacBook Pro. It's phenomenal. A lot of you say, I'm
Speaker 1: not positive, Okay, these are things I like. Here are
Speaker 1: things I like. Are you happy now? I am kind
Speaker 1: of anyway. WWDC is where Apple has unveiled every new
Speaker 1: version of the Mac operating System OSX. It's where the
Speaker 1: original Mac Pro, FaceTime and the iPhone app Store were
Speaker 1: introduced to the world. This is the conference where Apple
Speaker 1: flexes its muscles and boasts about how powerful and important
Speaker 1: Apple is. Now you can understand why this year was
Speaker 1: just so strange. Gone was Apple's trademark bombast, It's propensity
Speaker 1: to tell the world how good it was at everything
Speaker 1: and how important its next big thing was. Instead, we
Speaker 1: got this weird juxtaposition between we're putting AI on your
Speaker 1: phone and it's totally fine. It's not big deal. You
Speaker 1: shouldn't be scared at doors. It's not that big a deal.
Speaker 1: Please don't be mad at us. Despite this ostensibly being
Speaker 1: Apple's big artificial intelligence play, CEO Tim Cook and SVP
Speaker 1: of Engineering Craig VEDERIGGI spend far more time explaining how
Speaker 1: much they love privacy and shareish your data and would
Speaker 1: never share it with anyone, and listen to all the
Speaker 1: ways we're keeping it private, before casually sauntering into a
Speaker 1: series of product updates that appear to actually use AI
Speaker 1: for a purpose and kind of useful and hardly suggests
Speaker 1: that Apple is intentionally trying to distance itself from the
Speaker 1: AI hype train. And while it's integrating CHATGBT intoosaighteen, which
Speaker 1: don't worry, I'll get to later, it's doing so an
Speaker 1: arms length approach, with most of the day to DAAI
Speaker 1: work done by the company's own models and actually on
Speaker 1: your device these AI integrations, which arrive some time in
Speaker 1: the fall to the iPhone fifteen Pro and iPhone fifteen
Speaker 1: Promax that's autumn for my British readers and listeners, along
Speaker 1: with iPad and MacBooks with M one or later chips.
Speaker 1: They're fairly straightforward and don't do anything we haven't really
Speaker 1: seen elsewhere, which is kind of the Apple game. Apple's
Speaker 1: AI can generate transcripts of cause, but not before warning
Speaker 1: participants that it's doing so, generate images through a tool
Speaker 1: called image Playground, help write and rewrite emails kind of
Speaker 1: like grammarly does, and perform distinct actions across multiple apps,
Speaker 1: like adding slides to a presentation or opening a web
Speaker 1: image with the photos app where you can edit it.
Speaker 1: The last items a little bit fuzzy is it extends
Speaker 1: to both Apple's own apps and other third party apps,
Speaker 1: and the functionality itself is expected to roll out over
Speaker 1: the coming year or so, and as ever, take any
Speaker 1: promises made without a demo with a big grain of salt,
Speaker 1: which I guess is just a regular grain of salt
Speaker 1: when you think about it. Apple also says that Siri
Speaker 1: will soon have an awareness of what's on your screen
Speaker 1: and be able to respond appropriately. In one of their demos,
Speaker 1: you're filling out a form that asks for your driver's
Speaker 1: license number. Siri can then look through your photo library,
Speaker 1: identify any pictures of your license, and grab the pertinent
Speaker 1: information for you. Equal parts useful and creepy and also
Speaker 1: I really do not recommend having a picture of your
Speaker 1: driver's license saved on your phone. But thanks to the
Speaker 1: power of artificial intelligence, you can now generate your own
Speaker 1: custom emojis, a feature that screams, we have to fill
Speaker 1: a few minutes of this goddamn presentation, But nevertheless they
Speaker 1: were quite excited, more excited than the open Ai integration, which,
Speaker 1: as I've said, I will get to you later as
Speaker 1: it requires a bit of space for me to laugh.
