Windows Weekly 995: The Greatest Depression

Summary

Podcast Summary: Windows Weekly 995 "The Greatest Depression"

Date: August 5, 2026
Hosts: Leo Laporte (A), Paul Thurrott (B), Richard Campbell (C)
Location: Live from Black Hat, Las Vegas, ThreatLocker booth

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Episode Overview

This special live episode takes place at the Black Hat security conference in Las Vegas. Leo, Paul, and Richard dive into the state of Microsoft, dissecting its latest financials, the ongoing AI investment frenzy, the shifting landscape of Windows and Office, and the future of Xbox. Alongside serious analysis, there’s plenty of wit and immersive commentary on tech culture—plus a deep dive into Nevada whiskey history.

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Key Discussion Points & Insights

1. Setting the Scene at Black Hat

• Excitement and energy at a major security event, highlighting the tech community’s vibrancy.
• The hosts poke fun at the sheer scale of Mandalay Bay and the perennial construction on the Vegas Strip.
  • "This hotel is a city unto itself, and it's full of security geeks." (A, 03:40)

2. Microsoft Earnings: “The Greatest Depression”

Microsoft's Q2 2026 Financials and Market Reaction

• Microsoft sees a historic rally, boosting its market cap by nearly half a trillion dollars after its quarterly report.
  • "They went up almost half a trillion dollars in capex in market value. The largest jump in history." (A, 05:03)
• Discussion on why Microsoft’s AI spending reassures Wall Street, while Google and AMD are punished for similar outlays.
  • "Microsoft is considered the adult in this room because everybody else went down, didn't they?" (B, 05:21)
• Paul explains Microsoft’s clever financial engineering—extending depreciation on data center hardware/real estate, and shifting what counts towards their published AI CapEx.
  • "What they're doing is this is ninja level financial manipulation. It's good." (B, 15:21)

Notable Quote:

"All of us are reading this 1873 as the book to be read... This is a book about the Rothschilds and the Great Depression..." (B, 16:47)
Satya Nadella invokes economic history, signaling Microsoft’s intent to avoid historical pitfalls with this generation’s AI boom.

AI, CapEx, and Financial Trickery

• AI CapEx in the quarter: $45–50B (up as much as 100% YoY), but actual spending is even higher due to accounting changes.
  • "Their spending went up quarter over quarter and year over year... but it's also not the real number... we're not gonna account for that anymore." (B, 19:11)
• Microsoft praised by analysts for this opacity; hosts express healthy skepticism about financial “happy noises.”
  • "There was a...analyst literally complimented them [on the call]...you guys are just nailing the financial part of this." (B, 19:32)

Value vs. Reality in the AI Boom

• Growing disconnect between “market happiness” and actionable (non-frothy) business metrics.
• Concerns about circular flows of capital between big tech companies investing in, and buying from, each other.
  • "These seven companies just exchanging $100 billion between them, that's also a shell game." (A, 22:12)
• Microsoft, Amazon, Alphabet all tout “future demand” for AI/cloud as justification for present spending.

3. Practical Implications: What Does It Mean for Windows & Office?

Windows: End of an Era?

• The hosts discuss how decades-long patterns of productivity—Word, Excel, Office—are being replaced by suite-level subscriptions and AI-first interfaces.
• Anticipation that conversational interfaces will soon dominate over legacy “direct manipulation” GUIs.
  • "I think everyone's...I think that is going to be how we interact—with speech—...that is going to be how we interact with [computers]." (B, 55:33)
• Microsoft 365's continuing strength, but clear sense the classic “Office app” model is sunsetting.

Windows Update & Insider Programs

• Paul notes real improvements but urges better transparency: features hyped as “done” are often still exclusive to certain Insider Rings.
  • “They’re making happy noises about being more transparent. But one of the ways you could be transparent is saying, ‘hey, we think this will ship in the second half of the year.’” (B, 65:09)
• Real pain points—crapware, unwanted advertising, and restrictive hardware requirements—still neglected.

Cross-Platform Frustrations

• Detailed talk about how Apple's closed platforms limit user convenience (e.g., phone link, cross-device copy/paste).
• EU regulation will force Apple to open up interop; the hosts applaud antitrust in action.
  • “This is a clear case of just arbitrary gatekeeping and, you know, locking third-party developers out...antitrust working.” (B, 74:56)

4. Xbox: Revenue, Strategy, and the Changing Face of Gaming

• Xbox revenues decline amid stagnant hardware sales and shrinking paid userbase.
• The platform seems adrift, but the hosts see hope in Microsoft leveraging IP—animated series, movies (e.g., Fallout, the Halo TV show)—and Game Pass.
  • “Make movies and TV shows about Xbox content...there’s so much IP in the Xbox space...” (B, 91:22)
• Game disc phase-out: Sony’s move to digital is inevitable, but still rankles those who view disc resale as true ownership.
  • “Physical media is dead. Get over it.” (A, 114:47)
• Prices for consoles, hardware, and components are all rising, due to supply constraints and relentless demand for RAM/AI chips.

5. Tech Culture & Memorable Moments

• The hosts riff on tech conference idiosyncrasies ("This compared to Mexico City, this is like a tranquil oasis." B, 33:11) and the nostalgia for old media and hardware.
• Extended, comedic discussions of how the computer-user interface is always evolving (from mouse to voice to AI).
• Fun in-jokes: AI-generated art, account of Vegas spa visits, and the “making dust or eating dust” slogan of a Nevada whiskey brand.

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Notable Quotes & Moments

| Timestamp | Quote / Moment | Speaker | |-----------|----------------|---------| | 05:03 | "They went up almost half a trillion dollars in capex in market value. The largest jump in history." | A (Leo Laporte) | | 15:21 | "What they're doing is this is ninja level financial manipulation. It's good." | B (Paul Thurrott) | | 16:47 | "All of us are reading this 1873 as the book to be read." (Satya Nadella, quoting the CEO’s conference call.) | B (Paul, quoting Satya) | | 19:32 | "[An analyst] literally complimented them...you guys are just nailing the financial part of this." | B | | 22:12 | "These seven companies just exchanging $100 billion between them, that's also a shell game." | A | | 55:33 | "I think everyone’s...I think that is going to be how we interact—with speech...that is going to be how we interact with [computers]." | B | | 65:09 | "They're making happy noises about being more transparent...but one of the ways you could be transparent is saying, 'hey, we think this will ship in the second half of the year.'" | B | | 74:56 | "This is a clear case of just arbitrary gatekeeping and...antitrust working." | B | | 91:22 | "Make movies and TV shows about Xbox content...there’s so much IP in the Xbox space..." | B | | 114:47 | "Physical media is dead. Get over it." | A |

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Timestamps for Important Segments

• Microsoft Earnings Deep Dive: 05:03 – 23:00
• AI Spending & Accounting Tricks: 06:29 – 20:40
• Stock Market/Wall Street Reaction: 19:11 – 22:12
• Windows & Office: The Changing Model: 51:02 – 56:03
• The Age of Conversational Computing: 55:33 – 56:29
• Windows Update/Insider Feedback: 61:11 – 66:10
• Antitrust/Ecosystem Interop (Apple v. Microsoft): 70:39 – 76:15
• Xbox: Revenue, Gaming Strategy, Future Plans: 89:06 – 104:09
• Physical v. Digital Media Discourse: 111:53 – 115:46
• Whiskey of the Week (Frey Ranch/Nevada history): 135:05 – 162:16

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Live Atmosphere, Tech Community, and Humor

• Frequent jokes about the chaos of navigating Mandalay Bay, the joys of trade shows, and nostalgia for “old tech.”
• Banter interwoven with serious critique on AI “froth,” tech business shell games, and the shifting ground under legacy software business models.

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Back of the Book: Tips, Picks, & Whiskey

Paul’s Tip of the Week

• Windows 11 Field Guide: final update after two months of intense revision. Calls it "never really done..."
  • "It is a thankless, endless job." (B, 128:01)

Pick of the Week

• LibreOffice as the go-to suite for those who want to escape the Office subscription cycle as 2021 support ends.

Richard’s Pick / Whiskey of the Week

• A lovingly detailed, history-laden review of Frey Ranch bourbon—a rare, world-class Nevada whiskey.
  • Whiskey segment runs from ~135:05 to 162:16.

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Final Thoughts

• Microsoft’s market leadership is as much a story of financial showmanship as it is technical competence; the AI boom is full of smoke and mirrors.
• The age of “apps” is ending—productivity is shifting toward conversational AI, suite subscriptions, and cloud-enabled intelligence.
• Digital-only gaming is inevitable, and nostalgia for physical media is just that—nostalgia.
• The hosts balance expert skepticism with a sense of play and community, showing that while tech (and Vegas) never sleeps, a little whiskey and humor help everyone make sense of the chaos.

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For fuller context or deeper dives, reference the timestamps above to zero in on Microsoft’s AI strategy, the evolving Windows ecosystem, Xbox’s crossroads, or even the Nevada whiskey origin story.

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End of summary.

Transcript

[A]

It's time for Windows Weekly. We are at Black Hat in Las Vegas, Nevada for a very special episode. Paul Thurot has come down. There's his elbow right there. Richard Campbell is over there. And we are gonna do the show live from the Threat Locker booth. There is lots to talk about, including Microsoft's earnings, Xbox News and yes, a local whiskey. All that coming up next on Windows Weekly. Podcasts you love from people you trust.

[B]

This is twit.

[A]

This is Windows Weekly with Paul Thurat and Richard Campbell. Episode 995, recorded Wednesday, August 5, 2026. The Greatest Depression. It's time for Windows Weekly. Hello, all you winners and you dozers too. Yes, it's a little noisy in here because. Hello, we're at the Black Hat Conference in Las Vegas, Nevada. Richard Campbell on the far right there. Hello, Richard.

[C]

Hey. Great to be back from fishing to this.

[A]

Oh my God, that's right. You were in Montana. I was Paul Thurot to my immediate left. Hello, Paulie.

[B]

Hello, Leo.

[A]

Came all. So we had people coming here from all three countries in North America.

[C]

Got them all.

[A]

Yeah. Canada, Mexico, usa. Black Hat is a big security conference, happens every year in Las Vegas as follows.

[C]

And it is huge. This is a lot of.

[A]

It is big. Yeah, yeah. Metadata, master of packets. I got that from Hoer who runs the is part. Probably doesn't run it. I want to give him a promotion, but he's part of the network operations center here. I said, is it safe to get on the WI fi? He said, oh yeah, there are 50 people in the knock up stairs.

[B]

We're going to take a tour. Last night I got on, turned my laptop, my wife's like, what are you doing? And I'm like, what do you mean? I'm like work or whatever. She's like, you told me I couldn't get on the WI fi. Oh, I told you you couldn't get on the WI fi. Me, I have stuff to do here.

[A]

The wives are here. The wives. And Steve Gibson's also here. In fact, I see him chatting to fans. We're going to do Windows Weekly now and security now. A little later on we moved intelligent machines. The normal Wednesday follow up to Monday. So we've done that one already. Yep. And we're here to talk about Windows. So we're glad you're all here. I hope it's not too noisy for you. If you are at Black Hat, come on by the booth. We are at the threat locker booth, which is pretty much to your immediate left as you come in the Business hall.

[B]

Richard's instructions were so simple. What he said, just go in the main door and go to the left. It's a shorter walk. And I'm like, all right. You know there's 18 main doors, right?

[A]

The main door was the first door.

[C]

I said the first.

[B]

It's the last door. I came from that direction.

[C]

That is the first.

[B]

Dude, if you. I went to the north hall, I still wouldn't be here.

[A]

Freaking frack.

[C]

Don't go to the north. I like my original route where it says, when you see the red Kutash. You're right.

[B]

Yeah. Right.

[A]

Oh, there is.

[B]

There's a Kunta right at the kids selling fireworks. And then.

[A]

So trade shows are fun. I always get jazz when I come to trade shows. The days of me going to CES are long. Same, gone.

[B]

This is like a muscle I haven't used in a while. Like, I. It's been a while.

[C]

It's like, you need to calm down.

[B]

Yeah, yeah, yeah, yeah.

[A]

But of course, you know, we went to RSAC in San Francisco earlier this year.

[B]

Right.

[A]

It's really fun to come to the security shows because it's a different.

[B]

I mean, quality. I mean, other. Yes. Other than a sobering look at your peers. But the way to put it. I don't know. But other than ces.

[A]

Yeah.

[B]

I, I, I can't remember. Show this big. I can't believe I. If this is big and getting bigger. Yeah. Like, this hotel is a city unto itself, and it's full of security geeks.

[C]

I'm pretty sure we changed time zones getting to the convention center.

[A]

Yeah. We're in Mandalay Bay.

[C]

Yeah.

[A]

That's what Steve was saying. He said, I can't believe how huge these casinos are. They really are massive.

[B]

I know.

[A]

And the Strip is under construction constantly as we're driving in. Of course they're building a new stadium. They already built the Allegiance Stadium for the Oaks of Radio.

[B]

I asked about that on the way, and I thought it was maybe a concert venue. And he said, no, it's for baseball,

[A]

for the Oakland A's. I'm sorry, The Las Vegas A's.

[C]

They're taking all of. I mean, Oakland's gotta be so angry.

[A]

But you know what? You can also understand why Oakland's coming here because it's going to be an amazing complex. It looks like a beautiful stadium. Sure. It's huge. Yeah, it's right off the Strip.

[B]

That thing will never be open to the air. It's perfect, right?

[A]

Yeah, it better not. It was 13° when we arrived.

[C]

Yesterday. Yes.

[A]

It's not nice outside 13° and yet it's 64° everywhere inside.

[C]

I know.

[A]

So the shock of going out is

[B]

like you're going out in the room. Didn't kick off for one second. It was just constantly going, just fighting for it.

[C]

Yeah.

[A]

So Paul, you said there's nothing to talk about this week. That's too bad.

[B]

That's all we got. Thanks for showing up everybody.

[C]

I appreciate it.

[A]

Microsoft had an amazing stock market rally last week after they put out their quarterly results. It was right at the end of the show last week. The next day they went up almost half a trillion dollars in capex in market value.

[C]

Crazy amount of value.

[A]

The largest jump in history.

[B]

Yeah. So I think it says something about AI and finances that Microsoft is considered the adult in this room because everybody

[A]

else went down, didn't they?

[B]

Yeah. It just doesn't make any sense. Market punished Google Market punched AMD yesterday they had a 50% jump in revenues year over year. 50 and they.

[A]

And the stock went down.

[B]

The stock went down like at the time 9 or 14%. I remember the number.

[A]

But for the most part the reports are the market didn't like how much these companies were spending on building Right. Data set.

[B]

But they love how much Microsoft's making. Right.

[A]

What is the distinction?

[C]

Well, Microsoft is being more conservative with their spend.

[B]

You give me the number, I'll look at it when we get to it. But it's I. They've raised their estimate for a capex spending this year. That raising of spending is accompanied by an accounting change where they're not going to put any of their physical, non component physical assets into the AI spend. So they're still spending more money than they're. They're spending more than they were. They're spending even more than they were. But we're not, we don't get to

[C]

know importantly they are concealing it and Wall street loves that.

[B]

They're doing it really well. Yeah, the concealing part is going great. I don't know, it's like financial shenanigans. It doesn't ever make sense.

[A]

And I almost really feel like it's silly to talk about market valuation because yeah, that's not what we care about. We care about how but it is an indicator, it's a bellwether. It's at least how the world feels.

[B]

Mark.

[A]

Microsoft's doing with its business.

[C]

The traders feel.

[A]

Yeah.

[B]

There's a Corey doctor I was making the rounds, you know he has a new book, whatever. Right. So there's a He has a 90 minute interview with Jon Stewart from the Daily show and he's, he's probably made this comment elsewhere and I'm gonna, I'm gonna screw it up a little bit. But he said something like, you know, there's these AI doomers who think like AI is gonna drive this planet into the ground somehow. And he's like, you know, the, the, the great spell checker in the sky is gonna turn his paperclip somehow. And he's like, I don't think you understand how science works. You know, it's like, it's, it's, it's, it's, it's, it's helpful sometimes just to kind of hear someone say something like that.

[A]

Yeah.

[B]

Because the amount of money that's being spent on this stuff is just.

[A]

Well, give us the top line. What are the learnings from the earnings?

[B]

Yeah, well, let's get, let's. I mean, first of all, just basic finances. Right. So Microsoft revenues are $90 billion in the quarter. That's a gain of 18% year over year, interestingly, in this quarter for the first time, and I'm going to call it 5 or 7/4 intelligent cloud, which is the part of the business that's Azure, which is also where a lot of the air, not all of it, but a lot of it is kind of in there. Is now Microsoft's biggest business again. It hasn't been for a while because Microsoft moved. Actually it's probably four quarters. They moved Windows revenues associated with Microsoft 365 AI, I, e. Sorry, everything's AI these days. Commercial Windows revenues into business. Sorry, Productivity and business processes, which is the.

[A]

We're getting you a latte. Don't worry, it's gonna be all right.

[B]

It's a little early for me. By the way, this is the stupidest earliest time I've ever done this show by far. It's true. It's weird. Like it feels even though we normally

[A]

do it at this time. Well, but you're in a new time zone.

[B]

Yeah, I guess it's a no. But it's, it's still an earlier time. It's like we started an hour earlier. For me it's 11:00am or when it started.

[A]

Yeah.

[B]

Normally it would be 12 in Mexico and two and.

[A]

Okay, so it's not too bad for your Mexico.

[B]

It just feels weird. But anyhow, so intelligent Cloud Again, number one, almost 40 billion in revenues, 32% gain year over year. That's crazy. Avenue Azure. I can't say anything. Azure revenue growth was 43%, which is it's been in the 40s for a long time. Before this AI boom, Azure revenue growth falling from the 70s down to the 40s was a problem. Now that revenue growth is the greatest thing Wall street has ever seen. They are in love with this because

[C]

one of the conversations we had as AI emerged in 2023 was this is perfect timing. That's why they're all over this. Because their cloud numbers were starting to fail. They were coming down enough where it's like, hey, we've taken the easy market. Now it's going to be a battle. Oh, wait, we have a new product, right?

[B]

Don't look over here, look over here.

[C]

Yeah.

[B]

So productivity and business processes number two close, right? Almost 38 billion in revenues, gain of 14%. And then the sad trombone that is more personal computing. So this is Windows, Surface, Xbox and then some kind of ad and search stuff. 12.9 billion in revenues.

[C]

Loving that. That's the sad trombone. 13 billion.

[B]

Well, 13 that's going down. I mean, it is a decline of 4% year over year. But you can see it, you know, it was in the thirteens. It was, you know, there was a time when these businesses back when 11 billion a quarter was a big deal. Yeah, they were all roughly 11 for a while.

[C]

Yeah.

[B]

So the other two are now three times as big. And this one is like, you know, kind of just right, you know, where it was.

[C]

I think it's in declining, you know, and declining.

[B]

Yeah, it's like, wait, I have a third child. So it's just out there doing whatever it's doing. Not so great. So let me see if I can

[A]

find Xbox doing these days.

[B]

Excellent. I'm glad you asked. Yeah, not excellent.

[C]

So good. They have a whole. We have a whole segment on them.

[B]

Yeah. Actually the Xbox segment today is pretty great like this. There's a lot of Xbox stuff going on.

[A]

They're not making a lot of money.

[B]

I didn't say that, I just said so. Capex spending on AI, 45 billion in the quarter. And I don't have it here for some reason. I'm not sure why, but that's dramatic. I believe that's up possibly as much as 100%. It's a giant.

[A]

Now I understand why they're not getting public punished because other companies. It's three figures. It's like 130.

[B]

Well, this is one quarter.

[C]

This means 180 billion for this.

[A]

Oh, never mind. Yeah, they are right there with the best of them.

[B]

Yeah, no, they're going for it.

[C]

But I like that they're quoting quarter numbers like they're literally playing games to make people comfortable.

[B]

No, it's.

[A]

So apparently they fooled the market.

