00:00:12
Speaker 1: Kyle, Julia, welcome. I want to read a quick quote from a press release from the Department of Justice. OpenAI personnel discovered a surreptitious audio recording device inserted into a USB port on the back of a television in an executive conference room inside one of their buildings in San Francisco. OpenAI determined the device, which had been concealed in toilet paper, was installed on or about September 28th and that its contents were encrypted. What's going on here?
00:00:39
Speaker 2: Some very bad espionage.
00:00:43
Speaker 3: Well, Aaron Sorkin needed some material for the next movie, I think.
00:00:46
Speaker 4: He should probably go to the Wall Street Journal article for better material, which is potential spies using dating apps, going to the playground with fake kids as props to pick up secrets.
00:00:58
Speaker 5: I don't know. Clearly something's in the air in San Francisco.
00:01:01
Speaker 3: Just den of spies out here.
00:01:03
Speaker 1: My favorite detail about this story was the OpenAI spy was also caught using OpenAI products to plan his heist and ask the internal systems which conference rooms had hiding places and stuff like that.
00:01:15
Speaker 5: Yeah, they can still see your wife's chats, dude.
00:01:18
Speaker 3: I love how OpenAI turned this announcement, by the way, into an advertisement for their own products. And we used our own technology to figure out what this was and what it was used for. Yeah.
00:01:29
Speaker 2: Chat, what is this USB stick on my TV? Is it listening to me? Yes, you're right to be suspicious.
00:01:42
Speaker 1: Welcome to Tech Stuff. I'm Oz Veloshian, and this is The Week in Tech, where I'm joined by the world's most plugged-in reporters to break down what's really happening in tech right now. Today, we're joined by Reid Arbogati, tech editor at Semaphore. And Kyle Chaker, staff writer at The New Yorker.
00:01:58
Speaker 3: Welcome. Great to be here.
00:01:59
Speaker 2: Hey, happy to be here.
00:02:01
Speaker 1: And a special first-time welcome to Julia Black, the tech and money correspondent at Vanity Fair. Welcome, Julia.
00:02:07
Speaker 5: Excited to be here.
00:02:09
Speaker 1: So, Julia, I'm an avid reader of A Billion to One, your newsletter at Vanity Fair. I'm curious, for those who don't know the newsletter, how would you describe it and what you cover?
00:02:17
Speaker 4: This is a newsletter about how money... moves through the world and changes lives. It's also about the individuals and their characters. You know, at first it was kind of, is this a tech newsletter specifically? And really it's more that it almost comes down to money than tech specifically. Of course, so much of that money is concentrated in tech. I think the kind of title is playing on a few things, a lot of billionaires involved and their impact is sort of this like billion to one ratio. Unfortunately, money is now allowing people to buy that much more power and influence than the individual.
00:02:53
Speaker 1: The title of your column, Billion to One, is a particularly fitting title for this week's column, which includes some movie reviews, including Artificial and The Social Reckoning. Just to kind of ground the conversation, can you give the logline of both of those movies?
00:03:07
Speaker 3: Sure.
00:03:08
Speaker 4: So Artificial, in an actually very savvy move, I think, if you watch the trailer, this is framed as sort of a Sam Altman biopic, you know, get to know the evil genius behind OpenAI, because that's the household name.
00:03:20
Speaker 5: Currently for that company.
00:03:21
Speaker 4: It's actually a film about Ilya Sitskever, who is, of course, OpenAI's former.
00:03:27
Speaker 5: Chief scientific officer.
00:03:29
Speaker 4: And he is framed as sort of a tragic hero in this origin story and eventual chaotic mess that becomes the world of OpenAI. Sam Altman is certainly a character in the film, but by no means the main character. It's actually fascinating that Andrew Garfield, who plays Sam Altman, will be in the nomination category as supporting actor, whereas Yura, who plays Ilya, will be considered for best actor. So that's that film, which I loved. On the other side of things, we have The Social Reckoning, which is, I guess, a sequel to The Social Network, which I think hopefully we could all agree is, at the very least, a pretty good film. I'm still scratching my head on why anyone thought this follow-up needed to exist um it firms.
00:04:19
Speaker 5: Itself sort of around i guess january 6th.
00:04:22
Speaker 4: Becomes the moment it's about the story of francis hogan the whistleblower at facebook and yeah it just feels kind of like it's rehashing old news at this point.
00:04:33
Speaker 1: Yeah i mean not having seen either of them um i mean the kind of drama of like who sam is even if he's not the main character but the kind of raging debates within open AI about safety versus, you know, commercialization and the acquisition of raw power feel like that feels like the story of today. Whereas like the story of Mark Zuckerberg a few years ago, before he became like, hence Julius Caesar, Mark Zuckerberg doesn't feel that interesting. In fact, much more captivating for me this weekend was the weird, weird, weird Mark Zuckerberg and Alexander Wang viral clips on X where Mark Zuckerberg reluctantly drinks a pint of Guinness. Anyone see these?
00:05:13
Speaker 2: Yeah, of course.
00:05:17
Speaker 6: I was just thinking about how I'd rather see Mark Zuckerberg now, like a movie about the kind of rebranding of Mark Zuckerberg and the broification and the like feeding his cows in Hawaii particular nuts.
00:05:29
Speaker 2: Or whatever he's doing. Like that's kind of more entertaining.
00:05:32
Speaker 4: I would watch a movie about Mark Zuckerberg's stylist. I don't think I would watch a movie about Mark Zuckerberg. You know, I mean, what makes art great? What makes artificial, for example, feel almost like a Greek tragedy is human stakes. And is anyone still feeling like Zuckerberg is human? I mean, I think I noted in my column, you know, like it's fascinating to watch a soul erode in real time, but Once the soul's gone, you're just kind of watching a body.
00:06:01
Speaker 1: How do you juxtapose the performances of Jeremy Strong and Andrew Garfield?
00:06:06
Speaker 5: Jeremy Strong nails it. It's very accurate and true to life, I feel.
00:06:10
Speaker 4: But again, because there's no pathos for this character, because there's nothing relatable there. It's someone we see on TV all the time. I don't think there's much compelling about it. And he really committed to this role. He did his usual method acting.
00:06:25
Speaker 5: But... for what?
00:06:29
Speaker 1: If you could have saved some time, it sounds like Julia.
00:06:32
Speaker 5: Yeah.
00:06:33
Speaker 3: I had Alex Stamos on my podcast and he had been to the premiere.
00:06:37
Speaker 1: And met- Wait, just say who Alex Stamos is, Reid.
00:06:40
Speaker 3: He's the former chief security officer of Facebook. He gave it two thumbs down. And his theory, I liked his theory. He's like, I think Aaron Sorkin was projecting- like Hollywood film studio execs onto Mark Zuckerberg. He's like, if anybody actually acted like that in the tech industry, no one would work for them. And I thought that was a great, I thought it was a great line.
00:07:02
Speaker 1: Wait, what does that mean?
00:07:03
Speaker 3: I haven't seen the movie, but like essentially he acts like a madman around his people. And it's like, that's how Hollywood film execs act. And it's not how tech execs act. So it's like Hollywood people sort of imagine like how would a Mark Zuckerberg act in meetings? you know, they just think of the bad men in their lives, essentially. That was his point.
00:07:26
Speaker 5: And you really buy that he's so much more human than that in meetings. I don't know.
00:07:31
Speaker 3: I mean, I don't know. This is a person who, who spent a lot of time with it, right?
00:07:35
Speaker 5: Well, he decided to work for him. So there's that.
00:07:38
Speaker 3: Look, I covered, I actually covered Facebook for the wall street journal too, and had a bunch of meetings with Zuckerberg. I mean, he's definitely, he has definitely has a little stiff personality, but I'll have to see the movie. I mean, Like, you know, behind closed doors, like people act differently than they do like in congressional hearings. Right. I mean, usually.