Speaker 1: Apple claims that many of these features run entirely on
Speaker 1: your device, and those that don't use something called private
Speaker 1: cloud compute, where Apple claims in a lengthy privacy statement
Speaker 1: I'll link to that at no time will anyone ever
Speaker 1: have any access to any of the data that's being
Speaker 1: processed on their servers, even and I quote during active processing,
Speaker 1: meaning when Apple's servers are handling the request. Apple has
Speaker 1: also offered security researchers the opportunity to personally verify the
Speaker 1: claims it's making, and in general the news it seems
Speaker 1: to have been well received, though some, like Chief Privacy
Speaker 1: Officer Steve Wilson of EXABEAM told Dark Reading, worry that
Speaker 1: threats in generative AI are poorly understood and that despite
Speaker 1: Apple's best efforts and no doubt heavy policing, some will
Speaker 1: slip through the cracks. On some level, Wilson is being
Speaker 1: a little alarmist, with his only criticism being that we
Speaker 1: don't know everything about this thing generative AI, and thus
Speaker 1: should be scared about what we don't know, which isn't wrong.
Speaker 1: On the other hand, he's right in so far, and
Speaker 1: that we are relatively early days into the mass scale
Speaker 1: use of large language models like Apples, like GPT, like
Speaker 1: anthropics Claude. Apple has chosen, albeit cautiously, to take the
Speaker 1: risk of integrating these models into devices at a time
Speaker 1: when companies like Google and Meta have proven that one
Speaker 1: cannot simply trust that a multi trillion dollar company will
Speaker 1: maintain the stability and privacy of a product, or for
Speaker 1: that matter, can guarantee the accuracy of its outputs. Also
Speaker 1: really doesn't help that Apple CEO Tim Cook told The
Speaker 1: Washington Post that Apple's AI is short of one hundred
Speaker 1: percent when it comes to hallucinations, which, as a reminder,
Speaker 1: are when these llms tell you something authoritatively that isn't true.
Speaker 1: And this is a little bit worrying when we're talking
Speaker 1: about an AI model that's taking actions across your apps.
Speaker 1: These features are predominantly running on Apple's own models, like
Speaker 1: I've said, so, not on GPT or claud or anything, which,
Speaker 1: according to Apple, are trained using licensed data such as
Speaker 1: images licensed from Shutterstock, data selected to enhance specific features.
Speaker 1: No idea what this means, but it's from licensed data
Speaker 1: at least, as well as publicly available data collected by
Speaker 1: Apple's WebCrawler Applebot, which Apple allows publishers to alpt out
Speaker 1: of using a rule added to their website's code, which
Speaker 1: I should add, does not solve the bloody problem if
Speaker 1: Apple has already used the data for training purposes, which
Speaker 1: is bordering on impossible to confirm, I should add, I
Speaker 1: have added this code to my website. You're not getting
Speaker 1: my blogs, mister Cook. And the thing is, if Apple
Speaker 1: already has done this, if they've already scraped this stuff,
Speaker 1: if they've used publicly available, which could mean any website
Speaker 1: on Google, for example. It's indicative of some really shady, shitty,
Speaker 1: underhanded behavior. Well, it's fair to say that Applebot the webscraper,
Speaker 1: isn't you. It arrived at some point in twenty fifteen,
Speaker 1: it wasn't really publicized that much, save for a few
Speaker 1: posts on Apple rumor sites speculating that the company was
Speaker 1: working on a replacement to Google Search, which by the way,
Speaker 1: had never happened because Google pays over ten billion dollars
Speaker 1: a year to Apple for that monopoly Jesus Christ. Prior
Speaker 1: to the launch of Apple's generative AI features, Applebot's sole
Speaker 1: stated purpose was to provide data for Siri and Searchlight,
Speaker 1: the search built into Mac OSX that scours both the
Speaker 1: user's hard drive so that it can pull data out
Speaker 1: so say you're looking for a file, or it can
Speaker 1: search for something on the Internet. Generally a useful feature,
Speaker 1: but an entirely different one to a generative AI one.
Speaker 1: If Apple is already training its models on data scraped
Speaker 1: by Applebot, it will be immensely deceptive, using a tool
Speaker 1: way beyond its intended purpose, or at least its advertised one.
