OpenAI and Anthropic Price War

SpaceX IPOs soars and makes Elon Musk the world's first trillionaire. Anthropics's fable rollout doesn't go as planned, and openp AI may drop rates drastically. That's coming up on a big technology podcast Friday edition right after this This summer, Fandool is the best place to bet on goals. Including equalizers. Uhuh Boies? Y, Pters. Every goal is worth more on fan dool. So let there be goals. N customers get three hundred fiftyteen bonus bets guaranteed when you bet five dollars for seven days. twenty one plus in presence and select dates. First online real money wager, only, minimum five dollars wager required for seven consecutive days, five dollars first deposit required. Bonus issued at non withdrawable bonus bets, which expires seven days after receivt restrictions applies, see full terms at fan doolot com slash sportsbook Gambling problem call one eight hundred gambler or one eight hundred My Ret. Depending on who you ask, between eighty and ninety five percent of enterprise AI projects fail. To get AI to work for you, you don't need more tokens. you need better people. A board pairs powerful proprietary tools with senior engineers who've seen it all. That combination means your project doesn't stall, doesn't drift, and doesn't fall. It ships. Whether you're a startup that needs to get to market or an enterprise with complex legacy challenges, a board delivers exactly what your business needs fast your partner for AI transansformation. Visit abard dot com and let's build something together. Welcome to Big Technology podcast Friday dition where we break down the news in our traditional cool headed and nuanced format. This is definitely one of those weeks where I have been waiting to get Raanjan's take on the news. for days on end, I haven't heard his thoughts on the fable fumble, but I'm so excited to get his perspective on what it means now that we've seen a version of Mythos. So we'll do that in the second segment. We'll also talk about open AI, potentially drastically lowering prices four, it's GPT models, but first we'll talk about SpaceX and the SpaceX IPO companies trading above trillion dollars unpack what it means. Joining us as always, of course on Fridays to do it is Ron John Roy of Margins Rana. I'm great to you Wow, you know when the fable fumble is going to be story number three. We've got a we've got a busy week, but we do have the world's first trillionaire I think it's time to celebrate, right? That would be Elon Musk. You know, this is a very interesting IPO for a number of reasons. Obviously it's going to factor heavily. in the AI world because if you think about it a year ago SpaceX didn't really have an AI play. then in the run up to the IPO any signed a fifteen Billion dollar deal with Anthropic, a thirty billion dollar deal with Google to Lys out license out the data centers that it's built for its own AI efforts. and now it's become like one of the biggest clouds in the world and that has propelled it to a seventy five billion dollars IPO. It's above two trillion dollars. So Ranjan, I just would love to get your perspective on the IPO. Of course, the broader story about what it means But also, you know, they came out telling us that twenty six point five of twenty eight point five Trill of their total addressable market is AI So is this the world's first AI IPO? And if it is, what does it mean for open AI andanthropic Is this the world's f well, it's not the world's first AI IPO. I think it's certainly out of the big three It is amazing, I have to just say like How In the span of, I think, what is it six to nine months, Elon Musk has turned SpaceX into an AI company with the acquisition of of XAI his own company with these incredible anthropic and Google AI cloud deals with the potential kind of a I don't know if it's an acquisition of cursor, at least it's the right to buy cursor. Suddenly has has gotten in the folden And again, we talked about this in the last few weeks. The numbers are interestnteresting, again, in terms of like the actual revenue in terms of how much money they're losing in terms of Starlink, the actual infrastructure business being the cash cow. but I just have to say like, Let's take this moment to actually This is what Elon Musk incredible that. And like I have to admit between the anthropic and the Google contracts, between the way he rolled up all his different entities. to pull this off in this way, at least for this moment is pretty spectacular It's pretty masterful And you know, there was certainly money that was going to be earmarked towards AI IPOs from investors, right? And certainly people were waiting to invest in SpaceX, but you could argue that without the AI side, SpaceX is not a very compelling story. It's a communications company was Starlink and this launch business that's not profitable. Of course, a lot of that money is in R and D AI story, you know, gave the market the market, I think was looking for something to be enthusiastic about for SpaceX, something to justify putting in the money And now they got that story and they responded accordly So the question to you Ranjump becomes is is Elon taking money out of Sam and Dario's pockets because maybe some of that money was going to go to the open eyes and anthropics of the world or Has he just set the precedent that if you want this you know, AI company that's sort of spun up in a moment. you want to get behind that story thenen you should definitely get behind the other two. What's your thought I think So I actually think that they're like masterful pivot that was made. And again, I say this all notot saying that any of this is good for the markets as a whole or if like retail investors in general. But again, the brilliant kind of pivot he made was that Elon Musk made here was It's no longer just kind of like an AI play in the way XAI and Grock was like where he was positioning those businesses Data centers became the business dujure. And he turned this into a data center business. Remember, originally He talked about Colossus, he talked about all of, you know, the it was a major part of the overall infrastructure, but it was to fund Grock to be the leading AI business. But then he just with two contracts, two phone