1 00:00:02,160 --> 00:00:07,720 Speaker 1: Zone Media. Hello, and welcome to this week's Better Offline Monologue. 2 00:00:07,760 --> 00:00:16,960 Speaker 1: I'm your host ed Ze Trunk, and I am going 3 00:00:16,960 --> 00:00:19,800 Speaker 1: a little insane. You've likely seen the news that open 4 00:00:19,840 --> 00:00:22,239 Speaker 1: ai is buying and that's in air quotes. By the way, 5 00:00:22,480 --> 00:00:26,279 Speaker 1: famed Apple designer Jony I've startup io. You may think 6 00:00:26,280 --> 00:00:28,080 Speaker 1: that I'm about to explain to you what this company 7 00:00:28,080 --> 00:00:30,520 Speaker 1: does other than build devices, or why it was acquired, 8 00:00:30,520 --> 00:00:32,879 Speaker 1: and I cannot tell you. Oh and by the way, 9 00:00:32,880 --> 00:00:34,600 Speaker 1: the air quotes of are buying it because they bought 10 00:00:34,600 --> 00:00:37,080 Speaker 1: the entire company in six point five billion dollars of 11 00:00:37,120 --> 00:00:42,000 Speaker 1: open Ai stock stock in a company that is unprofitable. 12 00:00:42,120 --> 00:00:45,080 Speaker 1: These aren't even real stock units. I'll get to that later. 13 00:00:45,520 --> 00:00:47,480 Speaker 1: By the way, Joni, I've he worked Apple. He worked 14 00:00:47,479 --> 00:00:49,800 Speaker 1: on designing products at the iPod, the iMac and iPhone, 15 00:00:49,840 --> 00:00:52,279 Speaker 1: worked closely with Steve Jobs, dined out on that for 16 00:00:52,320 --> 00:00:55,560 Speaker 1: many years. He left Apple in twenty nineteen. Now, this 17 00:00:55,600 --> 00:00:57,520 Speaker 1: announcement came in the form of a nine minute long 18 00:00:57,600 --> 00:01:00,080 Speaker 1: video that does not explain anything about the company. And 19 00:01:00,080 --> 00:01:04,800 Speaker 1: there's been some reporting, if you could call it them. Now, 20 00:01:04,880 --> 00:01:08,240 Speaker 1: let's quote the Wall Street Journal's Burberjean, who I generally 21 00:01:08,280 --> 00:01:11,240 Speaker 1: really like, but there is a piss take happening here. 22 00:01:12,080 --> 00:01:13,679 Speaker 1: Ortmand and I have offered a few hints at the 23 00:01:13,680 --> 00:01:15,800 Speaker 1: secret project they've been working on. The product will be 24 00:01:15,880 --> 00:01:18,160 Speaker 1: capable of being aware of the user's surroundings in life, 25 00:01:18,200 --> 00:01:20,880 Speaker 1: will be unobtrusive, able to rest in one's pocket and 26 00:01:20,920 --> 00:01:23,400 Speaker 1: on one's desk, and will be a third core device 27 00:01:23,400 --> 00:01:25,720 Speaker 1: a person would put on a desk after a MacBook 28 00:01:25,720 --> 00:01:28,759 Speaker 1: Pro and an iPhone. Now that wood and will those 29 00:01:28,800 --> 00:01:32,120 Speaker 1: are load bearing, by the way, I continue, though the 30 00:01:32,200 --> 00:01:34,320 Speaker 1: journal earlier reported that the device won't be a phone 31 00:01:34,360 --> 00:01:36,360 Speaker 1: and the ivan Aortmand's intent is to help ween users 32 00:01:36,360 --> 00:01:38,560 Speaker 1: from screens. Aortmand said that the device isn't a pair 33 00:01:38,600 --> 00:01:41,000 Speaker 1: of glasses and that I've have been skeptical about building 34 00:01:41,000 --> 00:01:43,120 Speaker 1: something to wear on the body. Ortmand and I have 35 00:01:43,120 --> 00:01:45,200 Speaker 1: offered details about how the collaboration grew over the past 36 00:01:45,280 --> 00:01:48,440 Speaker 1: few years. Eighteen months ago, open AIE vice president of 37 00:01:48,480 --> 00:01:51,480 Speaker 1: product Peter Wellender began working with ives team. The two 38 00:01:51,480 --> 00:01:55,240 Speaker 1: sides became excited about a specific device last four What 39 00:01:55,320 --> 00:01:58,920 Speaker 1: device is that? Who the fuck knows? Printed baby. There's 40 00:01:58,920 --> 00:02:02,600 Speaker 1: also a thing in this art about this effectively tripling 41 00:02:02,680 --> 00:02:05,280 Speaker 1: or caadrupling the value of open Ai. It's complete bullshit. 