Speaker 1: If this came to pass, those unwilling to have their
Speaker 1: content repurpose this training data for a trillion dollar take
Speaker 1: company would really have nowhere to go. What are you
Speaker 1: going to do? Getting an AI to unlearn something isn't
Speaker 1: exactly straightforward, and Apple has yet to explain how that
Speaker 1: might work. I've reached out to Apple for comment here,
Speaker 1: but it's unclear exactly how it intends to fulfill this
Speaker 1: promise that you can opt out of being included in
Speaker 1: their training data, especially if the applebot crawler has already
Speaker 1: allowed said data to be fed into the model. If
Speaker 1: I hear back, it'll be a little bit of a
Speaker 1: pain in the ass, but I will update that here.
Speaker 1: And because I love you all, I love you all
Speaker 1: so much. Though Apple has done a better job than most,
Speaker 1: it's gross. It's disgusting, especially for the generally the best
Speaker 1: of the big tech companies to do the thing that
Speaker 1: all these people have done. It's disgraceful that, yeah, another
Speaker 1: big tech company has seen the open Internet as its
Speaker 1: personal property, despite publishing a remarkable amount of information about
Speaker 1: their privacy standards and how their models are trained. Apple
Speaker 1: likely hopes that this privacy focused media blitz will hide
Speaker 1: the fact that it's ripping off everybody's work, just like Google,
Speaker 1: just like open ai, and just like Anthropic and Meta,
Speaker 1: except it's doing so in a way that's a little
Speaker 1: bit easier for the media to swallow, because the main
Speaker 1: selling point of its AI is not vomiting out oodles
Speaker 1: of anodyne business bullshare. Unless you're using the smart reply
Speaker 1: feature in mail, which drafts a response to an email
Speaker 1: for you. I'm just I really don't understand people need that.
Speaker 1: I'm sorry if you can't email someone back with your
Speaker 1: brain words, what's going on? Seriously, what's going on? But
Speaker 1: it sucks, though, It really sucks even for the smallest
Speaker 1: feature to have to steal people's work, especially when you
Speaker 1: have what two hundred billion dollars in the bank. Just
Speaker 1: a complete mark of disrespect against anyone who isn't an
Speaker 1: Apple user, and plenty of people who are. This is
Speaker 1: particularly worrying when you consider Apple's image generation features, which
Speaker 1: will function similarly to chat GPT and stable diffusion and yes,
Speaker 1: I'm getting to chat GPT. Well, I'd love to believe
Speaker 1: that Apple has only used licensed content to train its models.
Speaker 1: It really isn't the case. And if their version of
Speaker 1: publicly available includes things from Google or DeviantArt or social networks.
Speaker 1: Apples just part the problem. They just part the pillaging
Speaker 1: of the Internet. They are stealing, just like all the
Speaker 1: other big tech companies, and there's just this is a
Speaker 1: time when I feel a little helpless forever. I don't
Speaker 1: know what you do here, and I don't think we're
Speaker 1: going to hear anything back from them. But as I mentioned,
Speaker 1: I've requested comment from Apple about this, and I hope
Speaker 1: that I get an answer. Apple's approach to PR doesn't
Speaker 1: film me full of hope, though. It's almost as contemptuous
Speaker 1: as testless. They only really provide comment and interviews or
Speaker 1: review samples that those journalists they've deemed worthy, and only
Speaker 1: really on certain subjects. It's a style that mirrors the
Speaker 1: kind of haughty, snooty image it crafted in the mid
Speaker 1: two thousands with those goddamn I'm a mac ads, with
Speaker 1: reporters divided into worthy and unworthy camps, meaning, by the way,
Speaker 1: those who would bend the knee to mister Jobs and
Speaker 1: his company and those who would not. And by the way,
Speaker 1: there weren't many who wouldn't. But okay, if you can
Speaker 1: put these very real concerns aside, Apple's AI announcement feels
Speaker 1: equal parts useful and extremely strange. These are not world
Speaker 1: changing integrations. They're useful ones transcriptions, a better SII that
Speaker 1: works like it's meant to, that can take actions across
Speaker 1: multiple apps and know what you're talking about based on
Speaker 1: what you're doing on the screen theoretically at least, a
Speaker 1: better photos app with better search, which is already in
Speaker 1: the product already, and the ability to edit photos with
Speaker 1: AI and remove things and backgrounds. These are cool features.