[B]

Their estimate for the year and it's not clear to me as I say this, that they mean their fiscal year annual, it doesn't matter but $205 billion. Oh, I'm sorry, I'm reading the wrong. I'm absolutely reading the wrong numbers.

[A]

Sorry, you're talking Capex here.

[B]

And the numbers I just gave you are for Google because I was making a comparison of these things. So the problem with Google, there were two things in Microsoft's earnings in the call afterwards that were directly related to what just happened to Google but without mentioning Google at all. Right. So Google had raised their yearly spending estimate of 205. That was the narrative escape. Sorry, that was Google, not Microsoft. 99 billion of Google's revenues actually came from investments it made in other AI companies. Right. And I think I might have talked about this a little bit last week, but they were cash negative, which is the first time in the history is crazy cash flow negative

[A]

for Google. That's saying something.

[B]

But yeah, but think about the given how much money, how bizarre is it that you are investing in your competitors and they made almost $100 billion.

[C]

Right.

[B]

Investing in the companies competing with them. I mean one of them is a partner, but they're still competing. Right. And that's nuts. Like Microsoft's number for that was somewhere in the 13 billion. It was a really small number actually it was even smaller was because they lost money in OpenAI. They, they had like 2.8 billion in investment gains. 2.8 versus 99. 99 basically. It's insane, right? Yeah. So I'm actually, I'm trying to find this number for Microsoft me so I can do this. I can't. All right, so we'll get to it. Where is Microsoft's investment number? Barely see this thing.

[A]

Anyway, you said in your notes Microsoft finds a new way not to account for AI expenses.

[B]

So this article generated an email for Microsoft PR to ask.

[A]

Let us explain.

[B]

Well, it's weird.

[A]

You don't understand, Paul.

[B]

No, no. Oddly they didn't quibble about any of the big bits. It was more like I had this comparison of short, medium and long term, not investments, but rather like the way you account for the cost of a thing over time.

[C]

Right.

[B]

Depreciation essentially, I guess. And they changed two quarters ago the way they depreciate hardware in data centers to extend the life. And I had made the observation at the time because Amy had literally said in a conference call that we found that the longer we use this stuff the more efficient it gets. And I was like, yeah, I do the same thing with the cars. The tires of my car. I just run them until they're bald and it's more efficient. There's no, there's no friction with low rolling friction. Yeah, it's great.

[C]

It's all good until you turn.

[A]

Perhaps you're thinking of generally accepted practices. We're non gap.

[B]

Yes, I am. Yes. This is.

[A]

Our gap is 1 millimeter.

[B]

So I don't have this in the show notes but this is another thing Curry doctor just said which I, I did not see and I'm fascinated. They did this because I, I was ragging on Spotify a quarter ago because they don't. They were claiming a profit when if you actually look at their books they, they did not have a profit. But if you don't look at it using generally accepted accounting principles. So Anthropic just did the same thing. Yeah, they're like if you just ignore the legal standard worldwide for accounting, we're doing great non gap.

[A]

We're making money.

[B]

Yep. So.

[A]

So the SEC lets them as long as they say it. Well, we aren't using generally accounted except accounting practices here.

[B]

Well, by the way, I'm so first of all Spotify is a Swedish company that doesn't play Anthropic. Are they a publicly held company?

[A]

No.

[B]

So who cares?

[A]

So it doesn't matter.

[B]

They can do whatever they want.

[A]

Right. So Microsoft on the other hand is a publicly traded company.

[B]

Yeah. So what they're doing is this is ninja level financial manipulation. It's good.

[A]

I don't try this at home. They're trained professionals.

[B]

Yeah. I'm struggling to find this number. I'm so sorry but it doesn't matter. So last year they spent 145.3 billion on capex related to AI infrastructure. I do have that here. I just went through this whole thing.

[A]

So they're going from 145 to about 180.

[B]

It's probably closer to 200 but eventually we'll come up. There was so much weirdness in this conference call. At one point someone actually asked about it was either ROI or just the spending or whatever it was. And Amy Hood answers first course she goes to this whole thing and whatever. And then this is Satya Nadella's contribution to this conversation is that this is a quote. All of us are reading this 1873 as the book to be read. And so in my Mind, I think you've got to get the product shape. Right. So Chris, you hear that? You're like, what, what, what's that? It came out of nowhere. Like there was no, there was no explanation what he meant by it.

[A]

Well, everybody's reading it, Paul, don't you.

[B]

Everyone in the senior leadership team's reading it. He probably handed it out for Christmas or something. Right. So this is a book about the Rothschilds and the Great Depression and there

[A]

was a big crash in 1873, maybe the biggest.

[B]

Are you like, are you.

[A]

There's also a book about 1929 ironically, I guess that's a popular.

[B]

Maybe now.

[A]

Right.

[B]

Well, there's going to be one about 2026 too, Leo, because like, like, like you're. I'm sorry, you're reading up on how people destroyed the economy.

[C]

Yeah.

[A]

Just in case. We got to be ready, we got to know what to do next.

[B]

Just came out of nowhere.

[C]

It's a great reference.

[A]

So it is actually. It really is kind of a deep cut.

[B]

It's just so bizarre. I was like, you know what?

[C]

Black Friday is not going to do it for me. Can we go darker? What's darker?

[B]

Yeah, you, you get like a. Right. Literally the great, the Great Depression.

[C]

Yeah. So is there a Greater Depression? Oh, 1873.

[B]

Yeah. This is gonna be the best depression. This is the greatest depression. It's a record scratch moment. It was just really strange to me. So I think it was two quarters ago, sometime in the past year, they did an accounting change, like I said, to spread out the cost of these AI hardware components over a longer period of time than they've ever done. There is actually a standard of sorts for that how you depreciate things over time. But they've extended it by 100%. So they're doing the same thing now with real estate related things. So property, buildings, things that are not the actual components, but the land, the whatever the things are. And they're going from 15 years to 25 years on the leases on that stuff. Wow. And.

[A]

And that's one way it's. It's just like your tires, I thought analogy.

[B]

It's the Apple upgrade thing, you know, it's like now instead of. Yeah. Spread it over three years, you know, so except for a big company with spending hundreds of billions of dollars. But there's another thing that's tied to that. They're not going to account for that cost in their capex spending for AI anymore. So it's going to. Because of, because of the nature of that change. They can account for it differently legally and it will not be included in these numbers. So when their spending went up quarter over quarter and year over year like it did in this quarter and I'm still looking for that number. It's killing me. It doesn't. Maybe this quarter did, but going forward it will not, it will not include that number. So if you say something like, well, it went up 50% year over year, it probably went up 60 or 70% because we're not seeing part of the, the number anymore. You know, it's going to be in the same column, so to speak. So I thought that was just rather incredible. Microsoft will spend $50 billion this quarter. Right. Which they've not accounted for yet, but they will. That's a 25% increase quarter over quarter. But it's double the figure from a year ago.

[C]

Right.

[B]

Okay. But it's also not the real number. Like I said, it's probably 60 plus billion because we're just not gonna, we're not gonna account for that anymore. We're not that. We're gonna pretend that's not a cost. And I think that explains their Wall street, you know, acceptance and their market cap jump. There was a. One of the ns literally complimented them.

[C]

Yeah.

[B]

In the call for making this change. They're like, oh, you got. It's like you guys are just nailing the financial part of this.

[A]

But our analysts kind of sycophantic. I mean, is that mean, is that meaningful that they are.

[B]

So if you ever listen to a conference call. Apple, Google, Microsoft. Yes. There's a lot of suckling going on.

[A]

It's cabinet meeting.

[B]

Gross.

[A]

Yeah.

[B]

It's like, oh, guys, nailing it in the quarter. Good job.

[A]

Yeah.

[B]

Softball question. You know, then and it's like, what are you doing? Your job is to protect people's money. I don't understand any of this stuff. But yeah, so I don't again, I still can't find this damn number. But it's somewhere. Trying to see if this. It's somewhere in the 48 billions so it's 41 billion. 31.9, 37.5, 39, 34.9 for the previous four quarters.

[A]

So that's the quarter by quarter capital

[B]

expenditure this quarter past quarter was in the 40s. The next one will be 50. Okay, they've said this. This is not a guess. This is what they said.

[A]

So pay no attention to the total.

[B]

The total it is 175.

[A]

Just look at the subtotal.

[B]

But the only reason they didn't Raise it is because they took part of the cost out of that equation. Right.

[A]

So it really would be more.

[B]

I'm thinking it's going to be, I don't, I don't want to say 200 billion, I don't actually know, but it's north of that number somewhere.

[A]

Right? It still doesn't. I mean surely people buying Microsoft stock, institutional investors, serious traders, aren't fooled by this number game. They know.

[B]

Well, it's not. So you're right. But I, but I feel like they also. Look, maybe you understand this is a game because the Wall Street's a game. It's a lot of marketing. It's like who's feeling good about stuff right now? It's not really about really.

[A]

When you buy a stock, you're not saying believe this company is going to do well. It's, it's what I think other will pay for the stock down the road.

[B]

And if you are a Microsoft investor, you probably don't care about Windows or Office or Azure or anything like that. What you care about is are they speaking happy thoughts and making the stock go up? And they are. They're killing it as long as the number goes up and they're like, yeah, that's what I want. I want explosive growth and I can sell this thing off when I want to.

[C]

So that's why they were complimenting and say, hey, great way to come up with a way to get your stock price.

[B]

Exactly.

[C]

So I can get out at a profit.

[B]

It's insane. It's.

[C]

By the way, it worked, right? Yeah.

[B]

18%, 100% worked. Yeah.

[A]

So, all right, so we've now given great advice for the investor, the retail investor. Don't fall for this. But what does it mean for Microsoft's business?

[B]

Really?

[A]

Not so much it's Capex or they're

[C]

making scads of money.

[A]

They are making money.

[B]

I mean, kind of eliminating that. I realize that's the point. But if you kind of eliminate that we're making a ton of money. Well, in some ways the question should be like, but how are you making a ton of money? Right.

[A]

You know, what's the long term prospect for that?

[B]

Yeah, there is this circular thing with, you know, again not to keep mentioning

[A]

and all of this, these seven companies

[B]

just exchanging $100 billion between them, that's

[A]

also a shell game.

[B]

This is 100% what they're doing. Part of Microsoft's big investment in OpenAI is them exchanging money with each other that never came from anywhere. It's like we're going to Invest X amount of dollars in you, but then you're going to pay back to us. Because using Azure infrastructure, same. There's never been an actual check, but it's just kind of. But both of them can book this as some form of revenue.

[C]

Right.

[B]

And it's like, how does no one see through this? I, I don't know. It's incredible. I.

[A]

This is just a general. Well, this is what puzzles me. You could have, you could say you have. I'm generally bullish over AI. So I think Microsoft's investments in AI infrastructure are going to pay off. But why doesn't, why doesn't Google get the benefit of it out there? Why is it.

[B]

Well, Google's. Oh, I'm sorry. Never got to that point. Google had run, you know, cash negative, cash flow negative. First time ever. Microsoft in their conference call mentioned, like I said, two things related to this. One was we are not cash flow negative. I don't think they've ever discussed cash flow because why would you? Obviously your cash flow positive, you're Microsoft, you're making a ton of money. It's just something that doesn't come up like Google, unlike Google. And we don't anticipate being cash flow negative at any time during this fiscal year.

[C]

Right.

[B]

Which is kind of a weird thing to say aloud because that opens the possibility you could see it happening in the future. Like, it's a weird thing to say, but it's something that's hard to project.

[C]

Right.

[B]

Yeah. And. But it's also something they would never have mentioned otherwise. I, They've never mentioned that. I. But. And their cat, actually their cash flow position is very positive. So.

[C]

Yeah. I don't know why she didn't say we have no expectations of not ever being.

[A]

They are limited a little bit about forward.

[C]

I think you're right.

[B]

They are. But also you, you might have anticipated this coming as a question because this just happened at Google last week so. Or the week before. I. But they said it proactively. They didn't wait for someone to ask about it. Right, right.

[A]

And no, I think that's relevant. That was in the light of what Google said. I'm sure you're right. And you know what, that might be the single sentence that made the $442 billion difference in their market.

[B]

The one thing, I'll say, one thing you hear consistently from Amazon, Google and Microsoft is they talk about they book revenue and they also book potential revenue or future revenue or anticipated future revenue in kind of different ways. But they all use the same Language they say, you know, we booked whatever it was we did. We don't have the capacity to meet the need that we see. We're spending to try to meet that need sometime in the future. We could have booked a lot more if we just had the capacity that we're now building. They all say this. So what they're trying to do is explain why they're spending all this money. Because if we had the business our customers say they would spend with us, this would make sense financially. But I feel like there's a big gap between here's a check for the service you offered that I'm paying for and I might sometime in the future want to use this service. And of course Microsoft's like, I mean if you're just guessing how much do you think you would spend on that? And they're like well it might be this much and like cool. And they use this to justify the spending. It's just that the spending is so, it just feels so incommensurate with what people would actually. What are people doing with this? What are they doing with it? Like I, all I hear is that nobody uses Copilot. What, what like what is, what are they spending it on? Like what or what would they spend it on? I, I'm, I'm having trouble understanding like you know, like a, a Windows license or an Office license is this thing you sort of understand. You have business customers, they have X number of seats or employees, they're sitting there every day doing work, whatever. The AI stuff feels so nebulous. Nebulous. It's also bigger, you know, some somehow, you know. Whereas you know Mike, whatever the percentage, some single digit percentage of Microsoft, 365 commercial subscribers are also paying for Copilot. It's tiny. It's still tiny. It, it went from 20 million seats to 30 million in one quarter. Which is like yeah, that's crazy.

[C]

But on a billion something.

[B]

See it's still only 6.7% of the user base. So you know, it's easy to jump big when you're small. You know, chat GPT just passed the 1 billion mark right. the time of this article I wrote it was 900 million. But now it's what we know, it's over a billion now those aren't billion users paid users, right? I mean probably mostly not.

[A]

Yeah.

[B]

But there's some percentage of them are.

[A]

They've got mind share.

[B]

Yeah, yeah.

[A]

In fact I've seen.

[B]

Oh it's, it's actually it's roughly 50 million people pay for 20. 20 buck probably. So it's. Yeah, whatever that percent. You can't do simple math. But, but it's. That's a bigger number than 5%. Yeah. What Microsoft has.

[A]

Yeah.

[B]

You know, as far as paid, paid subscribers, I don't know. I don't know. But they just see this, you know, they always talk about like GitHub, Copilot. The one thing they dropped, remember they just went to usage based pricing. Right. So the previous quarter before that happened that they were talking about, hey, we have X million users, we have X number of paid users that at that time it was 4.7 million. They didn't mention that number this quarter. I bet it went down. Right. But they're also charging those people more. Right. Because now they're actually, you know, I don't know. I don't know. What? I don't know. So there's that and then just looking at like individual businesses. Windows is going great, Xbox is fantastic. I think we just gloss over all that.

[A]

What is the driving business for Microsoft now? Is it Azure? Pretty clear, right? Finally. That's a good point.

[B]

Well, this is, you know, in fact

[A]

that was a good move to make Satya the CEO.

[B]

This is, I mean they were already

[C]

on the Azure path, right?

[B]

Yeah.

[C]

But Satya navigated that ship fairly well.

[A]

Oh, we finally have. Thank you.

[C]

Wow.

[A]

We finally have some.

[B]

I'm going to jump off a diving board and dive right into this.

[A]

Juice is here.

[B]

Thank you.

[A]

Thank you, Lisa.

[C]

Thank you.

[B]

Look, in the history of just our industry, but of really every industry, I would imagine there's always this kind of fake it till you make it thing. And there's always this notion that you have this successful product, but Wall street being Wall street, you have to sell the next thing. So you're always promoting something else. And there's this thing that's really making the money and you don't talk about that thing. Right. It was Windows for a long time and still is to some degree. It was Office for a long time. But Wall street wants to hear about the new and the exciting and that kind of thing. So I think, you know, you could make the argument that's what's happening with AI. The problem is just the kind of exponential price of it. But yeah, Azure, I mean, how old is Azure? When did they announce Azure?

[C]

20 years ago, 2008.

[B]

Yeah. So almost not quite 20 years, but it's been a long time. So it's, you know, now it's. And when they announced that no one knew what it was, they had no. Like, what is this?

[A]

I didn't know how to even say the word.

[B]

What are you doing? Right. Couldn't even pronounce it.

[C]

Where's Ray Ozzy?

[B]

I know this is all Ray Ozzy's fault. They knew it. You know, Apple did this. I always talk about Apple in the 80s, like, Apple II. Apple II was making all the money for the company. They were trying to sell a Mac. Nobody wanted it, you know.

[A]

Right.

[B]

And eventually desktop publishing happening and happened. Obviously now that thing still exists. But, you know, this is why we

[A]

are good businessmen and we really understand this and we should really.

[B]

I am not a good businessman.

[A]

This is like the wrong people to talk to.

[B]

I don't know what you're talking about, because I am.

[A]

Yeah, they seem to know what they're doing, these guys.

[B]

Listen, I don't even. My wife doesn't let me carry money. I was at like a. Like a. Like a fair thing. And it was like a cookie that was a dollar. Like, oh. And I looked at my wife and I said, can I have a dollar? And this guy next to me dispersed the lights, like, what are you, a child? And I'm like, I don't have money. I want a cookie. You know, daddy wants a cookie. You don't want. You don't want to give me your money. But I don't know, whatever. So there's this weird thing, like, Windows is as an example of kind of a weird business. They sell licenses, but the licenses they sell don't always match up with what's going on in the industry because there are different factors. Right. So as last year, especially as we got late in the year and then into the beginning of this year, PC makers knew that component prices were going up, so they were buying up components and thus buying up Windows licenses. So there were a couple of quarters there where Windows kind of benefited from higher than usual sales, because when you compare the growth in that business to the growth in actual PC sales, they didn't line up.

[C]

They were lined up.

[B]

There were more. More Windows license sales and fewer PC sales. But now we're hit with this quarter, we hit the opposite. They've now stockpiled Windows licenses. So this past quarter, PC makers were not buying a bunch of them. So that business declined by 7%. You know, okay, so we kind of go up and down. There's probably going to be another cycle of this because component prices are only going to keep going up.

[A]

Xbox, you know, is Surface at this point, a hobby?

[B]

Yeah, it always has been. Really. Right, right.

[A]

Never really Took. Did they think it was going to be more.

[B]

Yeah, of course.

[C]

I always looked at it as it was the reference hardware. Encourage the vendors to make better gear.

[B]

Yeah, that is definitely how it started. But the thing is, you know, they saw this as. Remember at some point There were like 18 different surface models. They had all those peripherals and different things. I mean they really kind of expanded that into something and now they've retracted it back through. We basically have two core models and that's it. Like that's the business. And you know, there are consumer versions and business versions. I.

[C]

Well, you never know. Lenovo are the guys who now make all the crazy models.

[B]

Right.

[C]

And so it's like as long as that exists, do you need to make it right? It's.

[B]

Yeah.

[C]

I mean I appreciate the ultra they're making. Right. The 128 version.

[B]

Right.

[C]

Is that feels to me like a reference model. I thought this is going to be ridiculously expensive and for you few fools who want to spend that much, fine.

[B]

Right.

[C]

But it's as a high watermark for the Dells and Lenovos and hps of the world to go. Well, I guess.

[B]

Look, this is the same conversation we're starting to have about Xbox, which is you have these partners that are really good at this thing.

[C]

Yeah.

[B]

They operate in a really low margin business. They're doing fine. I mean they make money so they're doing something right. Maybe let them do that. And Xbox definitely. But Surface for its entire existence, the whole time has been like, why are you doing this? Yeah. If this thing is never going to be profitable, I don't get what the point of this is. It survives such an adela, which is astonishing.

[C]

Yeah, but only barely.

[B]

I know, but it's still. Yes, well.

[C]

And it's lost Panos, like from the moment Panos was out the door, we're all like, surface days are numbered here.

