Apple Price Increases and Memory Costs

Mythos is back and OpenAI's most powerful model, GPD five point six is out too. But will the public ever get to see either of them? And Apple hikes prices massively to keep pace with memory prices? Is it Greed That's coming up on a big technology podcast Friday edition right after this In the face of ongoing disruption and opportunity, TMT leaders need to deliver tangible results, not just ideas pace and performance matter most, PWC combines market insights and deep sector experience with AI, cloud, and emerging tech to accelerate your transformation and drive measurable ROI from strategy to execution PWC can help you anticipate what's next, outpace disruption, and compete. For more information, visit pwc. comot Insurance isn't one size fits all And shopping for it shouldn't feel like squeezing into something that just doesn't fit That's why drivers have enjoyed progressives name your price tool for years With the name Y your prrice tool, you tell them what you want to pay. and they show you options that fit your budget Enough hunting for discounts, trying to calculate rates and tinkering with coverages Maybe you're picking out your very first policy Or maybe you're just looking for something that works better for you and your family. Either way, they make it simple to see your options. No guesswork, no surprises. ready to see how easy and fun shopping for car insurance can be? progressive. com and give the name Your Pice tool a try Take the stress out of shopping and find coverage that fits your life on your terms Progressive casualty Insurance Company and affiliates Price and coverage match limited by state law Welcome to B big Technology podcast Friday Edition where we break down the news in our tritional Cool headed and nuanced format. We have a great show for you today coming a bit later than usual, but we are here On the feed we're going to talk about the return of Anthropics Mythos, the debut of OpenAI's GPT five point six. Open AI, by the way, may be delaying its IPO to twenty twenty seven or maybe it won't. We'll discuss that. And Apple kikes the prices up on MacBooks and other devices. by anywhere between the teens and thirty percent. So we'll talk about what's behind that memory crunch that's underlying a lot of the price increases you might see in consumer electronics and whether it is unavoidable or as some might say, greet. Joining us as always to do it is Ron Jean Roy of Margins, Ron Jean. greatreat to see you Great to see you, Alex. is Are you on the Mythos list out of the hundred U.S institutions, major companies and government agencies that now have access to Mythos? I am not if the government is picking winners and losers, then I am without a doubt a loser. So let's go through the headline here. It's something that we have breaking as we speak. The US. releases powerful anthropic model mythos to some U.S companies from Semaphore. The U.S. goovernment Friday lifted its block on anthropics powerful Claud Mythos five AI model, allowing the company to release it to more than a hundred U.S institutions including major companies and government agencies The decision in a Friday letter sent to Anthropic is a major de escalation. in the confrontation between the Trump administration and one of the world's most valuable private company The letter is silent on Fable five, a weaker version of Mythos that was briefly the most powerful AI model available to consumers. People close to the talks said they are moving toward releasing Fable as well The timeline is unclear Howard Lutniick, the commmerce seecretary has given his stamp of approval Well, Ron, it looks like this u Long outage of Fable is about to end. And so and the saga. I don't know if we have any details about whether there've been actual structural fixes or whether the guardrails or the anti jailbreaking guardrails that the U. S. government has asked for are there u What do you make of the news It's For me, the most difficult part of trying to process all this is I mean, more on the overall regulatory landscape of who has control of what and when I think I mean, we've talked about is mythos more marketing and fear mongering or is it a true danger to kind of the global structural order And I don't know. it's like do you feel that the government is actually has any real plan around how they're approached dealing with anthropic now. Like it looks like this just feels like an extension of what originally Project Glasswing was, whatever that was, twenty to thirty companies now at one hundred. I don't really understand where this is going or what's fundamentally changed Right, Well, it does seem basically, you know, when you take it in combination with this week's openen AI newews that the government has installed itself as the approval of frontier models. And I think we should talk about The implications there Let's get into the opening ey News because I feel like it really couples together with the anthropic news. So This is from a blog post from opening eye previewing GPT five point six Sol, a next generation model. Today. we are beginning a limited preview of the GPT five point six series Sol our flagship model Terra a balanced model for efficient, high volume work, and Luna a fast, affordable model for everyday work. I'm just going to pause here for a moment U They're calling their two of their three models, Terra and Luna like the worst branding mistake ever made. Thank you. That was the first thing that just jumped out dramatically to me for listeners who don't remember, those were the names of cryptocurrencies that crashed dramatically One by ninety nine point nine nine nine percent, the other by Terra by ninety eight percent and Terra was a stable coin as well. These were kind of the Poster children for the crypto fallout from a couple of years ago. So I mean, I'll take that over Sud, I guess, their cod nameame, but How do you think they came up with those names All of them actually I think they were trying to find some version of like the anthropics Soul or like a version of a story like a sonnet and an opus and a fable. So they were trying to make their own with these Eth and space celestial nicknames like Terra, Luna, and Soul U they're obviously like they have are wide open to the fact that Anthropic has beat them on branding. but I would just say, for goodness ses Don't use Terra and Luna Read the room guys. Read the room my God.lease. And it's not only that they crashed it's that and correct me if I'm wrong here. It was a scam, right? It was a scam that basically got everybody