Speaker 1: These are the kind of things that Google would staple
Speaker 1: onto a pixel phone to pretend you're going to buy
Speaker 1: one instead of an iPhone. And these are all things
Speaker 1: that a user could foreseeably want to use in their
Speaker 1: daily lives without being told that they're in the future,
Speaker 1: in large part because they are not. In fact, I'd
Speaker 1: argue that Apple's biggest generative AI push is in trying
Speaker 1: to sell us back the idea that Siri can actually
Speaker 1: do stuff, years after most users accepted that it was
Speaker 1: kind of a voice controlled roulette wheel that occasionally understood you,
Speaker 1: and for my Scottish, British and other people with accent friends,
Speaker 1: that's very occasionally. What's weird, though, is my Apple TV
Speaker 1: remote can understand me every time I say like the
Speaker 1: Imaginarium of Doctor Parnassis, and it will pop up immediately.
Speaker 1: But I tell my phone, hey, can you play this
Speaker 1: song on this home pod? And it just freaks out.
Speaker 1: It has a complete conniption. It's so strange. Nevertheless, putting
Speaker 1: all my jokes aside, looking at everything here, I just
Speaker 1: can't get over how reserved Apple is being about artificial intelligence. Well,
Speaker 1: Google has desperately tried and completely failed to convince Wall
Speaker 1: Street that it's building and selling the future by putting
Speaker 1: generative AI into search and making it worse. Apple's almost
Speaker 1: desperate to explain how boring and normal your iPhone and
Speaker 1: Matt could be, and how Apple intelligence is just another
Speaker 1: feature that will make you want to keep using Apple products,
Speaker 1: rather than the reason that Apple should be worth forty
Speaker 1: trillion dollars and keep growing forever. I like how wireds
Speaker 1: Will Knight put it. He said that AI is a
Speaker 1: feature rather than the product. And this is what's really
Speaker 1: interesting about this. Apple really doesn't feel like they're selling
Speaker 1: us the future. They feel like they're selling us the present.
Speaker 1: And maybe that's a good thing. Maybe it's good that
Speaker 1: Apple isn't rushing, but also the fact that Apple isn't
Speaker 1: rushing kind of says something about the wider AI movement.
Speaker 1: It suggests that outside of what they're offering, they don't
Speaker 1: really see much value to it. And now we reach
Speaker 1: the funny part. Quietly stapled onto the end of the
Speaker 1: announcement of Apple Intelligence was integration of open AI's chat
Speaker 1: GPT in arguably the vaguest least consequential way that I've
Speaker 1: ever seen a product launch. After spending an hour and
Speaker 1: a half, actually more so talking about how great its
Speaker 1: own AI features were, Craig Federighi mentioned that and I quote,
Speaker 1: there are other artificial intelligence tools available that can be
Speaker 1: useful for tasks that draw on board world knowledge or
Speaker 1: offer specialized domain expertise just fuck just completely stupid anyway,
Speaker 1: saying that Apple wanted users to be able to and
Speaker 1: again I quote, use these external models without having to
Speaker 1: jump between different tools, integrating them directly into Apple's OS.
Speaker 1: Starting with the pioneer and market leader, open Ai. Apple's
Speaker 1: integration with open ai, the supposed big dog, the big
Speaker 1: swinging dick of the tech industry, in the biggest announcement
Speaker 1: for the company in years, was explicitly advertised as the
Speaker 1: first of multiple integrations with multiple models, and not even
Speaker 1: kidding literally that was the end of the announcement. It's
Speaker 1: very funny. And even then, chat GPT's integration with Siri
Speaker 1: is entirely opt in, with certain requests that they were
Speaker 1: very unspecific about, occasionally prompting Apple to ask you if
Speaker 1: you'd like to run them through chat gpt, like I
Speaker 1: have these ingredients, what meal can I make? And other
Speaker 1: questions that tens, maybe even hundreds of people will find useful.