[B]

Yeah, that's true. He was there from the beginning. Almost the beginning.

[C]

But yeah, it was kind of his thing.

[B]

Yeah, it became his thing. Yeah, yeah, yeah.

[A]

If you're just joining us, you may notice it's a little noisy here. We decided the quiet environs of Paul and Richard's homes was just not conducive to good thoughts.

[B]

So we decided honestly, this compared to Mexico City, this is like a tranquil oasis.

[A]

Garbage. We are live at the Black Hat conference in Las Vegas, Nevada. We are thanksing thanking Threat Locker for letting us take over their booths space a little bit. Actually they have quite a bit of booth space. It's A very large booth. And they have other things going on around the corner as you might be able to hear. But we're really glad we could be here. And it's a fascinating conference. We're doing Windows Weekly in a little bit. We'll be doing security now. Steve Gibson's here already getting ready for that show. We will continue with Windows Weekly in just a little bit. Stay right here. We'll get right back to Black Hat in just a moment. But first a word from our sponsor, Windows Weekly, brought to you today by Sara Sync. Oh man. If you run Microsoft 365, you know this one, you need a coworker's number. So you're digging through teams, email, maybe your HR system just to find it and then somebody updates the number and now it's wrong everywhere else it lives. The global address list looks great on a desktop, useless on your phone. If you're using an iPhone, are you using a Windows Phone? And there's always that one shared contacts folder that some poor person is maintaining by hand. Do you want that? No, you don't. Sirasync can fix this permanently. It works with Microsoft 365. It pushes your company's contacts, calendars and your whole gal to every user's Outlook and phone automatically tenant wide. And the contacts just show up in their address book and they stay current on their own. So go to sarasync.com windows and book your free demo. The Sirasync team walks you through how convenient and hassle free it is and can even help you get set up on the call so you can roll it out across your whole organization. That's sirasync.comwindows to sync your whole company's contacts and calendars automatically. C I r a s y-n c.com Windows thank you so much for supporting Windows Weekly. Now back to the show floor. Welcome back to Las Vegas, Nevada, the Black Hat Conference. Leo Laporte going live from the threat locker booth. We're doing Windows Weekly. Paul Thurat is here, Richard Campbell. We've been talking about the earnings learnings from this year's mic or this quarter's Microsoft's results.

[B]

I need like an anteater tongue so I can drink this.

[A]

Oh, here, let me just.

[B]

Thank you. Leo.

[A]

Slide your microphone out of the way. Look at that, look at that. That's teamwork, baby.

[B]

So every 30 seconds, if you could just do that.

[C]

Pull the microphone back.

[A]

Yeah, it must be hard. We're wearing headsets so that the sound

[B]

is a little bit better.

[C]

It's a very NFL rig, right?

[A]

Yeah. Yeah. I feel like Pat Summerall or something.

[B]

Someone give me a football. I'll demonstrate what a play looks like on the carpet.

[A]

Don't run out there. The problem is Paul, poor Paul is suffering as he needs this coffee and he can't. He can't bring it in with the microphone there. So I'm glad to help.

[B]

I'll just dip it in.

[A]

Just dip it.

[B]

Suck them up.

[A]

Be good. So are we done with earnings or have we done.

[B]

Oh, no, no, no, no. We've only just scratched the. We've only just begun. Well, no, that's right. I mean, I'm. I'm sure we're at least halfway through it, but I. Oh, my God. Well, you know.

[A]

No, no, let's get the learnings.

[B]

When, when Microsoft announces their earnings, right. You go through the. What they report and then you go through what they say.

[C]

Right.

[B]

And is that record scratch moment like with Amy? I think it was am. Yeah. Amy Hood. No, sideshow with the broadcast. Usually it's Amy Hood, but this, yeah, this, this, this quarter, it was sideshow. That was good. But then you see things like this. So maybe there's someone in the discord or whatever who could look something up and prove me wrong. But Xbox content and services revenues declined 10% year over year. Okay. Microsoft cited strong first party content performance from the year ago quarter. I'm like, what? So somehow one year ago from now, there was some big game release that did so great that the comparables were negative or were tough.

[A]

All the numbers changed.

[B]

So I looked at, I looked at what we wrote a year ago to see what was out. I couldn't find anything. Right. I don't know. So I'm like, okay, maybe I, you know, so I don't know what to say about that.

[A]

Oh, I know. It was that, that three month period where game pass cost a million dollars.

[C]

Right.

[A]

Actually, they made all the money that could be.

[B]

I mean, they. When did they reverse that? I don't remember.

[A]

How long did that last?

[C]

Not long.

[B]

Not long. It was less than a year, I think. Okay.

[A]

And I doubt they made a lot of money on it just because it was so much.

[C]

I got a lot of cancellations. Well, really got.

[B]

Allegedly lost a million. At least a million people over that.

[A]

Nope.

[B]

See you later. Yeah, yeah.

[A]

I mean, they found out where the limit was.

[B]

Right? Right, right. How much can you charge people before they notice? Well, apparently it's $30.

[C]

Yeah.

[B]

You know, hardware declined 13% year over year. The year ago quarter, hardware revenue declined 32% year over year.

[A]

Yeah. Hardware is not going to be.

[B]

When does it hit zero and bounce?

[A]

Let me ask you a structural question. I don't know about Microsoft. Different companies handle this differently. It's always a challenge as the company gets big to keep that. Jeff Bezos used to call it the day one fervor like of a startup where you really gunning for and the way companies do it is different. Does Microsoft.

[B]

Yes.

[A]

Kind of say, okay, we're going to give you a division, turn it into a billion dollar business and you live. But. But treated autonomously. That they kind of say, go ahead

[B]

and do a couple, a couple of things. Billion dollars is so quaint. What is wrong with you?

[A]

It's a billion dollar business.

[B]

It used to be a number. Yeah. No. So sometime in the past year, you might remember this better than me, but Satya Nadella kind of said internally, we're going to run this thing like a startup. And this is when he ceded a lot of his CEO responsibilities to other people. Right.

[A]

Give them autonomy.

[B]

Because what you want is that robot coming into the room and telling you like, geez, like making you prove your worth, you know, to the CEO.

[A]

Scary.

[C]

It's awful.

[A]

But you know, that's what Jack Welch did at GE and he pitted different executives from different divisions against each other. Who's going to have the best numbers? And he felt like, I think he was wrong, but he felt like that kind of competition made everybody better.

[B]

We just mentioned Ray Azzy. So one of the things Ray Azzy. I love Ray Ozzie. The one thing I think he might have made a mistake with was he had too many different teams working on the same kind of product at the same time. And the idea was the best will win out, but the it's Microsoft. So in the end what we did was we had five different versions of the same thing.

[A]

Yeah, that's.

[B]

It's kind of the. Kind of a bad thing.

[A]

There's also the risk of demoralizing people.

[B]

Yes. And that ties into. So what Kosacha Nadella compared to Jack Welch is not about people in the company coming up with competing ideas and you know, challenging each other. He just brings in people from the outside and outrages everyone who's in some executive position because they just gave a job that they should have had to some guy who used to work at Meta or Instacart, Asha Sharma's case or whatever. It is. Like, I don't know this for a fact, but it does feel like far more upper level people are coming into Microsoft today than at any time.

[A]

Interesting.

[C]

Coming in in very senior roles, that's

[A]

really saying to the existing team, we

[C]

don't think you're good enough.

[A]

You're not good enough.

[B]

Right. I mean, how many different ways can you say that?

[A]

Multiple rounds will last 10 days, 10,000, 20,000 people.

[C]

Yeah.

[B]

Right. And then you do a buyout which was, you know, really successful, where you're literally targeting the old guys. People have been there the longest, making the most money.

[C]

Yep.

[B]

Just trying to get rid of those guys. I mean, which is whatever. I mean, one way to do it yet.

[A]

The stock market loves Microsoft.

[B]

Love it.

[A]

And that may be what they like. Actually, I think they like a ruthless leader.

[B]

Wall street does love layoffs. I mean, it's kind of a weird thing to say, but just in general, getting rid of overhead like that to Wall street is one of the greatest things you can do.

[C]

And I'm all about ruthless. But is it effective? Right. Are you actually getting results?

[B]

Yeah. I don't know.

[C]

I got all the empathy in the world for Ashalmer. She seems like she's got a lot going on.

[B]

Yeah.

[C]

And she's young.

[B]

Yep.

[C]

She doesn't know a lot about gaming, but she's pulled a lot of good people.

[B]

Maybe. Maybe what that business needs is someone who knows and business more, you know, maybe the problem, like, I love Phil Spencer. I will die on that hill. I think he was great. I don't know what he was like as a business person. I don't know that Xbox maybe had the. I don't know what to call it. Financial discipline or whatever it was, you know, because at one point, very late in his tenure, he came out. You know, I referenced this recently. He said, you know, it's a lot of studios around here that aren't producing. And this really is a. What have you done for me lately? Business. It's wonderful that 20, 15 years ago you made some awesome game. Congratulations. We all loved it. But what are you doing right now? Because right now you're just collecting a paycheck and you guys are working on stuff, but you don't ship anything.

[C]

It's no games.

[B]

Yeah. I mean, it's so. Look, it's a tough business. I don't know. I'm not. I don't know the business side of it.

[C]

But the thing that impressed me about Ash Sharma is that the caliber of people who went to her. Right. You talk about a leader like they don't have to know everything, but can they put together a team? There were a lot of Folks from across Microsoft that went with her.

[B]

Just looking at Microsoft, I have experience with people at upper levels of whatever business were super knowledgeable about the technical aspects of those products. Right. And I've seen the opposite too. I've. And at first this was kind of shocking because I think Microsoft and how I kind of came up with Microsoft came out of a real engineering background. A lot of people were very technical. They were programmers and they kind of moved up in the company and so they knew stuff, you know, about the products and things. And then you eventually run into a guy who literally has no idea what he's talking about and it's a little, it's like a little off putting, you know, at first. And maybe that's common. I, you know, in the history of the industry or in any industry. I don't know. I'm not really sure. But, but there are definitely, you know. So Asha Sharma is the most recent and high profile version of that. She has a lot to learn about that business is. But she had something that Sasha thought that business needed.

[A]

And she was promoted from within though, right?

[C]

Yeah, she came.

[A]

Yeah.

[B]

But yeah, she was not there super long though, right? I mean, yeah, so months.

[C]

Yeah.

[B]

It wasn't like she was there for 10 years. But again, I'm not, I'm not actually criticizing it. I actually like, I like her quite a bit. I. What I see from her is overwhelmingly been positive. But, but the point is Xbox has been floundering for a long time. So there's something about her that Sacha believed was the right thing.

[A]

Well, and that was the concern was that she was brought in to be the hatchet man.

[B]

That's the conspiracy theory that the, the reason you're here is to maybe spend that business off ultimately, you know, and maybe that's true. You know, it's hard to say. We'll talk more about Xbox later and some other stuff that's related to this, but in the industry it's not just Xbox. You see this thing where, you know, in this case, Xbox spun off four studios and one of them's already announced layoffs. There'll be some related. I don't want to get too far into it, but there's some other stuff and it has nothing to do with Xbox. This is going to happen a lot. This is happening everywhere. It's not just Xbox. Okay, I think that's it.

[A]

Is that it for the learnings?

[B]

Okay.

[A]

We have learned. What have we learned here?

[B]

What have we learned? Microsoft is really good at hiding money.

[A]

Yeah.

[B]

Oh, I should just Point this out, because I'm super proud of it, which is so stupid, but I am super proud of it. This might be my greatest headline of all time, which is Hide me the money.

[A]

That is good. I like it.

[B]

And I got the AI picture of Satya Nadella as the Jerry Maguire character. You know, yell, give me the money.

[A]

Yep, that's pretty good.

[C]

Funny.

[B]

I'm oddly proud of that. But stupid.

[A]

But that's, you know, you gotta take your wins where you can.

[B]

That's how my brain works. Yeah.

[A]

Yeah. All right. Well, actually, this week, it's time to take another break. We're going to talk about Windows. When we come back, you're watching Windows Weekly. Paul Thurat, Richard Campbell. Richard. It was easy to get here from Canada. No. Your airline went on strike.

[C]

One of them, yeah.

[A]

So what were you flying?

[C]

I was flying WestJet, and then they had a threat of strike and they went on strike. So I got refunds on the tickets, because you can do that when they're on strike.

[A]

Sure. And then that only seems fair.

[C]

And bought Air Canada tickets.

[A]

Okay.

[C]

And then they resolved the strike. But, you know, as one does.

[A]

But you made it here. That's good.

[B]

John Mulaney does a great skit about airlines and how terrible they are, and one of them, you know, it's like, they. It's like, you know, we're leaving. He's like, nope, sir, this flight's been delayed nine hours. So he goes to the bathroom, comes back, he's like, is it still nine hours? Like, this plane just took off.

[C]

What have you been?

[A]

What did you do?

[B]

And then he's like, so, I'm gonna get my money back, right? He's like, no, we're gonna frame you for murder. We can, because we Delta, you know?

[A]

And I could just see that in his voice.

[B]

That's so perfect.

[A]

So your wife came down with you, which is nice. What's Stacy doing right now?

[C]

I think she's out with Steph. Yeah, those two collaborated.

[A]

Are they shopping?

[C]

Yeah.

[A]

I imagine there's some good malls expecting

[B]

to say the word spa. Yep, there it is.

[A]

They're in the spa like this.

[B]

A text from my wife. I. I'm like, the word spa will appear in this. And sure enough.

[A]

Good. I'm so glad that they came, and I hope they're having a good time. We're having a great time.

[C]

When we did the cruise back in the day, Steph and. And then Stacy took off and went kayaking, and I think we just drank beer. Pretty sure we drank.

[B]

I can Tell you, what we didn't do was go kayaking.

[C]

Yeah, we ate crab legs.

[B]

That was weird. A pile of crab legs the size of our head. Yeah, we have photographic evidence of this is not an exaggeration.

[A]

We'll come back to Vegas right after this.

[B]

Yeah, like literally, it's day past two. Spa.

[A]

I love it. I love it.

[B]

Classic.

[A]

We'll get right back to Black Hat in just a moment, but I think I might want to mention our sponsor, the people who brought us to Black Hat today, this episode of Windows Weekly brought to you by Threat Locker. Threat actors are using AI these days to do amazing things. Automate vulnerability, discovery, modify scripts during an attack, generate new malware variants, and coordinate activity across multiple systems. And that means tasks that once took hours or days now happen in minutes. And at the same time, organizations are introducing AI assistants and agents. They're great, right? They can access documents, source code, cloud applications, APIs, internal systems. What could possibly go wrong? Security teams need to know which AI tools are in use, what information they're allowed to access, and when they're operating outside their intended scope. A successful login or an unfamiliar hash file hash doesn't give you enough context. Teams also need to understand whether an application is behaving normally, whether it's accessing unexpected data or communicating with systems it shouldn't be able to reach. That's why you need Threat Locker. Threat Locker is Zero Trust. It uses application allow listing to control which AI tools and other applications are permitted to run. It uses ring fencing to limit what approved applications can access, what processes they can launch, even how they communicate. Threat Locker also uses Web content control to manage access to public AI platforms and other online services. And Threat Locker's privileged access management prevents AI applications and their users from receiving unnecessary or even dangerous administrative privileges. Threat Locker applies Zero Trust network access, Zero Trust cloud access, just like they've been doing it with Endpoint access to restrict resources to authorized users, approved devices, and permitted applications. Those policies are what protect you. They're what keep AI from going rogue and keeps the bad guys out. It supports Windows, it supports Mac, it supports Linux environments. And Threat Locker gives you a great 24. 7 US based support team. They're fantastic. Trusted by organizations like JetBlue, Heathrow Airport, the Indianapolis Colts, the Port of Vancouver. Ask Jack Thompson. He's the director of information security, Risk and Compliance for the Indianapolis Colts. He said, quote, with Threat Locker, we have the ability to centralize disparate elements in the security stack. Threat Locker has also recently received the following industry recognition Recognized as a strong performer in the January 26th Gartner Peer Insights Voice of the customer for endpoint protection platforms. Ranked number one in application control by Peerspot, winner of Best Zero Trust Security Solutions at the 2025 Tice Awards. AI governance requires more than an acceptable use policy. Threat Locker gives your security team the technical controls they need to define which AI tools are approved, who and what can access them, and how those tools are allowed to interact with business systems and data. We need this. These. You need this. Visit threatlocker.com twit to get a free 30 day trial and learn more about how ThreatLocker can help mitigate unknown threats and ensure compliance. That's threatlocker.com twit threat locker we thank you so much for inviting us to Black Hat. We're excited to be here and we invite you all, even if you're not at Black hat, to visit threatlocker.com twit right now. Now let's get back to the show floor. You're watching Windows Weekly. Leo laporte, Paul Thurat, Richard Campbell. We are in Las Vegas, Nevada for the Black Hat Conference. Thanks to our sponsor Threat Locker for bringing us out here and setting us up with a little corner of the booth. We are in the hedges area if you're looking for us. Just, we're behind the hedges.

[B]

When this show's over. Can I have that? Because that would go really good. That would work on the balcony in Mexico really well.

[A]

You know, they never need cutting, they never need watering. They're just, they're beautiful. All right, let's talk about Windows, because that is, it's funny how Microsoft, Windows and Office were the driving force for

[C]

so long and M365 is still huge, to be clear.

[A]

Is it?

[B]

Yeah.

[A]

Is that.

[B]

But is it. But it's not really the, I mean, it's not Office.

[A]

It's not like it's Office. But it's also M365, a subscription to Office.

[B]

And you also have to sort of feel that we're witnessing the end of an era here, that Microsoft 365 is going gangbusters. Absolutely. But when you think about you as whether you're an individual or you're in an Office, whatever it is, and you're creating content, whatever it is right today and for the past 40 plus years, whatever we have thought in terms of these apps, I have to write something. I'm going to use Microsoft Word, I'm crunching numbers, I'm going to use Microsoft Excel, et cetera, et Cetera. I feel like that's coming to a sharp close.

[A]

Absolutely.

[B]

And that means that the thing you're paying for will become something different.

[A]

That's kind of what I meant. You're not buying words specifically. You're buying a suite of capabilities almost,

[B]

which we might call an AI chatbot, for example, that you can talk to conversationally and say in natural language, are you going to fall over? I thought you were like.

[A]

No, I just wanted to try exalting it.

[C]

Yes.

[B]

And you know, you're generating some content. It could be a chart, could be

[C]

a report, TPS reports.

[B]

Yep. But it doesn't. It could be output for a little while. We'll output this in docx format because that's what we're used to.

[A]

I'll tell you a story. My father in Law, who's 84, had a computer for 12 years, had died, went to Staples, the office. I said, why don't you call me? He went to Staples, the office supply store, got an 80 HP.

[B]

Okay.

[A]

Took it home. It was actually, the guy was nice. Took the hard drive out of the old one, was able to recover most. But the one file that he wanted and he, he describes it, he couldn't describe it. He said, well, it's a thing, it's a table. And I put all the expenses in there. I'm pretty sure it sounds like Excel, right?

[B]

Yeah.

[A]

So he gets it home and. And you can't open the thing because

[B]

he doesn't have Excel.

[A]

So he goes back to the store. The guy says, yeah, I got a card, it's $90 and there's no software. All he does is give him a code, the code, and he puts it on the machine. He doesn't know what it's called, he doesn't know what he bought.

[C]

Right.

[A]

In fact, the way he described it at first I thought the guy is scamming you. I don't know what the $90 he bought 365 personal.

[B]

I realized by the way, should only be 70.

[A]

But okay, whatever, you know, it's Staples, so you gotta make.

[B]

You gotta make some money somewhere.

[A]

So that was easy. And, but I thought it was interesting because that is kind of the old school thing is I have this document, I need to open this document. I need office.

[B]

Right.

[A]

But that's not the way of the future.

[B]

I don't think so. And by the future I mean like next Tuesday, right.

[A]

Tomorrow.