to invest in these two thinking that they were stable and people lost their shirts. That's why I would stay away from that naming Thought actually now that you did explain it to me, it didn't jump out at me the whole kind of like Earthwind fire space type stuff Maybe I am feeling it a little bit separating out the cryptocurrency association of actual full scale fraudulent scams that Had a lot of people lose a lot of money, maybe I the best man I'm liking it a little I don't know. mayaybe I'm liking it a little bit Maybe we're trying to appeal to a non cryptocurrency crowd and really try to get to something a little bit more memorable I don't know. I've just gone to undecided from negative on these names Well I'm still against, but I suppose it's better than harness. Okay, so let's talk about let's get back to our main story here, which is that here's what OpAI says in its blog post that the release of this model is going to be restricted at first We believe in broad access Um But we are starting with a limited preview for a small group of trusted partners whose participation has been shared with the government before releasing more broadly. During this preview, we will continue testing and coordinating closely with the partners as we work toward broader availability. We don't believe this kind of government access process should become the long term default. So obviously They saw what happened with Mythos and Fable. They don't want to repeat of that. So they're kind of letting the government hand pick the customers that they're able to work with and those they can't We're going to get into the model's capabilities because it does seem pretty impressive, but I think the release the way that it's being released is more important the moment. Um Obviously there are implications here, right? If companies or countries cannot rely on their ability to access frontier AI, from U. S. foundational model companies. They will rush toward open source They will rush towards other solutions. They may, you know, not they may be slower to go to these more expensive frontier models whichich means the ROI and the incentive to build them will be less And therefore, we're now at a point where, uh, I won't say the entire Business model isn' in question, but given the stakes and given the money that's being raised Maybe it is Hold on. let's take let's separate out. I think there's like a few different parts. of that statement. The first part is Uh I guess like on the or actually on the business model question Let's remember that it was anthropic that raised the flag and the concerns around this and basically invited the U. S government to bring this up. Now it feels like this is becoming the default American rollout like regulatory model for any kind of frontier model, but It was the lab itself that pushed the narrative. OpenAI obviously appears that it's following it, I don't do you think not releasing a frontier model to like a full scale audience is necessarily a bad thing? Do you think like the most qualified responsible and companies should be the ones that start testing it and pushing its limits first Yeah, well, we've gone back and forth in this. I mean, I have in the past said, okay, maybe this is the right strategy to if you think that this thing can be this powerful, then maybe you should be careful with your release U So I understand I've said that here Um, But the other side of it is that like You you know, you could end up in a situation where the government and the companies really pick the winners and losers in this space. And from a business standpoint, maybe they're able to charge a lot more. Right? So the initial preview of Mythos was quite expensive U And actually the preview of GPT five point six is about half the cost. of the of fable So that's interesting. But yeah, I think that like from a business standpoint, Um There are second order effects here. And I think more broadly there's concern to me that if we're going to go into this moment where There is this you know government picking winners and losers situation that you could end up uh, You could end up with a more controlled economy, right? Like there have been people on Twitter talking about how like the US is much more toppp down on AI than even China is today Here's another tweet that I thought was interesting. someone wrote, I'm afraid we've entered a dark era in AI model development and acccess. and somebody else quote tweeted them and wrote Breaking, member of the permanent underclass left shocked after finding out the permanent upper cllass is invite only So I imagine that this moment is going to pass, but certainly there's like some worrying precedence here if it continues Your thoughts I guess I found it a bit The whole phrase winners and losers and the government picking them becausecause that is how the administration has essentially worked for the last for especially in this second term And it it's just coming down on I think a faction that is kind of like screamed for libertarianism for a long time, but even though like when you know, when it's who gets to buy TikTok or what any other decision or how does Stargate roll out or you know, like all of these things the government and the administration have been pushing. So it's just kind of taking the same approach to frontier labs in my mind and I don't know, I guess I have not been surprised at how things have been playing out at all I don't think it's a good thing. I do agree that overall, like especially like visa Vis China and how things are playing out overall across the entire globalallyI landscape. I think it's a very bad thing, but I guess I'm not as surprised as a lot of VC Twitter seems to be. Yeah, what would say surprised is the the reaction I'm having, but, you know, it's important, I think it's important to talk about the problems that could lead down the line, both in terms of like, all right, if this is the new process, then certainly you're at a much greater disadvantage if you aren't able to use these models and your competitors are Right? So who gets to decide that? Right? I don't think that's you know, a the free market that the U. S needs. Then the other side of it is Do you end up playing into the hands of your competitors? This is an interesting thought from Aron Levy. and We've kind of touched on this, but it's worth talking about. If the US remains at the frontier at all times and has heavy regulation on the release of intelligence, then we end up with an economic and geopolitical edge because we can control who has access to frontier intelligence. However