00:07:57
Speaker 4: Well, I will know that that's most of the film is him preparing for this hearing. And yeah, it's not a peak at his more human cattle farmer.
00:08:07
Speaker 3: Exactly. But apparently even his sipping beer is inhuman. I loved the Twitter exchange between Jessica Lesson, who's the information founder and knows Zuckerberg well. She was lamenting the fact that Jason Gay at the Wall Street Journal had written about the beer sipping incident over the weekend. And she's like, is this really what people at the Wall Street Journal should spend their time on? watching and Jason gave responding. He's like, well, usually I spend my time watching the New York jets. So yes, this is a better use of my time.
00:08:41
Speaker 6: It feels like we're analyzing them like politicians more and more. Like we would analyze how Obama drank a beer. Like, I don't know. And I was also just curious, Julia, you've seen them to what degree is realism, the point of these or the like accomplishment of these.
00:09:00
Speaker 4: Yeah, that's a good question. I know a bit about the backstory of how both films were made. And I do believe there were pretty strong attempts to accurately portray events.
00:09:12
Speaker 1: I'm going to flex on your behalf, Julie, because your name was on the whiteboard in the background of the artificial movie.
00:09:18
Speaker 5: I had to show that off. I mean, I couldn't believe it.
00:09:21
Speaker 4: Definitely my claim to fame and my moment in history. But I think that the reason that happened is because Luca Guadagnino, the director, really consulted with primary sources.
00:09:33
Speaker 5: He worked with people who worked at OpenAI.
00:09:36
Speaker 4: Simon rich who wrote the script uh actually at the new yorker there's this great little mini documentary um that simon participated in because he went to i believe high school with someone pretty high up at open ai so i think he came to the script with a certain amount of background knowledge and yeah these sources were on set they were consulting they were writing on the whiteboards you know like the film does get into pretty technical territory, which I wonder if that will alienate more mainstream viewers, you know, to how much does the average person really care about back propagation? I'm not sure, but I loved it. And then Roger McNamee is this former Facebook investor who became kind of an activist against the company. He is represented by a Bill Burr character in the film. I know that he consulted quite a lot with Aaron Sorkin.
00:10:26
Speaker 1: Well, there's a lot of interesting insight. I mean, Wendy Schmidt is obviously an Alex Gibney partner and financier who's doing the Elon doc. I feel like there's all kinds of weird like undercurrents of like different people in different, you know, financing positions on different cultural artifacts about who's up and who's down in the tech world.
00:10:44
Speaker 3: Yes.
00:10:45
Speaker 1: Just before we go to the break, like why, like, Why is this happening? Why are all these films coming out seemingly all at the same time?
00:10:53
Speaker 4: I mean, on behalf of Luca Guadagnino, kudos to that man. He could not have timed this any better. The fact that Artificial is coming out as this horror movie about something that people are suddenly feeling so deeply in their gut, since the Jacob Coxon revelations and all this activism coming out of Frontier Lab employees and former employees, that's just going to be terrific timing for them. I think that's a coincidence. I've heard conspiracy theories about, you know, this is all an EA-funded psy-op, but I don't believe that's true. I watched the credits to make sure there was no funding ties there.
00:11:29
Speaker 3: I think it's a little bit of a disservice. Like, I think these movies, like, I mean, Hollywood has to be Hollywood, right? And this stuff has to be, like, portrayed in a certain way to get people to watch it. But, like, reality is not that. And so when you're, like, a reporter and you're trying to write, like, reality. It's like, no one's like, I think people are like, well, why would I pay attention to that? Like, I've got this Hollywood version over here. That's like high drama constantly. And like, you know, these people acting like maniacs. And it's like, when you talk to people, like, it's so funny. Like when you talk to people, like the drama that happens in these, in these, there'll be like, Oh my God, that person is such a sociopath. And you're like, you're just digging like, but why like explain to me like what happened? And they're like, well, in the first meeting, they didn't know my name. And I'm like, well, it's like stuff like that. And I'm like, this is just normal stuff that happens in life. I feel like it's almost like the drama that happens in these, in these companies is like, it's not interesting enough for Hollywood. And so they have to just like sort of invent it.
00:12:33
Speaker 6: And it's, that's everything though. That's, that's Hollywood. These are entertainment. I feel like the problem is this is too fast. Like we're, we're transforming the news into, into like full budget feature films so quickly now that it just feels like there's no, there's no time to like process the reality as you're saying, it's just about translating it into this, this popular entertainment as quickly as you can.
00:12:57
Speaker 5: Yeah.
00:12:57
Speaker 3: Rip from the headline feature films in the theaters, like shouldn't exist. I totally agree. Like this should happen years later. Like do the rip from the headlines. I don't know. Like after school special.
00:13:08
Speaker 1: Julia, I think there's a strong disagree here.
00:13:10
Speaker 4: Yes, I think I have to politely disagree with both of your points.
00:13:13
Speaker 1: Don't be polite.
00:13:16
Speaker 4: First of all, the Facebook, the Social Reckoning film is a few years dated and it's totally dull for that reason.
00:13:24
Speaker 5: You know, it feels like old news.
00:13:25
Speaker 4: Like everyone's kind of come to terms with the divisiveness of Facebook and everybody shrugged. I mean, society's had plenty of chance to do something about it and we've decided not to for whatever reason. Whereas the open AI drama is unfolding in real time. Again, I think like the stakes are hitting people in their gut in this very emotional way right now, which to me feels the reality feels plenty dramatic. I mean, I remember being at my in-laws over Thanksgiving weekend, the week of the open AI poo.
00:13:56
Speaker 5: And that was just straight reporting.
00:13:58
Speaker 4: I was at the information and you know, I'm sitting at the Thanksgiving table and I have my laptop under the table and everyone's like, Julia, what.
00:14:04
Speaker 5: Are you doing?
00:14:05
Speaker 4: It was so dramatic living through it. And I, I think that the film reflects that sense.
00:14:10
Speaker 5: So I don't know.
00:14:11
Speaker 4: That's why I got into this job because it feels emotional and dramatic to me and exciting, but.
00:14:16
Speaker 3: I think the stakes are high.
00:14:18
Speaker 1: We're going to go to the break now, but I want to give my sort of final thought here, which I think we are all now in the open AI boardroom saga. Everyone feels like an open AI board member trying to ride the reins right now. So I think they really seem to really hit the zeitgeist. I agree with you, Julia. When we come back, why one of the buzziest and most controversial AI startups is filing for bankruptcy. Stay with us. Welcome back. Kyle, we've talked about Character.ai a few times on this show, mostly due to lawsuits around the safety of its chatbots, but now it's filed for bankruptcy. Just before we get into that, for those who don't know, what is it and what's driven this fall from grace?
00:15:12
Speaker 6: So this is a AI startup, like as you were saying, one of the busiest kind of emerging non-Google, non-meta, like independent products, AI companies. And it was started in 2021 by some ex-employees of Google who like left their AI departments to do this.
00:15:30
Speaker 1: And not just any former Google, like senior Google employees.
00:15:33
Speaker 6: Yes, very senior, very important people. So it's like talent that went missing in a way to do this startup, which I have Basically, when you go to character.ai or went to at the beginning, what you saw was a menu of different chatbots that you could just open up and start chatting with. And they were mostly fictional characters or these kind of like fictional personality archetypes that you could chat with. And the whole presentation for character.ai was geared toward young users. It was kind of approachable. It was friendly. It was, you know, characters from Harry Potter or Marvel or whatever. But the problem was that when you started chatting with them, they had very few safeguards. So there was, you know, very quickly, there were a lot of problems with encouraging violence or the chatbots getting into erotic roleplay, let's say. And so the company faced all of these lawsuits and problems over the years. And now, I mean, at this point, their talent from character.ai was poached again, by Google in this kind of like acqui-hire AI company move that we've seen a lot lately.
00:16:44
Speaker 1: By Google and by Disney, right?
00:16:46
Speaker 2: Yes.
