Speaker 1: Zone Media. Hello, and welcome to this week's Better Offline Monologue.
Speaker 1: I'm your host ed Ze Trunk, and I am going
Speaker 1: a little insane. You've likely seen the news that open
Speaker 1: ai is buying and that's in air quotes. By the way,
Speaker 1: famed Apple designer Jony I've startup io. You may think
Speaker 1: that I'm about to explain to you what this company
Speaker 1: does other than build devices, or why it was acquired,
Speaker 1: and I cannot tell you. Oh and by the way,
Speaker 1: the air quotes of are buying it because they bought
Speaker 1: the entire company in six point five billion dollars of
Speaker 1: open Ai stock stock in a company that is unprofitable.
Speaker 1: These aren't even real stock units. I'll get to that later.
Speaker 1: By the way, Joni, I've he worked Apple. He worked
Speaker 1: on designing products at the iPod, the iMac and iPhone,
Speaker 1: worked closely with Steve Jobs, dined out on that for
Speaker 1: many years. He left Apple in twenty nineteen. Now, this
Speaker 1: announcement came in the form of a nine minute long
Speaker 1: video that does not explain anything about the company. And
Speaker 1: there's been some reporting, if you could call it them. Now,
Speaker 1: let's quote the Wall Street Journal's Burberjean, who I generally
Speaker 1: really like, but there is a piss take happening here.
Speaker 1: Ortmand and I have offered a few hints at the
Speaker 1: secret project they've been working on. The product will be
Speaker 1: capable of being aware of the user's surroundings in life,
Speaker 1: will be unobtrusive, able to rest in one's pocket and
Speaker 1: on one's desk, and will be a third core device
Speaker 1: a person would put on a desk after a MacBook
Speaker 1: Pro and an iPhone. Now that wood and will those
Speaker 1: are load bearing, by the way, I continue, though the
Speaker 1: journal earlier reported that the device won't be a phone
Speaker 1: and the ivan Aortmand's intent is to help ween users
Speaker 1: from screens. Aortmand said that the device isn't a pair
Speaker 1: of glasses and that I've have been skeptical about building
Speaker 1: something to wear on the body. Ortmand and I have
Speaker 1: offered details about how the collaboration grew over the past
Speaker 1: few years. Eighteen months ago, open AIE vice president of
Speaker 1: product Peter Wellender began working with ives team. The two
Speaker 1: sides became excited about a specific device last four What
Speaker 1: device is that? Who the fuck knows? Printed baby. There's
Speaker 1: also a thing in this art about this effectively tripling
Speaker 1: or caadrupling the value of open Ai. It's complete bullshit.
Speaker 1: In fact, all of this sounds like complete bollocks to me.
Speaker 1: Why are you announcing this now? What is it you're buying?
Speaker 1: Who knows? The journal also claims that Aortmand believes that
Speaker 1: they will ship one hundred million of these theoretical devices
Speaker 1: by late twenty twenty six, the magical year when everything
Speaker 1: from Agi to powerful agents are meant to work, the
Speaker 1: bullshit year. I can't wait anyway. Jony I've also gets
Speaker 1: to keep his independent design studio love From, which has
Speaker 1: already been working with open Ai, and will, according to Bloomberg,
Speaker 1: takeover design for all of open Ai, including its software,
Speaker 1: and apparently Joni and Sammy initially met up to improve
Speaker 1: the interface of chat GPT. When did that fucking happen?
Speaker 1: Bloomberg also reports that Altman and I have yet to
Speaker 1: work out a user interface for the new hardware product,
Speaker 1: which is a big deal considering it's meant to be
Speaker 1: out in like a year and a half. What are
Speaker 1: we doing here? Why? I understand the objective reporting requires
Speaker 1: you to just say to things that, but I feel
Speaker 1: like I feel like at some point you have to
Speaker 1: just say all of this is theoretical. It's complete wank,
Speaker 1: and all signs point to this venture being a load
Speaker 1: of bollocks. It's a smoke screen, a desperate moved by
Speaker 1: open Ai, a desperate company. All stock deals are quite
Speaker 1: common in large public corporations that are quite liquid, but
Speaker 1: they have stock that has value that they can then
Speaker 1: be solved right, But open Ai is neither public nor
Speaker 1: a corporation. It's the for profit arm of a nonprofit
Speaker 1: desperate to convert it's for profit arm into a public
Speaker 1: benefit corporation. They don't have stock, they don't have stock.
Speaker 1: They have these goddamn profit participation units. It's it's so silly.