If we delay model releases and another player specifically China doesn't slow down and has equally strong models, not now but soon, then our delays end up advantaging their models and eventually their tech stacks. And we've definitely seen conversations recently about how Um, We're moving from people usings a frontier model to using model routing, using more open source models and And I think this kind of goes to your point, right? Like if you think the harness is the big confetitive advantage now and not the underlying model then you could end up with this type of policy sort of icing out the frontier labs and having a lot of the benefits of this AI moment go to open source in China, which who knows? I mean, if there's a robust open source AI availability, then that could be really good in a lot of ways. But you also then sort of lose your ability to control on the safety side of things And that's why you have people talking this week about banning open source models, which I don't think would be good either Well, I think let's dig into that a little bit. like To me, they are two separate issues Because especially a lot of the stories you're hearing about or work that's being done or even what I've been seeing kind of like, with customers on the front lines around exploring open source models. A lot of that is more around cost and like what models are actually suited to what tasks versus The idea that anyone is going to use mythos or Fable for a lot of the work that's being routed now towards open source. So I think like The cost driver, which we'll talk more about is more of a factor rather than the regulatory side But I do think like Because we have to remember like the most state of the art cutting edge frontier model That's really about Whether it's, you know, finding tons of security loopholes or pushing the boundaries of science scientific innovation, like I don't know, like that that kind of work is still to me very different than what we're hearing about on the open source side. Right, but I mean That's because the open source models have trailed in capabilities But it could end up, I mean, this might have happened whether we see the regulation or not. The open source models will not only be cheap. No it's aulous It's a rival It's happy It can start to rival in capabilities. and And that really, I mean, especially now as these companies head towards IPO, it really makes you wonder And I did try to speak with Brockmann about this a little bit when he was at the AI summit, but like makes you wonder Like if you have a model that's closed and is the equivalent of like fifteen PhDs and has good EQ and can do stuff get stuff done for you Then you have an open source model, right, let's say a couple of years down the line, that's like the equivalent of twelve PhDs and has decent EQ and we will still get things done for you then like, what is the competitive advantage for the frontier models versus versus, you know, the open source if they all get that smar Well, okay, so on the business model and IPO question and we're going to Tal more about open A eyess, the reporting and on their potential IPO, but I think it's a massive deal. I think it's like a absolutely ridiculously massive deal The fact that completely destroys the entire story. The story has been Like expensive frontier models, all the ARR growth that was shown to the world from call it September is, October is to February, March was peopleeople just cranking on whatever the latest, most expensive frontier models? The moment And again, we can Jevinons paradox it all day long. and I do firmly believe overall utilization of models in Eentic AI is going to be just you know like exponential. but core IPO story. I think takes a huge hit from this. So I think like the the advantage of having something far superior for a short amount of time starts to go away anyways the moment people start realizing they don't need The Ferrari, the Honda accord is great You know, up until this point, it was like a nobody gets fired for buying IBM situation where like you wouldn't look elsewhere because you didn't need to Right becausecause it was just kind of easier to plug and play the found these frontier models from the closed companies But what I'm saying is because the frontier is now being restricted, it adds an incentive to look elsewhere And when it adds that incentive to look elsewhere, you might see a slowing. Now The foundational model companies would argue that their models are still better, which they are They have more compute, which they do ultimately The expectations have been built up so high and the money is so you significant in that they basically need to shoot a hole in one here for everything to work or Maybe a hole in two, I don't know. They have to basically be near flawless in their execution and the pressure is now on. and that's why I think you saw opening ey taking the risky stance of saying we're going to play with the way the government wants us to play right now. But we would really prefer not And you're right, like They have executed dearly flawlessly I mean, it feels like for the last six to twelve months. and that's why the expectations have been built So massively I don't know. oververall, I think This is a bigg issue. I guess one thing I haveve been wondering though is Right now keep hearing and reading about as these frontier models actually you know like have widespread adoption, that's where the distilling starts to take place. That's where compometitors can start to, I mean like, you know, I've heard about these like distillation swarms where they're literally like asking, you know, like sending millions of prompts to try to like start understanding all of the model behavior and starting to work to actually recreate it from an open source standpoint is there some world where regulation is good to kind of protect the frontier model and you only give it to your hundred most profitable large enterprise and government customers that pay you the most money and also minimize risk of Distillation as well. could that Could they be almost A little happy That' nice. My hot take is that one of the things that we saw from anthropic with all these safeguards that it put on Fable was not as much that they were worried that fable would be misused, although I'm sure there was some worry there It was more that like, we know our competitors are going to try to distill this model And we're just not going to let them do it in places that provide the most value And in fact, I think Anthropic was you know, effectively coming out