[B]

I really do think this is going to change very rapidly.

[A]

I agree with you.

[B]

Because already people. Well, you know, just as a person. Right. You pay 20 bucks a month. Let's call it for some AI. Or you pay 20 bucks a month for. Let's call it Microsoft, whatever it is. And, you know, the capabilities of that thing are way more than the content creation capabilities of individual apps that you have to take the time to master and learn, understand the nuances of, et cetera. This is the thing I keep talking about. Every January, I make that chart. I forget how to make the chart, so I have to relearn every January because that's like, apparently living in momentum or whatever it is, or memento, I guess.

[A]

I know a guy at Staples if you have.

[B]

Thank you. I do need a copy of Microsoft 365 personal. I just tell AI to do it. Yeah, you know.

[A]

Well, people have speculated, is this the end of software? Are we. Are we seeing the end of software? I don't know if that's the case.

[B]

I think the problem with that is it's, you know, you're thinking of software in terms of these apps that we're used to, because software never really goes away. It's all software.

[A]

AI is software.

[B]

You know, do movies go away because we have streaming and not discs? No, I mean, we're still movies. It's just, you know, different delivery vehicle, whatever. But. And again, I say this not as some like, AI Pollyanna or whatever, but, you know, not having to learn how complex things work just to get one thing done is not necessarily a bad idea. I. You know, there are. There are pros and cons to everything,

[A]

but I think what's changed is the user interface. You now talk to your computer, or you now say, I want to do this. And it. But it still uses software.

[C]

This is Stevie Batiste's Outside mode. Right. I describe my intent, and then the tool orchestrates the software to get to your intent.

[B]

And I.

[A]

Does an amazingly good job.

[B]

That's the kind of. I have shock of it repeatedly got the feedback, and I bet you guys have as well. And I've gotten it from Mary Jo, by the way. This is the conversation I've had with her where what it amounts to is no one will ever talk to their computer. And I'm like, I. I think you're wrong. I think everyone's. I think that is going to be how we interact with. It's sort of like giving up, like handwriting or something at some point.

[A]

Yeah.

[B]

This thing that was just normal for

[A]

a long time, very natural.

[B]

Goes away.

[A]

And this is really the. The most natural way to interact with anything is Right. Speech.

[B]

Because it. It also enables Refinement, you know, if we're having a conversation like that. Yeah, yes. And. And you know, look, especially the beginning of this show, like I'm stuttering over words and everything. I'm like on camera at some stupid o' clock in the morning, whatever it is.

[C]

Yeah, okay.

[B]

Hey, we got you the latte anyway. But you understood me to some degree, right? Yeah.

[C]

Okay.

[A]

That's a really good AI.

[B]

Does a good job of that. You know, as well.

[A]

In the old days it was deterministic and specific and you had to get it just right. Especially if you're coding, you know, one missing semicolon, the whole thing doesn't work. But now it is. It's much more natural.

[B]

Yeah. And honestly, for all you can get into whatever details you want about how things work and how different AI is, or is it not however you want to phrase it. But honestly, I think the most fundamental change here is that software always did exactly what you told it to do, including all the flaws, the other things you forgot. That was always the way it was. Whereas AI tries to and often does understand your intent. And I just find that to be fascinating. But you can also just do that endless iteration of things. So it could be something as simple as an image. You create an image like this is. And in fact, the image, you can

[A]

say literally do this every year for

[B]

me, no one out there can see, but the image for this article, I told it I wanted this rising sun thing by landscape, mountains, whatever. Windows flag. The Windows flag it created initially was like the Windows 95 style flag. Oh, that's funny. And it was in front of the mountain. And I said, no, I needed to be behind the mountain. And also it needs to be the Windows 11 logo. So I created the Windows 11 logo, but it put it in front of the mountain. I said, okay, you're getting there. But I also, you know, so it took iteration. This is a stupid example in some ways, but you.

[A]

No, it's exactly right.

[B]

But you're making a chart, you're making a report, you're doing whatever it is, and you have this kind of series of interactions that are part of the same conversation. You iterate and iterate and then you get to the final thing, whatever that thing is, and then you can. Whatever you're doing, sharing, collaborating, whatever you're doing. So. Yes. And look, someone said something about an open office. Right. I feel like open offices are a big mistake, but whatever. But remember that when we say natural language and talking, you can also type.

[A]

Yeah.

[B]

You know, you don't have to say it. You can also type. So if you're in that kind of situation where a bunch of people talking into open air is bad, you know, obviously you're not going to be doing that.

[A]

A lot of us are not working in an environment where there are a lot of people around.

[C]

A lot of us work from home.

[A]

I'll tell you what.

[B]

Sure. That they don't want the humans getting together. Humans allowed.

[A]

No. I end up talking to it much more than I type. I will do sometimes type. And I also gave it a voice, which is kind of a mistake, but.

[B]

Right.

[A]

Not from my point of view, but my wife's not so happy. Happy about it.

[B]

Did you get like a British butler voice or something? You went Jeeves. Okay.

[A]

Actually, I've been playing with different voices. 11 Labs has many, many choices. So each agent has its own unique voice mostly. So I know who's talking to me. Oh, that's Claude code. Oh, that's Codex.

[C]

Oh, I see.

[A]

Yeah. So that's helpful. I don't know. That's my own personal psychosis. I don't need to share that with you. But I just saying I think people are resistant to it. Our Discord commenters are saying, I never want to do that. But it's kind of the way of the future. And it's more natural. It is the way we want ultimately interact.

[B]

If you're, say, a male of our age. Yeah. You're going to be against us. I get it. But you also understand you're two seconds away from retirement and there's a. There's a whole generation coming up that doesn't care at all about any of us. Y. Yep. They're absolutely ecstatic to talk to this thing. So. Sorry. You know, it's just like the teams thing from not quite. Not even 10, five years ago, whatever that was. You know, nobody wants to collaborate this way. It's like. No. If you grew up on outlook and you're 50 something years old. Yeah. You don't want that. But they're trying to attract younger people who are used to this form of communication. And that was the point of that stuff. Yeah. And last time I checked, you know, Slack and Teams doing pretty good. So it's obviously worked out okay. Even though I hate both of those things with, you know, every fiber of my.

[A]

I think people hated Zoom. You know, when Covet happened, everybody was stuck on Zoom. People came to hate it. Right now it's just kind of part of how you work.

[C]

Yeah.

[A]

You just. You get used to this stuff.

[C]

Yeah. The dosage matters, right? Like, how much you do. We did get burned out of screens during the pandemic. This is all we had, right?

[B]

Well, yeah.

[C]

I mean, remember folks freaking out about the mouse? Like, why would you ever take your hands off the keyboard? That's crazy.

[A]

Right?

[C]

Right.

[A]

You get used to it.

[C]

Yeah. Do you put the. I'll use it as a foot pedal. That makes more sense. Right.

[B]

Like.

[C]

But it's a change in interface and that is disruptive to people's workflow.

[B]

Right? Yeah.

[A]

People are very resistant to change in that regard.

[C]

Yeah.

[B]

I think. In every regard, honestly. I mean. But yes.

[A]

Yeah. What else is happening with the Windows?

[B]

Right. So I think it was last Friday. I think it was the last day of the month. So if that might have been last Friday, but Microsoft released several builds. We'll talk about that in a second. Pavan Davalori, who runs the. Who runs Windows.

[C]

The new Windows boss. Yep.

[B]

Yeah. So he posted kind of a status update. He's like, you know, a couple of months back, we said, we're going to do this. Here's the list of all our successes, you know, and I'm trying super hard not to be cynical. It's kind of my go to for everything, I guess. But I, and I want to be super clear. They're. The things that are happening with Windows this year are overwhelmingly positive. But I do have kind of two general concerns. One is the thing I raised when they first announced this, which is you go through the list of things he says they're going to do and then you compare it to this list, because I do this because it's my life of the actual problems with Windows 11. And what I see is you're fixing a bunch of problems I don't think are big problems. Right. I've never hit the Start button and thought it came up too slow. We're real super hyper focused on this right now for some reason. But. Okay. But you have these things, which I would call a certification. There's maybe five or seven of them. How many of those things are you addressing? And the number is 0 to 1. It's not very much, you know, so that's. That's a big one for me. But the other one, now, you got to remember, this is what, three, four months later, they. He's rattling off this list of successes. You said you wanted to move the taskbar to different sides. We've done that. You said you wanted a new Start menu. We've done that. You said you wanted the cleaner widgets with less. We've Done that. You said you didn't. You wanted to be able to pause updates. We've done that. You kind of go down the list and you're like, yeah, but have you done any of that? Because the truth is most of those things are still somewhere in the insider program.

[C]

Right.

[B]

And the one thing that for all this transparency, there's a real lack of transparency about when these things are going to hit the world, you know, like people. So, for example, actually, we'll get this in the.

[A]

So who's he talking to?

[B]

Just enthusiasts. It's the insider.

[A]

The insiders.

[B]

Yeah. But also to Microsoft's customer base. Right. In other words, if you say to insiders, we have delivered the taskbar, for example, you can move around and resize. That's only true if you're in certain channels, not all. It's not everywhere.

[C]

And it hasn't been released.

[B]

It's not in unstable.

[C]

Yeah.

[B]

So the. The thing that has never been said, I believe for a single feature, some have occurred. Most of them are the smaller ones is we're working on this. This is when it's gonna. This is when we think it's gonna. You don't have to be exact. I mean, I. Look, we know things change, but, you know, I. I do like that there is a more logical path through the insider program channels now than there ever has. Well, than there had been in recent years. Right. They used to release new features, you know, randomly into whatever channel. Sometimes just went public without testing. Okay. Now we're seeing a thing. So, for example, the taskbar we'll get to in a moment, but started in experimental, now it's in beta. So you're like, all right, I can see a path here, but what kind of a. Like it. How long ago did it hit experimental? Right. I actually wrote this down. Let me look. They said they were going to do it on March 20th.

[C]

Yep.

[B]

A month before that, we had rumors they were improving the taskbar.

[C]

Right.

[B]

Right. So the work was happening. They didn't release a build, any build with this thing in it until May 16th. This was two months later. Two months. May, June, July. Over two months after that, it went into experimental. So when does it get to release preview? When does it get stable? I'm looking at 26H2, I guess.

[C]

All depends on. Of the feedback comes from experimental, right?

[B]

Yeah, but I mean, at this point you would think it would be if anything.

[C]

So you say making happy noises too soon or are you thinking they're going too slow? Because it doesn't seem that slow.

[B]

No, No, I, No, I don't think so. The one thing I was very explicit about when I wrote this was this is Windows. You're not changing a pixel on an app somewhere. This is Windows. You have to get this right. And by the way, it's a core UI of Windows and it's also the

[C]

thing, you know, what does anybody want to. From Windows, but reliability. Like, we're not looking for innovation here, we're looking for it not to make us angry.

[B]

So. Yes. So I guess what I'm saying is you're toting a success that you've done this thing, but it's not released to the public.

[C]

Yeah.

[B]

You've never said when it will be released to the public. You're talking, you're making happy noises about being more transparent. But one of the ways you could be transparent is saying, hey, by the way, we think this will ship in the second half of the year.

[C]

Right.

[B]

To everybody out in public.

[C]

I don't even know if they know that number. Like, what's the threshold to say this is good enough to be pushed into?

[B]

Well, I look at this schedule and I think that is what's going to happen. And I just don't understand why you don't just say that. Yeah, because the other thing that's tied to this is there is no such thing as Windows versions that matter. Mostly because you get all the features in any supported version.

[C]

Windows.

[A]

Yeah.

[B]

So if they ship this as part of 26H2 does make it 25H2 is still supported, 26H1 is still supported. They will both get it too. I think he has never said that.

[A]

No.

[B]

You know, and this is what I mean.

[C]

Like, I wonder if there's a big debate about those releases numbers anyway. It's like, are we going to stratify these things or is everything going to go into everything?

[B]

Well, I'll tell you, they do all this happy updates, we're doing great, everything's awesome. And then you don't ship it in the two of the three supported versions of Windows. That's not good.

[C]

So, yeah, I mean, if you're going to ignore anybody, ignore the ARM people because both of them will be angry. But they're both of them.

[B]

And I take that with great exception. So look, again, I'm not trying to be super negative here. It just comes naturally. But I, I know, I do see the, the positive nature of what they're doing. Right. I, I appreciate someone who cares.

[C]

There's a spokesperson for Windows who seems to care.

[B]

Yeah, right.

[C]

Like that.

[B]

And a group of people around him like Marcus Ash and all those guys. Scott Hanselman is sort of in there, in the mix somehow who just are like, yes, let's get this thing right. And I love that. I love the positive attention is receiving from within Microsoft because for years they ignored and. Or made it worse on purpose, you know, And I like. But, but again, if you go through that. I'm sure I do. Yeah. Here's what the, the list of things that they're not fixing. Like, what about all the crapware? What about just explaining what happens?

[C]

You're gonna poke at the revenue streams.

[B]

Yeah, I am. I mean, like, when are you gonna stop the advertising? Things everywhere. When are you going to stop? I click a button and it goes to Edge even though I'm using Chrome or whatever browser. There are some examples where it does do that. There are many where it does not. And the ones that. Where it does not are the ones that did the revenue generators from ads, you know, things like the MSN news stories and so forth. So there's all that stuff, you know, I mean, in a year that you're addressing pain points. We're having a component crisis where all of a sudden we're selling 8 gigabytes computers for some reason again. And you have hardware requirements for Copilot plus PC and Windows 11 that kind of run afoul of the modern hardware,

[C]

you know, can you respond fast enough to actually take care of that before it becomes a moot point?

[B]

Well, if you have a. I'm going to call it a 7th gen Intel Core processor, which is right outside that support window for Windows 11, but it could run Windows 11 no problem. And maybe it has TPM 2.0. Maybe it is TPM 1.2. Whatever. You think they're ever going to open up Windows 11 of those computers just because there's a component crisis and what. No, absolutely not.

[C]

Yeah.

[B]

They will never do that. They quietly extend the Windows 10 Extended Security Program or. Yeah, the update. And they don't tell anybody. No, like it's just, you know, it's like we're just going to ride out the component shortage. You know, OneDrive will still enable file backup without your acknowledging it, even if you say no to it.

[C]

But see, you know, the bigger issue here is is this component shortage temporary or much longer? Like how far? And I think that nobody knows, but.

[B]

Right, but okay, but let Microsoft just extended the Windows 10, you know, ESU.

[C]

Yeah.

[B]

So it's going to be at least another year. Yeah, I mean, we could make that, you know, People are going to keep using the hardware they already have, so I guess they can keep using Windows 1110 for one more year. I don't know. I. There's just a lot unsaid and I. For all the happy noises and positive stuff, there's still like a bunch of stuff that are problems that no one is even talking about, you know, so that's my. I just want to make sure, you know, like, just don't forget there's more, you know, fix it.

[A]

You're saying fix it.

[B]

Like, we're fixing it.

[C]

They're fixing it. Let's not ship.

[B]

Let's. Let's do more than you said let's do. You know, let's do more than that.

[A]

But he's. I also. Maybe he's a little defensive, but I understand. He's saying, look, we're working on it and they are.

[B]

And I.

[A]

That's true.

[B]

No, and I want to. We should acknowledge that. I want to be super clear. Like, I think what they're doing is great. I don't think it's enough, but I think it's great. Yeah, yeah, yeah.

[C]

Yes.

[A]

New insider bills.

[B]

Yeah. I already blow away the only interesting thing in it, but the taskbar is coming to beta. So it took two months, but now. Okay. But that gives you a hint at the schedule. So, yeah, the rate, I would say in one to two months, release preview, and then from there it's within the month. Yeah. So it's the same schedule. It's 26H2. Right. So that's fine. And then there's just a hibernation policy that I care less about.

[A]

You're having a hard time getting. I can tell.

[B]

Hibernation is that thing we should all just disable and pretend every existed. But whatever. So there's that.

[A]

I'm excited. Apple's going to let me copy and paste to my iPhone.

[B]

I love. You know, I like, I like how you just said that, like Apple's going to let me do it. And that's proper because that is the Apple Apple keeper, let's face it. By gunpoint, by regulators. Right. So I just.

[A]

Oh, this is the eu.

[B]

Yeah. Yeah. This is why.

[A]

Interoperability. Yeah. Yeah.

[B]

So I just, you know, I've been updating the Windows 11 field guide. I just rewrote the phone link chapter, so I had to go back and use it with three different phones. Because you have different experiences. Right. So if I have an iPhone, so I can do like three different things. Nothing. It's garbage.

[A]

Something actually I use all the time. Because I'm Apple. In fact, it's the only thing keeping me using Macs, to be honest with you, is that I can copy something on the Mac and then paste it on my iPhone. It's very handy.

[B]

There's an irony too. When I, when I saw the first pre release like prototype Windows and ARM Snapdragon X based laptops, I was in New York with Qualcomm in a meeting and I brought my MacBook Air and there was a, they put up a screen before we got to the machines with a. All this data on it. And I was like, man, I really want to get a copy of that slide. So I was like, well, I'll just take a picture of it. I'm like, man, I'd really like to get that into my notes.

[A]

Right?

[B]

And I'm like, could I. So I'm like, I went and I copied the Clipart on the phone.

[A]

Did it work?

[B]

Yeah, 101 second.

[A]

Thank you.

[B]

And I was like, well beside this was iPhone and Mac. So I was like, man, I would love to have something like that in Windows. But if you have a. I think it's, I think it's Android. You know, there's so many different features that only work somewhere. But you can do that with Android basically, right? So if you have Windows and Android, that works. It works, it works fine. It's good. There's different ways in Windows to send something to a phone or vice versa in some cases, right? Depends on the device. But this is the problem. So. Well, it's two problems. So one is Apple's the gatekeeper. They limit what others can do to a degree that I think most people don't understand. So when something doesn't work, we Apple users know well, but if you're a Windows guy, you might be like, oh, Microsoft, they can't figure this stuff out. It's Microsoft's fault. You don't understand. This is not. Yeah, they just don't allow certain things you can do a, There's a sync you can do through Android where it's just in real time. And on the Apple side with an Apple device, you have to wait for a Bluetooth thing to kick in and kind of catch up and it's, it's not the same experience. So if you use an iPhone with, you know, phone link like I do, you're not getting, you don't, you don't know what you're missing.

[A]

Phone link is best with Samsung, actually. Right, right.

[B]

That's the third experience. So my wife still has her old Samsung Ultra. So I use that for the third phone and then you get like screen robots, lots of really good stuff. You can drag and drop between like the phone and the desktop, which is crazy. There's some really good things in there.

[A]

I think that actually illustrates more that it's not Microsoft but the company, the phone companies.

[B]

Well, so there's, like I said, there's two things. So on the Apple side, it's Apple. Apple just blocks everything. I mean people don't appreciate this. The one thing I ran into on Apple recently that I found to be a huge problem is I don't want to use the Apple app for the camera app. I want to use like a third party app. And you can, but you don't get the, all the resolution choice. You don't get the 24 megapixel thing that I want JPEG, right. You could do RAW, I guess, but if you shoot JPEG, you're 12 megapixels. Apple just doesn't allow it, you know, no one knows why. It's, you know, and you know, whatever. This, this is their thing. So yes, copy and paste Android phone link works fine. Can't do it on Apple. But now the news is that's going to happen soon. Like regulators in the year. This is a clear case of just arbitrary gatekeeping and, you know, locking third party developers out of the things you give yourself. They do this in messages, they do this in the camera. Like I said, they do this everywhere. Yeah, right.

[A]

You know, they scared me yesterday. I use Telegram for a channel to my agent.

[B]

AI.

[A]

It's how it communicates with me, how I communicate when I'm not sitting at the computer. Apple pulled Telegram from the App Store.

[B]

Well, did you find out? Did you hear why? Yeah, yeah.

[A]

Well, but this is the thing. So there was CSAM and Apple apparently made some sort of arrangement with Telegram to get it down and they put it back. But the fact that Apple can unilaterally just say, yeah, your app is no longer available, you won't get updates and I scared the hell out of me. It actually moved me off Telegram.