Speaker 1: It's all very silly. And Jony Ivan is team of
Speaker 1: fifty five people. They're working on a very real thing,
Speaker 1: and they were required with six point five billion dollars
Speaker 1: of very real paper profit participation units and a company
Speaker 1: that burns billions of dollars and has never turned any profit.
Speaker 1: To be clear, the company i Owe is somehow different
Speaker 1: to Love from his design firm. Fifty five people work
Speaker 1: at IO I think like that many work at Love
Speaker 1: from really not clear what they work on Io, though
Speaker 1: no one seems to know. No one seems to have
Speaker 1: a single detail other than the fact that they can't
Speaker 1: tell you what they're working on, which sounds a lot
Speaker 1: like they have no idea. Now. You may also wonder
Speaker 1: what Joni I has been up to since he left
Speaker 1: Apple in twenty nineteen. The answer is extremely vague. In
Speaker 1: twenty twenty, he founded love From in twenty nineteen, the
Speaker 1: design firm, and in twenty twenty they signed a non
Speaker 1: specific multi year partnership to design the future of Airbnb.
Speaker 1: Apple has apparently kept working with love From in some
Speaker 1: way that I can really not find any information about.
Speaker 1: Love From also worked on some sort of seal for
Speaker 1: King Charles of England to give away to and I
Speaker 1: quote recognize private sector companies that are leading the way
Speaker 1: and creating sustainable markets. They also designed an entirely new
Speaker 1: font for it, which does not matter in the slightest
Speaker 1: to anyone, but led to some reporters writing entire stories
Speaker 1: about it because John fucking Ive was involved. In twenty
Speaker 1: twenty three, I've in his team redesigned Linn Sondeck's LP
Speaker 1: twelve turntable in and I quote a respectful and gentle way,
Speaker 1: and in twenty twenty four, he teamed up with fashion
Speaker 1: brand Montclair to make an out to wear a lion,
Speaker 1: and his work appears to involve some kind of magnetic
Speaker 1: button that can click together different pieces, which is kind
Speaker 1: of cool. I'd have loved to actually read about that,
Speaker 1: but that you can't. It's just people just put what
Speaker 1: he says in the thing. They don't go and find
Speaker 1: the clothes I'd have actually been interested in, and that
Speaker 1: can't find shit about it because no one actually holds
Speaker 1: any of these people accountable. They just go, oh, it's Jony.
Speaker 1: I've all listened to whatever shit he's anyway. I'm very sorry. Okay,
Speaker 1: I'm very sorry, but reading about this really frustrated me.
Speaker 1: And ives also working with Ferrari apparently on a new
Speaker 1: electric vehicle. Can we see it? Do we know when
Speaker 1: it will be released? What? Kid? What's the range? What
Speaker 1: will look like? No? Done for you? None for you?
Speaker 1: You silly little you, silly little freak. How dare you
Speaker 1: ask Jonny I've to tell you what he's doing? So
Speaker 1: in summery Since twenty nineteen, Jony I've has redesigned Airbnb
Speaker 1: in some way, made a new font, made a new
Speaker 1: system for putting on clothing. Made a medal for the
Speaker 1: King of England to give companies that recycle, and made
Speaker 1: some nonspecific contribution to creating an electric Ferrari while also
Speaker 1: designing a non specific device that open Ai intends to
Speaker 1: ship hundreds of millions of people. And to be clear,
Speaker 1: like they are designing a product that another company run
Speaker 1: by Jony i've Io will manufacture. I've has not, from
Speaker 1: what I can tell, worked on the consumer electronics product
Speaker 1: since he left Apple, And let's be really clear, Apple
Speaker 1: has not really been cooking since Steve Jobs died, and
Speaker 1: their coolest shit in recent history came after I've left,
Speaker 1: specifically the new generation of M series laptops, Imax and
Speaker 1: the like, but in the middle of twenty twenty four all
Speaker 1: of his designers left the company, And really, I like
Speaker 1: the Imax and MacBook Air is way more now and
Speaker 1: I know whatever like Hindsight's twenty twenty Like I'm sure
Speaker 1: like the original MacBook Air was kind of cool, but
Speaker 1: it's like, how much did j Only I've actually work
Speaker 1: on them, And it's actually really difficult to find out
Speaker 1: what it is that Jony I've did it app or
Speaker 1: other than be associated with things what you can see, however,
Speaker 1: is how good Jony ive is deals getting people to
Speaker 1: pay to be associated with Jony. I've the guy who
Speaker 1: worked with Steve Jobs on big produgs that people like.