and saying that if we think that you're using our technology to build a competing model We're going to block your access to do that they kind of backed off that a little bit because people were like, anthropic doing any you know, preventing any AI research with its models is anti competitive and bad But yeah, I think that was a real worry. and this limited release strategy could prevent distillation to a degree, although You know, the models It seems like it's kind of hard to keep the models under wraps, don't you think? I My favorite Bill Girley this week had tweeted, if you're on the verge of AGI or ASI, why isn't your model smart enough to recognize espionage distillation in real time You say you can cure cancer in a few years. Isn't sniffing illicit distillation quite a bit easier than curing cancer And I kind of loved it because it's like Why do you need why it is surprising to me that that is still such a threat when it is existential to their business They haven't kind of invested or figured out a way to protect against this short of not giving as many people access Yeah, no, it's a great point. I mean, I think that's what they were trying to do with these proactive safeguards, but Obviously it's still a problem. They just accused Alibaba. Anthropic just accused Alibaba of just stealing their models recently. Okay, one thing on GPD five point six Then we'll move on to the opening Iy IPO stories Um So they ran GPT five point six through a test called Exploit Bench And the capabilities were basically on par with Mythos this is obviously a cybersecurity test But Mythos is much less token efficient. so Mythos used something like three hundred thousand for the test and GPT five point six used around a hundred thousand So I would say it's at least you half two times more efficient than Mthos's preview which is which is interesting and it's priced more cheaply than it aboutout half price Yeah, I mean, you see price constantly being now a highlight rather than kind of some afterthought. I don't think. most people could have, you know, like reasonably known what their input and output token costs were in the past and now everyone is looking, I mean is looking at it I've u Wait hold on, it's not publicly available in any capacity now, right? Not five point six It's not publicly available. It's the same thing. there's a limited number of companies They enesfer all three of them Also likea and Ter all through Okay. So they're not doing like Luna everybody gets a little bit of access too, but u So got way Yeah. I mean, I think the hope is that it comes out fairly soon. That's just the way that they're talking We'll see Well, I guess why I'm asking that is In my mind and maybe it's wrong I still kind of associate The more expensive and heavy the model is, the more dangerous it is And that's why when Luna is fast and affordable for everyday work and that's kind of the position. and you would think like That should be easy and you just give it to everybody versus Soul is the flagship model. and That's the big dangerous one that can get us all into trouble, but maybe that's the wrong assumption. but Yeahah, you got to be careful. those nimble fighters, right? You think they're just lightweight and chill next thing you know, they cught you there they' they're exploiting software left and right, bringing down global financial infrastructure Okay. So speaking of global financial infrastructure, we do have IPOs On the way This is but the question is when this is from the New York Times. OpenAI leans toward waiting until next year for its IPO. OpenAI is leaning towards holding off its initial public offering until next year, a turnabout that punctuates the uncertain future for fast rising artificial intelligence giants. The maker of Chati Pe hired bankers and lawyers with an eye towards public offering as soon as the third or fourth quarter of this year but becausecause that's not going to hit the one trillion dollar valuation that Sam Alldtman been seeking, it looks like they are going to potentially postpone's from the Tim story. Top of mind is what happened to Elon Musk's SpaceX after its IPO this month. It had the largest ever largest IPO ever raising more than eighty five billion dollars at a one point seven seven trillion dollars valuation However, it's fallen back Um I'll just share my, you know conspiracy theory on this one and then turn it to you in terms of your views of the implications here I think OpenI knows it's important to beat Anthropic to the public markets given the growth that Anthropic has shown. off late I probably sees a better opening now because anthropic has been in a way held back by the government because of the fable Tumble And Opening eye might be just sending out signals that it's going to wait then it will pounce As a lightwight fighter does And cut cut anthropic get it get it G get there first. That's my litiracy theory. talking about two potentially trillion dollar companies as lightweight fighters here, but gotta be nimble Got toa be enimble. Okay, I do like that because was surprising to me that that could even be leaked. And I feel a lot of this IPO reporting is very purposefully leaked because again, In the past Like I mean, having seen a lot of this very up close Everyone does whatever they can to not allow for any of this kind of reporting and we've certainly seen plenty of it. so It feels very Like anything that comes out is purposeful. So then yeah, the question, why would they signal that they may be delaying Do like your take there? I think that's a fun one. but I also just think like right now What to me, what's interesting with the market is two months ago Everything felt like it had direction Everything, ARR was just unreal like any kind of number that was being reported out U overall, you know, everyone's feeling good about things, the frontier lab and State of the art models still are the kind of dominant narrative. Meanwhile, to meet the biggest vibe shift has been when you see Bill Girlier the coin basase CEO all Brian Armstein, like everyone is just bragging about not using frontier models Think about two months ago, three months ago. It was just Oh my God, have you used oppus four eight or whatever like? It was just GPT five five is now ahead of four eight. That's all anyone talked about. No one had ever even We most The average user had never even heard of Quin or like now with GLM five point two this week. So to me almost feels like This is a moment to wait. becausecause the entire market has shifted from two to three months ago. and no one got out