[B]

Well, there are a million examples of this where some developers like we have been submitting an update. Yeah. And they're not doing it and they won't tell us why. It's very arbitrary. Yeah, it's, it's, it's a lousy situation. Anyway, Apple's a terrible company is my point.

[A]

And we all agree.

[B]

Okay, just throwing it out.

[A]

Dill Mac very quickly. I'm in your camp.

[B]

There you go. No, no, Microsoft is also a terrible company.

[C]

Oh, okay.

[B]

The difference between me and an Apple guy is I. They're all.

[A]

You admit it.

[B]

No, they're all. I don't admit it. I'm just saying it. They're all terrible. I, you know, believing that Apple is somehow like morally or whatever better than any other is a brain dead stance is they're terrible. Anyway, so this is antitrust working. I mean I just, you know, I still get occasional people like I, you know, a company should be able to do whatever they want. Like. No, there's a, there's a rich history of why we don't want that. Yeah. And Apple's a great example. So whatever.

[A]

Yeah, you could say they don't have a monopoly, but they have a monopoly over us, over the people who use their stuff.

[B]

And that is an audience of billions. Yeah, I'm sorry, that is that definition of a monopoly.

[A]

And they lock us in, man. They really do.

[B]

Yep.

[A]

What else is going on?

[B]

So we got more earnings. I'm just gonna gloss over most of this stuff. Okay. So we did the Microsoft stuff. So since Microsoft, which was last Wednesday, AMD was I think just yesterday. So their revenues were up 50%. A Wall street is not impressed. Their business is almost. It's two thirds of their revenues now come from the data center, not from PCs. Their graphics business, which graphics cards for PCs is declining rapidly. Like it's. Wow.

[C]

Yeah, it's all Nvidia all the time now.

[B]

Yep. Yeah, they're almost. That part of the business is like disappearing. They still, they saw small single digit growth and just PCs overall. Like the AMD Ryzen chipsets. Sure, those are doing great.

[C]

There's nothing wrong with them.

[B]

No, they're great.

[C]

You know, I built those two machines and one of them was a Ryzen, one was an Intel. I think I trust the Ryzen more.

[B]

I absolutely do.

[A]

Can't even tell the difference though. Really.

[C]

Not really, no. But it's a PC the intel get. Yeah, I had that stint of weirdness with the intel until I got the chipset update.

[A]

That's right.

[B]

Yeah. So I would tell you that where you would notice it. See the thing is a normal person would not notice this. Right. You buy a computer and use it whenever, so you just notice it working or not working. But the reliability of AMD based PCs is actually, I also want to say far greater. But it's definitely greater than intel. So it gets better. Meaning what happens when you open the lid on the laptop? Anything, you know, an intel thing. You're spinning a roulette wheel. It could be. You could get a full boot, a hibernation reset.

[A]

We've talked about that before that the OEMs are up, it's up to them to kind of fix intel, get the firmware right. Yeah.

[B]

Yep. And so, but, but by and large I think no, I, I know for a fact Intel's chips require more fixing and are often much less reliable than amd.

[A]

Right.

[B]

That's just the way it is. So I, I would say categorically AMD's chips are better. That's how I would say it. But I'm trying to think.

[A]

I don't think I've bought an intel chip in quite some time actually.

[B]

Yeah, I mean I review them because I more than six, seven years. It's still most, most of what you get, you know, from PC makers.

[A]

Right.

[B]

Is intel like they, that they've cemented that relationship, you know, decades ago really. Right. And then we have.

[A]

I want AMD to do well regardless because we need the competition.

[C]

Yeah. We're better off.

[A]

We're better off. And I'm glad that Qualcomm and Snapdragon are doing well. I think that's great.

[B]

Yeah. Actually Qualcomm revenues were down in the quarter but.

[A]

Okay. But I mean you know they're doing, they're not dead.

[B]

No. And they're, I mean there are pieces.

[A]

They're getting better and intel is actually

[B]

coming back are better than everything else. There's a big objectively much better. Much better reliability, better performance.

[A]

Battery life.

[B]

Battery life is insane. Efficiency, however you want to measure it, it's better. Well except for that one thing that dedicated graphics game playing which is all hard coded for x86 and you know that's just the market so that's not their fault. But that's the way that is. Amazon made a gajillion dollars, I'm going to call it 200 points.

[A]

The Jeff Bezos turn jillion.

[B]

Well you can't look at year over year net income gains but 20% for revenue and actually you really can because I didn't put the number in there. Ignore that. But AWB up 36.7% year over year. Awesome. But by the way below Azure growth, I'll just throw that out but fastest growth in 18 quarters. They dominate this world anyway. I mean they're doing great. Amazon's earnings I every quarter I just look at, it's like this mile long list of all the products they ship which is, you know, that's what they do. They ship baby diapers and you know toys. I mean it's like crazy and low margin. It's hard to get through. Like where's the, where's the meat in here? You know it's not that much but they talk about the, this AI spending. Right. So now they intend to spend $220 billion on CapEx tied to AI.

[A]

So that's 220 billion.

[B]

Which is more than. Yep. In this. In a year. So more than Amazon. Sorry. More than Alphabet slash Google and Microsoft.

[C]

Wow.

[B]

But the reason that went up so I, I, the previous number. I, I don't have it here. I want to say it was 200. They're not actually building more. They're spending more in RAM. It's because of the RAM component cost.

[C]

Wow.

[B]

So like their costs have gone up by 20 billion. Like by 10 I guess so that's crazy. And their free cash flow was negative in the quarter. Yep.

[A]

So but there's a tradition with Amazon for that. Right?

[B]

That's right. Yeah. So there if you look, if you

[C]

were to look at your still get back into that pool. I don't know. I think that was a time they

[A]

were building, they were building fulfillment centers all over.

[B]

I don't know about cash flow for Amazon but what I do know is profits and losses.

[C]

Yeah.

[B]

And that this company is like this spiky thing. You don't. There's no way to understand what happened or why or how they have more infra than anybody. There's just. Right. They have. They're more physical in like physical like warehousing expensive drivers and trucks and y. You know the whole just that whole moving is incredible. So they're just hard. They're hard to get a handle on. Apple's doing pretty good. So 109.4 billion in revenues up 16%. That's good. Strongest. They call it the June quarter. I guess it's the second quarter different.

[C]

Yeah.

[B]

You know iPhone is 50% of their revenue still directly.

[A]

It's.

[B]

I would say it's closer to 75 to 80% because everything flows around the iPhone. Everything they do but services. 30.7 billion gain. A 12% would have been higher. But they're starting finally starting to see app store revenue hit from regulation. Right.

[A]

Right.

[B]

Where they're starting in certain places not the United States yet. But they're going to get there where they're. They're actually having to open up the store to third parties et cetera and

[C]

it is impacting them.

[B]

I can't wait for that to go down because that is the most undeserved money that anyone has ever made in the history of mankind.

[C]

Sure.

[B]

Terrible. Somehow, despite the fact that I spent almost 2,500 bucks on an iPad pro, that business business fell. But the rest of the company.

[A]

It's true.

[B]

The rest of their businesses went up.

[A]

So wait till you see the new phones.

[B]

I know.

[A]

And this is traditionally the slowest quarter for Apple because it's the pre phone.

[C]

Right? Right.

[B]

That's right.

[A]

Yeah.

[B]

Yeah. This is when all the Apple blogs publish that story. This is the wrong time to buy an iPhone. Thank you, Robert. [e-mail] you know. Yeah, yeah. Yes. They're also the ones that publish. This is how you can watch the Apple keynote, like, because nobody knows how to Google anything, but whatever.

[C]

Okay.

[A]

It's got great SEO, though, let me tell you. Great SEO.

[B]

Yeah.

[A]

All right, we're going to take a little break. We are coming to you live from Las Vegas. That's why it's a little noisy. I apologize if it's too noisy. It seems like they're giving away that Countach or something over there. I don't know. But we are at the Threat Locker booth at Black Hat, the biggest big hacker conference in Las Vegas, having a lot of fun. Thank you, Threat Locker, for sponsoring our visit here. And we will be back with more of Windows Weekly right after this.

[B]

This

[A]

welcome back to Black Hat in Las Vegas at the Threat Locker booth. It's Windows Weekly coming up. Steve Gibson in security now. And we're going to. Steve has made a special request that Paul and Richard stick around.

[B]

He's made a huge mistake.

[C]

Yeah.

[A]

So that'll be fun. I think may regret.

[B]

Yeah. His future regret.

[A]

We'll let you go get some lunch or whatever. But yeah, it'd be nice to have you back and.

[C]

Sure.

[A]

I don't know if the three of you have ever done a show together. I think that'd be kind of cool.

[B]

I don't think so. I feel like he. I must have done maybe a.

[A]

Maybe the holiday show or something.

[B]

Yeah.

[A]

We'll never forget the New Year's Eve where Steve was dancing with Captain Kirk.

[B]

That was something.

[A]

It was a moment. All right, I think it's time. And if Kevin King has the theme song back at the home office.

[C]

Oh, yeah.

[B]

We have two things first.

[A]

Oh, crap.

[C]

Sorry.

[A]

It's. It's time for more AI. We don't have a theme song for that.

[B]

No, that's not. A trombone thing would work. I don't know why. So there were rumors ahead of Build that Microsoft was working On.

[A]

Oh, the super app.

[B]

The super app, right.

[A]

Yeah. What is that all about?

[B]

It's. It's not that big of a deal actually. I don't know why people like Satya Nadella, in his opening remarks for the earnings conference call last week, you know, talked for five or 10 minutes and mentioned somewhere there, not for the first time, we are working on like what is essentially the next generation of the Copilot app. And. Yeah, of course you are. So who cares? I don't know why does everyone excited by this? Nobody even uses Copilot. But you know, OpenAI has released their version of this, the new version of Chapter GPT where they have everything inside. So it's. Again, I forget names today. Companies like Work and Codex and the in app browser, it's all together Anthropic does the same thing with cloud. Microsoft's doing the same thing with Copilot. The one little nuance to this one is Microsoft currently, because Microsoft is. What they do has two copilot apps. Right. So only two. Well, in Windows 11. Right. So you.

[A]

Why do they have two?

[B]

Because there's a separation of church and. Sorry. Is a commercial and consumer.

[C]

Yeah.

[A]

And so one's like a chatbot.

[B]

Well, no, they're, they're very similar. I mean, you know, but I got

[C]

them both pinned there. Right. There's the, the regular copilot and the M365 copilot. Right.

[B]

So if you.

[A]

They differ how.

[C]

If you buy how much money you spent on them.

[B]

Oh yeah, well, yeah, that's true too. If, if you get a new computer, if it's a consumer product running home, you'll get, you'll go Copilot. If it's running pro, you'll get Microsoft 365 Copilot. You can install either, you can uninstall either. You can do whatever you want. So they're going to merge that into one app, which, you know, like teams. Right. Same thing. It's. They go through this process every time. Viva Las Vegas, baby.

[C]

At the same time,

[A]

if you're not watching the video, you're missing the best part of the show. I love that.

[B]

That's funny.

[A]

That's the Vegas impersonators.

[B]

I don't even recognize this there. That's really weird. So, yeah, I, you know, he, There's a throwaway sentence in the middle of a long string of sentences and it's like micro, you know, CEO confirms, you know, super app, whatever. Yeah, he said it on stage. It builds. Geez, guys. Like, he's not confirming Anything. It's still.

[A]

Elon Musk always talks about making X the Everything app. Is that what super app is or.

[B]

No, this is already the Everything Terrible app. Yeah. So I.

[A]

It succeeded there.

[B]

Yeah.

[A]

I mean, what is a super.

[B]

How. No, it's. It's. In other words.

[A]

Do I amuse you?

[B]

What do you mean?

[C]

Right, right.

[B]

No, it's just a combination of these previously separate capabilities, which is just. It's just the next generation of super.

[A]

It's just. You could say the combo. Yeah, the combo.

[B]

Consolidated.

[A]

Consolidated. That's not nearly as exciting as a super app.

[B]

I don't think this is a big okay deal personally, but everyone seems really excited about it because it's super. Yeah. It's based on Copilot. Do you still think it's super? No, you know, I don't know.

[A]

Actually, the co pilot coding harness is pretty good.

[B]

So I was gonna. So to be fair to Copilot, because it does have a bad reputation, I also updated the co pilot chapter.

[C]

Right.

[B]

So I had to go through that. I don't use Copilot. And I have to say it has definitely gotten a lot better. So in the sense that the new Siri that's coming out this fall is kind of gotten up there. It's, you know, works like other AI assistants. That's true of Copilot as well, actually. So it's easy to kind of dump on it. It's a little too cheap and easy maybe, but it's fine.

[A]

And a lot of people use Copilot and VS code as a coding tool. And there is a Copilot harness now for coding.

[B]

But you know, I don't know. I don't. I don't know. I don't know numbers about this. But when you think about the audience, Visual studio code. Well, no, I don't just mean tiny, but it spans the open source world and the traditional Microsoft.

[A]

There's an OSS version.

[B]

Yeah. And this is like the one Microsoft products. Even Linux guys like. Yeah, actually this is pretty good. You know, we like it, we use it. I bet a lot of those guys are using open models or you know, smaller models, whatever. They might be like open source models. So I don't know. I don't know what the percentages are on GitHub. Copilot, actually, that's a good question.

[A]

I'll ask Christina Warren.

[B]

That's where she works. I bet there's a lot of mixed model uses there. But that's the point of it, right? I mean, that's designed. You can do whatever you want, Right. So it's fine. And then this is a super minor one, but Proton, late last week, I think it was released. Two big updates. One to the Proton Pass, which is the password manager I use and love, and they've actually improved that pretty dramatically. So it works basically just works better and faster. Meaning there are certain ways you can construct a webpage where the sign in thing is in a frame and it doesn't really work very well. You have to cut and paste. That actually works better now, you know, whatever. And if you want to use it in a managed environment, they package it as an MSIX on Windows. So that means you can manage it with intune, you know, but nice. It's good, Good. And then they have the Lumo AI assistant that now does data visualization. You know, charts, graphs, whatever. Custom visuals. Is that like, you know, like we're all just doing the same things all over and over again? So there's that. All right. You wanted to cue some music, I

[A]

believe now Kevin King can play the Halo in reverse because it's time for the Xbox. Yes. Even here. Black.

[C]

It'll be inserted in post.

[A]

Good enough. Yeah, good enough.

[B]

Boy, like an alien probe kind of insertion.

[C]

It'll be the first time.

[A]

Okay, so by the way, somebody in our YouTube chat says we engineers are using the Azure AI foundry, which means you can use any AI you want.

[C]

Yeah.

[B]

Even Microsoft itself is promoting the use of their. You know, they're like, you can mix and match, do what you want. Of course. Right.

[A]

Yeah.

[B]

Look, we don't care what you use as long as you're paying us something every month, you know? Well, I mean, it's a business. I mean. Yeah, yeah. So a bunch of Xbox stuff. There's a leaked memo from Asher Scheimer explaining the core priorities for Xbox over the next 12 months, which is an interesting timeframe because These are the 12 months before we even get a peek at the next console, which everyone seems to be betting big on for some reason, despite the fact Microsoft has never made money from consoles. No, but the only reason a new

[C]

console is interesting is the new game that goes with it. And then nobody seems to be talking about that.

[B]

Right. And we've had multiple generations where we didn't even have that. So I don't. I don't know. I will see what happens in a year. But so strengthen this. So these are so vague, I don't even know what to do with this. Strengthen our platform led by console. You get to put those words in the. Shut the Xbox guys up. Okay? Grow great games into global franchises. Right. Make Minecraft the world's creator platform and extend the worlds that fans love. So I'm going to assert a small bit of editorial in here that I think will actually save Xbox and that is make movies and TV shows about Xbox content. Like, I'm not kidding, think Nintendo during the leanest years as the Swift was falling apart, before they got Swift too, had blocked two blockbuster movies that actually saved. Not that the business going away, but like actually save quarters. Yep. There's so much IP in the Xbox space. Well, you know, the, all the game studios, they have space.

[C]

Yeah.

[B]

They. Why are there not, why isn't there a Netflix series that just Call of Duty, it just never stops, you know, pioneered.

[A]

That was George Lucas.

[B]

Yeah.

[A]

That was the brilliance of George Lucas. It wasn't just a movie movie.

[C]

Right.

[A]

It was merchandise. It was, that was never a thing

[B]

before in Fox, I think it was the time was like, yeah, you can have that.

[A]

It was building a universe. And there were. And his theory was, which was smart, was there were an infinite number of entry points. You get somebody into the universe, they're going to migrate into all the other products. And Xbox is really in a good position to do that.

[B]

They have so much, so much they could do it.

[A]

Maybe that's the problem.

[B]

There's a little bit of it too much, I feel. Yeah, that's true.

[C]

You gotta think there's a bunch of showrunners running around trying to develop shows on all these things, but actually getting to making product is hard.

[B]

Yeah. So there is a Call of Duty thing happening, but that's been rumored for years. And at one point, Steven Spellberg was allegedly going to make a movie somewhere around something of something. Something. Call of Duty, whatever. I believe the TV series that's coming is going to be like Modern Warfare stuff, which. Okay, fine. But you know, Gears of War, Sea of Thieves would be a fun cartoon show for kids, you know, I mean, like.

[A]

No, seriously, learn how to be a buccaneer kids.

[B]

Why not? I, I, this is like, I think this might put this business over the top. How about if you just did it to subsidize the console?

[A]

Well, you know, actually super smart.

[C]

There's that great feedback loop then is. And then people want to play the game. Yes.

[B]

Yep.

[C]

It introduced certainly Fallout.

[A]

New, new players. Yeah, but yeah, absolutely. Don't you think people are buying Fallout because they saw the show and said, oh, I'd like to do that.

[B]

Definitely. In fact, the biggest failing of that because that show was so successful and so Great. Is that they didn't have a new game right then.

[C]

Yeah.

[B]

To tie into that. Yep. I mean, look, I know that doesn't.

[C]

But even the remasters are good.

[A]

Yep.

[B]

Yep. So. And that's just an idea. I, you know, whatever. But I. I don't know why somebody's pointing out.

[A]

Oh, you are, Anthony. That the Halo series didn't do all that.

[C]

Everything's gonna work.

[B]

No, no. And by the way, you could chase

[A]

people away if you made a bad movie.

[C]

You're not gonna hurt. Help things.

[A]

That's for sure.

[B]

Yeah. I feel like they. They made some mistakes with that. But Halo is an. Is an example of something that would be an incredible movie. Slap. Could be.

[A]

I still see Master people in Master Chief costumes at Halloween. There's something there.

[B]

Gears of War would be incredible.

[A]

I just saw that they are in. They're gonna bring in. There we are. And the gears in the Xbox. I don't know what the hell that is.

[B]

Thank you for making me Master Chief. And I don't know what the hell

[C]

he is, but I am a dork gamer.

[A]

You're the gamer. You're the player.

[C]

I look like Jeff Fritz actually.

[A]

I love that.

[B]

Actually

[A]

we're for those who don't know what we're doing. We're talking about AI images generated. Usually it's by Pretty fly for assist guy. Who is that? Who did that one? No, no. Is it Darren?

[C]

Sandy Rez.

[A]

All right, so that's nice. So we get a lot of people in the club Twit discord generating I don't know what we should call them images of us in the. In the shows.

[C]

It's art.

[A]

It's art and it's a lot of fun.

[C]

Yeah.

[A]

But yeah, if you're not. If you're only listening, you just have to imagine which might be better. Maybe that's, you know, the thing. That's what I'm thinking. Maybe they should do like imagination things with the Xbox game. Imagine yourself in the. In Fallout Vegas. Vegas.

[B]

We're two seconds away from being able to, you know, here now actually make it a real time thing.

[A]

All we need is a nuclear war and we're.

[B]

Send me a fake gun and it can run around here and blow stuff up.