42 00:02:05,440 --> 00:02:08,360 Speaker 1: In fact, all of this sounds like complete bollocks to me. 43 00:02:08,560 --> 00:02:11,280 Speaker 1: Why are you announcing this now? What is it you're buying? 44 00:02:11,360 --> 00:02:13,720 Speaker 1: Who knows? The journal also claims that Aortmand believes that 45 00:02:13,760 --> 00:02:16,640 Speaker 1: they will ship one hundred million of these theoretical devices 46 00:02:16,680 --> 00:02:19,560 Speaker 1: by late twenty twenty six, the magical year when everything 47 00:02:19,560 --> 00:02:22,320 Speaker 1: from Agi to powerful agents are meant to work, the 48 00:02:22,360 --> 00:02:28,280 Speaker 1: bullshit year. I can't wait anyway. Jony I've also gets 49 00:02:28,280 --> 00:02:31,440 Speaker 1: to keep his independent design studio love From, which has 50 00:02:31,639 --> 00:02:34,760 Speaker 1: already been working with open Ai, and will, according to Bloomberg, 51 00:02:34,800 --> 00:02:37,639 Speaker 1: takeover design for all of open Ai, including its software, 52 00:02:37,680 --> 00:02:40,440 Speaker 1: and apparently Joni and Sammy initially met up to improve 53 00:02:40,480 --> 00:02:43,600 Speaker 1: the interface of chat GPT. When did that fucking happen? 54 00:02:44,200 --> 00:02:46,960 Speaker 1: Bloomberg also reports that Altman and I have yet to 55 00:02:47,000 --> 00:02:49,359 Speaker 1: work out a user interface for the new hardware product, 56 00:02:49,400 --> 00:02:51,520 Speaker 1: which is a big deal considering it's meant to be 57 00:02:51,520 --> 00:02:54,520 Speaker 1: out in like a year and a half. What are 58 00:02:54,600 --> 00:02:58,800 Speaker 1: we doing here? Why? I understand the objective reporting requires 59 00:02:58,840 --> 00:03:01,320 Speaker 1: you to just say to things that, but I feel 60 00:03:01,320 --> 00:03:03,920 Speaker 1: like I feel like at some point you have to 61 00:03:04,000 --> 00:03:08,320 Speaker 1: just say all of this is theoretical. It's complete wank, 62 00:03:08,560 --> 00:03:11,720 Speaker 1: and all signs point to this venture being a load 63 00:03:11,720 --> 00:03:13,960 Speaker 1: of bollocks. It's a smoke screen, a desperate moved by 64 00:03:13,960 --> 00:03:16,760 Speaker 1: open Ai, a desperate company. All stock deals are quite 65 00:03:16,760 --> 00:03:20,080 Speaker 1: common in large public corporations that are quite liquid, but 66 00:03:20,160 --> 00:03:22,400 Speaker 1: they have stock that has value that they can then 67 00:03:22,440 --> 00:03:25,000 Speaker 1: be solved right, But open Ai is neither public nor 68 00:03:25,080 --> 00:03:27,960 Speaker 1: a corporation. It's the for profit arm of a nonprofit 69 00:03:28,000 --> 00:03:30,160 Speaker 1: desperate to convert it's for profit arm into a public 70 00:03:30,200 --> 00:03:34,520 Speaker 1: benefit corporation. They don't have stock, they don't have stock. 71 00:03:34,560 --> 00:03:39,920 Speaker 1: They have these goddamn profit participation units. It's it's so silly. 