other than Elon. and he did a great job at that. So I think Waiting actually would be the smarter decision But how long do you want to wait? Because if you wait too much longer, you might be in the situation where you've spent a lot of money, you're waiting for more money And your customers are starting to try to find ways to efficiency max they are and they already are you. They already are But you want do you want that you know, right now the c the curve is looking up into the right, But do you want it to to even out as these customers try to try to find more efficient ways to use your tools. I guess I mean, and I have no direct knowledge either way on this. To me, the curve is no longer up into the right. from where it was a few months ago, just every writing Yeah, I mean, just again When the coinbase CEO is bragging about model routing and here's five different models suited to different tasks. and everyone is talking about that changes the entire the growth curve. The entire story September to, February, March, Aprilish, all of that has changed Like it's just so clear. So that to go out, you're going to have to show your latest results. You're going to have to show the last few months. So I do think versus you have a lot of promising different business lines, startart allowing a little bit more maturity and then go out with a stronger story rather than Here's an ARR curve that looks insane And it's not just the Cnbase Cnbase CEO and it's not just Twitter voices who are talking about finding more efficient uses of their models and looking for savings in their engagements with anthropic and open AI. And by the way, there's also some reporting about anthropic and open AI potentially overcharging customers So it is a broader pullback, not just a micro influencer pullback And we have the reporting and we're going to talk about it right after this Bonjour, compomadre, It's the prelineoti. How do I negotiate so many great travel deals? My greatest gadget. 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So before the break, we talked a little bit about How Uh, There's this now it's become a meme that people are trying to pull back on their cost with open e and anthropic and finding ways to do it. The reporting shows that it's more than a meme, that it's a reality that seems like more widespread then you would even know by seeing the tweets. This is from the information. how AI customers are lowering their anthropic and open AI bills. As prices for anthropic and open AI's flagship products soar, some large customers are using cheaper AI models from those companies menus as well as from other providers. Enzsemba Health Partners a provider of software for hospitals that plans to spend up to one hundred million on AI this year said it's had success switching to an open AI model that's one twentieth as expensive as the company's more advanced models. The AI powerow tool for writing appeal letters to insurance firms that won't reimburse Esembble's hospital clients for care. They provide, sry, AI power is a tool that does that. Ensembble sends about fifteen thousand such letters every month And the chief technology officer of the company said switching to a lower cost model will result in savings of nearly seven hundred thousand dollars per year. Many anthropic and open AI customers are willing to stomach the rising costs of these two companies' products, but some are hitting the brakes after blowing through their budgets Okay, so basically what you're seeing now is It's almost as if these smaller flash models have gotten good enough that you can make these moves and companies are looking at what they're spending and saying, hey, wait a second This makeakes zero sense we are actually just going to going to go to the smaller models and we're going to route and maybe use the more powerful models as a decision m as a sort of player decision maker as opposed to a work It's pretty interesting R John, wouldn't say I mean, it does seem like this is going back to our discussion in the first half here a real not to use a you know, jargon, but a real economic headwind for these companies and not good again, if you're rooting for them to show, you know, exceptional growth as they get to IPO. I mean, to me the most interesting part of what you just said is You called it an economic headwind, but even within that reporting They're still talking about using an open AI model. justust one twentieth is expensive. so To me, that's an even bigger challenge overall to the narrative is is Like you can be using Anthropic and openen AI's own products And still that's not good for their overall like IPO narrative and the business story. because the it's dependent on using the most expensive models, not Here's a whole suite of products and models and use all of them the best you can and that's good for all of us. It really feels like the fact that that becomes a story in itself versus, oh, you're just using different parts of AI ecosystem, I think that is a pretty telling thing Is there a Jevin's paradox side to all of this where it's like, yeah, like you switched from using only our frontier model for everything to some of our cheaper models, but you're going do a lot more now And so therefore, you know a category that you never would have even spent on in twenty twenty three Now you're going to spend, you know a ton more. I think like this is the crazy part of the timing of all this. To me, I firmly believe in a few years time and especially in like the next decade There is going to be just massive increases in overall tooken consumption, and gentification of everything, I believe it The timing because in a If there's this pressure wasn't so great on the two giant, the frontier lab giants you would think like the product should actually Very clearly, you ask it a question, you give it a problem and it tells you And I've seen Claude do this sometimes where it's like, I like it won't actively switch, but if you ask it, which of your models are best suited for which part of this task, it will tell you. So but they don't like Pour bake that into the product because it's not good for the business overall Like and it should be. it should. they should. They could own this and make their portfolio approach and everything is tightly integrated, but it's given the IPO pressure That would be a dangerous thing to do over the next six months Sorry, wasn't the entire like big controversy around the GPT five rollout that it would route your queries to the appropriate model so they' Not doing that anymore or How does that comport