[A]

Actually, Jeff Atwood who does that crazy club show off by 1 is. Is. Is doing some sort of pip boy project.

[B]

Okay.

[A]

And he says it's a surprise he's

[C]

going to tell us about Is great at that.

[B]

He loves like a Palm Os.

[A]

He was wearing one, it was like this big. But that's so you can put your

[B]

phone in it and then you have the screen.

[C]

That's what it is in the show too, Right. Like the game. The pip boy was huge.

[A]

Huge. Like, who's going to want to walk around wearing that? I guess so. I mean, Patrick Mahomes wears all the plays on his arms.

[B]

Yeah, exactly.

[A]

What else? Anything else going on in the Xbox world?

[B]

Yeah, just. Just a couple of data points from this memo which I think are kind of interesting. Xbox has over 100 million daily active users, over 500 million monthly active users, and nearly 1 billion yearly active users. So this is the. That's interesting. This is the installed base. Sort of our. Yeah, the installed base, I guess we'll call it.

[A]

Who doesn't. If you play a game on Xbox, doesn't play it every month, apparently. Half. Half of the audience.

[B]

Yeah. Right.

[A]

Doesn't play it every month. What's that mean? So played every six months.

[B]

I think it means a bunch of different things, but it could be tied to game releases. You know, big franchises tend to come out once a year or less. It could be.

[A]

That makes sense. You play it for a month, maybe once a year.

[B]

Some of it might just be the basic thing everyone keeps talking about, which is that Xbox or games do not just compete with Sony and other games, they compete with movies. Every form of entertainment there is. Right. That's true. It may be cyclical. You know, maybe in the, you know, you go back to school, you don't play so much. Maybe in the summer you have.

[C]

But a hail, a hail Mary comes out and video game playing goes down. Right?

[B]

Yep. Maybe. Yep. It's a little cheap. I feel like to blame other forms of entertainment, but I, I think that's the thing. And we talked about game pass subscriptions going down. The, the last figure we got officially was 32 million February two years ago, but now that figure is 30 million. So it's gone down by 2 million in about two and a half years. And a big chunk of that was no doubt due to the price increases. Right. Last year. So there's that. So there's a couple of numbers in there that's always kind of interesting. And then the whole, well, we'll get to the desk thing. That's a whole. Another conversation. The PlayStation. Yeah, yeah. And the kind of debate around that, which is just world. Well, we'll get to it.

[C]

I'm sorry, I just want.

[B]

That's a. I just. You. Sometimes you see a topic, you're like, oh, geez, we're going to be doing this for a week. Aren't we like, you can just tell like it. Yeah, it's really not my. Anyway, let me get. We'll get to it.

[C]

Sorry.

[B]

It's hard for me not to go viral.

[A]

You can't resist it.

[B]

It just makes me crazy. So, okay. Xbox Console prices went up in the us. They're going up in the UK and the eu. We don't have to be that one to test.

[A]

There's not, you know, there's never going to be an end to prices going up.

[C]

No, no.

[A]

We are in dire state.

[C]

Well, until the market's flooded with hardware. But that has.

[A]

But how long is that going to be? Question.

[C]

I know, I don't know.

[B]

We're going to talk about AI every week. We're going to talk about price increases in hardware. Every week it's going to be the same thing. It's.

[A]

For a while, I guess we were living in a fool's paradise where this stuff was incredibly cheap. Really realistically.

[B]

Yeah.

[C]

There is a market saturation point. We just don't know where it is. And that's both demand going down and supply going up. Yeah. Somewhere it'll cross.

[B]

When the prices were what they were, it seemed to be a pretty good business for everybody. You know, everybody was happy.

[A]

But I mean I think of the. I think for a long time we said the computer you want is 2500 bucks. But 2500 bucks 20 years ago is like $8,000.

[B]

Yeah, I know. You could get a good premium computer in the PC space was about 1200 bucks. Yeah.

[C]

Yeah.

[B]

Today it's $2,000.

[C]

Yeah, sure.

[B]

And that's stinks.

[C]

Maybe.

[A]

I'm just saying maybe that's a more realistic price. I mean maybe we were, we were living in a.

[B]

Well, see, I don't. That's what I'm not sure of. Like I, I mean the component prices have gone up for those companies. I, I don't know. I mean I feel like. I don't know. I don't know. Yeah.

[A]

Right now it's price.

[B]

We're going to be able to look back and maybe learn more about that. I. We're going to be able to compare companies revenues and things and most in sale, actual unit sales.

[A]

This, this was always the miracle of microprocessors and silicon in general was as things get smaller, they get more efficient, they get cheaper, they get faster. And that was kind of the reverse of everything else.

[B]

Even within generations of hardware, whether it's computers or consoles is a really good example. Phones, whatever it is you are Able to cost reduce this thing in various ways over time. And now it's the opposite. Like you can try to cost reduce, but really the cost is going up. Yeah.

[A]

Xbox is no exception.

[B]

You can't get ahead of it. It stinks. So anyway, if you live in eu,

[A]

how much is it now? The Xbox we know.

[B]

I mean, so US prices went up by 150 per model.

[A]

That's a lot.

[B]

Yeah. In the EU they're going to go up. Looks like. Yeah. €130, €150 to €200 per month.

[A]

That's huge.

[B]

Yep. It's not great.

[C]

Wow.

[A]

That does argue for getting out of the Xbox.

[B]

Well, you have like. Well, honestly, it's not just them. I mean, you know what, he's doing it too, right?

[C]

I mean Sony's prices are up, everybody.

[A]

Yeah.

[B]

But these are big increases. I mean like a 1 terabyte Xbox Series X was €600 is now €800. Yeah, you know, that's. I mean that's 30%, 33%, whatever that is price. Because it's terrible. This is the one of those Captain Obvious stories. I'm not even sure why this merits. Anyone could have written this and anyone did, but when Microsoft announces three original Xbox games in backward compatibility for PC, that's not the end of it. Right. So there will be more, but there will also be Xbox 360 games in time and then eventually we'll move on to other consoles as well. So someone has reported that that's going to happen and you know, of course it's going to happen. So whatever. That's just super obvious. I would think by this time next year we're going to have a healthy collection of probably hundreds of titles across various generations of Xbox games that work on PC. That makes sense because you know, the Xbox has really always kind of been based on a PC in many ways is today and will be more so in the future as we move to this Helix thing they're working on now. But we'll see how that goes. This is an anniversary year for Xbox. 25th anniversary. So we're celebrating and not just by laying off everybody, but also. Well, you want to give them free time to celebrate with the fans.

[A]

25 years. Wow.

[C]

Yeah.

[A]

I remember going in 2001, going up to Seattle for the launch. Yeah.

[B]

I to this day that it was in a. Like a sports stadium and it was Bill Gates and the Rock. And the Rock at the time was still a wrestler. He was not acting. I don't think. I don't think he had acted at

[A]

all is where he got the idea for acting, I believe.

[B]

I didn't know him from any. He was just this big guy and he was hilarious. And, and you know, Bill Gates with the stupid little whiny voice is like. Well, I think that he goes, no one cares what you think, Bill. And it was like. I was just like, oh, just, just beautiful. It's, it's the, it's one of the most excellent moments in a Microsoft event.

[A]

Bill said, roast me, Rock. Roast me. Come on.

[B]

Well, it reminded me of like that south park movie where Bill, he's like, bring me Bill Gates. He's like, you said Windows 98 was going to be fake. And it was exactly that moment, but with the rock. And it was just, it was so beautiful. It was excellent. But anyway, they're doing fan fest events throughout the world because, you know, 25, that's unbelievable. Great year to celebrate.

[A]

Yeah.

[B]

So terrible. Anyhow, so that's happening. And then actually I remember Apple did the same thing.

[A]

Apple 2 forever. They had a big conference. Apple Forever.

[B]

And that was the end of it.

[A]

That was the end.

[B]

Yeah, exactly right. I went to the last Mac World, that was in Boston, and it was like a. It was like a flea market garage sale in the. In the. The tiniest corner of this vast new convention center. So conferences die.

[A]

Terrible. Terrible.

[B]

So two sets of things happening here. Gears of War E Day is the next Gears of War game coming out in early access.

[A]

Is that the one with Batista in it? Dave Batista is going to be in the next Gears of War.

[B]

It should be. Yeah, totally should be in the movie. Yeah, that's. Yeah, yeah. Okay. I'm not sure about that. But the next game that's coming out is a preview. I'm sorry, a pre quell of the original series. So it's got those original characters, but younger as the. You know this. Well, it's not an alien invasion. It's actually coming from in the ground, but the. The Horde or whatever it's called. The, you know, the aliens that live underground are coming out. Honestly, this game looks awesome. So it looks pretty. If you have a Game Pass subscription, you can play it starting tomorrow. I think It's Thursday the 6th, I believe. Yes. And then, yeah, if you pre order the game in the Microsoft Store, Steam or have Game Pass ultimate or PC Game Pass, you can play it starting Thursday, August 6th. So that's great. I'm looking forward to this. This game looks. I always like the gear single player stuff and this one looks really good. So that's. That's good.

[A]

Nice.

[B]

Yeah. And then more game pass games. And we go through this every. Twice every quarter. Sorry. Twice every month.

[A]

And Richard and I go, what game was that?

[B]

Oh, I do the same thing. Most of these. Well, I've heard of Heretic. Heretic and Hexen. That's awesome. Those are the classic games.

[A]

Are classic.

[B]

Grounded 2 is another really good game. And then the rest of this is like.

[C]

Yeah, I don't know what it's like

[B]

power Wash Simulator 2. It was so popular.

[A]

Do not knock the power wash. Just

[B]

that they're like now.

[C]

It's now with clean.

[B]

I like doing this thing on this wall. But what if it was a different surface? Okay, whatever.

[A]

I got to write my dirt.

[B]

The game will be like salt and like some cleaning fluid to get a stain out of his shirt, which is going to be like a game. You know which combination of things works on, like a white shirt with an oil.

[A]

Power wash fans. You. You speak up for your game. Speak up for.

[C]

These are like whole YouTube channels just like cleaning carpets and things.

[A]

Oh, yeah. People love that.

[B]

By the way, one of my favorite YouTube channels is a guy mowing lawns. And it is. It's spectacular.

[A]

Oh, I know which one you mean. He cleans up yards.

[B]

Oh, my God. It's awesome. It's incredible. In Kansas or Iowa, somewhere in the middle of the country, we'd eat.

[A]

Yes.

[B]

And he just does it for free. He does the edging and people are like, almost crying. So happy. Yeah, it's awesome. Like, it's awesome. Yeah. So would that be a good video game?

[A]

No, but It's a great YouTube video.

[B]

It is a great YouTube. I know. It's crazy thing to recommend the things that we watch really good now that

[A]

we don't have the networks holding back the good stuff.

[B]

Yep. I don't. I. It's. It hasn't been published on my site yet, but there's. Microsoft is doing another round of testing of system updates for the Xbox consoles. So I don't have that in front of me. I don't even know what's involved. It happened just as we were sat in the show, but that's happening. And then they keep bringing the Xbox app to different smart TVs. So if you have a Hisense TV 2024 roughly on.

[C]

So it is an Xbox.

[B]

Everything's an Xbox. I don't know if you got the marketing message.

[C]

Message lingers on.

[B]

It's like the Oprah thing. You're an Xbox and you're an Xbox. You're an Xbox. Well, not Hemis in a coma, but

[A]

have you tried on a smart TV these Xbox?

[B]

No, I would never do that.

[C]

Terrible.

[B]

Let's like how could we introduce more latency into this process? Right, Exactly. You know, one would be these things

[A]

have the processes and these things are really pathetic.

[B]

And it's like Bluetooth connection to what's happening when I would take it a photo.

[C]

We're all posing for photos.

[B]

Okay, so there's that. So last I think it was September, a consortium of companies that involves the country of Saudi Arabia for some reason decided to buy Active, sorry Electronic Arts for $55 billion. And just shy of private. Yeah. And then took it private. And so that happened. That deal closed I think yesterday or the day before. Wow. The this, it's like a private investment fund from Saudi Arabia owns 93.4% of this company.

[C]

Wow. Okay.

[B]

The thing I don't quite get here because they're going to be massive layoffs by the way.

[A]

Sure.

[B]

It's an all cash transaction.

[C]

I know a bunch of EA people who've already left. Like it started going on. It's like we gotta go find something else. Yeah.

[B]

Speaking of happy, you don't want to

[C]

be around for this.

[B]

Yeah. There's been a lot of memos that trying to paint this in a positive light. But 20 billion of this includes debt financing and that's going to be the layoffs. It's like we have to account for this somehow. We have to make this money up somehow. And so we'll see what happens to ea. They have a, you know, incredible franchises. They have a lot of the big sports games. Obviously Battlefield is a big thing as well. So we'll see what happens. I, I think you can expect to see. I don't know how they do it. I don't know if they have studios internally. They must I some studio closures, etc.

[A]

Pokemon Go got acquired by these guys. Okay. And it turned out what they really wanted was the all of the location data collected.

[B]

Yeah, yeah, yeah.

[A]

And then now selling it to weapons.

[C]

Oh, good.

[A]

So good.

[B]

What could possibly go wrong if you found a Pokemon in a park that could be like the site of a missile assault?

[A]

So what they, what Pokemon was doing for a while, Pokemon. This is that game Pokemon Go where you walk around. I remember you'd get to somewhere and say, hey, you know what'd be really great is if you walked around it and filmed from every angle what it looked like.

[B]

Right.

[A]

And it turns out that was specifically because satellite imagery doesn't capture things under bridges and in obscure areas. So they were getting you to record video of these locations. Oh, man. And it made them very valuable.

[B]

The guy there. Andrews or Andrews game. Who wrote that? Orson Scott card.

[A]

Scott Card.

[B]

Isn't this a book by him?

[A]

It feels like it.

[B]

That's crazy, right?

[A]

Feels like it.

[B]

Oh, man.

[A]

I don't know.

[B]

What.

[A]

I can't imagine that EA has anything like that. But still, I don't know.

[B]

See, well, there were. I don't know. Yeah, I don't know either. Crazy. Any world. What a world. 55 billion in cash.

[A]

Well, and I played Pokemon Go like crazy for men.

[B]

We did a home swap in Paris, and it was. Yeah. So it must have been 2016, because my son wasn't there. And.

[A]

Oh, that was the year it came out.

[B]

And we were up, all three of us, finding little cartoon things in Paris, like idiots. But I don't.

[A]

A fun game.

[B]

It was.

[A]

Lisa still plays it. She loves it.

[B]

Yeah, no, it was fun. The truth is, it was fun.

[A]

Yeah. And it gets you out of the house.

[B]

And you be. Well, we're. We're. We're in Paris. I mean, we're already out of the house.

[A]

Oh, yeah. What fun is that?

[B]

Well, because, like, we're walking around and then, like, Kelly screams like, I found one. You know, and it's like, okay, settle down over there.

[A]

We were in Malta playing the game, and some people that didn't speak English came up, said, come on, come with us. And I thought. And we started following them because, you know, there's a distinctive thing when you're playing Pokemon Go and you're so swirling your finger around to catch Pokemon. So they must have seen us. And they. It was a group of four guys, said, come on, come on. And I thought, either we're gonna get murdered or we're going on a raid. And it turned out we were going on a raid. It was fun. It was so much fun. We met these people. Yeah, it was really great.

[B]

We had a thing on, like, when Angry Birds first came out. It was huge. Right. And we. And I think my kids just had, like, the little ipod touches. Yeah. We're on a plane, I think, flying home from some home swap. And the guys behind them saw that they were doing Angry Birds. So they all got together in the same room, like my kids and these two older guys, and they're all playing Angry Birds together.

[A]

Brings people together.

[B]

Yep.

[A]

Take that, Asha Sharma.

[B]

Right to layoffs. All right, so Sony had their earnings announcement. I've stopped trying to translate Yen into dollars. I can't stand it anymore. It's just too much work.

[A]

But million yen to one, but.

[B]

So they're not having a good time right now. Yeah, their biggest business is gaming.

[C]

Right.

[B]

So gaming network services. That's PlayStation. They sold 1.3 million PlayStation 5 consoles in the quarter. They've now sold 95.3 million overall. That's awesome. Frankly, I mean, you know, the best selling one I bet was probably two. Might have been in the 140 range somewhere, you know, something like that. But this is better than PlayStation 3. I don't remember for it. They haven't got it before, but it's, it's good, you know, for them. So it's good. I mean, obviously it's going down. I mean that's the problem. But they have 125 million PlayStation accounts. They address the component prices there. They're okay with ram. They're not doing disks.

[A]

We're okay with ram.

[B]

No, like we bought up enough of that. We're going to be good for the fiscal year. Which goes.

[A]

How much RAM is in those things? Probably not that much.

[B]

Yeah, no, probably not. And we don't know, maybe. And it might not. I'm sure it's not the fastest ram. Like it doesn't need to be.

[A]

Right?

[B]

Probably doesn't need to be. But, but they, but that was, you know, that's the right thing to say out loud. Like, you know, don't worry, we have a plan. We have a plan for that. So that's good for the, you know, for the. Through mid mid next year. But their big thing was they addressed the. I think this is a separate article. Yeah, yeah. So this is, this kind of story bothers me. Right. So Sony announces that they're going to stop making physical discs.

[C]

Right.

[B]

The rational response to that is duh. Yeah, of course you are. This doesn't make any sense anymore. Right. But the people who like this stuff are very vocal. They might be a small minority, but they are very vocal.

[A]

My kid is very vocal about it. He's 22 and he says, I sell my discs, I get a resale value.

[B]

No, I'm going to get, I'm going to get to that. Because that to me was the thing like, so what's the market for that? What does that look like? Right.

[C]

For use games.

[B]

So I just want to see where the figure is. So I know I put this in here somewhere. I want to say that something like, I don't see it. But yeah, 82% of the games that Sony sells and third party sell for PlayStation are digital, not desk. So where, where does all the game selling occur? Mostly. Right. Places like GameStop. Right. So the CEO of GameStop came out and said I just want to be super clear about this. This is the tiniest part of our business. It means nothing. If they killed us today, it would impact us in the slightest. And the big argument to be made about discs is that you have a thing that's an ownership that you can sell it to someone else and say okay, now I can earn like you would with a paper book or something. Right. Like it. Like that I, that I do understand but I feel like the list of advantages to digital is so long that it kind of weighs that. And, and the other thing is when you buy a disc, it's like the product code. You was your dad or your. Who did you say bought the new computer at Staples or whatever?

[A]

Oh, father in law.

[B]

Father in law. So it's, it's kind of like that. You get this thing but you still have to download the whole game digitally. Like it's almost never. Could you just put a disc in and just play like it's, you know, there's always updates.

[A]

So I do want to mention the CEO of GameStop is not the most credible source for anything.

[B]

Oh, I agree.

[A]

They just put in a bid for ebay.

[B]

Right, right, right. I mean, yeah, I mean, but, but look, this is a company.

[A]

Yeah. It's not our biggest business.

[B]

Our biggest suggesting auctions online physical retail store chain that sells chalk keys essentially by ebay that wants to buy ebay

[A]

in a hostile takeover.

[B]

I'm not saying it's the business of the future. I'm just saying, you know, by and large, if you're going to sell games, there's a synergy.

[C]

It's a synergy, my friend.

[B]

Yeah, yeah. Things that adults who behave like children like. Yeah. Okay. I guess Disney World, you know, Disney World successful. Yeah. Okay, but look, they just re entered like guys, I'm sorry. Like the data is really clear on this.

[A]

I'm sure it's true.

[B]

Yeah, I'm sure it's true. So.

[A]

But it does, I think it just, it reminds people they don't actually own these games and.

[B]

But you know what?

[A]

Care.

[B]

Who cares? No, no, I mean that like almost literally. I'm with you in the sense that all of our lives are temporary anyway. Like, like my physical ownership of like a Star wars movie on some form of disc that could be harmed easily in any way. What is the meaning of this?