calls from I believe I know Google is certainly an investor in SpaceX. I'm not anthropic, I'm hoping that would be crazy if they were. That would just take this to another level. But again of phone calls and Elon Musk managed to completely shift It's crazy. Like when was SpaceX founded? thousand two thousand two two? twenty four year old business you completely transform how the market understands it with two phone calls. A couple of lawyers, I'm guessing, mayaybe a couple of meetings, but that's it But then talk, where what do you think about the implications for the other two I think It's it's hard to say as of recording time SpaceX trrading at one seventy one point three. I think it says like a twenty four percent increase from the IPO price one hundred and thirty five We are at a one point seven five trillion dollars value. all that sounds good. but I mean, we got a long couple of months ahead of us. Like, I think I don't know what? Normally the summer months are especially on certainly any IPO activity, they're just quieter I think we're going to be in for two of the two to three of the most Wild news months in a summer ever in any of these. And again, I think Where is SpaceX trading on Monday a week from now, a month from now It is impossible. Remember So much of how this is orchestrated, it's only a four point three percent float like It's tiny. It's like everything was done and it was done perfectly to actually kind of like bring about this massive Uh, valuation and IPO, but We got a long ways to go and I don't know. where do you think it's going end up for our friends, Dario and Sam? Yeah, o. so since you're dancing around the question, Ranjan, I'm going to take the timeance to answer it. Okaykay. I do think that yes, this is so it's a small float, which means it's a small percent of the company being said It's still the biggest IPO ever. timimes two and a half or three So no times two and a half, right? because u two and a half. Saudi Ara. twenty nine plays twenty nine. So this raised eight, you know, in the realm of eighty We're still not sure because there might be more shares that they sold as this thing went live. U that's a lot of money And I don't know if it would have been that level of cash if AI side of this wasn't included. So I think of course of course that money would have otherwise gone to open AI and anthropic And and I think that because Elon Musk has, you know, with Say what you want about him. He's held the value of Tesla pretty much. U If people were looking to make an AI bet They wanted to make this bet And Elon has become a vehicle for it uh, even if You know, like you said already. XAI hasn't really pned out as an AI foundational model company or an application company. But then again Elon Musk did build all that infrastructure and he's been able to lease it out. wouldn't even call him a neoc clloud. He's just a cloud. And remember last week We talked about how open AI Has these ambitions to become an AI cloud Well, Overnight pretty much, SpaceX has beat them to it. And that is what we're seeing reflected in the IPO. Well from Okay, let's take open a eye first. I mean Sam. has definitely talked about AI cloud ambitions very loosely at times. like there's never been any real concrete plans. I believe that they've kind of communicated, but he'll talk about it every now and then as like a potential business line I do agree. I think This is very interesting into how quickly just on the span of two contracts Um They kind of took that, I do think they have taken that away or kind of taken the legs out from openp AI moving that direction whichich is also funny that open a sorry, anthropic kind of help spur this as well U Oh they knew what they were doing They knew what they were doing.be Google as well and maybe exactly Google Oh, wait, I like this now worldorld against Open AI It's anthropic at the Enterprise, Google at the consumer O A I sorry basics at the infrastucture. Sorry, I can't even remember what I'm supposed to call the Elon business right now. SpaceX at the infrastructure laayer. one by one All going at open AI. I don't know, but I feel Do you think that even enters the head of any of the deal makers as they're approaching these kind of contracts Absolutely Absolutely. Okay. open up' a big threat to all of them. So well where it's not a threat. It wasn't just a threat to the space business U certainly was an a nemesis when it comes to Elon. Yeah, I do think they all want to hurt open ey But let's talk a little bit about this valuation before we go before we move on. So the valuation is a little bit like crazy. It's a two point two trillion dollars company. It's not going to have earnings that justify that at all for years And you look at the breakdown in the prospectus and it's like, well, what is going to fund this company, right? And so the space when it comes to the total addressable market that they put out there, space and connectivity are like two trillion dollars tams. the total dressable market. The total dressable market for AI is twenty six point five rill We've talked about it before. It doesn't make any sense Let me, u let me sort of make the case for why this crazy valuation is a feature in the system and not a bug. and then I will turn it over to you and you will be very mad Um I'm toing about publishing this something big technology, I probably will before this episode comes out Without these crazy valuations, right, which are just not mapped to reality of the business You wouldn't have satellite internet or space data centers or these moonshots And so this valuation craziness is actually enabling the risk taking, similar with AI Right? It's enabling the risk taking and some of those risks eventually pay off And that's where you see progress. What do you think about that That is a hot take, Alex. I will give you that if we U For listeners who are not watching this on video, you can Alex is just doing some air guns here with this. after the hot take I get suspended by the NBA now But okay. Wait, are you not allowed to do that in the NBA? Well, Joh Morant can't. Oh then Joh let's move for. I mean, but Joh Morant he can't., he should have, right? Yeah. But okay, anyways. T find this interest in the idea that For a number of