Corporate Strategy and Investor Pressure

Welcome to the Birdcast, the flagship podcast of Mythos Class models. I'm your friend, David Pierce, and today on the show, we're going to talk about AI We got a lot of questions from all of you over the last couple of weeks after Google IO and Microsoft Build and Apple's WWDC about all things AI. And then we had a just truly chaotic blowup between Anthropic and the US government over the new model Clauded Fable and whether it is the most dangerous thing anyone has ever invented in history So we're going to get the Virgus senior reporter Hayden Field. She's going to come and we're going to answer a bunch of your questions about all things AI But first, here's a look at everything else happening on the vererge today This is ninety S secondconds on the verd for Tuesday, june sixteenth, twenty twenty six Snap's first consumer grade AR smart glasses are finally actually apparently coming out this fall. That's what the company announced today They're called specs. They're thick and wide and black, and they kind of look like spy glasses that James Bond would have worn in the nineteen nineties. I don't know if I mean that as a compliment or an insult, but there it is. But the best part is they're going to cost two thousand one hundred and ninety five dollars It's been a full decade since Snap's first ever pair of spectacles went on sale. Back then, they were only one hundred and thirty dollars, and they weren't a huge hit even then I have no doubt that the tech here will be impressive, including the built in display and the new chips. But this one might be a steep climb for Snaps Meanwhile, Microsoft launched new sururface devices, a new sururface laptop, and a new Surface Pro, both of which are powered by another quQualcom chip, the Snapdragon X two They look good, The spec sheets are great, The colors are solid as always. and unfortunately, as with basically every gadget right now, they are too expensive The Pro starts at fifteen hundred dollars and the laptop at sixteen hundred dollars, both up one hundred bucks from the last generation I am still excited about them, though. The sururface lineup is some of the best stuff going in Windows World and has been for a long time And as these quQualcom chips get better, so do these laptops Microsoft in particular is making really big battery life claims, and I hope they pan out. And finally, happy birthday to the Trump phone, which was first announced a year ago today. Back then, the Trump phone was made in America and was going to be shipping last September Today, it's an obvious dupe of an HTC phone that is very much made in China, and as far as I can tell, it has only shipped to a bunch of YouTubers and tech reporters I suspect most people at this point have just written off their hundred dollars deposit. But hey Maybe year two will be a big year for Trump moobile I would not hold my breath. You can read more about all of this at the Virge d. com That is ninety seconds on the verge for june sixteenth Let's answer some questions about AI. Hayden Field is here. Hi, Hayden. Excited. You are just deep, deep in anthropic nonsense as you always are. This seems to be like half your beat now is various anthropic nonsense. It's true. We have a joke that like anytime news happens on another company, they text me immediately has in me and Addie, my editor had that joke becausecause it's like every time something else happens it's like oh, anthropics's gotta get in there. you know, it's just crazy. But no problem to them. It's just a hilarious coincidence every single time. But yeah, last night, we were up till midnight, we got a peace out. There's some crazy battles going on again between anthropic and the Trump administration is just what we do here. So I have a handful of questions for you from our audience about all things AI But everybody's asking us to make sense of what's going on with Mythos and Fable, and Anthropic and the U.S government. So let me just start with a question from Samuel, which says Can we have a complete Virgecast episode on how this is going to impact the way the world looks at US tech companies and the risk this behavior will cause? What's next stopping PowerPoint for the rest of the world I like this question because I think it is a good framing for what's happening between Anthropic and the US government. and kind of the way the rest of the tech industry and the rest of the world is going to take whatever the outcome is of this story But really quick Just for people who have not been following this. you did sort of a big TikTok story of what's been happening over the course of the last several days. Just give me the cliff notes version of what has happened between anthropic and the U.S government in the last week Yes, that's a great question because the last like five days have really been the crux of the whole thing. So on Friday night, when everyone was getting ready for the big games that were happening this weekend, Andthpic was having the opposite experience where they at like one PM got a call from the US government saying, you have ninety minutes to shut down access to Fable five. It's a new model that had been hyping for a week. And Mythos five, its other new model I had been hyping for a week. So Fable five is kind of the safeguarded version of Mythos. They're built on the same underlying model. Mythos five is the one that they gave access to enterprise governments, you know select partners. Mythos is the one that they were like, if we release this to the world, it will destroy everything. We can't possibly let you have it Like Right. And I'm barely overstating what anthropics said when they put this down. Exactly. And that's what they still say. And then Fable is the one where it's built on the same exact model, but it has a lot of safeguards apparently. So it's safe to release to the public. Now we don't know for sure, but the independent Red teamers I've spoken with have been pretty impressed with the safeguards so far, which