[A]

Like, look, I used to say this on the radio show 10 years ago. Physical media is dead. Get over it.

[B]

Yeah, yeah.

[A]

And people would hated me. They yelled at me.

[B]

No words.

[A]

But it's. But it was inevitable.

[B]

And now we live in this era where like these, like the. My definition of a hipster is the person who is nostalgic for a time they did not experience.

[C]

Right.

[B]

These kids who are buying you love

[A]

vinyl because you never lived.

[B]

Exactly. You don't understand.

[A]

Like it doesn't ever owned a dishwasher.

[B]

It doesn't mean that everything has been better as we evolve. Like there are losses and gains.

[A]

Just nostalgia.

[C]

Yeah. It's just.

[A]

I like it though, for like a

[B]

vinyl record literally loses quality. Is that thing scratches it into the crown every time it spins. Does that mean nothing to you? I mean, like, I. You know, whatever. Yeah, it sounds warmer. I'm sure it does. So whatever. They're just nostalgic for this stuff. So this is not nostalgia yet. But yeah, like mourning the decline or the disappearance of something that you're used to.

[A]

And humans hate change. This is the theme of this show, basically.

[C]

Right.

[A]

We all hate change. Chime in for a second. Anthony Nielsen, ladies and gentlemen. No, our producer. Producer.

[B]

You can chime in, but not if you're a physical media fan.

[A]

No, no.

[C]

Well, so like, why, why, like what's

[A]

the benefit of going PlayStation versus PC once?

[B]

Like, there's no discs. Like, the future console is probably going to be a thousand dollars. Get a Steam. Like a Steambox.

[C]

Steambox is more than that. Yeah.

[A]

I actually asked Paris Martino how she was a serious gamer. She plays all the time. How do you play? Says Steam Deck Switch. I said, you have a beautiful tv. Sometimes I hook the Steam Deck up to this tv.

[B]

Right.

[A]

There's no discs.

[B]

Everyone does things differently. I mean, I. Yeah. So what's it. Right. That's a good question. I mean, you still. These. If we're in a console. I feel like consoles are just outdated and need to go away and that will get its own.

[C]

That's not gonna anger anybody.

[B]

We're gonna.

[A]

No, nobody's gonna buy that message. You know, the PC is dead. Paul, did you hear that? Yeah. It's all about the phone.

[B]

Well, we still sell hundreds of millions of these things every year and we still sell tens of millions of consoles. And the nice thing about the PC is the kind of infinite scalability of graphics quality and performance, etc. There's no reason you can't do that in a console. There's some of that we're starting to see that change a little bit. As Microsoft evolves the Xbox to be even more like a PC, I hope to see more of that. I'd like to see a modular design where you could improve the graphics, improve the.

[A]

So you think they'll keep making it

[B]

for the short term, but the question is, will they have a desk for this next one? And my guess is no, because that's a 25 cent part that kills their profit margin, so.

[A]

And the disc was invented in an era where the Internet wasn't ubiquitous.

[B]

Yeah, well, I mean, look, I, I'm, I'm rereading this thing about the history of Commodore. And like, one of the big changes that occurs in the late 1980s is that audio CDs occur. And it turns out you could store data on this thing and we have this machine has a floppy that holds whatever it was, 800K, you know, kilobytes or megabytes, I guess. Megabytes. No, or whatever it was. And then you have like 600, you know, versus eight or whatever the numbers are, and it's like, okay, we're going to move to this format. So that kind of change was super positive for the time, but now we just have like infinite, you know, storage and infinite lots. You know.

[A]

Who was it? What was the. Who is the Microsoft executive who said, well, you're not going to be able to play the games on a submarine.

[B]

Right. Don Matic, by the way, worked for my Xbox for 16 more seconds after I said that.

[C]

Yeah. But his point was, John Matric.

[A]

People got upset because you needed Internet access to play a game.

[C]

Right, right, right.

[B]

Well, they, they were promoting this notion of constant. You had to have Internet access to do anything. Right. Not just play a game, like to just have the thing.

[A]

Right.

[B]

And it was like, hold on, guy. Like, what about the guy? It's not just submarines. Like, what if you live out in a cornfield and. Right. You know, you don't have broadband or whatever. Like, what does that mean?

[A]

Like, everybody complaining now?

[B]

No, but that he, but at the time he said that it was 2014 or whatever that. Or 2012, 2013, whatever that was. He. That was the wrong thing to say then, of course. Right.

[A]

And probably there's, you know.

[B]

Well, I mean, look, we live in a world where you expect constant connectivity. Everyone's had the experience, probably. How to hear you walk around, you're

[A]

like, what the, where's the WI fi?

[B]

Why isn't this working?

[A]

Right.

[B]

I think we got to Mexico, we didn't have the Internet. And I thought, I, I'M like, I could do this for a day. By the end of the day, I'm like, my wife's lucky I didn't murder her. She had nothing to do with the problem.

[A]

Problem.

[B]

But she was in the room and I just wanted to kill something. Like, I was like, I can't live like this, you know, I mean, it's, it's weird how you go like it goes south really fast.

[A]

Yeah.

[B]

So, yeah, I mean, expectations change over time for sure. I mean, eight track tapes used to fade out in the middle of a song. If you bought Boston's first album, one of the greatest songs ever recorded, More than a Feeling on the eight track fades out kajok and then fades back in. What the what? That's where you split it. That's crazy, right? So, I mean, it doesn't mean that the next thing was 100 better. The next thing being like cassette tapes or whatever.

[A]

I miss the eight track fade. What are you talking about?

[B]

There was a physical kind of quality to it, right.

[A]

Like, I like the chunk.

[B]

It was like a cartridge. Like a. Yeah, like a video game console or whatever. Like it was kind of cool. But yeah, it would fade out the stupid. Right. But these are the conversations, you know, These are the things we debate.

[C]

And gotta tell you, I got my local stash of music on my synology working through Home Assistant this past weekend. Yeah.

[B]

So I've been playing a lot, a lot with that kind of thing. I, I just. The thing I published right before we started was about movies and TV shows and different kind of content. There's different. Kind of like you're talking about ownership or whatever. Like you could buy a bunch of books. Yeah. And I did. I had many bookshelves full of books. They were organized and it was beautiful. It was also like kindling for fire and 2 tons of paper to carry around every time I moved, which I moved a lot.

[A]

Yeah.

[B]

So I had these sagging shelves and shagging floor. Sagging floors. Right.

[A]

Yeah.

[B]

So, okay, so you go to a Kindle so you can have a device as big as a phone that holds every one of those. I mean, there are there things that are not as good with this thing. Yes. I can't smell the paper when I, you know, whatever. Yes, I, of course. But you kind of make that change. But do you. The other thing though is so I like everyone else in my industry, I have ADHD or whatever, so I have to own these things. They have to, they have to be organized. Exactly. Right. If I have all the James Bond movies, the Question is not what order they go when they go in chronological order, not alphabetical order, but, you know, that's whatever. That's the mentality. Dr. No, think about it like a movie, a TV show and a book are examples of things most people, for most of those types of content are going to do one time. You know, there are some things, movies, whatever, that you will re watch, but like the, the notion that you have to own the thing.

[C]

Right.

[B]

In most cases, not all cases, is like, what are you doing?

[A]

It's a. It's an emotional thing. It's not a rational.

[B]

No, it's. It's completely irrational.

[A]

Yeah.

[B]

But also normal and human nature. I'm not discounting that part of it. It is. But music is a good example of something where maybe a subscription service, as much as they stink, can make sense because there's so much music and you want to mix things and you want to do whatever, and it's like you will re. Listen to songs again and again, you know, so it's different for everything. But video games, one of the things that makes sense about Game Pass to me is that a lot of games are one and done. So a new Call of Duty comes out. You have it on Game Pass. You don't anymore, but you did for a little while. You could play that new game. You could be done with it in a month or two and then move on to the next thing. And that model, to me, does make some sense. Does. Are there people who played the same game month after month, year after year, decade after decade? There's almost no way. Because those things improve so much. I mean, I, you know, in many ways, buying that kind of thing might not make sense for most people.

[C]

Right.

[B]

You know.

[C]

Right.

[B]

But it depends on the person and it depends on the type. And I think the other thing that

[A]

bugs people is you may not have a choice.

[B]

Yeah, well, that's, you know, you're being

[A]

forced into it whether you want to.

[B]

So. By the way, so speaking of choice, you know, there's a. There's a very common phenomena that I think everyone's heard of where if you have too much choice, it becomes like a big blocker. So you got a choice, Right.

[C]

Paradise.

[B]

Right. So you go to supermarket, there's 111 kinds of Italian dressing. You need Italian dressing. You're looking at the sweeping vista of Italian dressings, and you're like, yeah, I'm not buying Italian dressing. I can't deal with this. It's just too much. So we just got rid of a bunch of Subscription services. And I got to tell you, there's a weird kind of mental freeing effect where now that you don't have infinite choice in movies to watch or whatever it is, you don't do. The thing I used to do with my wife, which was spend more time trying to find something to watch than we actually did watching the thing. And I know that it's a slight exaggeration, but I have at nights, and I get so mad, like, 45 minutes of like. But this one, look it up. She's looking it up on Metacritic or whatever.

[A]

Worst.

[B]

It's like, oh, that one's a 27. Yeah, like, like. And, you know, we spend nights and it's like, all right, let's go to bed. That was a fun night. You know, shopping for movies. So sometimes, you know, you limit choice. And it's actually.

[A]

I miss the days when you'd go to the movie store and you'd Walkbusters

[B]

and look at the movie you're watching.

[A]

Windows Weekly. We are live in Las Vegas at the Black Hat Conference. Thanks to Threat Locker for bringing us out here. I hope you're having fun. We're glad you're working watching. And I do want to give a special shout out, a real thanks to the folks from our club who make all of this possible. We really appreciate your support as club members. It keeps us on the air, literally. And in fact, if you are a club member, we don't have to show you ads, so we don't. We can put chapter markers in. So we do. You also get access to the. The Club Twit Discord, which is a great place to hang out and lots of special programming, programming we would never do because we could never get an advertiser to sponsor it like Jeff Atwood's off by One and Stacy's Book Club and Micah's Media Club. Actually, Micah's Media Club's gonna be fun. We're doing some very classic, very famous animated shows like the Marge and the Monorail, the classic Simpsons episode. We've got a Rick and Morty episode. So we do a lot of fun things in the club. Our AI user group is twice a month now. Anyway, if you're not a member of the club, please. Twit TV Club. Twit. This programming only exists because of our club members. Literally. Your membership makes a huge difference to us. Thank you so much, and we appreciate it. And if you're not a member, consider. I know times are tight, and if you can't make it, that's fine. We're glad to have you no matter what. But if you can Twit TV Club Twit.

[B]

Amazon Health AI presents Painful Thoughts why did I search the Internet for answers

[C]

to my cold sore problem?

[B]

Now I'm stuck down a rabbit hole filled with images of alarmingly graphic sores in various stages of ooze.

[C]

I can clear my search history, but

[B]

I can never unsee that. Don't go down the rabbit hole. Amazon Health AI gets you the right care fast.

[C]

Healthcare just got less painful.

[B]

Hey, it's Ryan Reynolds here for Mint Mobile.

[C]

Now.

[B]

I was looking for fun ways to tell you that Mint's offer of unlimited Premium Wireless for $15 a month is back. So I thought it would be fun if we made $15 bills, but it turns out that's very illegal. So there goes my big idea for the commercial. Give it a [e-mail] Switch upfront payment of $45 for three months, $90 for six months or $180 for a 12 month plan required $15 per month equivalent taxes and fees. Extra initial plan term only greater than 50 gigabytes. Me slow when network is busy. See Terms.

[A]

I'm not giving up.

[B]

I am selling the building.

[A]

The final season of FX is the Bear.

[B]

The restaurant is flooded. Everything's either gonna be okay.

[C]

Nope.

[B]

Stop. Or not.

[C]

We are outgunned and we are outmanned.

[A]

But we have each other. FX's the Bear the final season, all episodes now streaming on Disney. Now back to the show and the back of the book. The best part of the show where we get your tips of the week, your picks of the week, and your whiskey of the week. When we have a Nevada whiskey.

[C]

I do do indeed.

[A]

That'll be interesting.

[C]

Great story.

[A]

But first let's kick off with Paul Thorat's Tip of the Week.

[B]

So I feel like I've been talking about this every other week, but hopefully the last time for a while. But I just spent the last two months updating the book, the Windows 11 field guide and I don't know, sometime last week I finished the major part of it. I added two chapters to it since then. But now I got to go back and look for inconsistencies and things. But I actually updated this book. It's like a thousand two hundred page book. So now it's, it's down to about 760 pages, something like that. Squeezed screenshots down, that was the big thing. But it's done. Like it's actually done. I mean I got it done.

[A]

Until next time.

[B]

It's Never really done. Right. I mean there'll be monthly up 26H2. Yeah. And 20.

[A]

I think the guys painting the Golden Gate Bridge get to the end and they go oh, that's done.

[B]

And they're like oh, now you got to go back to the beginning and do it again. Because that end is now resting. And yeah.

[A]

Yeah. It's never done.

[B]

It is a thankless, endless job.

[C]

Yeah.

[A]

But. But you. You pause now or what do you do?

[B]

I'm going to move on to the next thing for a little while but.

[A]

Good.

[B]

But also there will be those feature updates that come out every month. So I want to. I'm going to try to keep it up to date now going forward. Then I'll switch over to a new edition.

[A]

Nice.

[B]

For 26H2. But yeah. And then I have a style change and things. There's other changes.

[A]

Can I ask you what your work. But the next thing is or is

[B]

that a secret so you can do worldwide? No, I've got this up that markdown book thing. I want to write. I have. I want to do a second edition of the Injured if I Windows 11 book approach. It's kind of in a slightly different now with more in shidifying now with less than shit.

[C]

If I. Yeah.

[B]

I don't know. Yeah. Like two poops on the COVID instead of one. I don't know. I also have this. I really. I've want for a long time. I've actually written big chunks of this. But I want to do an update to that Windows Everywhere book as well because Good. Stopped at when Windows 10 happened which is 10 years old.

[A]

Yeah.

[B]

There's also things I didn't. I want to kind of put in there. But we'll see. I'm not sure which of the. I don't know. We'll see which one happens. Yeah. Kind of work out.

[A]

It's nice. You just like to write obviously. So you're always going to have something.

[B]

I think the other way to say that is I don't like to be around people. Even though even now I'm vaguely nervous. I've been touching a lot in weird ways and I don't.

[A]

They have. They have little stickers you can put at the bottom of your badges. Have you seen that?

[C]

No.

[B]

That says do not talk to me.

[A]

Give me yours, Anthony. Because I got one for Anthony that. I think this would be good for you.

[B]

Yeah.

[A]

Oh, poor Anthony's all tangled up with his bed.

[C]

So many wires. There we go.

[A]

This would be a good one for you. Can you read that out loud.

[B]

Which one? Oh, deep fake detector.

[A]

Oh, you're not wearing the one I gave you. I gave him another one that said introverted but working on it. There's also Extroverted, which I put on leak. Lisa. There you go. You can add that, you can add that to your, your badge. Introverted but trying.

[B]

Did you know Todd Nelms when he worked at Microsoft? Do you remember this guy? So he went on from there to VMware. I'm not even sure where he is anymore, but I still follow him on Instagram. And all what he posts is things about being an introvert and it is almost always the best part of my day. His little meme, things are so great, I miss him so much.

[A]

And mine says, I'll show you mine. Mine says, will code for pizza.

[B]

Love it. Yeah, so that was like in the 80s we would have like the FBI federal body inspector. Yeah, it's like, like that, but for introvert nerds.

[A]

When you're listening to your Boston 8 track, you can talk about that.

[B]

Yeah, that's good. Nice.

[A]

Pick of the week.

[B]

So the Document foundation has gotten awfully vocal lately about kind of a thing that feels like it's almost from the past, which is Microsoft and Office and their document formats and how they're open but not really open because they're never, they've never been like fully documented. So like the implementations are all rather vague and there are compatibility problems, et cetera, et cetera. But anyway, they keep going and they make, so they make LibreOffice and they just published a post about how Office 2021 is exiting support in October.

[A]

So you're going to need LibreOffice if you're going to open those files.

[B]

The thing about Libre, well, there were many things, but they have, it's open source, it's infinitely supported, there is no version where it's like, oh, sorry, you know, you can always upgrade to the latest version for free. It just goes and goes. The history of this is kind of fascinating because what was what became Star Office, I guess actually dates back to the 1980s.

[A]

Right.

[B]

But they were in, by the 1990s, had become sort of, I believe, an open source alternative to Office. Sun bought them when sun.

[A]

And by the way, that's when it all went down.

[B]

I'm not blaming that, but that was what.

[C]

It all went pretty clear trend.

[B]

Well, I mean, yeah, I feel bad about sun, but. But oops. Yeah, so when sun bought them, I actually reviewed Star Office that year for the first time. You know what, 1996 or whatever. Year that was. Yeah, I don't remember but anyway they're still kicking so LibreOffice was a fork of OpenOffice.org etc.

[A]

Etc.

[B]

So they've been around for a long time but this is I. I will never use any Office suite ever again. But if you need something that's like what I would call Office Microsoft Office adjacent like looks and works like that is compatible with all the file actually

[A]

I told my father in law is sorry you bought because all he was using is for that one file. You don't get it.

[B]

Yeah, you do not need a subscription. So I use other things and I don't need any of the other stuff I just need the writing stuff. But I'm never going to use a word processor again. But if you need really for your

[A]

books you probably do it on Google Docs or what do you.

[B]

No, I do it in Markdown. It's all Markdown really. I've been using Markdown.

[A]

I meant to tell you on the next Jeff Atwood show off by one so you know the story of Markdown which is Aaron Schwartz and Jon Gruber and they wrote a specific Gribber wrote a pearl program that was the spec

[B]

but the way he announced it was Markdown was two things. It's this processor that takes the thing and turns it in HTML and then there's the syntax of the but it

[A]

was vague enough that it caused problems. When Jeff started Discourse Chrissy did it,

[B]

you know he was solving a problem

[A]

for him he wasn't designing a language.

[B]

It was a good. Yeah, it was a good thing.

[A]

Oh I don't blame John at all. I'm glad he did it.

[B]

Yep.

[A]

But when Jeff Atwood was creating Discourse, which is the form software we use he wanted to be able to use Markdown and it was so vague they couldn't so now they're actually funded a process Professor BERKELEY Now John McFarland wrote a standardized version of they call it common Mark. It's what everybody uses now we're going to interview McFarland on the next by one he's around he's a very smart guy and it's a really interesting story. Yeah because Markdown everybody uses it right now in the Agent.

[B]

I mean.

[A]

Yeah, that's what the agents all right.

[B]

When I started doing this which would have been I guess for Windows in the Windows eight time. I remember when you started Markdown Editor. Yeah it was, you know, it was different and it was, you know, the tools weren't as good.

[A]

Right. Of course now you have Tapura. Is that what you're using now?

[B]

Yeah, mostly type or I would use IA Writer if it was better on Windows, but it's not on the Mac. It's better get ready because there's going

[A]

to be an onslaught of Vibe coded markdown programs.

[B]

I should warn you. Written at least 10 myself.

[A]

Exactly.

[B]

Yeah. It's become the new like they're all from this guy named P3 at GitHub. I don't know. Yeah, so it's the new version of like the canonical app that everyone writes. The first app. So for a while it was like a podcast app. Was like everyone, you know, and then RSS Reader, RSS Reader, classic. Now it's like, now it's the markdown marked down.

[A]

By the way, my watch now says it's 107 degrees outside.

[C]

So stay inside.

[A]

We're going to stay here for a little bit. I did wear my. I don't know, it looks like I'm wearing lava.

[B]

Step outside night. You're going to burst into flames immediately,

[C]

you know, like on fire.

[A]

Richard Campbell, run as Radio. What do you got for us this week?

[C]

Coincidentally talking to Heather Renzi, who's based here in Vegas. She's spent a long time as a fractional cto, so just doing.