decades in America, One could argue that for these literal moonshots This is where the innovation like the U S. government partnered with Private organizations would come in and fund these and kind of like push forward a lot of, whether it's the interternet, whether it's the original space program, and kind of together the public sector along with the private sector would kind of get us the Mon Now So what you are saying is only way we can do this is to have a highly orchestrated Um conglomerate of kind of self interested companies enrich us into the world's first trillionaire at the expense of the mainstream retail investor in order to one day hope as the permanent underclass, we can get some data centers in space. Is that what you are saying, Alex Exactly right. I'm not saying that it's the only way to do it. I'm saying that like there's another side to see this valuation. But I also think what you hit on here is really important, which is that retail. So everyday investors will be a very big part of this, right? So more than twenty percent of the IPO allocation went to retail investors, which means and this is sort where The negative side of it is The risks typically borne out by government and venture capitalists are now being borne out by everyday investors who may end up doing fabulously well. h but there they they may not. And I won't be the one that says they shouldn't be able to invest on the it is something to think about when it comes to my hot take is Yes, these big bets are being enabled, but who is enabling them U and retail is becoming a bigger, a bigger part Your thoughts. Well, I think, again, it's part of the whole game. It's been for a number of years. L Tesla was the warm upp to this Tesla is again a incredible product, very like, you know, market leading It was revolutionary. and then that gave enough of that credibility to kind of build this larger story kind of like can keep up you said, maintain this valuation as well. And have that retail energy and to kind of translate that into there's always, you know, like the This solar city Um, the boring company, like all these different pieces were all all feel kind of like a warm up to this is like the greatest act of all time and this is like you know, to then pull it into world's first triillionaire. two trillion dollar IPO off twenty billion dollars of revenue. I guess We extrapolate that out after the Google and Anthropic contracts a little bit more, losing four billion dollars a year I mean, it's incredible T truly incredible Okay, I'm going to give you an option of questions to answer as we end this segment Here's here's a couple Is the SpaceX IPO good for society and business And can SpaceX maintain It's valuation perpetually or is this eventually going to come down to Earth? No space pun intended Um I'm gonna the first one I mean, I think It's very good and I'm actually my favorite. U, my favorite little bit I saw online was Um As the investment banks who led this IPO are making a record reaping a record making five hundred fifty million dollars in fees Goldman Sachs, who is leading the deal, has remade its entire lo, lobby and cafeteria with a space theme There's a fueling station with lattes and macaroons that look like moon rocks In the cafeteria, the bank is serving a mission control brunch with big quote unquote, Bang burritos So when we're talking about who's benefiting, again Goldman's gotot Big Bang burritos because they're very happy about all the fees as retail investors are coming in thinking they're excited. So if that Does that in a roundabout way help you understand whether I think this is good for society Oh, it sure does. I mean, of course, myself and all of our listeners and viewers will react in a couple of ways. First of all, yeah, that's a lot of fes U secondecond of all, this is clearly a perspective of a hater who just wants his own big bang burrito And u I can't blame you. I mean, I would hate him too thousand burrito is different than do you think the big bang burrito?' only I'm here on thirty fourth Street Yeah two hundred West Streets Maybe I'll take the subway down just Everyone else everyveryone else is protesting. I'm just going to have a sign, just one big bang burrito Bet be special burrito. Like I think it'll have to have like a snickers in the middle or something like that sounds. Like what that sounds like what rememember when GPT two was like giving recipes and putting glue on the pizza. Oh I A actually wait Google told us to eat rocks. I miss those days. I miss the days of when JenAI was just Telling us to eat rocks Now we got data centers in space. I will say that I'm more bullish on it. I think ultimately I'm sticking with my, let's fund the crazy things, But if you're a retail investor, you have to be careful. Okay, can it hold the revenue or can it hold the valuation Well, it certainly I hope it can hold the revenue Again, Starlink is very interesting. L Starlink is it's an eleven billion dollars business built over A number of years we all know. I still I fly Delta usually and I wish it had Starlink Um So Can it grow Can it hold evaluation I think it is completely susceptible to whatever the overall market trend is doing. I actually think everyone is talking about what SpaceX is doing toanthropic and open AI I think what's more interesting is if they come out poorly, I think that's going to dramatically impact SpaceX's valuation. So maybe Elon shouldn't be going at Sam so aggressively. What do you think? But I don't think they're going to come out poorly I don't know. it's one of those things that He will have a lot of Uh A lot of support so to say, like as they say in the financial world, that stock will have support and it will have a floor But it'll probably be tough to grow much, much more than where it is today No, but this is where Foor or the support line comes from one of two areas. One If there's enough vested interest that is just so widespread and distributed that has capital, that is not getting hit in other areas, they will do whatever they can to kind of hold that valuation because there's been so much money that is just being made off of this But if that money starts getting hit in other parts of their portfolio, which There hasn't been anything