Speaker 1: Or having chat gpt write a bedtime story for your
Speaker 1: kid if for some reason you lack books or creativity,
Speaker 1: or you feed into this weird thing with AI people
Speaker 1: where they think everything has to be about you and
Speaker 1: that you must be the star of every story. That's
Speaker 1: a separate podcast ed put it away. Chat gpt can
Speaker 1: also generate images and summarize documents, features already available in
Speaker 1: Apple's own AI. This underwhelming addition to an already placid
Speaker 1: announcement ends with Apple adding that it intends to add
Speaker 1: support for other AI models in the future, before moving
Speaker 1: on to how developers can integrate Apple's own AI. The
Speaker 1: deal that would supposedly cement Sam Mortman's hold on Silicon
Speaker 1: Valley and Open Ai ended up being a two minute
Speaker 1: long sidebar at the end of a near two hour
Speaker 1: long announcement, one that requires users to agree every single
Speaker 1: time they interact with it, with no specifics about how
Speaker 1: often that a user would actually see chat GPT. Despite
Speaker 1: the insane romanticization of Sam Wrtman's incredible technology, Apple's approaches
Speaker 1: one that begins and ends with them saying do you
Speaker 1: really want to use this? And a remarkable lack of
Speaker 1: excitement or trust While it remains to be seen exactly
Speaker 1: how often you'll be prompted to use it. Chat GPT's
Speaker 1: addition to Apple products feels far more like something cooked
Speaker 1: up to police Wall Street, and it worked, briefly, making
Speaker 1: Apple the most valuable US company, beating Microsoft just for
Speaker 1: a minute, or without having to invest billions of dollars
Speaker 1: into another company. Now, quick side note, there's undoubtedly here
Speaker 1: a level of cya covering one's ass here. If Apple could,
Speaker 1: it would undoubtedly monopolize AI on the iPhone, much like
Speaker 1: it has without distribution and browser rendering engines. That's the
Speaker 1: bit of the web browser that turns HTMLCSS and JavaScript
Speaker 1: into a web page. From the beginning, Apple has saw
Speaker 1: absolute control of the iOS and its derivatives ipied os,
Speaker 1: tvOS and watch os ecosystems, using user safety as a
Speaker 1: justification for well, they're kind of benevolent dictatorship. The problem
Speaker 1: is the line between protecting users and anti competitive behavior
Speaker 1: is thin, and indeed, regulators, particularly those in the European Commission,
Speaker 1: aren't convinced that Apple's iinclad control of the iPhone is
Speaker 1: entirely altruistic. And that's why you can access alternative app
Speaker 1: stores in the European Union and even install apps directly
Speaker 1: from the web. And it's why you're no longer tied
Speaker 1: into using the Safari WebKit rendering engine, even if you
Speaker 1: install an alternative browser like Brave or Safari or Firefox. Indeed,
Speaker 1: if Apple iced out open AI or Anthropic, they both
Speaker 1: could conceivably complain about Apple to the European Commission, who
Speaker 1: might rule in favor of them and order Apple to
Speaker 1: start supporting their models, in addition to levying a huge
Speaker 1: multi billion dollar EUROFIE. And so Apple chose to save
Speaker 1: itself the hassle and the cost and buried open Ai
Speaker 1: and the rest of them in the back. One might
Speaker 1: imagine though, putting aside by cynicism, this is still a
Speaker 1: big deal, right, Wow, Chat GPT on every iPhone, well,
Speaker 1: iPhone fifteen pro and so on. That's millions, hundreds of
Speaker 1: millions of people, tons of M one and M two
Speaker 1: and M three mags. It's a huge deal. Each time
Speaker 1: that someone interacts with chat gpt. Even though they're not profitable,
Speaker 1: that's still a sliver of revenue. They're still paying chat gpt, right.
Speaker 1: They're not just stapling this on, Sam Altman isn't doing
Speaker 1: this for exposure? Is he? Yes? He is. This is
Speaker 1: not a coup at all, at least not one for
Speaker 1: open Ai. As reported by Bloomberg's Mark German, Apple didn't
Speaker 1: give open Ai any money to integrate Chat gpt, paying
Speaker 1: them in distribution. As I said, for a tool that
Speaker 1: loses the money on literally every transaction, Apple doesn't appear
Speaker 1: to be paying anything. German also reports that users will
Speaker 1: be able to upgrade their chat GPT accounts to chat
Speaker 1: gpt Plus through the integration. No idea, I'm sorry, it's
Speaker 1: far you get more requests, I get, who cares? But
Speaker 1: the important thing is that upgrading to chat gpt plus
Speaker 1: will likely operate on the same terms as every other
Speaker 1: digital good and iOS, meaning that open ai will be
Speaker 1: paying thirty percent of that take to Apple unless the
Speaker 1: user upgrades directly on chat GPT's website. This is not
Speaker 1: good for this company, to be clear, In most cases,
Speaker 1: companies integrating chat gpt pay them on a per thousand
Speaker 1: token basis, meaning that open ai will, while unprofitable, still
Speaker 1: generate revenue of some kind when people ask them stuff.