with what you're saying now? No, no, no, hold on. Those were two separate things because the GPT five rollout W, you're talking about when It would peopleople were mad that it wasn't syychophantic and they wanted to No no I'm talking about how when GPT five rolled out, this is just in ChatCPT, right? ChatCPT would had its own built in model router and said, oh, this is an easier query. We'll send it to a smaller model, or this is a tougher query. we'llnd it to our most powerful model, and you really couldn't pick. Now you can pick, I guess Well, no, so okay, I would put those in two different categories around Building an aentic workflow that's repeatable and like predictable, And they're spending the time to assign the right model to the right task makes a lot of sense now again, now like when GPT five did have their model router. So yeah, I acknowledge People were backlashing because they were like, o, I'm getting dumber stuff. It's not doing this in the right way. When you're just having a back and forth like turn based conversation That's not where I think this is value And actually, that's like a good example where It was clumsy the way it was actually executed and people in that exact kind of like situation, it's probably not the most useful thing. I think it could be useful because again, as we both talked about like There's times where You ask Claude a basic question and it creates like a twenty page PowerPoint deck and just goes on, scrapes half the web and does whatever in God's name it's trying to do. and having a little bit of a lighter flash model typey thing might be good. But yeah, so to me, it's more as you have a workflow that is predictable and kind of like you know what the different pieces of work are everyone should be a lot more and they should be trying to lead that and they're not it's not good right l And by the way, you know, as we're talking You know, again, this all matters for the IPO because the growth and the dollars are going to be pretty important When we see these S on s and when they actually go out, There might be some overcharges happening because of the opacity of the system. So this is from the information Anthropic customers find errant charges, auditing startup says, someome customers may be paying more for anthropic and open AI products than they should due to billing inaccuracies, according to Vudit, which sells an AI bill auditing tool Obviously they're gonna find stuff. Okay, let me I'll read it we can talk about it Between March and June, Vaudit audited bills sent to sixty companies totaling thirty four million, mostly for usage of anthropics Caud CodD and found about one point seven million doars in mistaken overcharges. we are observing in that enterprise AI billing has become increasingly opaque said, errant billing isn't unique to AI, of course, and can be seen throughout enterprise software cloud services and online advertising. Do you think that this is a big problem? NAI is basically like you send these tools like Cloud code out to do stuff for you. Uh And because it's so opaque, you have no idea whether you're being overcharged or not. I mean, one point seven million of overcharges out of thirty four million is not insignificant at all My favorite part of this story is just hearing you say vudit audited I love this name Vodit. That was a tongue twister. Yeah. V it B betterter than Terra Luna, but not exactly the easiest thing to say on the air. Vodit audited bills. think this is an issue. I actually and not as concerned I think, as normally I would think I would be around it, more just because like Yes, Okaykay. outut of thirty four million one point seven is like a pretty significant percentage, but Again, when no one has been checking their bills, It makes sense that like without any malice there would be errors happening. L it's just If no one had been checking their bills, digging into their bills, even knowing what they're spending when you hear Uber surprised that they blew through their entire year's AI budget in a quarter, that shows that no one was carefully tracking things. So of course there's going to be certain errors Aually, one of the ones that was The most interesting part of that to me though was when the session times out or you don't get An answer, which happens plenty Are you responsible for the tokens becausecause it actually kind of cited that as an error. I hadn't actually thought of that as a billingair before. It's just kind of something you just eat. like it's just in AI, you're not it'll time out sometimes. That's how it works But like, that actually made me think Are customers responsible for any tokens consumed during that session? And could start to be more and more of an issue Yeah, that could add up. I feel like it happens to me all the time multiple like multiple times a day where I ask something to a chat bot and it thinks a bit and then gives up Whatever's behind that. I don't know. But It is pro to you. It's a proge to you Yeah Yeah, all this stuff is going to add up as we start to see these companies head towards the most significant financial event of their lifetimes, for sure And then of course, we have the president this will be the last financial or sorry financial market story we do Um this on this topic, but SpaceX obviously not faring very well I mean, it shed about, I think it was down fifteen percent or so on the week. It's trading at one hundred fifty three. U That's the way it closed Friday and all this sort of Yeah e buulliance over the fact that it was on this legendary run has certainly quieted down two and a half trillion market cap was bigger than I think bigger than Amazon for a moment now it's dropped down to two trillion, which is still nothing to sneeze at. but defefinitely less frothy than its earlier trajectory seemed like it was going to be at this point Your thoughts I two trillion. is frothy I mean, like that's why had two, two and a half I will say first week of the post IPO There are moments in any kind of cycle you remember and that's going to stick with me when you saw like Elon Musk is a trillionaire now. He's heading to two trillion. It's bigger. And remember, this is a company with eighteen point seven billion dollars of revenue total. I mean, Amazon, it surpassed its market cap. Amazon has seven hundred fifty billion dollars in revenue, like this is a company that's losing four billion dollars. which again If you believe there's going to be data centers in space and you believe like all that It's you can come up with the story behind it, but when you just kept seeing it