dramatic yet then They're not going to be able to hold that. And then the other side is retail as well. And the same thing would hold to them. So both on the institutional and retailers retail side I feel like It to me, it's just in a happy market. this can continue for at least a little while Anything, little anythingything Kind of what was a liberation Day. almost forgot the name of it. Anything like that could screw a lot of this up I think as long as you keep feeding people the big bang burritos you're going to be happy, but once thats supply runs out trouble for the stock Okay big B big bang burritos are only for bankers. Let's be real. Well not everybody gets a big bang burrito No, no, no, no, no, no this day and age. Big bang burritos is only for the bankers that is the seeds of SpaceX's demise Okay, so let's talk about fable. I've been waiting to hear your fable take for a long time. Let me set it up. This is from the Wall Street Journal. off course able is mythos. So this from the Wall Street Journal. Anthropic's new Fable AI model is met with user backlash over restrictions. Anthropic is finally giving the public a taste of its next generation model, but its blunt safety barriers are angering some artificial intelligence developers and users and feeding a growing debate over who should be the keeper of dangerous AI capabilities Clauded Fable five, the new model that Anthropic released Tuesday is an update to the mythos model that the company said was too dangerous to release widely. That model spooked government officials and cybersecurity experts for its potential toine unknown vulnerabilities in software used around the globe. Fable comes with broad restrictions, Anthropics says are aimed at kneecaapping its ability to assist users with potentially dangerous activities So Runj on mythosis here but it is a neutered version of the model And it's called Fable and it has sparked the biggest backlash to a Mel release I've seen todayate I've been waiting for this. What is your perspective on the model and the rollout I got to say in the same week And I've been saying this for regular listeners will know that I feel there's like a large element of marketing into the way Anthropic has kind of communicated around methos and now fable five. Um It's crazy to me when Gary Marcus, David Sachs And then even Burgly Oros? Surge. ye Gergay, the primaryic engineer, sorry from butchering the name there. everyveryone is saying the same thing. This was never about safety. this was all marketing. I feel when you have three people from that Generally, I would say like are just in very different areas in terms of perspective all coming around I'm going to feel a little vindicated wasas the after saying that it was not just marketing and it was a true threat to. Humanity you feel scared today with Fable five in the wild Let me read a little bit about the restrictions, and then I'm going to ask you a question When a user touches on sensitive top, sensitive topics like bioeapons and cybersecurity, Fable pops up a notification and then redirects the conversation to an earlier less capable model. also degraded the quality of its responses about high end AI development to be less useful. for developers looking to build AI tools that might not have the same safeguard For those responses, there was no pop up notification. However, the company cited national security and its own terms of service as reasons for the invisible restrictions. yet it's since rolled some of that back Here's my question to you, Ranjon If anthropic didn't believe that this model had these capabilities for cyber hacking, for bi potential bio wararfare for building models with without the same safeguards Um If it didn't believe it Why would it score such an own goal here with the rollout Do you think it's just complete a complete sense of tone deafness that it thought that it would put let me fin this question, that it thought it would put its company in a better light do something that ended up becoming so despised by users S, I don't think it actually is that much of an ownn goal. I think like This is within, I'm guessing, listeners of the Big teechnology podcast for us We're all kind of like watching this roll out, but I think still Mythos better than any other kind of like moment around like this is the potential end of the world really had kind of just mainstream people starting to build this kind of I will say No pun intended mythos around anthropic U sorry, there there's something somewhere in there the pun would exist. So I u So so I think they did a good job of it and it worked and like this is just all kind of Again, like think about how ridiculous that is. like If you Ask for a bo about a bio weapon One Shouldn't there be content? I don't know, like I'm guessing most of these have always had some kind of content moderation around if you ask to help you make a bio weapon. I have not, I will tell listeners right now but that's never I've never gotten weapons. No, no, but now I look close I know but I tell you it's going it degrades you to a lower model. That's what I love. So are they saying like give you the like. You know, like a dollar store buio weapon. You don't get the good one though, but we'll still give you the Sonnet four six or maybe a little Haiku like What are they trying to say there I mean, they're trying to say that they drew a line where the model would be able to actually help people with these weapons and they're not going to let you use it to me, that's the sort of, okay, if that was the line, then I would say fine It went so much further here I'm just going to read again from the story. Many complained the model was blocking them from discussing ostensibly benign topics like mathematics, biology, and chemistry, or even analyzing Fables's own publicly released system information. When newser posted a screenshot of fable refusing to answer a query on basic cellular autonomy, tell me about mitochondria So this goes back to my question, right? Like If you put so obviously like some of these things it's not going to want to block like asking fabable about a system card. But if you didn't believe that this model is capable of the harm whyy you would like it doesn't make any sense for to do