72 00:03:40,000 --> 00:03:42,880 Speaker 1: It's all very silly. And Jony Ivan is team of 73 00:03:42,880 --> 00:03:46,119 Speaker 1: fifty five people. They're working on a very real thing, 74 00:03:46,200 --> 00:03:48,960 Speaker 1: and they were required with six point five billion dollars 75 00:03:48,960 --> 00:03:53,560 Speaker 1: of very real paper profit participation units and a company 76 00:03:53,560 --> 00:03:56,520 Speaker 1: that burns billions of dollars and has never turned any profit. 77 00:03:56,960 --> 00:03:59,280 Speaker 1: To be clear, the company i Owe is somehow different 78 00:03:59,320 --> 00:04:03,119 Speaker 1: to Love from his design firm. Fifty five people work 79 00:04:03,160 --> 00:04:06,600 Speaker 1: at IO I think like that many work at Love 80 00:04:06,640 --> 00:04:10,840 Speaker 1: from really not clear what they work on Io, though 81 00:04:11,240 --> 00:04:12,880 Speaker 1: no one seems to know. No one seems to have 82 00:04:12,920 --> 00:04:15,320 Speaker 1: a single detail other than the fact that they can't 83 00:04:15,360 --> 00:04:17,880 Speaker 1: tell you what they're working on, which sounds a lot 84 00:04:18,000 --> 00:04:21,119 Speaker 1: like they have no idea. Now. You may also wonder 85 00:04:21,120 --> 00:04:23,040 Speaker 1: what Joni I has been up to since he left 86 00:04:23,040 --> 00:04:26,000 Speaker 1: Apple in twenty nineteen. The answer is extremely vague. In 87 00:04:26,000 --> 00:04:29,400 Speaker 1: twenty twenty, he founded love From in twenty nineteen, the 88 00:04:29,480 --> 00:04:31,760 Speaker 1: design firm, and in twenty twenty they signed a non 89 00:04:31,800 --> 00:04:35,120 Speaker 1: specific multi year partnership to design the future of Airbnb. 90 00:04:35,920 --> 00:04:38,880 Speaker 1: Apple has apparently kept working with love From in some 91 00:04:39,040 --> 00:04:41,880 Speaker 1: way that I can really not find any information about. 92 00:04:42,160 --> 00:04:44,719 Speaker 1: Love From also worked on some sort of seal for 93 00:04:44,800 --> 00:04:47,200 Speaker 1: King Charles of England to give away to and I 94 00:04:47,279 --> 00:04:50,840 Speaker 1: quote recognize private sector companies that are leading the way 95 00:04:50,839 --> 00:04:54,520 Speaker 1: and creating sustainable markets. They also designed an entirely new 96 00:04:54,600 --> 00:04:56,839 Speaker 1: font for it, which does not matter in the slightest 97 00:04:56,880 --> 00:04:59,279 Speaker 1: to anyone, but led to some reporters writing entire stories 98 00:04:59,279 --> 00:05:02,360 Speaker 1: about it because John fucking Ive was involved. In twenty 99 00:05:02,360 --> 00:05:05,920 Speaker 1: twenty three, I've in his team redesigned Linn Sondeck's LP 100 00:05:06,040 --> 00:05:09,640 Speaker 1: twelve turntable in and I quote a respectful and gentle way, 101 00:05:10,000 --> 00:05:12,120 Speaker 1: and in twenty twenty four, he teamed up with fashion 102 00:05:12,200 --> 00:05:14,359 Speaker 1: brand Montclair to make an out to wear a lion, 103 00:05:14,640 --> 00:05:16,800 Speaker 1: and his work appears to involve some kind of magnetic 104 00:05:16,880 --> 00:05:19,720 Speaker 1: button that can click together different pieces, which is kind 105 00:05:19,720 --> 00:05:21,960 Speaker 1: of cool. I'd have loved to actually read about that, 106 00:05:22,120 --> 00:05:25,560 Speaker 1: but that you can't. It's just people just put what 107 00:05:25,600 --> 00:05:28,280 Speaker 1: he says in the thing. They don't go and find 108 00:05:28,320 --> 00:05:30,640 Speaker 1: the clothes I'd have actually been interested in, and that 109 00:05:30,720 --> 00:05:34,120 Speaker 1: can't find shit about