is really saying something I wasn't expecting that. Now, what happened on Friday was at one PM, yeep, they got a call from the U.S government saying, hey, this has been Like we are aware of a jailbreak here for Fable, the safe one for the public. So you gotta shut it down within ninety minutes Andthropic asked for more details. They said, okay, well, what's going on? Like, you know, let's let's talk about this. And the U. S. government Apparently was not happy that they asked for additional details and they said, Nope It's been more than ninety minutes. you got to shut it down. and they were hit with an export control directive at five twenty one PM on Friday. So that was like basically saying, hey, you cannot allow any foreign national to use either of these models even if they work at anthropic. So if you're not a U.S. citizen, you can't use the model. And obviously, Anthropic was like, well, we can't control that So let's just shut it down. We can't really, I mean, these are out there now, you know? So they had to completely sideline them. The whole weekend was spent you know, trying to kind of make nice with the Trump administration. Apparently, Dario was not available for the first hour that the Trump administration called. And Thropic called the Trump administration back within fifteen minutes when that first call came in. but Dario It took an hour and fifteen minutes from that first call. He was unavailable originally. And so that created a whole point of contention as well. There was some rumors that he was on a wellness retreat. I can confirm that he was not on a wellness retreat, but he still was not available for an hour and fifteen minutes. So yeah, there wass a lot of drama going on, lots of virtual meetings all over the weekend Th then end uping ended up flying out three of its senior staff to DC on Sunday. Notably Dario, I don't think was among them He was still meeting virtually. And so the in person meetings on Monday concluded without any U, you know, resolution. so right now it's still banned. So we'll see what happens rightight now Anthropic is trying to talk to the Trump administration and say, hey, we saw the jailbreak you're aware of. And it's actually something that opening eyes GBT five point five can also do. It's not that crazy. So they, you know, they went from hyping this model for a whole week to saying, oh, well, it's actually not as powerful as you think. So there's a lot of interesting things going on here. and Amazon is also involved because apparently Andy Chassie was the one to sound one of the first alarms about this to the Trump administration whichich is fascinating for a whole bunch of reasons we don't have time for here, but like Amazon's weird role in all of this as a company with like deep ties to everyone in the AI space Very strange. It seems to me that there's been a lot of discussion about all of the things that might be happening here. There was a like maybe China hacked it story that I think has turned out to be pretty thin. There's a what if this is just fundamentally about the ongoing relationship? problems between anthropic and the U.S. government. There's a whole thing like you said about are these guardrails completely passable and you can get access to this whole terrifying mythosy It seems to me, and I should say this with the preface that there is still an awful lot we don't know and there's a lot of this left to come as with this entire story But it seems to me that the sort of Ocham's raazor explanation of this, the simplest possible explanation here is that this is just once again, the Trump administration trying to punish anthropic in particular And you think about what the Trump administration responds to which is people in a position like Dario Amedes, coming and you know, bowing at the knees of the Trump administration. That is you show up to the octagon for the UFC fight and Trump gives you what you want. Like this this is how it works And so Anthrapic has largely not played this game. and you can just see how an administration that operates this way would respond by, well, we have to continue to find ways to punish them because they are the enemy Again, I don't want to say that is the answer, but it seems to me that that is the simplest answer to a lot of this right now Is that your read to or are you seeing something different I think it's gonna to be really interesting to see what else they try to squeeze them on you know, like you mentioned, this is kind of following a lot of months and months of discord between the two. and there's even an ongoing lawsuit right now about the supply chain risk for the DOD stuff. So I think what's going to be interesting is what else they squeeze them on? Are they going to you know make them you know bend the knee for DOD stuff to get this of the expport Control directive, we don't know. I mean I think that it's a combination of the two things. what you said and the fact that The government doesn't know that much about this technology a lot of the time. And so if Amazon researchers or Andy Jassie himself are calling, you know Scott Besson and saying, Hey, I found a jail brereak in the most powerful model that Anthropic has spent, you know, months saying is so powerful. It could be a cyber weapon. You know, they're going to freak out. What what I so I think that was the initial situation. It's the fact that they don't know that much about this technology. If someone who does know a lot about it is telling them it's a problem, they're going to freak out But then they try to talk to Anthropic. Anthropic says, okay, let's discuss this. Let's like you know, hear some more information. We'll come to a conclusion. And they immediately said, no, shut it down. I think that's the part that was probably a result of The administration's current communications with anthropic. apparently, a lot of reports have come out saying that they're just not good at talking to the administration. They don't, you communicate in the same language. AK, they're not