this as a marketing exercise because you're pissing off your users and you're causing a group of people who usually would not have any common ground, the ones you read off before, to rally together against your company. Okay, okay, that's fair maybe. This is all again, but they just need to get out an IPO After that, everything's fine and it all goes away and all everyone's made their money. So like no I mean, but like, hold on, how would you explain why would they do it this way Like what what would be the I'm going to flip that back on you and ask like, why would you do it this way? if you really believed it really believed it Like you wouldn't release this, you wouldn' in this neutered away, you wouldn't really I mean, honestly, actually, I think the true goal here is Now with Fable, and I mean, I'm seeing this very firsthand and hearing this like working in enterprise AI. like everyone is talking about the data retention right now Because enterprise agreements, anthropic and open AI, as well as everyone else, like claim no data retention. now they're just explicitly saying that they're going to for thirty days. And like that's a huge deal So Why? whyy do you think they would even release it if it's going to cause them much this many problems. Okay, so the argument would be you put it in the hands of people because when they work through and again, like let's just talk this through. When you work In the areas you're allowed to use the stuff for, you can actually do a lot of things. like there's a thread that they posted of people creating animations, building games, I guess they're doing a simulation of an airplane, all these things created programmed with mythos or fles So Basically like the I think the strategy is they believe in the model If I'm taking the non cynical view R. They believe in the model And they want people to be able to use it for productive us. It's just not for the ones that they find scary. And if they actually didn't believe those things were scary, they would have just released it you know, wholesale. But I can give you my my conspiracy theory take here If you'd like All right I like both Here's my conspiracy theory take you know, even though it might cost them a little bit in public perception, there is like some story you could tell about anthropic releasing this nerfed fable, getting everybody talking about how annoyed they are with the restrictions. And then adding more and more companies with a lot of money to spend into this glasswing coalition where they have access to Mythos without the same boundaries. So maybeable Maybe Fable acts as a as a sort of Look what we've given the public, if you want the thing that works and you've seen some of these examples, you're going to have to pay up I did see somewhere U It was kind of like around, you know, two track AI or a K shaped AI and now this is going to like kind of increase at both like the token costs and we're gonna to get into that conversation just a little bit. but even the access, okay, wait waute, I like this. I like this that So maybe with let's Let's give them, it's not even conspiracy, recognizinging the genius of their marketing and communications over the last six to twelve months, especially Could they score a known goal this badly or That's an interesting one. It's We're going to give you this if you want the good stuff. Gotta pay up and only if we invite you Yes. I mean, could you imagine being a salesperson and walking in, you got the deck up and it's like Normal users can't talk about mitochondria with mythos to the price you can talk about anything you want. It's not even a price. it's only if I let you And if I' invited, haveue for abouted money Yes. ye. so I don't think that's what's happening, but you know, its we have to air it out there as a possibility. But Wait does mitochondria have something to do with but Is that how you make bioeapons No, it's a simp biological thing that was I of regulating mitochondria Cloud won't tell me I don't know know not tried. Good. Okay, good. So both of us are We're clear Bio weapon free this is a bio weeapon free zone. Neither of us have ever gone down that path just Yes If you're going come to the summit next week, Bronjon and I will not release altered mitochondria built with mythos during our session. That is the one thing we can guarantee you about the summit next week. I can't promise you much, but can promise we can promise. that we can promise and some coffee U, but okay, let me, let me, um sort of ask you this other question, which is peopleeople really got on anthropic for the idea that they wouldn't allow people to use this this model, fabled model in the pursuit of building competing AI models And on one hand, and I think both of these things are true On one hand, it showed just how much power a frontier lab has if it makes a decision about something Um you know, you're sort of at a loss if you're reliant on its capabilities. And it's rare that you're going to see a tech company use its power that way Um thing you could say on anthropics' behalf. is Um you could say that they will have their model to stilt if they or they will have They will have they've had people distill their model, use the technology to create competitors And and they're getting wise to it and you don't want to enable it. So I'm actually curious to hear your reaction to those two statements And u It be great to just hear hear what you think and whether there's any credibility to it No no, I think on the ladder, there definitely is Well, hold on Walk me through exactly before before I fully agree with you The second point U basically The point is you, um If you're a company like Anthropic, you've seen other companies take your models and glean some of the IP off of it through you know, distillation, things like that So why would you make your model available to people building AI models knowing that that's a possibility I think that's probably more S say. No no, I think I think that okay. And I do think It is a tough one because on one hand could imagine it would factor in, but on the other I don't know. I've been thinking about that a lot because how do you try to control for it? Do you add like because even right now, that's like only a mild safeguard, I