Climb it got to like two fifteen, I think, two hundred fifteen near the highs and then it's like surpassing Amazon sururpassing Meta, closing in on Microsoft I don't know. Th those are the moments that whatever shakes out in the next year or so I will definitely remember Okay, let's go to our our last story, which is that Apple has raised the prices on the Macax iPads by two hundred dollars or more on some models A fasting thing is happening right now. memory prices have gone up and now Apple is making its product lineups. much more expensive. This is from Bloomberg. Apple raised prices on its Macs and iPads early Thursday morning. A week after Chief executive Tim Cook said the soaring cost of memory and storage chips would force the company's head. The company briefly took down its Apple online store early this morning as it typically does when announcing new products. That was Friday. When I came back online Price tags for Mac computers rose roughly fifteencent to twenty percent, and iPad prices rose fifteencent to twenty five percent Among the price increases, the base MacBook Air rose from rose two hundred dollars to twelve hundred and ninety nine. The Base MacBook Pro increased three hundred dollars to nineteen ninety nine The entry level MacBook No increased one hundred to six hundred ninety nine cents the iPad air increased one hundred fifty to seven hundred forty nine and the iPad Pro increased two hundred one thousand one hundred and ninety nine dollars I have become a someomewhat of a lightning rod on X this week because of this was my reaction to the news Um I wrote that Micron's gross margins Micron's gross margin was eighty four point nine percent last quarter and Apples's was forty nine point three percent Sure, price hikes in supply chain price hikes in supply and demand price hikes are supply and demand at work, but at a certain point It's greed U I don't know, man. I mean, yes, the the memory prices have gone up But as somebody pointed out, if you're building a data center filled with these things then it makes sense to raise prices if you're building a device with a little bit of it Probably not.. This is the exact tweet. I sell this is from Kyle Peterson. I sell GPUs for living systems, integrators buying two terabytes of RAM for a server have an excuse for raising Prices Apple buying eight gigabytes for a MacBook does not Greed or supply and demand What's your take on the Apple price hikes Greed I do you know what my tell was I don't know if the HomePod Mi as an owner of multiple ones, has any kind of storage But it certainly does not have any meaningful storage. So to raise that by thirty percent I think shows that they're just going across the board here I like and also The increase in memory has been If they're saying that this is here to stay, and maybe that's actually a positive signal for the sand disks and mem microns of the world, but like to me you have this kind of massive Price hike of an input to change these like long supply chain type products prricing this dramatically.s This is actually pretty shocking to me I like, you know, you change the price flight. He, you you chang the price of a flight because the cost of oil goes up, that's dynamic. That's relatively like up and down fluctuations This is huge relative. and once it's done They can they're just going to keep it there Well, unless that they have a corresponding decrease in sales because they need those devices in people's hands for their service businesses to be strong Yeah, but we're all locked in and can't escape the Apple ecosystem. and then oh wait Maybe They are so confident that Siri is going to be so good. that they're like Guess what Everything's going up and you guys aren't going anywhere because Sir is going to become your default AI in life That is what's happening Right, I mean, Timko calling the price hikes unavoidable is just like ridiculous. and you know, obviously like When the device goes up twenty percent, that's the entire price of the device DRM could be going up by whatever it is, but you're not You're not going to it doesn't the increase in DRAM price does not account for a twenty percent increase in entire device price crazy Like they're going to make margin off that And not only that They're responsible for it to a degree. This is an interesting tweet that I read that sort of captures the situation. Apple spent a decade squeezing memory makers below cost. One of them survive, finally got pricing power, and Apple is calling it gouging. I mean, they didn't use the word gouging, but they basically implied it Two years ago, Micron was selling DRAM below the cost of making it Gross margins underwater, and the kind of busust that has killed memory makers for thirty years field that once had a dozen players had dozens of players consoled down to three survivors Macron is here because it executed the downturns better than the ones that died Not because anyone was generous to it. The buyer is now screaming about eighty four point nine percent m margins, Apple and hyperscalers are exactly the players who spent that decade grinding memory to negative margins on every procurement cycle go ahe U don't know, actually, I'm curious So you should Apple do this I think's bad business I first of all, it's customer hostile. Right? You're using an excuse to jack prices up Second of all, like It's going to hit your services business You want services the one thing that's really growing with Apple. I mean, recently we've seen some growth with iPhone. G to want a robust service business. if you're Apple and the way you do that is you get devices in people's hands But they've been actually, so they have been I just had looked up price of the premium iPhone model in the last seven years is up sixty five percent. So went from nine sixty nine, which I think anyone who gets the new Pro Max whatever always has seen, it just keeps going up and up and up And I mean, I think I am a example that I don't buy the new iPhones because I don't feel I need to, but I'm paying way too much in services businesses for things I forget about. so So maybe in that case, if you don't have the devices, that's like a good example, I guess it's just I don't know, the confidence or maybe cockiness to raise prices this much and think it's not going to just like crush demand They have to be modeling this out somehow or they have to Something must be behind that. If you're Tim Cook and you're trying to do John Turnis a favor, what you do is You maybe aggressively increase prices Now of course, the products that are being They're