it because no one actually holds 110 00:05:34,520 --> 00:05:37,479 Speaker 1: any of these people accountable. They just go, oh, it's Jony. 111 00:05:37,560 --> 00:05:41,920 Speaker 1: I've all listened to whatever shit he's anyway. I'm very sorry. Okay, 112 00:05:42,160 --> 00:05:45,359 Speaker 1: I'm very sorry, but reading about this really frustrated me. 113 00:05:46,040 --> 00:05:49,600 Speaker 1: And ives also working with Ferrari apparently on a new 114 00:05:49,640 --> 00:05:51,760 Speaker 1: electric vehicle. Can we see it? Do we know when 115 00:05:51,760 --> 00:05:54,240 Speaker 1: it will be released? What? Kid? What's the range? What 116 00:05:54,279 --> 00:05:57,480 Speaker 1: will look like? No? Done for you? None for you? 117 00:05:57,480 --> 00:06:00,000 Speaker 1: You silly little you, silly little freak. How dare you 118 00:06:00,040 --> 00:06:02,400 Speaker 1: ask Jonny I've to tell you what he's doing? So 119 00:06:02,520 --> 00:06:05,680 Speaker 1: in summery Since twenty nineteen, Jony I've has redesigned Airbnb 120 00:06:05,839 --> 00:06:07,720 Speaker 1: in some way, made a new font, made a new 121 00:06:07,760 --> 00:06:09,720 Speaker 1: system for putting on clothing. Made a medal for the 122 00:06:09,800 --> 00:06:12,200 Speaker 1: King of England to give companies that recycle, and made 123 00:06:12,240 --> 00:06:15,800 Speaker 1: some nonspecific contribution to creating an electric Ferrari while also 124 00:06:15,920 --> 00:06:19,039 Speaker 1: designing a non specific device that open Ai intends to 125 00:06:19,040 --> 00:06:22,679 Speaker 1: ship hundreds of millions of people. And to be clear, 126 00:06:24,120 --> 00:06:27,039 Speaker 1: like they are designing a product that another company run 127 00:06:27,080 --> 00:06:31,719 Speaker 1: by Jony i've Io will manufacture. I've has not, from 128 00:06:31,720 --> 00:06:33,880 Speaker 1: what I can tell, worked on the consumer electronics product 129 00:06:33,920 --> 00:06:37,000 Speaker 1: since he left Apple, And let's be really clear, Apple 130 00:06:37,000 --> 00:06:39,200 Speaker 1: has not really been cooking since Steve Jobs died, and 131 00:06:39,240 --> 00:06:41,839 Speaker 1: their coolest shit in recent history came after I've left, 132 00:06:42,000 --> 00:06:44,880 Speaker 1: specifically the new generation of M series laptops, Imax and 133 00:06:44,920 --> 00:06:47,000 Speaker 1: the like, but in the middle of twenty twenty four all 134 00:06:47,000 --> 00:06:49,760 Speaker 1: of his designers left the company, And really, I like 135 00:06:49,839 --> 00:06:52,359 Speaker 1: the Imax and MacBook Air is way more now and 136 00:06:52,400 --> 00:06:55,800 Speaker 1: I know whatever like Hindsight's twenty twenty Like I'm sure 137 00:06:55,960 --> 00:06:58,360 Speaker 1: like the original MacBook Air was kind of cool, but 138 00:06:58,400 --> 00:07:00,920 Speaker 1: it's like, how much did j Only I've actually work 139 00:07:00,960 --> 00:07:03,520 Speaker 1: on them, And it's actually really difficult to find out 140 00:07:03,560 --> 00:07:05,440 Speaker 1: what it is that Jony I've did it app or 141 00:07:05,480 --> 00:07:08,880 Speaker 1: other than be associated with things what you can see, however, 142 00:07:09,000 --> 00:07:12,000 Speaker 1: is how good Jony ive is deals getting people to 143 00:07:12,040 --> 00:07:14,360 Speaker 1: pay to be associated with Jony. I've the guy who 144 00:07:14,400 --> 00:07:17,200 Speaker 1: worked with Steve Jobs on big produgs that people like. 145 00:07:17,480 --> 00:07:20,040 Speaker 1: Has he built anything people like recently? Who knows? But 146 00:07:20,080 --> 00:07:23,080 Speaker 1: because people are lacking an object permanence, they believe i'ves 147 00:07:23,240 --> 00:07:25,840 Speaker 1: still got it, even if it doesn't really mean anything. 