feel, but it's not really going to solve the problem. And it's funny because for as comp sorry as complex and Like advanced and revolutionary this technology is, it's amazing to me that it's like dealing with the problem that like the apparel industry and most others dealt with in the two thousands. Some can come steal your model and that's your high margin product and that's like where you will make most of your money and So They have to, but I don't know. I can't imagine that is going to dramatically that's going to be like a major reason behind this because can't be that. relevant. Like I mean, at that point, a simple like throttle Throttling throttling mechanism would be I think more u more useful than just trying to catch you in a prompt if you're making some AI stuff Well they did they did roll up. Do you think they're being defensive you're I Of course they're being defensive. Yeah. They rolled it back to some degree, but But it is interesting. And as these things become more capable, if one company takes a lead and wants to protect that lead, we might see more of this, which is I mean, we know anthropic restricts. the use of code and its competitors. So we may end up seeing more of it Let's go to one one quick question Even for it, when is the last time You felt something magical What was like the model release that where you like Tpe some stuff in, had a couple of turns with your agent and we're like, holy shit, this is incredible Was it When was it? I'm gonna answer in a way that's going to I was talking with a listener this week and I was like, Ron Jon's been stacking W's on me and I'm gonna get another L to be honest that places where I've had the more Holy moments been using the medium powered models like Cloud Sonnet in uh in the harness in something like Cld Cork. Oh yes. And I have really just become cowork pilled recently I'm using it for everything. I'm having it like draft emails. I can't even begin to tell you like I'm having it like register people for the summit, like when I get a list of people that are going to be that are coming to the summit, give the list to cowork and be like log in and out of our event platform because We don't have like the backe end tools to do it like batch and add each one of these people with this this coupon code, you know Uh and and it's doing it. So U, this is for one specific group like press, right? Welcome. It's doing our Aness Hive And I'm just I'm in the Harness hive now. I'm in the Harness Hive now I'm just like, wow, I wouldn't even want to use these high powered models for it. It works so well with the medium powered model. It doesn't need biggest brain in the world. to accomplish this task No I mean I felt that I've honestly felt that with four eight even like I saw it like where You're just like, youo, calm down. It's okay. Let's just We're trying to do something basic here. So So yeah, welcome to the Harnessive I'll pass it back to you if you want to break. Now that I've gotten that. Now that I've gotten that, I might just walk away from this microphone Don't leave the podcast.ike I'm not saying the model doesn't matter. Like clearly you need good you need good models in order to be able to create these experiences, especially if you create a lower powered version of them Um But but yeah, I'm in the harness I've now. I think I fully I've joined. Pretty amazing what this stuff can do It just saves so much time once you start to like think instead of how do I use my computer for these things? how do I just turn it over to something like a coort Is this funny though that Still traravel situations. I feel' we're gonna get into a little bit of Siri later I do love that the thing that makes me the happiest about Aentic and where it's gotten to in the last six to eight months is now most people other than even Apple marketing still have recognized that it extends far beyond just travel planning. Remember everyone's like, what are we gonna to do with the Jent tick? It's gonna to buy your plane tickets for you. It's gonna to book your hotels for you We're a good place. We'ret a good place. No' it's incrediblely handing it a spreadsheet and asking it to do stuff is pretty amazing and you can see the things kind of wh their way through stuff that they don't understand at first or they can't accomplish at first. and get better. and that's definitely been like Ttally new revelation to me, even though I've been using things like Claudd Code to build websites like the Summit website is built with Cloud Code Um I just think this coork stuff is I'm starting to use it more and more and it really, really is suuper productive for me. All right Let's take a break. We're going to talk about a potential pricing war between open A and anthropic coming up And then Ron John will tell us all that he apologizes to Tim Cook because he finally fixed Siri O he won't. We'll talk about it and we come back right after this This episode is brought to you by Orchestra. 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See terms at casino dot draftkings dot com slash promos ends july twenty second at eleven fifty nine PM Eastern time Brian Reynolds here from Mit Mobile I don't know if you knew this, but anyone can get the same premium wireless for fifteen dollars a month plan that I've been enjoying It's not just for celebrities. So do like I did have one of your assistant's assistants switch you to Mint mobile today. told it's super easy to do at mintMobile d. com slash switch. Upfront payment of forty five dollars for three month plan equivalent to fifteen dollars per month required. intntro rate first three months only, then full price plan options available. taxes and fees extra. Feful terms at mintMobile d. com. And we're back here on Big teechnology podcast Friday Edition U Nxt week before we get into this open eye story, folks, next week we're going to have a little bit of a different show. It will still be me in Ranjan, but it will be with audience participation from the Big Technology AI suummit. So we are going to go through one story next week And then we'll take questions live from the audience and it should be a good listen. Stay tuned for that. All right, Let's talk about this price war. So this is from the Wall Street