Speaker 1: Yet Apple's deal doesn't appear to pay them at all,
Speaker 1: meaning that every single time that someone uses chat gpt
Speaker 1: on their iOS device, they will be bleeding money. The
Speaker 1: more popular or it is, the more money it's going
Speaker 1: to lose them. It's a terrible deal, folks. This deal
Speaker 1: is equal parts perilous and hilarious. It's so funny, and
Speaker 1: it's something that could genuinely end up hurting open Ai,
Speaker 1: all while insulating Apple. In the event that this integration
Speaker 1: actually sees adoption by Apples hundreds of millions of users,
Speaker 1: It's going to cost open ai incredible amounts of money
Speaker 1: thanks to the fact that generative AI is both compute
Speaker 1: and energy intensive unlike any other piece of tech, especially
Speaker 1: as I imagine most users will ask it the occasional
Speaker 1: question and find no reason to opt into the twenty
Speaker 1: dollars a month Chat GPT plus subscription. Why would you care?
Speaker 1: What is the use of this? On some level, it
Speaker 1: also shows a remarkable amount of disdain from Apple towards
Speaker 1: open Ai. Most deals that hinge on the vast reach
Speaker 1: of the iOS ecosystem involve some kind of exchange of money.
Speaker 1: In twenty twenty two, Google paid roughly twenty billion dollars
Speaker 1: to be the default search engine on iOS. And just
Speaker 1: to be clear, that deal very clearly a mob style thing.
Speaker 1: That's just Google saying, look it would be won't please
Speaker 1: don't build a search and please don't please don't build
Speaker 1: a search engine. Our search engine's really bad. Just slim me,
Speaker 1: let me pay you man. Really gross stuff. But given
Speaker 1: the cost of running chat GPT, and the fact a
Speaker 1: large language model query is inherently more sophisticated and computationally
Speaker 1: expensive than a simple search one, you'd expect the opposite
Speaker 1: to be true. Right, the Apple would pay open ai
Speaker 1: something to defray its costs, but no, no money's changed hands.
Speaker 1: And if open ai makes a sale directly on the iPhone,
Speaker 1: it'll undoubted least be subject to the same Apple text
Speaker 1: as every other company. Like I said, this is possibly
Speaker 1: one of the worst deals I've seen in my life.
Speaker 1: It's a terrible deal, of folks. And I'd also speculate
Speaker 1: that Apple likely requires some level of service level agreement
Speaker 1: for its partners, meaning that open ai has to dedicate
Speaker 1: resources to maintain up time for Apple devices using chat
Speaker 1: GPT for free, which will in turn be incredibly expensive
Speaker 1: to maintain, burning money with every query on a product
Speaker 1: that Apple will only offer when Apple services can't do
Speaker 1: the job, and if iOS eighteen doesn't bring the expected
Speaker 1: users to chat GPT, those resources are just gonna kind
Speaker 1: of sit there, unused, redundant, and they could be servicing
Speaker 1: other deeply unprofitable demand. It might be hyperbolic to describe
Speaker 1: this as text equivalent of the Versie tree, but only
Speaker 1: a little bit. It's also just unbelievably funny. It's so funny.
Speaker 1: You heard the last episodes. You heard people talking about
Speaker 1: Sam Altman, like the art of the deal guy, the
Speaker 1: deal master, the master of contracts, the guy who can
Speaker 1: outthink us all, the mega genius, the mega nerd, the
Speaker 1: ultimate deal maker who could split the valley asunder with
Speaker 1: a wave of his hand. Sam Ortman is regularly described
Speaker 1: as this tier one operator, this superior intellect, and yet
Speaker 1: he has signed the worst tech deal I've seen other
Speaker 1: than I think the one signed by Yahoo with being
Speaker 1: from a few episodes back. It might actually be worse though,
Speaker 1: because even then Yahoo got paid by Microsoft. Jesus Christ.
Speaker 1: I think this also proves something else open ai. They
Speaker 1: have no leverage, They don't have anything they can play with.