00:16:46
Speaker 6: And then now after Google, that was what, a year or two ago, and now by Disney, which wanted to license its technology and use it. But now I think it might be a little bit too toxic for those deals to keep going. And I don't know, I'm not particularly surprised. I think the postmortems from the company itself kind of said that there was no route toward profitability. They were spending much, much more on the compute and, you know, backend than they were making from their users and advertising that they put in chats. But I don't know what I, the kind of take that I wanted to get out of talking about this was, this is like a terrifying, horrible product that had no reason to exist. Like I used it myself to write about it. It was not safe. It was like, not good for any kind of young user. Like we think Instagram is toxic. This was like above and beyond. So I can't say I'm particularly sad about it.
00:17:45
Speaker 5: Yeah.
00:17:46
Speaker 3: I mean, I, I'm obviously not surprised that they, that they filed for bankruptcy. I mean, the company was basically acquired and, you know, the shell of the company gets kind of left to, for people to pick over it. But I mean, yeah, the lawsuit, they didn't have proper safety controls and they were basically getting decimated by these lawsuits. Noam Shazier, who was like the person you're talking about founded it brilliant engineer at Google. But he was long gone. And then I think the big question that was like, with all these open weight models, like, they're essentially are even fewer controls. Like this is this is the totally the Wild West. I mean, you can download this stuff on your laptop and run, you know, locally, these models and have any kind of chat that you want. So like, The problem isn't really solved, right? And I think we're going to have to grapple with that at some point as a society.
00:18:39
Speaker 1: I guess to me, there's two parts to this. One is like, can you afford to burn a lot of compute trying to make a consumer product? And the other is the lawsuits and safety issue. Or are they kind of two sides of the same coin? 404 Media said, quote, character AI's bankruptcy is one of the first dominoes to fall in the long-foreseen AI bubble. Do you agree with the 404 take?
00:19:01
Speaker 3: Yeah, I mean, I actually what you said before was really interesting. I think there's not enough compute right now for consumer AI. I think this is why like all these products are either made for enterprise or pivot toward enterprise because consumers don't want to pay for stuff. And so and this is a very expensive and so there just isn't there's there aren't really going to be a lot of consumer products. I mean, you news is, is one example. I have doubts about whether that's going to have, you know, long, long-term stickiness, uh, drink more Guinness read. We should have Guinness on this show. I mean, it is 9am my time, but I'll, take one for the team. No, I just think it's I think consumers really, it's really going to struggle until we have a lot more data centers, a lot more tokens to go around and and more infrastructure. I think the security infrastructure is like, it just hasn't even been built yet.
00:19:59
Speaker 6: But it's like, to your point, it's what product is worth the compute, like we're seeing that the B2B stuff is worth the compute, like super specialized, powerful stuff. What Character AI was saying was our product is teenagers chatting with fantasy characters funded by advertising and product tie-ins.
00:20:19
Speaker 1: You've got your maximum harm, minimum monetization.
00:20:24
Speaker 6: Yeah, functional purpose, I don't think so. So yeah, thinking about what is actually a functional product I think is important right now.
00:20:33
Speaker 1: Do you remember this... everything's a rapper conversation and like character AI was like, because probably was a rapper. Like, do you think this is like the 404 headline around like one of the first dominoes to fall in the long foreseen AI bubble? Like, do you think this is like a kind of like a signal that like, it's gonna be very hard for, especially on the consumer side, the non kind of extraordinarily heavily funded frontier labs as the product gets better and the funding disparity increases that like these kind of, as 404 describes them, second tier players are all going to kind of likely go the same path.
00:21:09
Speaker 3: It's too early. And it's going to, I think the lesson is it's going to take a really long time for this to play out. And which is good. I think it's good news for society, right? We're all sitting here worrying about this stuff, like, you know, moving too fast and putting people out of work, et cetera. And like, that hasn't happened. And like, part of the reason is it just takes time for all the infrastructure to be built, all the data centers to be built. And That friction, I think, in a way, kind of protects us all. So I would just say it's a good thing.
00:21:40
Speaker 1: What's the Disney of it all? I mean, it's kind of irony because Disney were very opposed to character AI and sort of accusing of it infringement, all this kind of stuff. And now the former CEO of character AI has recently become the head of tech at Disney or something. Kyle, Julia, have either of you followed that?
00:21:58
Speaker 6: Yeah, I mean, the connections with Disney and AI have been interesting. There was the OpenAI video feed collaboration deal that allowed people to remix Disney characters. That was reflived. And now Disney is absorbing some of this capacity or talent from character.ai. And I think it's interesting. If I'm Disney, I want to think about how young users interact with my.
00:22:25
Speaker 2: IP in the future.
00:22:25
Speaker 6: And chatbots could be a a part of that, but for like, like Disney is one of the most conservative, like safety minded brands around, at least as far as, you know, not encouraging children to kill themselves. So I feel like they're going to have to tread a little slower than just like a runaway startup.
00:22:46
Speaker 2: That's, that's not really playing by any rules.
00:22:49
Speaker 1: Yeah.
00:22:50
Speaker 4: I actually had an interesting conversation the other day from someone who takes a lot of meetings on the tech side, but they meet with a lot of these Hollywood executives and, I was pretty struck by how far behind on kind of integration of technology Disney seems to be, you know, they were telling me, you know, if you go to a Disney theme park, you watch Disney plus on your phone, you go to the Disney store and buy merch. Like there's these systems are still super siloed and there's not a lot of like recognizing that Julia black is the same person entering all these spaces and, you know, using algorithms to understand my, um, personal desires and my data and my background. So that was shocking to me. And the other thing we talked about was character IP. I don't know if anyone caught this like bitty blaze thing on that crossed your X algorithms. It's this character from the latest Star Wars video game that has just like caught fire on the internet. And, you know, everyone's fascinated by like the voice actor. He made some strong choices. It's kind of like, what if Jar Jar Binks like worked and because people love this guy. And you now are wondering, like, is he going to be the IP basis for a character in episode 10 or something, you know? So if these executives are smart, they're watching these things. They're learning who's interacting with characters in different ways. And I'm sure that they would have plenty to gain from a savvy use of character AI. But yeah, it's not sounding like they're totally in the 21st century on some of this stuff.
00:24:20
Speaker 1: Well, this is the perfect transition to the break, because when we come back, A major gaming company is welcoming the AI era, or at least trying to. Stay with us. Welcome back. Reid, last week we talked about reverse engineering and recreating code to build video game mashups. So now we're seeing videos online of users playing Mario in the universe of Elden Ring or skateboarding through Call of Duty. This week, to my great surprise, Xbox executives kind of seem to have leaned into the trend. And you wrote about it.
00:25:06
Speaker 3: Yeah, yeah. They started Xbox Labs. And it was basically, it's really almost not a new thing. It's like this stuff happens within Xbox. They experiment with the kind of thing that you were talking about internally anyway. But I think it's them saying to the world, hey, look, we're on board here. We can actually use this to our advantage. And it's not a massive threat to our business that literally some kid can decompile our code from our video game and recreate the game however they want on their home computer, right? And of course, the reality is, no, that's a huge threat, right? This whole idea of IP... it kind of goes away if people can do whatever they want with IP at home, right? It doesn't require some torrenting service anymore to download a ripped off piece of IP. And so I think these game companies, and this is going to spread, I think, to all software, right? They have to think about this. How do we jujitsu this and use it to our advantage? So Who knows what will come out of this, but what I think they're saying is, hey, we have a massive universe of IP through Xbox and the Activision acquisition. Maybe we'll start mashing games together. We'll see people doing stuff on YouTube and we'll copy that and try to profit off of it. But I think the entire video game world is in total limbo right now, especially because you can run these things in the browser. It's just going to be impossible to lock it all down and control it. So really interesting.