Journal. Open Eye considers drastic price cuts anticipating war for users with anthropic. Open Eye is considering drastically lowering its prices, The prices it charges users as it seeks to win customers from its rival anthropic. c The company is weighing significant cuts It's what it charges for tokens, the unit of measurement artificial intelligence firms used to build for their products The move would be in anticipation of similar cuts. The company expects at Anthropic Business executives have begun to balk at high prices for AI usage. OpeningII Chief executive, Sam Altman said at a recent event that costs have become a huge issue. I think we'll have a lot of ways we can help people get more value for less spend Is this the beginning of a price war between open AI and anthropic that just drives the price of frontier intelligence down to not zero, but you know, way lower than it is today. And if so, what does that mean for the AI industry? So to me, this is a really interesting story. and I can tell you like the amount, again Fast this stuff is moving. Three to four months ago, no executive I spoke with was really concerned with token consumption and costs. and now suddenly that's all anyone wants to talk about. And I do think This is a really dangerous game Open AI would be playing if they move in this direction The way you figure it is like They are gonna to lose cost They're going to lose on costs at some point to a deep seek or others So they have built themselves as premium products that should win at the kind of frontier model layer And it's a luxury product essentially. So if again, like any luxury industry knows, like if you cheapen that, that can actually fundamentally threaten your overall like standing brand business everything. And it's almost funny to me too, because I saw like a lot of kind of open AI boosters trying to argue that the actual like individual API call or the individual token that is like distributed or inferred is profitable is a very high margin business. If you strip out all model training costs So like, you know, you send out that token, it's like a seventy, eighty percent margin. transaction, if you remove the hundreds of billions of dollars you've spent and that's why OpenAI loses nine billion dollars a year. So I think this is them going aggressively and anthropic and trying to undercut them, I think could be short term beneficial for them. but I think long term dramatically hurts them and anthropic because right now they are Premium products. Is this just a natural progression of where this business is going to go, which is that the intelligence layer becomes commoditized because there's so many people building it Oh, I mean, And it becomes more about the model and the harness and the product. Yeah No, I think I mean, I do think I think this is actually one of the bigger threats to both of these companies right now, even more so with Open AI. And hold, we've talked about this for years now that No one knows what the sustainable economics of these businesses are especially like a very high investment frontier model driven research lab phned consumer or enterprise business. No one knows what the economics should look like. We do know They're not software margins, traditional software margins Like the marginal cost of distributing a product is not effectively zero. So like We know it's going to look different Demn chasing and driving this in the wrong direction, I think could be really bad. Do do you think they're going to do it one? and do you think be good or bad for them if they do Now it'll be fun to ask Greg Brockman about it next week at the summit. So I will do that I think they will. I mean, I think that there's if you think about it strategically, right? Anthropic been winning. it's also it's like part of this is about lifetime value, right? Andthropic has been winning over a lot of these enterprise customers with its offering. And once you win these people over and you get them set on, you know, your system, They're not going to want to go anywhere else for a while because they're going to build that habit, right? And because if it's working for them, then why would they go somewhere else And and so I think that opening I probably sees it as, well If we drop our prices, we're going to lean on our strength Right? And what's their strength? They have all this infrastructure. They've invested in more infrastructure than anthropic Dario called it Yolo. they're doing on the infrastructure side If you've built the infrastructure, why not lean on that as a strength and try to win these companies over that lifetime value. that will be difficult for anthropic to get over time That assumes switching costs are low Like what you just said there in terms of like once they're in your system, But remember, in most of these cases, it's just an API call. Like again, or it's we've seen how dramatically clawed code users could switch over to Codex and when you're in the command line, it all looks kind of the same anyways. So like Like it's they're not it's not like the average end user has chat GPT open. Now maybe like memory and context become part of the mode or the switching costs, but like Adri From the pure model delivery perspective, I don't think is is really case Interesting Wait, let me ask you something things we're going to talk about it next week too Are you a believer in this like in the argument that it' becoming more and more proment more and more prevalent that model orchestration is where like the real Um value will be found as opposed to just the raw intelligence of the models you produce I can say that that is at the core of what we sell at Witer, and that's what I've been working on the last twelve months. and yeah, one hundred percent. I mean, I gota say being being the orchestration layer, being across and actually like being interoperable across different models, even though we have our own foundation model. This is what we've been building for a long time now And I'm telling you, I've seen the switch in the last few months where People really executives really did not think about token cost and now it's all anyone is talking about. I'm an I'm an orchestration guy Th and through Yes, beyond hardest, beyond the product But isn't