Speaker 1: They don't have anything they can go to Apple and
Speaker 1: say you need us, baby, No, they haven't got shit.
Speaker 1: It's hilarious. Open ai has effectively agreed to give chat
Speaker 1: GPT for free to hundreds of millions of people and
Speaker 1: got absolutely nothing in return. And worse still in this
Speaker 1: marvelous technological cocultry. According to Anissa Gardisi of The Information,
Speaker 1: Apple is already working on cutting deals with both Google
Speaker 1: and their Gemini LLM and Anthropics Claude to integrate them
Speaker 1: into iOS, likely using open Aiy's dogshit deal to leverage
Speaker 1: better terms. Allmand may have been at the Worldwide Developers Conference.
Speaker 1: He was there, people taking pictures of him acting like
Speaker 1: it was this big goddamn deal, but he didn't get
Speaker 1: to speak, nor was he mentioned during any of Tim
Speaker 1: Cook or Craig Federiggi's remarks, Apple treated chat GPT with
Speaker 1: less excitement than a new suite of emojis, kind of
Speaker 1: like an afterthought to a presentation that was deliberate and
Speaker 1: intentional in its lack of froth or hype. A series
Speaker 1: of fun, potentially exciting features, things you could play with
Speaker 1: if you want it, all delivered with a continual promise
Speaker 1: of privacy and reliability that tacitly accepted that the AI
Speaker 1: hype train was moving a little too fast. And it's
Speaker 1: a humiliating moment for the generative AI movement, especially so
Speaker 1: for open Ai, a company that desperately needs good news
Speaker 1: at a time when the world has become deeply suspicious
Speaker 1: of its product and its CEO. Apple is, for better
Speaker 1: or or worse, the gatekeeper to the technology used by
Speaker 1: hundreds of millions of people, and Apple has decided that
Speaker 1: chat GPT is a feature, not a product, and one
Speaker 1: that isn't trustworthy or useful enough to run without a
Speaker 1: user's permission or even pay for. This was, on some
Speaker 1: level open AI's iPhone moment, though. This was the time
Speaker 1: the world would see exactly how important the most important
Speaker 1: tech company in the world thought the most important startup
Speaker 1: in the world was and the answer was not particularly
Speaker 1: important at all. Apple can and likely will dump chat
Speaker 1: GPT at a moment's notice, replacing it with any number
Speaker 1: of other large language models, or ripping the feature out
Speaker 1: entirely thanks to the fact that it was introduced as
Speaker 1: a feature at the end of another feature, at the
Speaker 1: end of a presentation of better, more useful features. And
Speaker 1: what's insane is all of this is done without you
Speaker 1: creating an account. I know some of you might be
Speaker 1: a little bit scared that chat gbt's in your phone.
Speaker 1: It isn't. They don't get your queries, they don't save
Speaker 1: anything about what you're doing on their Apple has raked
Speaker 1: them over the coals, and you don't even need an
Speaker 1: account to use it, which means that they're not even
Speaker 1: increasing their users with this. Their queries are going up,
Speaker 1: but they can't even get any vanity metrics out of this.
Speaker 1: It's so unbelievably busted. It is one of the funniest
Speaker 1: and worst deals I've ever seen. I think it also
Speaker 1: shows that Sam Mortman doesn't have the juice. He really
Speaker 1: hasn't been able to outside of kind of intimidating people
Speaker 1: vaguely in the valley, really use his power that much.
Speaker 1: Microsoft weighed in to get him back at open Ai
Speaker 1: because it was good for Satchy Nadella, who had kind
Speaker 1: of tied his fate to Sam's. And it's funny the
Speaker 1: moment they step into the real world just doesn't seem
Speaker 1: to scale that well. Where are the big deals for
Speaker 1: open Ai? Where are the huge integrations? The Information reported
Speaker 1: last week that open AI's annualized revenue, which by the way,
Speaker 1: is just a fudged figure. It takes the months of
Speaker 1: revenue so far and extrapolates from there. They say they're
Speaker 1: annualized revenue is going to reach the billions in twenty
Speaker 1: twenty four. Yet they're still so unprofitable. And even if
Speaker 1: Apple had paid the money to integrate Chat GBT, it
Speaker 1: would still lose money on every search. And it's so bad.