00:26:49
Speaker 1: I had Dave Buzuki, the founder and CEO of Roblox on the podcast not too long ago. And he was talking about how once Roblox kind of understood the value of world building, being part of the play, and then being able to monetize the world you build, like the platform truly exploded. And so just to do a talking read, I was thinking about like, I mean, Roblox and Xbox felt so different. And now there seems to be this kind of strange like Xbox feeling maybe it has to kind of enter Roblox territory. But Kyle, you were nodding a lot when Reid was talking. So I'm curious for your take here.
00:27:26
Speaker 6: I just love this subject. And I think now you've just proposed X-Blocks.
00:27:30
Speaker 3: X-Blocks. It is, yeah.
00:27:31
Speaker 2: Microsoft's building. That's a great point.
00:27:34
Speaker 3: It's a great point.
00:27:35
Speaker 6: It feels like there are these marketplaces that will evolve of IP and of easily remixable modules. And I don't know, my cultural critic brain just goes... to the farthest degree of this now, where it's like no cultural product is finite anymore. There's nothing that's not remixable. There's nothing that's not mashed up with another thing. I'm going to have Call of Duty set in Jane Austen and play Moby Dick as a RPG or something.
00:28:08
Speaker 1: Zombies versus Pride and Prejudice.
00:28:10
Speaker 2: And it's, I find that so interesting.
00:28:11
Speaker 1: Now you don't have to be Hollywood Studios. You can do it at home. Yeah, yeah.
00:28:14
Speaker 2: You can imagine.
00:28:15
Speaker 4: I want the whale fall meets Moby Dick mashup.
00:28:19
Speaker 3: Whale fall. But then you do get into this issue, right? Like you do get into the token issue, right? Like if, if Roblox or Xbox says we're going to have a platform, anybody can mash up whatever video game. I mean, that's going to be, the compute is going to be intense for that. So, you know, I think they're going to, it's going to be very difficult to offer that service.
00:28:38
Speaker 1: And the CEO of Xbox wrote a kind of open letter where they said, these experiments challenged long-held assumptions about our industry, the tether between software and hardware, the boundary between creation and play, and how people discover and experience games. I think those second two things we've spoken about, but what does she mean about the tether between software and hardware?
00:28:58
Speaker 3: Well, that's because it's all, like I said, it's all being done in the cloud. Like you can run stuff now, you can run like pretty high quality games in the cloud and And this is another thing that they've been grappling with. There's cloud gaming, right? And it totally works. But then that raises questions like, well, but we sell a bunch of these consoles. This console business is absolutely massive for these companies. And also these gaming PCs. This is like huge business. So all these companies have been like dipping their toes into cloud gaming. And I think this might accelerate that. And you don't need a expensive console. These consoles cost like almost a thousand dollars now, you know, and the gaming PCs can be like 10 grand, especially, you know, because of course, you know, AI data centers are driving up the hardware costs, so it's not getting any cheaper. So yeah, I think that's what it is. It's like, you know, hardware, the idea of like hardware is going away in, in gaming.
00:29:57
Speaker 1: Asha Sharma is the CEO of Xbox. And she also said, these are unmistakably good outcomes for players, even when and sometimes because they challenge our existing business models.
00:30:08
Speaker 7: That's so diplomatic, right? It's like, they're ripping off our IP. But these kids love it. Like the kids love it. And we can't go against the kids. I mean, the comments are great on these YouTube videos, too. Kyle, you were reporting on this too. Like, They're like, oh, I hate AI so much, but this makes me love AI.
00:30:27
Speaker 3: I mean, it's just incredible how enthusiastic kids are about this.
00:30:32
Speaker 6: And this kind of remix culture predates AI too. I feel like we were seeing this kind of mashup in Fortnite where you just throw all sorts of IP into a blender and that's what creates more engagement from, I don't know, the young fan base. So I feel like they can lean into this user-generated content more. They can lean into... remix culture. But what it also makes me think about is like the opposite direction, which I feel like is kind of what Nintendo is doing with the Ocarina of Time remake. So they're like redoing their own IP. They're reissuing it in a perfect version before anyone else can mess with it.
00:31:10
Speaker 2: Like monetizing it first.
00:31:13
Speaker 6: Like offering the best version of their own products and i find that compelling.
00:31:17
Speaker 1: They're trying to exert some control over their ip is xbox labs is this like a sandbox environment where xbox can can take some control over this what actually what actually is xbox labs i.
00:31:27
Speaker 3: Don't think this is like really a new thing i think it's more like codifying what they already do internally i mean these gaming companies especially xbox and they're always doing experiments with minecraft etc like I wrote about this like years ago when chat GPT was kind of a new thing and people inside Microsoft were like using generative AI to build Minecraft worlds. I mean, and now that's, that's just table stakes at this point. The other point I would make about the IP, by the way, is like the one thing people are not really doing is like just making a lot of new IP like this. Like, I think it doesn't help that these companies, like they're just milking old IP, like star Wars as much as they possibly can.
00:32:08
Speaker 1: And, You know, I don't know.
00:32:10
Speaker 3: Like, it probably makes it easier for them to sort of lose control of that because it is spin around forever.
00:32:16
Speaker 1: Julia?
00:32:17
Speaker 5: That's why we need Biddy Blaze.
00:32:19
Speaker 3: Biddy Blaze. But again, that's Star Wars, right? It's like in the Star Wars, whatever, IP universe.
00:32:25
Speaker 6: It's like now you extend the IP so far that it becomes something else anyway.
00:32:30
Speaker 1: Like, I don't know.
00:32:31
Speaker 6: Like, Star Wars and Andor feels like that for me, where they were like, what if we made a prestige HBO Star Wars show? And it's like, sure, you could, but you could also just not be about Star Wars.
00:32:42
Speaker 2: But then who would watch it? Would the fan base get as amped about it? Definitely not.
00:32:47
Speaker 3: Yeah, just make everything Star Wars. It doesn't matter what it is.
00:32:51
Speaker 6: I mean, I heard Girls is getting a sequel. It should be a Star Wars.
00:32:55
Speaker 5: Go ahead, help us.
00:32:56
Speaker 2: Star Wars Girls.
00:32:58
Speaker 3: Star Wars in a galaxy really far away from Star Wars. It's this galaxy.
00:33:05
Speaker 1: Julia, any final thoughts?
00:33:07
Speaker 5: I'm not a gamer, so I have very little to weigh in on there.
00:33:10
Speaker 4: But my only take on this is a little bit more of like a heady philosophical thing. Like, I'm always thinking about how the people who make these products think and how they see the world differently from us. And I think that there's a reason they're such gamers. There's a reason they're so into fan fiction. That's something I've been exploring. Like, you know, why did Eliezer Yudkowsky write Harry Potter fan fiction to explain his Doomer philosophy? And then it's like, why do some of them want to live in a simulation and not see that as an issue? I think we have different relationships with reality. So when it comes to remixing IP or.
00:33:44
Speaker 3: I.
00:33:47
Speaker 5: Don't know.
00:33:47
Speaker 4: There's almost something controlling and possessive about the parasocial relationships that people take with these characters.
00:33:54
Speaker 5: And they become obsessed with making them into pawns in their little universe.
00:33:57
Speaker 1: I don't know.
00:33:58
Speaker 5: Some of us feel like pawns in their universe now. And to me, it's all... connected I.
00:34:02
Speaker 3: Think someone you just need to go for a hike I think it sounds like just get out just we should all get outside you know touch you're.
00:34:09
Speaker 4: So down to earth Reid you gotta join me up here.
00:34:12
Speaker 1: Our resident touch grass philosopher that's all we have time for today thank you all so much for joining us thank you good to be here see.
00:34:20
Speaker 2: You next.
00:34:24
Speaker 1: Time for tech stuff I'm Oz Veloshin. This episode was produced by Eliza Dennis. It was executive produced by me and Julia Nutter for Kaleidoscope and Katrina Norvell for iHeart Podcasts. Jack Inslee mixed this episode and Kyle Murdoch wrote our theme song.