good at like making nice. And I think that that is probably the reason this kind of blew up in their face, especially with the foreign nationals thing. I mean, everyone in the tech industry is Absolutely agghast at that Let's go back to Samuel's question at the beginning here, which is about What this means for other U.S. tech companies and others looking at building tech like this because what you have here is the U.S. government going to I would say the leading AI lab in America, if not in the world and saying the best model you've ever made, which might be the best model anyone has ever made. You are not allowed to release and Whether or not that is actually like a thing the government should be and is able to do. is sort of a separate question. It did do it Right? And so You talk to a bunch of people before this story about what the sort of downstream effects of something like this might be. If this continues to play out the way it is playing out What do you think other folks in tech and around the world are looking at in this? and what kind of changes are they going to make in how they think about this technology Yes, that's a great question It is crazy out there right now. and I think Whenever there's a lot of uncertainty in an industry It's just not good for business. and this is like peak that, peak that. So I talk to a lot of people for this story. yes. and It's interesting because people in the cybersecurity industry and the tech industry A lot of leaders have actually signed a public letter saying basically that they think this is really stupid even if they are not Um, Even if they don't agree that regulation should be a thing, they literally wrote, We don't all agree on that, that there should be regulation at all. But if there is regulation, it certainly shouldn't be this. Interesting. And so yeah, One guy interviewed Alex Stamos who put that letter together. He said that the industry right now is like awash with backup contracts being signed with non US. companies and open way models are being deployed on alternative hardware arrangements You know Political risk is now a huge part of companies' business plans in a way they didn't want it to be before. He said, they're laughing in us in Beijing right now. One of America's champions is being kneecaapped by the US government while we're in a race with the Chinese. It's just incredibly stupid. That's why I wrote the letter. and I think that's why a lot of people signed on to it. And yeah, a lot of the people I spoke with echoed that sentiment We're already, you know, the general consensus in the industry now is that we're about six months ahead of China and AI if if that. That's like best best case scario be like the hopeful scenario for how far we are av. Y. best case scenario, six months is kind of the consensus. and you know, this is just seen as being like a very U unnecessary, strange kneecapping ourselves moment. There are a lot of ways that this mirrors what was going on with The Pentagon deals, like you were talking about and we talked about on the show, that the sort of moment where any minute now, open AI is going to come out with some announcement about how it also launched a cyber weapon of a model and everything is going to be great There are weird machinations left to be done here. So we should come back to this, but I think this question of Uh the race to AI supremacy in the world next to the government trying its best to cut off at the knees the leading American AI company at this moment is just very strange. And I feel like Alex Dammos in particular, by the way, is somebody who knows, right? Like he was the chief security offfficer at Facebook for a long time. He ran the interternet Observatory at Stanford. He's like he is as good a cybersecurity guy in this space as there has been So to see him T turnurn this quickly on this idea was pretty fascinating to me Exactly. And the other crazy thing to me is that open AI Um, you know, and a bunch of competitors actually already have cybersecurity focused models that they say are as good as mythos. like the consensus is that they aren't, they're still behind, but they're marketing them as a similar product. And so if Anthropic undergoes this How long until its competitors have this same type of thing happen if this isn't resolved? And also the foreign nationals saying, okay, are all the US tech companies going to only allow US citizens to work on the products? It's just it's a huge mess. And I think hopefully we'll see this resolved in the next couple days, but I mean, even the fact it's taken this long is really surprising to a lot of people All right, let's move on to a couple of other questions we got from the audience. One question we got a few times that is pertinent to you and I think very interesting is we got a question from Andrew that is basically representative. It says here in the UK, people don't use Message all that much. We know. Listen, everybody. I want you to know that we know. I don't know anyone who does. we all use WhatsApp. So Siri AI isn't going to have access to a whole load of context and info for me. Is Apple likely to ever allow third parties to add to the index? Seems like a big deal for international markets? What would be the business machinations for both sides My question to you, Hayden is the question in the middle there, which is we are in a new kind of data race in all of this AI stuff Apple just launched Siri AI, and one of the things that it is able to do is do a much better job of indexing all the data on your phone in order to be able to like more successfully use Siri If I' meta I make WhatsApp Do I have any incentive at all to play nice with Apple here? Only if Meta falls behind. I think it's the same type of thing as why peopleople worked with Google to make the new Siri. I mean, they were behind. They were like, we don't really have a choice. you know, things are advancing at such a rate. If you't beat them, join them because they're already behind. And so I think that if Meta, you