that very bearish for the big moel companies. I mean, they can build the most intelligent system they want, but Ultimately, if it goes orchestration, then what are they going to do It is because it is already like I mean If you already saw like, I mean, like model routing even finding And the thing is they're trying to push it even themselves, but within their own family. again When you are searching about how to alter your own mitochondria to make yourself a bioeapon, Um, Fable five is downgrading you and doing some model routing to I think a Haiku or something like that. So so everyone is recognizing It's where things are going, That's just the model routing side now orchestrating across different systems This is where There's more value in coow workk is kind of like that entry point into feeling the power of what if I could connect documents and files and some a model, what could I do? and like some logins? I think that becomes the entry point for an individual But yeah I'm an orchestration guy through. All right, interesting stuff. We'll obviously be speaking about this over the next month on the show because a lot of these conversations that we're going to have next week, which we'll try to air as many as we can on the podcast. we'll feature this, including a conversation with Arvin Cernivas, the CEO of Perplexity. Okay. beforefore we go WWC, it happened this week. You've been begging the company for years to fix Siri. Do you think Siri's fixed Oh man. I know I've been a bit of a hater on today's show, but I am going say it I have not used it yet I have been going back and forth because apparently if you upgrade to the developer beta on your Mac, you can already install Siri Uh, via the command line. But I've not done it yet. I think I might be, but I don't know likeike I saw Joanna Stern has not been biggest fan of Siri in the past and she had some pretty good videos out about her using it. I've seen a lot of people and then even MG Siegler and his argument like It just all started kind of hitting. I'm like, oh my God, if they actually Do this Everyday AI And like what does that mean for Open AI What is that? I mean It's just it changes The look by December, we are having such a different conversation about the landscape and My God if Apple pulls this off, but it feels like they have a shot now more than ever Do you think they're going to do it Do it feel I think they did it I think they did it. I mean, I was so again, I if you use WWDC, you're not allowed into WWDC this year fair enough, but I was still on the day of or the day after I was on CNBC and said, lookook Um, you know, stocks down four percent. I think investors are wrong here. I think they're being too negative. becausecause consumer AI is wide open. And what Apple's done is it's used its operating system to first provide a lot of context for people on their phones, right? Like your phone is a screen where you're like tackling so many different things And And if you could just say, Hey, Siri, what does this mean? or how do I get there? Or can you copy this and paste it into my notes Um These are simple actions that you apply a generative AI layer and all of a sudden the phone becomes more powerful than it was previously. I haven't used it yet. But I've seen enough videos to put my early early analysis in. I think it's going to work. I think that the bar was also so low that they have to just show a little incremental progress and everyone's going to be like, wow they did it. And I think that's absolutely what's going to happen I would like I would like John Turnis Come on this show to thank us because thanks to just ripping on Siri for a few years now, we have set the bar so incredibly low that just answering a basic like GPT fourO voice mode query will make everyone just marble. becausecause honestly, I saw someone was like, asking they're like, I have a seven AM flight What time should I get to the airport and And it was like based on your location And a typical wait for an Uber at this time. And I'm like I mean, that is such basic Chbini GPT stuff. But everyone who was like commenting on Twitter like, this is incredible. So yeah We have set a very low bar and that's the best possible place you can start. So You' we all service Let's just say, it's it's not the most advanced stuff. It's not the most mind blowing stuff But because of where it sits, it doesn't need to be Right? As long as s'its in the operating system and it really is Like biggest loser if this thing works is meta because their personal super intelligence becomes that much harder for people to access if they have a working intelligence on their phone, even if it's not super, just intelligence. I'm not I'm already having like Visions of all the stuff they could do if it works. but I'm not gonna let you hurt me, Apple. I'm not gonna let you get me that excited If it works, my God, it just opens up just like an entire universe of interesting fun opportunity, but I won't let myself get hurt again, Apple I'm going to wait I'm going to wait till sometime this year because you haven't even told me when sometime this year. Sometimes later this year, I believe was the exact phrasing They're going to do it eventually They're a technology company. They're going to eventually they've basically taken it off the shelf from Google to a degree and used that to help train their own models. Um, they're going to figure it out. Stakes are too high and when they do, it's going to be cool. So I think this will be the first step. toward it and personally I My expectations were low coming into the week And They were they were exceeded So I'm excited to use this new y. You haven't used it yet neither of us Have used it? Do you think it'll let you alter your mitochondria I sure as hell hope so. I have yeah, three days watch to bring to bring that out I don't if Siri ended up being the AI platform that helped you with that project Fable five one It's the true danger it's so good. It is a cybersecurity risk that can threaten humanity and the entire global economic infrastructure I have to say, if we end up like getting wiped out by a super bug that's been generated on Siri, I'm going to be really mad. I'm going be be ironic. Actually for the irony, I'll be happy. so