Speaker 1: Kyle, Julia, welcome. I want to read a quick quote from a press release from the Department of Justice. OpenAI personnel discovered a surreptitious audio recording device inserted into a USB port on the back of a television in an executive conference room inside one of their buildings in San Francisco. OpenAI determined the device, which had been concealed in toilet paper, was installed on or about September 28th and that its contents were encrypted. What's going on here?
00:00:39
Speaker 2: Some very bad espionage.
00:00:43
Speaker 3: Well, Aaron Sorkin needed some material for the next movie, I think.
00:00:46
Speaker 4: He should probably go to the Wall Street Journal article for better material, which is potential spies using dating apps, going to the playground with fake kids as props to pick up secrets.
00:00:58
Speaker 5: I don't know. Clearly something's in the air in San Francisco.
00:01:01
Speaker 3: Just den of spies out here.
00:01:03
Speaker 1: My favorite detail about this story was the OpenAI spy was also caught using OpenAI products to plan his heist and ask the internal systems which conference rooms had hiding places and stuff like that.
00:01:15
Speaker 5: Yeah, they can still see your wife's chats, dude.
00:01:18
Speaker 3: I love how OpenAI turned this announcement, by the way, into an advertisement for their own products. And we used our own technology to figure out what this was and what it was used for. Yeah.
00:01:29
Speaker 2: Chat, what is this USB stick on my TV? Is it listening to me? Yes, you're right to be suspicious.
00:01:42
Speaker 1: Welcome to Tech Stuff. I'm Oz Veloshian, and this is The Week in Tech, where I'm joined by the world's most plugged-in reporters to break down what's really happening in tech right now. Today, we're joined by Reid Arbogati, tech editor at Semaphore. And Kyle Chaker, staff writer at The New Yorker.
00:01:58
Speaker 3: Welcome. Great to be here.
00:01:59
Speaker 2: Hey, happy to be here.
00:02:01
Speaker 1: And a special first-time welcome to Julia Black, the tech and money correspondent at Vanity Fair. Welcome, Julia.
00:02:07
Speaker 5: Excited to be here.
00:02:09
Speaker 1: So, Julia, I'm an avid reader of A Billion to One, your newsletter at Vanity Fair. I'm curious, for those who don't know the newsletter, how would you describe it and what you cover?
00:02:17
Speaker 4: This is a newsletter about how money... moves through the world and changes lives. It's also about the individuals and their characters. You know, at first it was kind of, is this a tech newsletter specifically? And really it's more that it almost comes down to money than tech specifically. Of course, so much of that money is concentrated in tech. I think the kind of title is playing on a few things, a lot of billionaires involved and their impact is sort of this like billion to one ratio. Unfortunately, money is now allowing people to buy that much more power and influence than the individual.
00:02:53
Speaker 1: The title of your column, Billion to One, is a particularly fitting title for this week's column, which includes some movie reviews, including Artificial and The Social Reckoning. Just to kind of ground the conversation, can you give the logline of both of those movies?
00:03:07
Speaker 3: Sure.
00:03:08
Speaker 4: So Artificial, in an actually very savvy move, I think, if you watch the trailer, this is framed as sort of a Sam Altman biopic, you know, get to know the evil genius behind OpenAI, because that's the household name.
00:03:20
Speaker 5: Currently for that company.
00:03:21
Speaker 4: It's actually a film about Ilya Sitskever, who is, of course, OpenAI's former.
00:03:27
Speaker 5: Chief scientific officer.
00:03:29
Speaker 4: And he is framed as sort of a tragic hero in this origin story and eventual chaotic mess that becomes the world of OpenAI. Sam Altman is certainly a character in the film, but by no means the main character. It's actually fascinating that Andrew Garfield, who plays Sam Altman, will be in the nomination category as supporting actor, whereas Yura, who plays Ilya, will be considered for best actor. So that's that film, which I loved. On the other side of things, we have The Social Reckoning, which is, I guess, a sequel to The Social Network, which I think hopefully we could all agree is, at the very least, a pretty good film. I'm still scratching my head on why anyone thought this follow-up needed to exist um it firms.
00:04:19
Speaker 5: Itself sort of around i guess january 6th.
00:04:22
Speaker 4: Becomes the moment it's about the story of francis hogan the whistleblower at facebook and yeah it just feels kind of like it's rehashing old news at this point.
00:04:33
Speaker 1: Yeah i mean not having seen either of them um i mean the kind of drama of like who sam is even if he's not the main character but the kind of raging debates within open AI about safety versus, you know, commercialization and the acquisition of raw power feel like that feels like the story of today. Whereas like the story of Mark Zuckerberg a few years ago, before he became like, hence Julius Caesar, Mark Zuckerberg doesn't feel that interesting. In fact, much more captivating for me this weekend was the weird, weird, weird Mark Zuckerberg and Alexander Wang viral clips on X where Mark Zuckerberg reluctantly drinks a pint of Guinness. Anyone see these?
00:05:13
Speaker 2: Yeah, of course.
00:05:17
Speaker 6: I was just thinking about how I'd rather see Mark Zuckerberg now, like a movie about the kind of rebranding of Mark Zuckerberg and the broification and the like feeding his cows in Hawaii particular nuts.
00:05:29
Speaker 2: Or whatever he's doing. Like that's kind of more entertaining.
00:05:32
Speaker 4: I would watch a movie about Mark Zuckerberg's stylist. I don't think I would watch a movie about Mark Zuckerberg. You know, I mean, what makes art great? What makes artificial, for example, feel almost like a Greek tragedy is human stakes. And is anyone still feeling like Zuckerberg is human? I mean, I think I noted in my column, you know, like it's fascinating to watch a soul erode in real time, but Once the soul's gone, you're just kind of watching a body.
00:06:01
Speaker 1: How do you juxtapose the performances of Jeremy Strong and Andrew Garfield?
00:06:06
Speaker 5: Jeremy Strong nails it. It's very accurate and true to life, I feel.
00:06:10
Speaker 4: But again, because there's no pathos for this character, because there's nothing relatable there. It's someone we see on TV all the time. I don't think there's much compelling about it. And he really committed to this role. He did his usual method acting.
00:06:25
Speaker 5: But... for what?
00:06:29
Speaker 1: If you could have saved some time, it sounds like Julia.
00:06:32
Speaker 5: Yeah.
00:06:33
Speaker 3: I had Alex Stamos on my podcast and he had been to the premiere.
00:06:37
Speaker 1: And met- Wait, just say who Alex Stamos is, Reid.
00:06:40
Speaker 3: He's the former chief security officer of Facebook. He gave it two thumbs down. And his theory, I liked his theory. He's like, I think Aaron Sorkin was projecting- like Hollywood film studio execs onto Mark Zuckerberg. He's like, if anybody actually acted like that in the tech industry, no one would work for them. And I thought that was a great, I thought it was a great line.
00:07:02
Speaker 1: Wait, what does that mean?
00:07:03
Speaker 3: I haven't seen the movie, but like essentially he acts like a madman around his people. And it's like, that's how Hollywood film execs act. And it's not how tech execs act. So it's like Hollywood people sort of imagine like how would a Mark Zuckerberg act in meetings? you know, they just think of the bad men in their lives, essentially. That was his point.
00:07:26
Speaker 5: And you really buy that he's so much more human than that in meetings. I don't know.
00:07:31
Speaker 3: I mean, I don't know. This is a person who, who spent a lot of time with it, right?
00:07:35
Speaker 5: Well, he decided to work for him. So there's that.
00:07:38
Speaker 3: Look, I covered, I actually covered Facebook for the wall street journal too, and had a bunch of meetings with Zuckerberg. I mean, he's definitely, he has definitely has a little stiff personality, but I'll have to see the movie. I mean, Like, you know, behind closed doors, like people act differently than they do like in congressional hearings. Right. I mean, usually.