148 00:07:26,440 --> 00:07:29,360 Speaker 1: In any case, this deal is ridiculous. A mere week ago, 149 00:07:29,400 --> 00:07:32,720 Speaker 1: Sam Mortman announced that Instacart's CEO Fijisimo, who was already 150 00:07:32,720 --> 00:07:34,880 Speaker 1: on the open Ai board, would become the CEO of 151 00:07:34,920 --> 00:07:37,400 Speaker 1: Applications open Ai and is and I quote the Wall 152 00:07:37,400 --> 00:07:40,800 Speaker 1: Street Journal, charged with helping that the chat GPT maker 153 00:07:40,840 --> 00:07:44,080 Speaker 1: become a profitable global business while remaking an internal culture 154 00:07:44,080 --> 00:07:46,040 Speaker 1: that has been mired and executive in fighting in high 155 00:07:46,120 --> 00:07:49,520 Speaker 1: profile departures. Yet as part of the acquisition, Jony if 156 00:07:49,520 --> 00:07:51,840 Speaker 1: will take over all design and open Ai, along with 157 00:07:51,880 --> 00:07:54,960 Speaker 1: his team of fifty five people from io. I think 158 00:07:55,040 --> 00:07:57,960 Speaker 1: love from will be as well. It's just this whole 159 00:07:57,960 --> 00:08:00,640 Speaker 1: deal is such a fucking mess. And see when she 160 00:08:00,720 --> 00:08:02,760 Speaker 1: joins in the summer, will now oversee a company that 161 00:08:02,800 --> 00:08:05,720 Speaker 1: has fundamentally changed since she took the position, and be 162 00:08:05,800 --> 00:08:08,200 Speaker 1: left to deal with the fallout because her whole fucking 163 00:08:08,280 --> 00:08:10,760 Speaker 1: job will be to take responsibility for the mess that 164 00:08:10,800 --> 00:08:14,080 Speaker 1: Sam Altman's made, and ma'am, what a mess. Open Ai 165 00:08:14,240 --> 00:08:16,520 Speaker 1: burned five billion dollars in twenty twenty four and is 166 00:08:16,520 --> 00:08:19,480 Speaker 1: on course to burn over ten billion dollars this year. 167 00:08:19,760 --> 00:08:21,880 Speaker 1: Acquiring another company in an all stock deal at this 168 00:08:22,000 --> 00:08:24,080 Speaker 1: stage isn't a victory. It's a sign that something is 169 00:08:24,120 --> 00:08:28,200 Speaker 1: financially rotten at America's dampest ai startup. As I've discussed 170 00:08:28,240 --> 00:08:31,400 Speaker 1: on previous episodes, open Ai is maybe fifteen billion dollars 171 00:08:31,440 --> 00:08:34,040 Speaker 1: of liquidity at any given time, and has promised nineteen 172 00:08:34,040 --> 00:08:36,840 Speaker 1: billion dollars to complete the Stargate data centers, as well 173 00:08:36,880 --> 00:08:39,439 Speaker 1: as allegedly offering three billion dollars, though it's not obvious 174 00:08:39,480 --> 00:08:41,040 Speaker 1: if this will be in cash or stock to by 175 00:08:41,080 --> 00:08:43,840 Speaker 1: the coding startup windsurf. And when I say, by the way, 176 00:08:44,360 --> 00:08:47,280 Speaker 1: they have fifteen billion dollars of liquidity, I mean that 177 00:08:47,600 --> 00:08:50,480 Speaker 1: at max It's it could be way less, because that 178 00:08:50,559 --> 00:08:52,920 Speaker 1: is just the combination that they're funding and in and 179 00:08:52,960 --> 00:08:55,800 Speaker 1: out revenue, and also putting aside the fact that neither 180 00:08:55,880 --> 00:08:58,400 Speaker 1: I own nor open Ai have actually settled on a product. 