Speaker 1: I'm not sure why no one else is saying this,
Speaker 1: and maybe some are Nick Builton and Vanity Fair give
Speaker 1: you cred there, classic dagnam lad. And the thing is
Speaker 1: the few people saying it with me are also smart.
Speaker 1: I don't know, but this is a crazy bad deal.
Speaker 1: This is one the guarantee is that open ai will
Speaker 1: bleed money every single time someone picks up if they
Speaker 1: even use it. If they don't use it, that's still embarrassing.
Speaker 1: It's still a deeply damaging thing for open Ai. Sam Altman,
Speaker 1: despite being the Valley's golden boy, didn't get to go
Speaker 1: on stage. They didn't even in this presentation mention what
Speaker 1: chat gbt's premium features do, nor did they really make
Speaker 1: much effort to explain why you should give a shit.
Speaker 1: And I'm not trying to romanticize Apple. There are no great,
Speaker 1: big tech companies all out my Apple devices. I'm looking
Speaker 1: forward to some of these features. That is faint praise
Speaker 1: for a tech industry that's lost its way. But I
Speaker 1: will give them credit for tim cook cooking mister Altman,
Speaker 1: because this is a great time for people who like
Speaker 1: bad things happening to bad people. I know I shouldn't
Speaker 1: be calling Sam Mormon a bad person. I mean, just
Speaker 1: read the stuff about him, listen to the episode. But
Speaker 1: look what happens when a little boy from the world
Speaker 1: of startups tries and goes up against the ugly forces
Speaker 1: of capitalism, the real scary monopolies. Apple won't accept another monopoly.
Speaker 1: This is the empire, for better or for worse. It
Speaker 1: is scary how much power Apple has. It is worth
Speaker 1: considering whether you are feeling safe using AI on these devices.
Speaker 1: What they've said suggests that, yeah, I would say you are,
Speaker 1: but I think that's something you really should consider. And
Speaker 1: in the episode links, I will provide all of the
Speaker 1: documentation of everything I'm talking about here, because I want
Speaker 1: you to genuinely know everything you can make an informed decision.
Speaker 1: I will say I would be unsurprised if every single
Speaker 1: other phone company doesn't do similar stuff. Samsung's already doing
Speaker 1: AI stuff I haven't looked, but I amaguine Google is too.
Speaker 1: Everyone's going to be doing this. I would trust Apple
Speaker 1: above them, because ah they they apparently have clearly worked
Speaker 1: out that what people actually want is for their phones
Speaker 1: to work, and that they'll keep making money just by
Speaker 1: making people happy. I'm not going to say they're super ethical.
Speaker 1: They're better than most, and they say that with a
Speaker 1: great deal of kind of annoyance because they don't really
Speaker 1: want to blow smoke with them. But back to the
Speaker 1: really fun part. This may be a genuinely dangerous thing
Speaker 1: for open AI, and at the very least, it's deeply
Speaker 1: horribly humiliating. Sam Altman might be able to walk into
Speaker 1: any room in the valley and say insane things like
Speaker 1: I need seven trillion dollars for new energy. I needed
Speaker 1: one hundred billion dollar computer, mister Nadella, But when he
Speaker 1: walks up to Tim Cook, there's nothing to really say. Oh, yeah,
Speaker 1: we'll add this at the end so that Wall Street
Speaker 1: feels happy, and that's all this is. This is so
Speaker 1: idiots like Jim Kramer on CNBC can say, Wow, Apple's
Speaker 1: god chat GPT in it and great, it doesn't matter,
Speaker 1: it's buried, and I guarantee you you're gonna be able
Speaker 1: to turn it on. Apple aren't the best. I don't
Speaker 1: know who the best are. I don't know who the
Speaker 1: most ethical are. I don't even know how you evalue
Speaker 1: at that. You know what, Let Tim Cook thank you
Speaker 1: for listening to Better Offline. The editor and composer of
Speaker 1: the Better Offline theme song is Matasowski. You can check
Speaker 1: out more of his music and audio projects at Matasowski
Speaker 1: dot com, M A T T O S O W
Speaker 1: s ki dot com. You can email me at easy
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Speaker 1: I also really recommend you go to chat dot Where's
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Speaker 1: you so much for the listening. Better Offline is a
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