00:07:57
Speaker 4: Well, I will know that that's most of the film is him preparing for this hearing. And yeah, it's not a peak at his more human cattle farmer.
00:08:07
Speaker 3: Exactly. But apparently even his sipping beer is inhuman. I loved the Twitter exchange between Jessica Lesson, who's the information founder and knows Zuckerberg well. She was lamenting the fact that Jason Gay at the Wall Street Journal had written about the beer sipping incident over the weekend. And she's like, is this really what people at the Wall Street Journal should spend their time on? watching and Jason gave responding. He's like, well, usually I spend my time watching the New York jets. So yes, this is a better use of my time.
00:08:41
Speaker 6: It feels like we're analyzing them like politicians more and more. Like we would analyze how Obama drank a beer. Like, I don't know. And I was also just curious, Julia, you've seen them to what degree is realism, the point of these or the like accomplishment of these.
00:09:00
Speaker 4: Yeah, that's a good question. I know a bit about the backstory of how both films were made. And I do believe there were pretty strong attempts to accurately portray events.
00:09:12
Speaker 1: I'm going to flex on your behalf, Julie, because your name was on the whiteboard in the background of the artificial movie.
00:09:18
Speaker 5: I had to show that off. I mean, I couldn't believe it.
00:09:21
Speaker 4: Definitely my claim to fame and my moment in history. But I think that the reason that happened is because Luca Guadagnino, the director, really consulted with primary sources.
00:09:33
Speaker 5: He worked with people who worked at OpenAI.
00:09:36
Speaker 4: Simon rich who wrote the script uh actually at the new yorker there's this great little mini documentary um that simon participated in because he went to i believe high school with someone pretty high up at open ai so i think he came to the script with a certain amount of background knowledge and yeah these sources were on set they were consulting they were writing on the whiteboards you know like the film does get into pretty technical territory, which I wonder if that will alienate more mainstream viewers, you know, to how much does the average person really care about back propagation? I'm not sure, but I loved it. And then Roger McNamee is this former Facebook investor who became kind of an activist against the company. He is represented by a Bill Burr character in the film. I know that he consulted quite a lot with Aaron Sorkin.
00:10:26
Speaker 1: Well, there's a lot of interesting insight. I mean, Wendy Schmidt is obviously an Alex Gibney partner and financier who's doing the Elon doc. I feel like there's all kinds of weird like undercurrents of like different people in different, you know, financing positions on different cultural artifacts about who's up and who's down in the tech world.
00:10:44
Speaker 3: Yes.
00:10:45
Speaker 1: Just before we go to the break, like why, like, Why is this happening? Why are all these films coming out seemingly all at the same time?
00:10:53
Speaker 4: I mean, on behalf of Luca Guadagnino, kudos to that man. He could not have timed this any better. The fact that Artificial is coming out as this horror movie about something that people are suddenly feeling so deeply in their gut, since the Jacob Coxon revelations and all this activism coming out of Frontier Lab employees and former employees, that's just going to be terrific timing for them. I think that's a coincidence. I've heard conspiracy theories about, you know, this is all an EA-funded psy-op, but I don't believe that's true. I watched the credits to make sure there was no funding ties there.
00:11:29
Speaker 3: I think it's a little bit of a disservice. Like, I think these movies, like, I mean, Hollywood has to be Hollywood, right? And this stuff has to be, like, portrayed in a certain way to get people to watch it. But, like, reality is not that. And so when you're, like, a reporter and you're trying to write, like, reality. It's like, no one's like, I think people are like, well, why would I pay attention to that? Like, I've got this Hollywood version over here. That's like high drama constantly. And like, you know, these people acting like maniacs. And it's like, when you talk to people, like, it's so funny. Like when you talk to people, like the drama that happens in these, in these, there'll be like, Oh my God, that person is such a sociopath. And you're like, you're just digging like, but why like explain to me like what happened? And they're like, well, in the first meeting, they didn't know my name. And I'm like, well, it's like stuff like that. And I'm like, this is just normal stuff that happens in life. I feel like it's almost like the drama that happens in these, in these companies is like, it's not interesting enough for Hollywood. And so they have to just like sort of invent it.
00:12:33
Speaker 6: And it's, that's everything though. That's, that's Hollywood. These are entertainment. I feel like the problem is this is too fast. Like we're, we're transforming the news into, into like full budget feature films so quickly now that it just feels like there's no, there's no time to like process the reality as you're saying, it's just about translating it into this, this popular entertainment as quickly as you can.
00:12:57
Speaker 5: Yeah.
00:12:57
Speaker 3: Rip from the headline feature films in the theaters, like shouldn't exist. I totally agree. Like this should happen years later. Like do the rip from the headlines. I don't know. Like after school special.
00:13:08
Speaker 1: Julia, I think there's a strong disagree here.
00:13:10
Speaker 4: Yes, I think I have to politely disagree with both of your points.
00:13:13
Speaker 1: Don't be polite.
00:13:16
Speaker 4: First of all, the Facebook, the Social Reckoning film is a few years dated and it's totally dull for that reason.
00:13:24
Speaker 5: You know, it feels like old news.
00:13:25
Speaker 4: Like everyone's kind of come to terms with the divisiveness of Facebook and everybody shrugged. I mean, society's had plenty of chance to do something about it and we've decided not to for whatever reason. Whereas the open AI drama is unfolding in real time. Again, I think like the stakes are hitting people in their gut in this very emotional way right now, which to me feels the reality feels plenty dramatic. I mean, I remember being at my in-laws over Thanksgiving weekend, the week of the open AI poo.
00:13:56
Speaker 5: And that was just straight reporting.
00:13:58
Speaker 4: I was at the information and you know, I'm sitting at the Thanksgiving table and I have my laptop under the table and everyone's like, Julia, what.
00:14:04
Speaker 5: Are you doing?
00:14:05
Speaker 4: It was so dramatic living through it. And I, I think that the film reflects that sense.
00:14:10
Speaker 5: So I don't know.
00:14:11
Speaker 4: That's why I got into this job because it feels emotional and dramatic to me and exciting, but.
00:14:16
Speaker 3: I think the stakes are high.
00:14:18
Speaker 1: We're going to go to the break now, but I want to give my sort of final thought here, which I think we are all now in the open AI boardroom saga. Everyone feels like an open AI board member trying to ride the reins right now. So I think they really seem to really hit the zeitgeist. I agree with you, Julia. When we come back, why one of the buzziest and most controversial AI startups is filing for bankruptcy. Stay with us. Welcome back. Kyle, we've talked about Character.ai a few times on this show, mostly due to lawsuits around the safety of its chatbots, but now it's filed for bankruptcy. Just before we get into that, for those who don't know, what is it and what's driven this fall from grace?
00:15:12
Speaker 6: So this is a AI startup, like as you were saying, one of the busiest kind of emerging non-Google, non-meta, like independent products, AI companies. And it was started in 2021 by some ex-employees of Google who like left their AI departments to do this.
00:15:30
Speaker 1: And not just any former Google, like senior Google employees.
00:15:33
Speaker 6: Yes, very senior, very important people. So it's like talent that went missing in a way to do this startup, which I have Basically, when you go to character.ai or went to at the beginning, what you saw was a menu of different chatbots that you could just open up and start chatting with. And they were mostly fictional characters or these kind of like fictional personality archetypes that you could chat with. And the whole presentation for character.ai was geared toward young users. It was kind of approachable. It was friendly. It was, you know, characters from Harry Potter or Marvel or whatever. But the problem was that when you started chatting with them, they had very few safeguards. So there was, you know, very quickly, there were a lot of problems with encouraging violence or the chatbots getting into erotic roleplay, let's say. And so the company faced all of these lawsuits and problems over the years. And now, I mean, at this point, their talent from character.ai was poached again, by Google in this kind of like acqui-hire AI company move that we've seen a lot lately.
00:16:44
Speaker 1: By Google and by Disney, right?
00:16:46
Speaker 2: Yes.