know a lot of drama is happening at Meta right now. They have had a lot of internal meetings where engineers are mad, The culture is really bad right now, according to reports They feel like they're falling behind Alexander Wang is reportedly not that happy. Now We'll see how this all plays out. I mean, they have hired a lot of good talent you know, they just released some models that, you know, I haven't heard a lot of buzz about, but they seem to be pretty good. But yeah, I mean, if they continue to fall behind, of course they're definitely going to end up making a deal, I think, because I mean they don't have a phone, they want to make their theyve got to get a deal somehow and I think Apple would pay a lot. So let's say, you know, wait and see on how Ma does. if they keep falling behind. Yeahah, I could see that happening sometime in the next few years Yeah, there's a fascinating set of arrangements to play out there, right? Becauseuse if you're Apple, Andrew's question is, is Apple likely to ever allow third parties to add to the index? The answer to that question is absolutely one hundred percent yes. Apple is abs desperate for third parties to add their stuff to the index. That's what app intents are, That's what a lot of the things that Apple has been exposing over the last couple of years is about. And the more developers do that, the better Siri becomes, the more powerful it is. like all of that is unequivocally a win for Apple The question for meta, I think is exactly what you just said. Like at what point is being accessible via Siri so important that we are willing to Be part of it And is Apple willing to bridge that gap by writing us a very large check I don't know the answer to either of those things, but I suspect WhatsApp might be the single most cute version of that because in the same way that like we talk a lot about how iMessage is the lock in for the iPhone. it is the reason it's very hard to switch from an iPhone B. people who use WhatsApp don't have that lock in. And so for Apple, it's like, well, maybe we can make Siri that thing that really gets to know you and know your information and know your context. And one crucial way to do that for lots of people around the world is going to be to index their WhatsApp messages. This might get to a point where it benefits everybody, but right now it feels like Apple wins a lot and it would just be meta giving in. Like you said. And I just wonder at what point those two things actually ever run into each other if they do Yeah, totally agree. And it's interesting because WhatsApp has a Automatic, like the default is that the messages delete in seven days You have to turn it off if you don't want that to happen. So yeah, there'd be a lot of changes that would have to be made or maybe it could just index really quickly But yeah, I mean, we'll see how the next couple of years play out. I think Meta is falling behind. It's the consensus, but they're not too far behind yet So we'll see, you know, or I mean, arguably they're super behind, but you know what I mean? In terms of the lowest competitor who' was like Well, basically they're in a precarious situation right now. so we'll see how it goes. Right Yeah, Ma is weird because it wants you to use meta AI inside of WhatsApp. So actually letting you use Siri to get to WhatsApp is sort of good and sort of againg, there's like everybody is going to have to like think themselves in circles about the user interface of AI going forward. and that will make a lot of this happen. but I suspect If there haven't been meetings, those meetings are coming because you can see why Apple in particular would very much want this to happen. All right, one more, I have a voicemail. that I'm going to play for you It's about AI branding, which is my favorite thing to talk about with you And it is also a thought that I had during WWEC. Let me just play this for you Hi, Virge Cast. I am a twenty eight year old living in Chicago. and there's a reason I mentioned my age On the podcast, you'll talk a lot about Young people hating AI Every single person I know. Absolutely despising AI especially including my partner, who's twenty five And whenever Theory AI was announced The first thing my partner said was, well, I can't wait to never use theory again because If it has a guy in the name We're just not going to touch it it becomes is you know And I'm just so curious what your thoughts are on Apple making this really big push into AI and how it will affect their brand and just their perception. because up until this point I have loved the apppple who's been behind on AI. It's made me feel better about using their product And now They're just icky. theirir tank is. So yeah I want to know what the people think It's Great question. and I understand I have many, many friends that feel the same way. I have a lot of people in my life that love AI and a lot of people in my life that hate AI and will not touch anything to do with it. So totally understand I think that you know Apple is just going have to reckon with the fact that it's going to lose some users. So fortunately or unfortunately depending on who you are, I don't know that it's going to impact Apple a ton. However, what they will really, really need to do in order to keep users, especially in different demographics is to really deeply allow for turning this stuff off. now you can't fully do it, but you can at least, you know, I hadn't used Siri in a while Over the past couple of years I had turned it off because it just kept Annoying mirror I'd press the button accidentally, whatever. So you can turn off Siri AI. It's not going to be a perfect solution, but I think that they're banking on the person personalization there and just hoping that people that don't want to use it won't and that people who either don't care or do want to use it, will take full advantage, especially U you know, I remember my dad was really into using Siri. I feel like he would have been really into Siri AI as well. oldlder