not a massive part of Apple's business, but they're big enough And the price will go up on the iPhone call the price. It's iPad and Mac. So if you're Tim Cook and you want to set John Turnus up in the best place you jack prices up because of global memory shortage If the If demand remains somewhat consistent, then you deliver turnurn as know huge profits as he begins running the company If demand goes down, you give Turnus the enviable position of saying I am John Turnis. I am the price cutter. I am going to cut prices to spark demand And you will love me now So either way I and cook. all option cook. He's giving Yeah, these's giving turns the greatest call option of all time. Okay, I like this one. I like this direction. It's a win win Um, But yeah, I this is I was genuinely shocked by this and trying to kind of like just it up to H. chuck it up to short term increases in memory prices that might be here to stay, but still I was pretty shocked I mean Sone someone told me like U do you think it's a charity product project or something about Apple when I said it was greed And I said I said, obviously, get your bag if you're Apple, but it doesn't mean you're beyond reproach and I'm reproaching I mean Of course, it's not a charity, but You you don't have to like Cheer on companies that are greedy This is from Scott Hifrerman, the founder of Meetup. Apple is was a change the world project, make insanely great products for as many people as possible. good profit makeakes sense, Beyond that isn't the point of the project. asking if it's a charity project or something is the question statement of the truly naive. Preach, Scott preach I was like you're reproaching. I am I'mroaching. I am reproaching. I'm approaching you, Tim. I'm reproaching And don if they don't let me into the next WWC, I really couldn't care less. Too much reproaching No reproaching if you want entry. But you will reproach approachach our approach All right, two things before we leave. I want to say thank you to you, Ranjan, and thanks to everybody who joined us at the summit last week. We've obviously been putting Some of the interviews up, will'll have the Greg Brockman interview in full up this coming Wednesday was a good time, wasn't it I had a great time. Thank you for everybody who came out and It was fun. It's we do this virtually sometimes in person together, but just Meeting all our listeners in person, that was a lot of fun It was really cool. So thank you everybody and If you weren't there, obviously we're trying to get as much of the content to you as possible So we'll have the Brockman interview this Wednesday and then we will go back to our normal podcast style, AK in studio or remote, one on one conversations with no audience starting The following Wednesday with Meta, CTO, Andrew Bosworth So stay tuned for that Run up before we go, teech industry lost a giant this week, Om Malik, the blogger, a founder of Giga Om. VC at true ventures passed away on june twenty fourth This is from his blog. He passed away at Stanford Hospital after a long health journey with his heart. He was surrounded by friends and family, Omas fifty nine U just a word about home. I mean he is he is if you've seen any of the tributes online this week you could tell that he was very generous with his time and his advice to anybody in the industry Um You know, I he's been on the show, of course. We had a great conversation with him not long ago U and weve definitely lost one of the good ones. and Uh, the nice the nice thing about Om is he really seemed to care about everybody in the industry. I mean, when he started T talking to me, I was like, Wait, Om knows what big technology is and he knows who I am. That's the craziest thing But he was read in and humble and Um, kindind of blunt and like in a fun way. I remember I was sitting next to him at WWDC or some Apple event And he had been writing these columns from the New Yorker and another journalist was like, Oh, how do you write for the New York And he just like looked the guy in the face and smiled and he goes, because I'm good. And he really was. So Um I don't know if you have any you know memories or reflections on O, but definitely, you know, he kicked off the modern tech blog era for sure No, I so for me. haaving never been a full time writer, but wrriting plenty. I had gotten in touch with him a number of years ago. neverever met him in person, but when I was running a startup in twenty thirteen and just You know, like trying to get into tech Crunch and gigaome and stuff like that What amazed me is he responded and we actually exchanged emails and He was just like, you know friendly versus so much of the, I mean, just overall ecosystem as a whole. And I think the most important it's like, yeah He He blogged. I mean, he got me blog. He got me interested He was one of the first blogs I started to read and actually got me interested in the whole new media thing. So Yeah, seeing all the outpouring and everything was Pre pretty special U I don't know if this I'm going to just read this. So Katie Jacob Stanton, who was in a VC and was a Twitter executive. U posted this letter that Om wrote to her father passed away And I think that like when people experience loss, sometimes it can be difficult to like to hit the right tone And I think this letter that Om wrote really did hit the right tone. I'm just going to read it and we can sort of end with this. You wrote Dear Katie, I read the sad news you shared last night on Twitter and I wanted to take a moment and send you my thoughts, prayers, and hugs to get you through this tough time We all have a habit of mourning what we don't have instead of celebrating all the gifts we are bestowed upon His life was a gift to you I didn't know your father, but it's clear that his grandness lives in you and yours, your compassion and empathy for the human condition is a gift of your parenting. And I hope you can remember that that I hope you can remember that when there is a moment of sadness that shakes up your world I hope you find his memories and his lessons a guiding light for the future with much love prayers for your family I mean, just just beautifully written. and honestly a can a lot of the same can be said said about Om today So rest in peace home, one of the good ones. I know we typically end on a laugh, but I think that Yeah, Om's presence in the tech industry around the tech industry brought a lot of joy to a lot of people So we'll do our best to live his legacy on in the ways that we can Okay Well, we'll see you next time on Big Technology Podcast