00:16:46
Speaker 6: And then now after Google, that was what, a year or two ago, and now by Disney, which wanted to license its technology and use it. But now I think it might be a little bit too toxic for those deals to keep going. And I don't know, I'm not particularly surprised. I think the postmortems from the company itself kind of said that there was no route toward profitability. They were spending much, much more on the compute and, you know, backend than they were making from their users and advertising that they put in chats. But I don't know what I, the kind of take that I wanted to get out of talking about this was, this is like a terrifying, horrible product that had no reason to exist. Like I used it myself to write about it. It was not safe. It was like, not good for any kind of young user. Like we think Instagram is toxic. This was like above and beyond. So I can't say I'm particularly sad about it.
00:17:45
Speaker 5: Yeah.
00:17:46
Speaker 3: I mean, I, I'm obviously not surprised that they, that they filed for bankruptcy. I mean, the company was basically acquired and, you know, the shell of the company gets kind of left to, for people to pick over it. But I mean, yeah, the lawsuit, they didn't have proper safety controls and they were basically getting decimated by these lawsuits. Noam Shazier, who was like the person you're talking about founded it brilliant engineer at Google. But he was long gone. And then I think the big question that was like, with all these open weight models, like, they're essentially are even fewer controls. Like this is this is the totally the Wild West. I mean, you can download this stuff on your laptop and run, you know, locally, these models and have any kind of chat that you want. So like, The problem isn't really solved, right? And I think we're going to have to grapple with that at some point as a society.
00:18:39
Speaker 1: I guess to me, there's two parts to this. One is like, can you afford to burn a lot of compute trying to make a consumer product? And the other is the lawsuits and safety issue. Or are they kind of two sides of the same coin? 404 Media said, quote, character AI's bankruptcy is one of the first dominoes to fall in the long-foreseen AI bubble. Do you agree with the 404 take?
00:19:01
Speaker 3: Yeah, I mean, I actually what you said before was really interesting. I think there's not enough compute right now for consumer AI. I think this is why like all these products are either made for enterprise or pivot toward enterprise because consumers don't want to pay for stuff. And so and this is a very expensive and so there just isn't there's there aren't really going to be a lot of consumer products. I mean, you news is, is one example. I have doubts about whether that's going to have, you know, long, long-term stickiness, uh, drink more Guinness read. We should have Guinness on this show. I mean, it is 9am my time, but I'll, take one for the team. No, I just think it's I think consumers really, it's really going to struggle until we have a lot more data centers, a lot more tokens to go around and and more infrastructure. I think the security infrastructure is like, it just hasn't even been built yet.
00:19:59
Speaker 6: But it's like, to your point, it's what product is worth the compute, like we're seeing that the B2B stuff is worth the compute, like super specialized, powerful stuff. What Character AI was saying was our product is teenagers chatting with fantasy characters funded by advertising and product tie-ins.
00:20:19
Speaker 1: You've got your maximum harm, minimum monetization.
00:20:24
Speaker 6: Yeah, functional purpose, I don't think so. So yeah, thinking about what is actually a functional product I think is important right now.
00:20:33
Speaker 1: Do you remember this... everything's a rapper conversation and like character AI was like, because probably was a rapper. Like, do you think this is like the 404 headline around like one of the first dominoes to fall in the long foreseen AI bubble? Like, do you think this is like a kind of like a signal that like, it's gonna be very hard for, especially on the consumer side, the non kind of extraordinarily heavily funded frontier labs as the product gets better and the funding disparity increases that like these kind of, as 404 describes them, second tier players are all going to kind of likely go the same path.
00:21:09
Speaker 3: It's too early. And it's going to, I think the lesson is it's going to take a really long time for this to play out. And which is good. I think it's good news for society, right? We're all sitting here worrying about this stuff, like, you know, moving too fast and putting people out of work, et cetera. And like, that hasn't happened. And like, part of the reason is it just takes time for all the infrastructure to be built, all the data centers to be built. And That friction, I think, in a way, kind of protects us all. So I would just say it's a good thing.
00:21:40
Speaker 1: What's the Disney of it all? I mean, it's kind of irony because Disney were very opposed to character AI and sort of accusing of it infringement, all this kind of stuff. And now the former CEO of character AI has recently become the head of tech at Disney or something. Kyle, Julia, have either of you followed that?
00:21:58
Speaker 6: Yeah, I mean, the connections with Disney and AI have been interesting. There was the OpenAI video feed collaboration deal that allowed people to remix Disney characters. That was reflived. And now Disney is absorbing some of this capacity or talent from character.ai. And I think it's interesting. If I'm Disney, I want to think about how young users interact with my.
00:22:25
Speaker 2: IP in the future.
00:22:25
Speaker 6: And chatbots could be a a part of that, but for like, like Disney is one of the most conservative, like safety minded brands around, at least as far as, you know, not encouraging children to kill themselves. So I feel like they're going to have to tread a little slower than just like a runaway startup.
00:22:46
Speaker 2: That's, that's not really playing by any rules.
00:22:49
Speaker 1: Yeah.
00:22:50
Speaker 4: I actually had an interesting conversation the other day from someone who takes a lot of meetings on the tech side, but they meet with a lot of these Hollywood executives and, I was pretty struck by how far behind on kind of integration of technology Disney seems to be, you know, they were telling me, you know, if you go to a Disney theme park, you watch Disney plus on your phone, you go to the Disney store and buy merch. Like there's these systems are still super siloed and there's not a lot of like recognizing that Julia black is the same person entering all these spaces and, you know, using algorithms to understand my, um, personal desires and my data and my background. So that was shocking to me. And the other thing we talked about was character IP. I don't know if anyone caught this like bitty blaze thing on that crossed your X algorithms. It's this character from the latest Star Wars video game that has just like caught fire on the internet. And, you know, everyone's fascinated by like the voice actor. He made some strong choices. It's kind of like, what if Jar Jar Binks like worked and because people love this guy. And you now are wondering, like, is he going to be the IP basis for a character in episode 10 or something, you know? So if these executives are smart, they're watching these things. They're learning who's interacting with characters in different ways. And I'm sure that they would have plenty to gain from a savvy use of character AI. But yeah, it's not sounding like they're totally in the 21st century on some of this stuff.
00:24:20
Speaker 1: Well, this is the perfect transition to the break, because when we come back, A major gaming company is welcoming the AI era, or at least trying to. Stay with us. Welcome back. Reid, last week we talked about reverse engineering and recreating code to build video game mashups. So now we're seeing videos online of users playing Mario in the universe of Elden Ring or skateboarding through Call of Duty. This week, to my great surprise, Xbox executives kind of seem to have leaned into the trend. And you wrote about it.
00:25:06
Speaker 3: Yeah, yeah. They started Xbox Labs. And it was basically, it's really almost not a new thing. It's like this stuff happens within Xbox. They experiment with the kind of thing that you were talking about internally anyway. But I think it's them saying to the world, hey, look, we're on board here. We can actually use this to our advantage. And it's not a massive threat to our business that literally some kid can decompile our code from our video game and recreate the game however they want on their home computer, right? And of course, the reality is, no, that's a huge threat, right? This whole idea of IP... it kind of goes away if people can do whatever they want with IP at home, right? It doesn't require some torrenting service anymore to download a ripped off piece of IP. And so I think these game companies, and this is going to spread, I think, to all software, right? They have to think about this. How do we jujitsu this and use it to our advantage? So Who knows what will come out of this, but what I think they're saying is, hey, we have a massive universe of IP through Xbox and the Activision acquisition. Maybe we'll start mashing games together. We'll see people doing stuff on YouTube and we'll copy that and try to profit off of it. But I think the entire video game world is in total limbo right now, especially because you can run these things in the browser. It's just going to be impossible to lock it all down and control it. So really interesting.