demographics seem to love. functionality So I think between the different generations, it may come out in the wash for Apple. But yeah, I completely understand. and I think that many, many people feel the way that this person does and that it's just going to be about turning it off and maybe the public calls for being able to more cleanly kind of turn off all of those features. I do think callalling it Siri AI was like a hilarious own goal of branding. Like what is a way to take Siri, a brand that people hate and associate with terrible products and make it worse? It's stick AI on the end. L it is just Two words that just only make a lot of people feel really, really icky things all at the same time. A lot of these branding decisions, I truly believe are done for investors without the consumer in mind at all. Like can you think of someone in your life that would be like Oh, yeah, Si AI can't wait. Like no, it's either ser like That's an investor thing. It's just FO. likeike they're like, oh, don't worry guys, we're going to talk about this on the quarterly earnings call likeike' glad you said that because I could I literally could not agree more. And even Apple went way out of its way two years ago to call it Apple intntelligence. and it's like it's not called Siri, Apple intelligence, it's called Siri AI. Like you're absolutely right that this was one hundred percent. Apple being like, just to be clear, we're good at AI now, everybody It's a worst name for an identical product, which is just a stupid bad thing to do I mean, Apple is not great at naming things. like this is a company that has Apple TV, which means thirty five different products, but Still, you would not call S Siri AI if all you cared about was making a good product that users actually liked. And I think this is the very funny thing you and I have talked about this before that Apple is so caught up in haaving to convince Wall Street that it has a play in AI because that's all Wall Street cares about at this particular moment that it has sort of fallen all over itself to throw AI into everything, despite the fact that a vast quantity of its users are saying A, these products aren't very good and B, I don't want them And I think That is the thing that really risks coming back to Bite Apple. Like I think you're probably right that frrankly, what's going to happen is a lot of people are going to use the new ser, be like, oh, this is actually pretty good and use it more. right? Like evenven a lot of people who have issues with the theory of AI are going to discover that having a product like this that is this accessible that has its upsides. U and the people who don't can turn it off and that's all fine But like every every little bit Apple goes down this road of we are just going to throw the latest AI features into things like the image playground thing. it starts to bite at their reputation that Apple has spent all of this time protecting is like we're a company that loves creatives and now you can screw with your photos in horrible unkowable ways because we don't actually believe in photography anymore. Like you eventually can't come back from that It just keeps reminding me of the Microsoft situation where they just stuffed Cop pilot into everything. It's like this, you know, out w that back They I hate this. we're so surprised We're constantly in this like cycle where everything just repeats and repeats and repeats and I'm like, well. If you're in this industry long enough or write about this industry long enough, like Everything comes back around and this also reminds me of like the meta rebrand from Facebook. like now they're so regretful of that it seems like. And it's like Siri AI just kills me. I can't believe that they did that. And so many of these. I think truly there should be like a class that executives have to take where they like talk directly to their users every week or something because I'm like sometimes people get so out of touch on what users actually want compared to like what investors want, which I guess is In America, you do have to cater to investors because of like that's the law, I guess when you're a public company. But it is just crazy how far the gap can be. CAAI is a terrible name and everyone who came up with it should feel bad. is basically my takeaway. But I am curious if you are a person out there who has strong anti AI feelings, and you have experienced the new Si in any way I really want to know how you feel about it because I think it's a different kind of AI being put in front of people. and I want to know how you feel about it. So call the hotline, send us emails. We love hearing from you. Hayden, good to see you. Thanks for coming to hang out Thanks. All right, that's it for the show. Thank you to Hayden for being here and thank you as always for watching and listening and sending us questions. If you have questions about AI, about anthropic and the government, about anything else that we talk about on this show, please keep reaching out. The hotline is eight hundred sixty six Vverge onele. The email is Virgecast at theVverge dot comot We absolutely love hearing from you about anything and everything. In addition to the Slack channel, by the way, there's now a Google dooc that Travis, our producer keeps of all the hotline questions It's my favorite Google Doc of all the Google Docs that I have. And as always, a reminder, the best thing you can do to support all of this that we're doing is to subscribe to the Verge Vverge dot com slash subscribe It gets you all of our podcasts ad free, including this one. It gets you all of our exclusive newsletters. It gets you all of our coverage of Anthropic and openp AI and Siri and everything else The best thing you can do is subscribe. Thank you to everyone who does, and takek you in advance. The Virge cast is a Virge production and part of the Fox Media podcast network. This show is produced by Josh Kahjas, Eric Gomez, Brandon Kiefer, Travis Laruck, and Eron Lacasi. We'll you tomorrow, Rck and roll