181 00:08:58,800 --> 00:09:02,560 Speaker 1: Hardware is hard, research and development is expensive. Apple spends 182 00:09:02,559 --> 00:09:04,520 Speaker 1: tens of billions of dollars a year on it, and 183 00:09:04,559 --> 00:09:06,959 Speaker 1: so it's manufacturing, especially if this device is meant to 184 00:09:06,960 --> 00:09:09,200 Speaker 1: be smaller than the smartphone, and especially in the era 185 00:09:09,280 --> 00:09:12,000 Speaker 1: of tariffs, unless they assume that those will be gone 186 00:09:12,000 --> 00:09:14,480 Speaker 1: by them, which they won't. Worse still, the margins on 187 00:09:14,520 --> 00:09:16,760 Speaker 1: hardware are much lower, about ten to twenty percent, and 188 00:09:16,800 --> 00:09:19,079 Speaker 1: there isn't a chance in hell that using this device 189 00:09:19,080 --> 00:09:21,680 Speaker 1: won't require you to subscribe to chat GPT, which means 190 00:09:21,760 --> 00:09:23,720 Speaker 1: users will have to pay the subscription fee on top 191 00:09:23,760 --> 00:09:27,800 Speaker 1: of this theoretical device and also be pinging chat GPT servers, 192 00:09:27,840 --> 00:09:32,240 Speaker 1: which are expensive and unsustainable and up unprofitable to run. 193 00:09:32,360 --> 00:09:34,640 Speaker 1: Even I swear I should be able to say unprofitable 194 00:09:34,640 --> 00:09:37,319 Speaker 1: by now I say it enough fucking times. I should 195 00:09:37,320 --> 00:09:39,240 Speaker 1: also add that if there's one thing that Sam Mortman 196 00:09:39,280 --> 00:09:42,440 Speaker 1: has proven, it's that he's fundamentally bad at product Well. 197 00:09:42,520 --> 00:09:44,640 Speaker 1: Chat GPT might be popular, it's hard to say what 198 00:09:44,720 --> 00:09:47,360 Speaker 1: it really does, which you can get away with when 199 00:09:47,360 --> 00:09:49,600 Speaker 1: your free software is hoped by every media out there 200 00:09:49,640 --> 00:09:51,400 Speaker 1: in the world, but can't with a device that will 201 00:09:51,480 --> 00:09:54,800 Speaker 1: likely cost hundreds of dollars. Open Eye has also proven 202 00:09:54,800 --> 00:09:56,280 Speaker 1: that it's not very good at making the kind of 203 00:09:56,320 --> 00:09:59,199 Speaker 1: seamless and effortless product that companies like Apple are known for. 204 00:09:59,480 --> 00:10:02,320 Speaker 1: And let's be real, with what money are they building 205 00:10:02,360 --> 00:10:06,280 Speaker 1: this crap? You can't pay factories in stock In any case, 206 00:10:06,280 --> 00:10:08,319 Speaker 1: this is a desperate move made by open Ai to 207 00:10:08,360 --> 00:10:10,640 Speaker 1: try and bolster the valuation of a company that's lost 208 00:10:10,679 --> 00:10:13,080 Speaker 1: the plot if they ever found it. If anything, this 209 00:10:13,120 --> 00:10:15,960 Speaker 1: device suggests a fundamental lack in chat GPT as a product, 210 00:10:16,160 --> 00:10:18,440 Speaker 1: and while boosters may frame this as the next generation 211 00:10:18,480 --> 00:10:20,920 Speaker 1: of open Ai, it feels more like a smokescreen to 212 00:10:20,920 --> 00:10:23,800 Speaker 1: convince people that this company isn't washed. Members of the 213 00:10:23,840 --> 00:10:26,040 Speaker 1: media treat this company with suspicion and demand that they 214 00:10:26,080 --> 00:10:28,440 Speaker 1: actually show you something before claiming this is the biggest, 215 00:10:28,640 --> 00:10:32,600 Speaker 1: most hugest move in Silicon Valley history. Don't embarrass yourself 216 00:10:32,640 --> 00:10:34,199 Speaker 1: by humoring these twerps.