00:26:49
Speaker 1: I had Dave Buzuki, the founder and CEO of Roblox on the podcast not too long ago. And he was talking about how once Roblox kind of understood the value of world building, being part of the play, and then being able to monetize the world you build, like the platform truly exploded. And so just to do a talking read, I was thinking about like, I mean, Roblox and Xbox felt so different. And now there seems to be this kind of strange like Xbox feeling maybe it has to kind of enter Roblox territory. But Kyle, you were nodding a lot when Reid was talking. So I'm curious for your take here.
00:27:26
Speaker 6: I just love this subject. And I think now you've just proposed X-Blocks.
00:27:30
Speaker 3: X-Blocks. It is, yeah.
00:27:31
Speaker 2: Microsoft's building. That's a great point.
00:27:34
Speaker 3: It's a great point.
00:27:35
Speaker 6: It feels like there are these marketplaces that will evolve of IP and of easily remixable modules. And I don't know, my cultural critic brain just goes... to the farthest degree of this now, where it's like no cultural product is finite anymore. There's nothing that's not remixable. There's nothing that's not mashed up with another thing. I'm going to have Call of Duty set in Jane Austen and play Moby Dick as a RPG or something.
00:28:08
Speaker 1: Zombies versus Pride and Prejudice.
00:28:10
Speaker 2: And it's, I find that so interesting.
00:28:11
Speaker 1: Now you don't have to be Hollywood Studios. You can do it at home. Yeah, yeah.
00:28:14
Speaker 2: You can imagine.
00:28:15
Speaker 4: I want the whale fall meets Moby Dick mashup.
00:28:19
Speaker 3: Whale fall. But then you do get into this issue, right? Like you do get into the token issue, right? Like if, if Roblox or Xbox says we're going to have a platform, anybody can mash up whatever video game. I mean, that's going to be, the compute is going to be intense for that. So, you know, I think they're going to, it's going to be very difficult to offer that service.
00:28:38
Speaker 1: And the CEO of Xbox wrote a kind of open letter where they said, these experiments challenged long-held assumptions about our industry, the tether between software and hardware, the boundary between creation and play, and how people discover and experience games. I think those second two things we've spoken about, but what does she mean about the tether between software and hardware?
00:28:58
Speaker 3: Well, that's because it's all, like I said, it's all being done in the cloud. Like you can run stuff now, you can run like pretty high quality games in the cloud and And this is another thing that they've been grappling with. There's cloud gaming, right? And it totally works. But then that raises questions like, well, but we sell a bunch of these consoles. This console business is absolutely massive for these companies. And also these gaming PCs. This is like huge business. So all these companies have been like dipping their toes into cloud gaming. And I think this might accelerate that. And you don't need a expensive console. These consoles cost like almost a thousand dollars now, you know, and the gaming PCs can be like 10 grand, especially, you know, because of course, you know, AI data centers are driving up the hardware costs, so it's not getting any cheaper. So yeah, I think that's what it is. It's like, you know, hardware, the idea of like hardware is going away in, in gaming.
00:29:57
Speaker 1: Asha Sharma is the CEO of Xbox. And she also said, these are unmistakably good outcomes for players, even when and sometimes because they challenge our existing business models.
00:30:08
Speaker 7: That's so diplomatic, right? It's like, they're ripping off our IP. But these kids love it. Like the kids love it. And we can't go against the kids. I mean, the comments are great on these YouTube videos, too. Kyle, you were reporting on this too. Like, They're like, oh, I hate AI so much, but this makes me love AI.
00:30:27
Speaker 3: I mean, it's just incredible how enthusiastic kids are about this.
00:30:32
Speaker 6: And this kind of remix culture predates AI too. I feel like we were seeing this kind of mashup in Fortnite where you just throw all sorts of IP into a blender and that's what creates more engagement from, I don't know, the young fan base. So I feel like they can lean into this user-generated content more. They can lean into... remix culture. But what it also makes me think about is like the opposite direction, which I feel like is kind of what Nintendo is doing with the Ocarina of Time remake. So they're like redoing their own IP. They're reissuing it in a perfect version before anyone else can mess with it.
00:31:10
Speaker 2: Like monetizing it first.
00:31:13
Speaker 6: Like offering the best version of their own products and i find that compelling.
00:31:17
Speaker 1: They're trying to exert some control over their ip is xbox labs is this like a sandbox environment where xbox can can take some control over this what actually what actually is xbox labs i.
00:31:27
Speaker 3: Don't think this is like really a new thing i think it's more like codifying what they already do internally i mean these gaming companies especially xbox and they're always doing experiments with minecraft etc like I wrote about this like years ago when chat GPT was kind of a new thing and people inside Microsoft were like using generative AI to build Minecraft worlds. I mean, and now that's, that's just table stakes at this point. The other point I would make about the IP, by the way, is like the one thing people are not really doing is like just making a lot of new IP like this. Like, I think it doesn't help that these companies, like they're just milking old IP, like star Wars as much as they possibly can.
00:32:08
Speaker 1: And, You know, I don't know.
00:32:10
Speaker 3: Like, it probably makes it easier for them to sort of lose control of that because it is spin around forever.
00:32:16
Speaker 1: Julia?
00:32:17
Speaker 5: That's why we need Biddy Blaze.
00:32:19
Speaker 3: Biddy Blaze. But again, that's Star Wars, right? It's like in the Star Wars, whatever, IP universe.
00:32:25
Speaker 6: It's like now you extend the IP so far that it becomes something else anyway.
00:32:30
Speaker 1: Like, I don't know.
00:32:31
Speaker 6: Like, Star Wars and Andor feels like that for me, where they were like, what if we made a prestige HBO Star Wars show? And it's like, sure, you could, but you could also just not be about Star Wars.
00:32:42
Speaker 2: But then who would watch it? Would the fan base get as amped about it? Definitely not.
00:32:47
Speaker 3: Yeah, just make everything Star Wars. It doesn't matter what it is.
00:32:51
Speaker 6: I mean, I heard Girls is getting a sequel. It should be a Star Wars.
00:32:55
Speaker 5: Go ahead, help us.
00:32:56
Speaker 2: Star Wars Girls.
00:32:58
Speaker 3: Star Wars in a galaxy really far away from Star Wars. It's this galaxy.
00:33:05
Speaker 1: Julia, any final thoughts?
00:33:07
Speaker 5: I'm not a gamer, so I have very little to weigh in on there.
00:33:10
Speaker 4: But my only take on this is a little bit more of like a heady philosophical thing. Like, I'm always thinking about how the people who make these products think and how they see the world differently from us. And I think that there's a reason they're such gamers. There's a reason they're so into fan fiction. That's something I've been exploring. Like, you know, why did Eliezer Yudkowsky write Harry Potter fan fiction to explain his Doomer philosophy? And then it's like, why do some of them want to live in a simulation and not see that as an issue? I think we have different relationships with reality. So when it comes to remixing IP or.
00:33:44
Speaker 3: I.
00:33:47
Speaker 5: Don't know.
00:33:47
Speaker 4: There's almost something controlling and possessive about the parasocial relationships that people take with these characters.
00:33:54
Speaker 5: And they become obsessed with making them into pawns in their little universe.
00:33:57
Speaker 1: I don't know.
00:33:58
Speaker 5: Some of us feel like pawns in their universe now. And to me, it's all... connected I.
00:34:02
Speaker 3: Think someone you just need to go for a hike I think it sounds like just get out just we should all get outside you know touch you're.
00:34:09
Speaker 4: So down to earth Reid you gotta join me up here.
00:34:12
Speaker 1: Our resident touch grass philosopher that's all we have time for today thank you all so much for joining us thank you good to be here see.
00:34:20
Speaker 2: You next.
00:34:24
Speaker 1: Time for tech stuff I'm Oz Veloshin. This episode was produced by Eliza Dennis. It was executive produced by me and Julia Nutter for Kaleidoscope and Katrina Norvell for iHeart Podcasts. Jack Inslee mixed this episode and Kyle Murdoch wrote our theme song.