Speaker 1: Has he built anything people like recently? Who knows? But
Speaker 1: because people are lacking an object permanence, they believe i'ves
Speaker 1: still got it, even if it doesn't really mean anything.
Speaker 1: In any case, this deal is ridiculous. A mere week ago,
Speaker 1: Sam Mortman announced that Instacart's CEO Fijisimo, who was already
Speaker 1: on the open Ai board, would become the CEO of
Speaker 1: Applications open Ai and is and I quote the Wall
Speaker 1: Street Journal, charged with helping that the chat GPT maker
Speaker 1: become a profitable global business while remaking an internal culture
Speaker 1: that has been mired and executive in fighting in high
Speaker 1: profile departures. Yet as part of the acquisition, Jony if
Speaker 1: will take over all design and open Ai, along with
Speaker 1: his team of fifty five people from io. I think
Speaker 1: love from will be as well. It's just this whole
Speaker 1: deal is such a fucking mess. And see when she
Speaker 1: joins in the summer, will now oversee a company that
Speaker 1: has fundamentally changed since she took the position, and be
Speaker 1: left to deal with the fallout because her whole fucking
Speaker 1: job will be to take responsibility for the mess that
Speaker 1: Sam Altman's made, and ma'am, what a mess. Open Ai
Speaker 1: burned five billion dollars in twenty twenty four and is
Speaker 1: on course to burn over ten billion dollars this year.
Speaker 1: Acquiring another company in an all stock deal at this
Speaker 1: stage isn't a victory. It's a sign that something is
Speaker 1: financially rotten at America's dampest ai startup. As I've discussed
Speaker 1: on previous episodes, open Ai is maybe fifteen billion dollars
Speaker 1: of liquidity at any given time, and has promised nineteen
Speaker 1: billion dollars to complete the Stargate data centers, as well
Speaker 1: as allegedly offering three billion dollars, though it's not obvious
Speaker 1: if this will be in cash or stock to by
Speaker 1: the coding startup windsurf. And when I say, by the way,
Speaker 1: they have fifteen billion dollars of liquidity, I mean that
Speaker 1: at max It's it could be way less, because that
Speaker 1: is just the combination that they're funding and in and
Speaker 1: out revenue, and also putting aside the fact that neither
Speaker 1: I own nor open Ai have actually settled on a product.
Speaker 1: Hardware is hard, research and development is expensive. Apple spends
Speaker 1: tens of billions of dollars a year on it, and
Speaker 1: so it's manufacturing, especially if this device is meant to
Speaker 1: be smaller than the smartphone, and especially in the era
Speaker 1: of tariffs, unless they assume that those will be gone
Speaker 1: by them, which they won't. Worse still, the margins on
Speaker 1: hardware are much lower, about ten to twenty percent, and
Speaker 1: there isn't a chance in hell that using this device
Speaker 1: won't require you to subscribe to chat GPT, which means
Speaker 1: users will have to pay the subscription fee on top
Speaker 1: of this theoretical device and also be pinging chat GPT servers,
Speaker 1: which are expensive and unsustainable and up unprofitable to run.
Speaker 1: Even I swear I should be able to say unprofitable
Speaker 1: by now I say it enough fucking times. I should
Speaker 1: also add that if there's one thing that Sam Mortman
Speaker 1: has proven, it's that he's fundamentally bad at product Well.
Speaker 1: Chat GPT might be popular, it's hard to say what
Speaker 1: it really does, which you can get away with when
Speaker 1: your free software is hoped by every media out there
Speaker 1: in the world, but can't with a device that will
Speaker 1: likely cost hundreds of dollars. Open Eye has also proven
Speaker 1: that it's not very good at making the kind of
Speaker 1: seamless and effortless product that companies like Apple are known for.
Speaker 1: And let's be real, with what money are they building
Speaker 1: this crap? You can't pay factories in stock In any case,
Speaker 1: this is a desperate move made by open Ai to
Speaker 1: try and bolster the valuation of a company that's lost
Speaker 1: the plot if they ever found it. If anything, this
Speaker 1: device suggests a fundamental lack in chat GPT as a product,
Speaker 1: and while boosters may frame this as the next generation
Speaker 1: of open Ai, it feels more like a smokescreen to
Speaker 1: convince people that this company isn't washed. Members of the
Speaker 1: media treat this company with suspicion and demand that they
Speaker 1: actually show you something before claiming this is the biggest,
Speaker 1: most hugest move in Silicon Valley history. Don't embarrass yourself
Speaker 1: by humoring these twerps.