[A]

What is that?

[C]

Literally taking care of multiple companies that, you know, small enough, they don't need a full time cto, but they need that advice, that expertise and so forth.

[A]

I've never heard that term total great, total badass.

[C]

And we, there's a very few people that scare me quite as much. Heather Renzi, she's, she's quite, she's quite potent. She knows a lot what she's doing. And we dove into, we were having a ransomware conversation. I said, can we just record this? Because it's good to just go back and have this conversation. She did. The fundamentals is like, listen, if you need a plan and there's a sandboxing exercise that involves finance, legal and it. And all too often it's the finance guys who sign the cyber insurance policy having never talked to it or legal in any way about it. And then they find out when the crisis hits that, yeah, you don't have the appropriate coverage. You have no, effectively no coverage, you're not in compliance. And so we sort of pull all these pieces together. But she went to the next stage, which is the real sandbox exercise is given you've been ransomware, you're locked out of your system. What breaks first? Like when what falls over? Like, yeah, you're probably not doing sales, and that's bad. But there's nothing falling over there. Like, if you're lucky, it's payroll.

[B]

Right.

[C]

That you may have a few days when you need to pay people and you really have a problem. But there's many other things go wrong. Totally depends on the company. And then given that it's broken, like, how long can you function for? And this is all about giving shape to what are our reserves, what are our actions, that kind of thing. And then the big one and the one that people mess up the most, who can make decisions? Who can make decisions at that moment, who's available? How do we get.

[A]

Who gets to stay in the bunker?

[C]

Yeah, well, and it's literally like you have to. Somebody else is going to detect this. Somebody else is going to be in the firefight. But then it's going to have to be a decision made about when and how you activate the Cyber Insurance, what their plays are, because they have a lot of responsibility in that space. Like, there's a whole method. So we really dug through that entire sequence again, just reminded ourselves, like, this is not simple. And a number of times she said, you know what? Just pay the ransom really well, because

[A]

the money's irrelevant because the FBI says never pay their.

[B]

That was part of that Telegram story. So someone was trying to extort that company and they inserted that CSAM into the.

[A]

Oh, is that. Oh, I didn't know that.

[B]

Yeah, that was the latest.

[A]

They were extorting Telegram.

[B]

Yeah. So that's how it got through.

[A]

So it wasn't. Although, to be fair, there's a lot of crap on Telegram.

[B]

Oh, yeah. Telegram's not clean. Yeah, but.

[C]

Yeah, but in the end, that call is actually the Cyber Insurance Group.

[A]

Ultimately, isn't that interesting. We have a sponsor, actually, I can't remember their name. I'm sorry to say that that's what they do. It's called. They focus on resilience. The idea of, you're not going to bring it all back at once. You need to have a plan. Oh, no.

[C]

I've done rhinos with guys who did the recovery and it's like, it's a year. Don't fool yourself.

[A]

Yeah, don't.

[C]

It's a year.

[A]

Sometimes companies slow themselves down by trying to get it all back quick.

[C]

Oh, yeah. And make mistakes and break more things. Like, you actually dig the hole deeper, not the other way around.

[A]

So, yeah.

[C]

Anyway, fun conversation. Very pleased to have had a chance to spend some time with really, really, really, really bright.

[A]

Now we. I apparently went to bed Too early

[C]

last night because we went and drank some free ranch last night. You were gone and it was good.

[A]

So you. We can't bring liquor on the show floor for obvious reasons.

[C]

Well, listen, listen. When it's my. When it's on that rock said it's

[A]

my booth, I'm just gonna stand off.

[C]

Yeah, when it's my booth, I might push the rules, but this is threat lockers booth. Yeah. You know, I don't mind getting cooked out of my own booth. I don't want to hurt them anyway. So no, I'm not going to bring. Okay, but you know, you would not be surprised if you find me in a dot net ROCKS booth somewhere. There might be a little something something

[A]

out of the bars here in Vegas. Do stock this.

[C]

It is almost only found in Nevada.

[A]

Interesting.

[C]

Yeah, so we're talking about a town called Fallon, which is up in the far north of Nevada. Like we're way down south here in Las Vegas, right? So this is like 400 miles away from Las Vegas.

[B]

Right?

[C]

It's like six hours drive. It's closer to Reno. It's like an hour from Reno. And this area is known as the Lahontan Basin or Lake Lahontan. Now Lake Lahontan is ancient. And you want to know how ancient?

[A]

How ancient?

[C]

Pleistocene. Wow. Now I could go back two and a half million years, but let's face it, that's a bit extreme.

[A]

Let's not start at the beginning.

[C]

Let's just do something.

[B]

Could you start at the beginning?

[C]

First there were the dinosaurs.

[A]

No, no.

[C]

First we have to make a universe. No. So 50,000 years ago, so we're very post dinosaur, but we're well in the ice age, right? And that's when Lake Lahontan exists. And it's about 8,000 square miles, like it's a big lake, right? And what we now know is Lahontan Mountains. If you get up there, they're just little islands, right? But it is the era of the megafauna. So this is the woolly mammoth Smilodon, which you'd know is saber toothed tigers, Mastodon's giant ground sloths. The first evidence of humans in this part of the world 16,000 years ago. So humans were around. And believe me, this all ties in. I'm not just doing this story for fun.

[A]

Paul often gets confused for a giant ground sloth, by the way.

[B]

First of all, I always called Smilodon. And secondly, the evidence of humans being around them were in that thing's stomach.

[C]

Nice.

[A]

Not true. Actually.

[C]

Not far from Fallon. If you get up there. He's an area called. Called the Grimes Archaeological Site. And that has this spirit cave in it where they found spirit man in the 1940s. This is the oldest mummy ever found in North America.

[B]

Wow.

[C]

Is in this area. Right. In Nevada itself.

[B]

It's actually rather surprising, although I guess they would have come over the.

[C]

And modern DNA testing on the material from that mummy has shown that the poet Shoshone native tribes of an area have a direct lineage to this person.

[A]

Wow.

[C]

So just, you know, clear evidence. Wow.

[A]

They've been there since then, literally 10 millennia.

[C]

Okay. Like, it's badass.

[A]

That's great.

[C]

Now, as the ice retreats, the water starts to disappear. It becomes more of a marshland. Right. Not lakes anymore. And the deepest part of this is the Carson Sink, and it becomes covered in these reeds. They're called Thule. It's a. It's a kind of water plant, and it's common elsewhere in the world. It's pretty basically gone from that area now. They're trying to bring it back. But the Toitokuta are the people of the Shoshanae that lived in this area that basically lived on the marshlands using these plants. It was food, it was bedding, it was housing, it made boats. It does everything. It's an extraordinary plant. And they were literally there living in that style. As the lake continued to shrink for thousands of years. Wow. Okay.

[A]

Wow.

[C]

So by the time you get out of the Ice Age and you're now in the Holocene and so forth, and the climbing have changed and the lake continues to shrink, the wetlands are getting smaller. We finally fast forward into the.

[B]

The.

[C]

The Spanish colonial times, okay. And the Spanish nominally, you know, controlled the own. The area we know as Nevada, but they never came here at all. The first time you actually see any Europeans in this area, it's the Hudson's Bay Company, and they're coming down the Humboldt river, which is the very northern part of Nevada north of the Carson Sink. They don't actually get down in this particular area. Now, when Mexico gets independence From Spain in 1821, normally all this land is now Mexico, right? Nominally. Cause they don't even come up here either. Right. None of the Carson river basically would have come in. It's just too far. Where you see routine Europeans coming through this area is the California Trail. Right? So this is the immigrants coming from the eastern part of the colonies of the United States trying to get either to California or get. And they travel down the Humboldt river, and then they split. They either Go north to the Columbia river, they go south to the Carson River. South is the California Trail, north is the Oregon Trail. Either way you're getting dysentery.

[B]

I was gonna say you have dysentery.

[C]

Yes, you are getting dysentery. But when you turn south and if you go onto the i80 which is the highway that goes all the way across and where the 95 conjuncts they have a marker for this thing called the 40 mile desert. This was this famous part of going down to the Carson River. When you leave the Humboldt Trail, so you hit Humboldt Lake, you should load up on water because you have to cross the 40 mile desert. But this is not a sand desert. This is an alkali desert. This is the residue of the Lahontan Lake as it's been contracting into those marshlands, leaving behind these alkaline powders. And these alkali powders are quite dangerous. Like if you breathe them, it would burn and you'd immediately cover your mouth. But for the emigrants at this point, they're thousands of miles into the journey and all they're still coming up to Hartberg is going to get.

[A]

They're looking for burning man. Right?

[C]

You would hope something's going to burn and it might be the men. You have to cross this desert. Right. Some would try and push straight through 20 to 30 hours non stop. Do not stop for anything and often kill their animals and sometimes just kill themselves. In fact, the 40 mile desert was literally littered with carcasses of oxen, people, wagons and so forth. The sort of ideal model was a two day where you'd load up on water. You travel till you got tonight, then you camp the night on a relatively stable spot. The next day get out. You go any longer than that, you're almost going to all kill every bit of your load bearing stock because they're breathing the alkali dust.

[A]

Wow.

[C]

And if you get to the end, you get to the Ricardo river. There was a little settlement there they called Ragtown. And the reason was when you spent two, three days in an alkali lake, the stuff on your clothing is burning you. And so you wash everything. It's Ragtown. And so literally these see rags everywhere, everything's hanging up, drying. Wow. Right. So this was this period. Here's the stupid part. The Dakota were just to the east of the whole thing in a marshland that was perfectly habitable. Like if they'd just gone like 40, 50 miles further east, they could have gone along the waterway and be fine. But they were sticking to the trail. And they went through this incredibly dangerous spot and it just killed a lot of people.

[A]

By the way, they didn't have Google Maps.

[C]

I think the Donner Party made it through most of the. The Donner Party went through there. They really made it through that.

[A]

No kidding.

[B]

That they made it through that?

[C]

Yes. Now they'd made some other mistakes. So they were weeks behind time and then they went into the Sierra.

[B]

You may have heard of the waste mistakes. Yes, yes.

[C]

All right, so let's fast forward a bit. And now the whole time, that whole area is Mexico and it's America's crossing Mexico into California. Right now in 1848, we get the Mexican American war ending. All that land that's Alta California now becomes us. So they're actually legal crossing that. And right after that you get Sutter's Mill and the Gold Rush and everything goes insane. The amount of immigrants goes way, way up. Like there's way more pressure in that area. At the same time, in 1849. And this all directly relates to Nevada. You have the Mormons, right, with Brigham Young, settled around Lake Salt Lake City and they declared the entire area the state of Deseret. Oh, yes, right. So this is.

[A]

That's right.

[C]

Utah, Nevada, parts of Oregon, California, Idaho, Wyoming, Colorado, Arizona, New Mexico. Very wide ranging. Congress is like, oh, I don't think so. But they haven't made any decisions either. But the Mormons are there and they've raised a militia and they are the de facto government in the area one way or the other. Now, they never get to the Carson river area, but nominally it's their quote, unquote, their land. By the way, the Californians also do the same thing, trying to expand their state going east. They also get pushed back on. It doesn't go anywhere. But finally, in 1850, Congress creates the Utah Territory. And so that's Utah. That's Utah, Nevada, somehow, Idaho, big parts of Wyoming, Colorado as well, center around Salt Lake City. Brigham Young is the governor, all wrapped in lds. He has the Nauvoo Legion, which is his militia, and he operates that whole area. Now, again, they don't come to Carson River. Like they don't actually are in this area of Nevada, but they do. They are sort of the rules there now. And amazingly, in this story about the Frey family, supposedly this in the middle of all this, the Frey family storm starts in and around what will become, but is not yet Fallon. I think it's apocryphal because as I dug it, it's just like it doesn't

[B]

line up well, because it's a farm and this area doesn't seem like, oh,

[C]

it's very farmable, actually. Along the river was fine, but you had to be along the river. It was mostly ranches. It was hay.

[B]

I can't even picture what yeah must look like.

[C]

But the argument is like, where did these people come from? It's like these are people that were on a wagon train and looked at Sierra Nevadas and went, nah, we're staying here. And there we. I did pull data from a bunch of different areas as far as Reno and so forth. There was a bunch of different Frey families, but is very classic with whiskey making. You always want, like, old lineages. So I think they're just tapping these old families. It may not have any real relation. There is a. Remember, this is Nevada, still not even a state. Right. One of their claims of this was that Charles Frey was one of eight people who got a land allocation, but he got it before the state was a state. This seems unlikely that that was even true.

[B]

I'm sorry. Yeah, you're using loop.

[C]

Yeah.

[B]

What the.

[C]

Deep down, I hate myself. I like to torment myself. It could have been one note, right?

[B]

Okay, fair enough.

[C]

Anyway, they called it a ranch for a reason. They're mostly growing hay and it's cattle and horses and that sort of thing. Right. Although they eventually will get enough water to be able to do barley and wheat and then into potatoes and that sort of thing. And then Carson Valley is one of the very few places where that could actually function. Now in 1857, we get the Utah War, right? And this starts with this Utah territory. There's a lot of immigrants. There's still a lot of pressure around gold Rush and things like that. And so the Mormons are getting really concerned about how many people come through that are not Mormon. And there's this conflict. There was a local militia leader, but part of the Nauvoo Militia, a guy named John D. Lee, who just. Who freaks out about this one group of immigrants. There's 150 of them, and they besiege them and then in a fake negotiated truce, kill everybody except the youngest children. Like, kill 120 people. It's a massacre. And of course. And then Brigham Young comes out saying, like, I wrote a letter saying, don't attack any immigrants, but apparently it arrived late. Like, it's all very sus. Lots of misdirection.

[A]

Actually a movie about this.

[C]

Yeah, it's really good. Lee will be put to death for 20 years years later. And the whole time saying, like, I'm the patsy on this. But it's what kicks off President Buchanan to send the marmy to the Utah territory. But they screw that up. But these guys get stranded in the winter and almost kill them. Get killed. Meantime, Brigham Young's guys are actually destroying their supply trains. So they're starving and so forth. They end up being stuck in Wyoming. And the upside of that is by 1858 they negotiate a peace. The army never conflicts with the militia. And so they do bring him youngsters down as governor. A non Mormon becomes the governor of the Utah Terry guy named Alfred Cumming. And perfect timing is then in 1859 you hit the Comstock load. So this was a huge silver discovery in an area they called Virginia City, just west of Fallon. And that's basically a new gold rush. People from California are coming up. There's more people moving to Nevada. This flood of people come in and they want California laws. They like the mining laws, like they know how to work in those things. But the Mormons are strictly against all of that. And you also have technology moving. This is the. By 1860 you have the pony express. So you now have stations keeping horses in different parts along there so they can move letters back and forth quickly. And in 1861 they get the telegraph. And that becomes wildly important because 1861 is also the beginning of the Civil War. And Lincoln needs to get the 13th amendment passed and one of the. And he needs. He doesn't have enough votes with the existing colonies. He needs another state. And Nevada's arg They're already fighting to be separated and they've only been in territory for three years. It's kind of unprecedented ground. But one of the rules to becoming a state is you have to send your constitution for your state to Washington D.C. now if you. If it's 1860.

[B]

Flash disk.

[C]

Tricky.

[A]

Yeah.

[C]

A little tough.

[B]

Yep.

[C]

They do it by Telegraph.

[A]

Oh, interesting.

[C]

16,000 words.

[B]

Wow.

[C]

It takes two days. It's the most, longest, most expensive telegraph in history.

[B]

Wow.

[C]

To get the state created in time to be part of the vote for the 13th amendment.

[A]

Wow.

[C]

So it's just.

[A]

Were they for and against?

[C]

They were oddly enough, for. For the 13th amendment.

[B]

Right?

[C]

Yeah. That's how they got it.

[A]

Yeah. Yeah.

[C]

But they become a State in 1864, which means they become a state during the Civil War. And if you see the state flag for Nevada, it says on it battle born.

[A]

Oh, interesting.

[C]

And it's a reference that they were born during the battle for the country.

[B]

Wow.

[C]

Now at that point there's A, you know, they've become a state in less than three years. There's a bunch of other territory that's still not state around them. They got about 40,000 residents mostly because of Comstock. And so now the, the farmland I was talking about from 1854, now it's 1891, same land, but it's controlled by another family called Joseph Douglas. And they built this house on it still there was built in 1917 called the Douglas Mansion. The final change, this is an important one. It has to do with the land behavior is called the Newlands project. That's in 1902. And this is the damming of the Carson river and building of canals and irrigation systems and so forth so that get rid of the mix of wetlands and the tula marsh and the alkali deaths and so forth. They're going to constantly deal with, you know, alternating floods and dry seasons. You build a reservoir and then you distribute the water so you have consistent water. So now you can, you don't have to count on natural flood irrigation. You have reliable irrigation. So it's a great plan for the farmers. It's incredibly destructive for the data population because it destroys the wetlands once for all, which is now there's a huge initiative to restore those wetlands and they're having some progress on it. But it's what makes grain growing in the Lahochian Valley viable, which is why you start talking about things like whiskey in that part of the world. Now the clear lineage on this property that is the Frey ranch comes in 1944 with a, with a Charles P. Frey Senior buys it from the Douglas family and they are obviously benefiting from the Newlands project. And then it's the grandson Colby that is now running the farm today. So they want to talk about 1854, but I think it's really 1944 that you really get the, the logical operation.

[B]

Slight difference in.

[C]

Yeah. And I went and looked these folks up like the Colby's father, Charles Ray Jr. Is actually a CPA accounting minded. Right. So they're pretty smart. And in fact, even when Colby takes over the farm in the 1980s, they're mostly just growing grain. But they add grapes, they start. They actually build a winery. Wow. They're just trying to make more product. They call the Churchill vine the church in Vinelands. They're very much modeled after Sonoma and Churchill is the name of the county that they're in. So that's where they get that name from. And they have a tasting room and all those sorts of things like it's very commercial, by the way. You will find none of that's on a website. I did this all out of archive. Org. They've ditched it all because they're a whiskey place now. But they did wine for many years.

[A]

Interesting. Probably not very good wine is what I think.

[B]

They probably do it again, though.

[C]

I mean, they did all right, but they also then started experimenting with distilling and they were playing with brandy and things like that. And again, I poked through their older websites and they had various kinds of grappa, they had an onion brandy, pearl brandy, different kinds of gins and acid and so forth.

[A]

Why would you do it on a brand?

[C]

Well, and part of the issue, the martini.

[B]

Without the martini, there were no.

[C]

Just. There were virtually no distilleries in Nevada at all because there were no state laws. So the Frey family was able to get a federal distilling law which allowed them to still. But without state laws for alcohol production, you can't sell it.

[B]

Right.

[A]

So it's not that there were laws against it. There were. There were no laws. The laws at all.

[C]

The laws were incredibly archaic. And so unless you're producing millions of gallons, you couldn't make it work. So the Frey family is involved in pursuing these laws the whole time operating the winery. And I found a posting of a piece from them in the state records about being on record for wanting craft distilling laws as the winery.

[A]

Interesting.

[C]

Because the other thing you couldn't do if you had alcohol as soon as you had a spirit, can't have a tasting room. You can only sell through distributors. Right. You can't do anything local. There's just no way to do it. So those laws finally get passed in 2013. So now, 2013. 2013, which is, remember, a lot of craft is still in the laws, tax breaks and all that sort of stuff. They come in around that period.

[A]

Right, I know, I remember. That's right. Yes.

[C]

We see this in Europe.

[A]

We happen in California. Yeah, yeah.

[C]

See in British Columbia and so forth. So Nevada, same thing they get.

[A]

And then we get all these craft distilleries now. Yeah.

[C]

Result, massive explosion. And the rules are pretty straightforward. Right. You have to operate from a single location under 10,000 proof gallons. So if you make 50% alcohol, that's 20,000 gallons. Right. And it has to be distilled and bottled on site. You can do direct sales. You can have a tasting room.

[A]

You have tasting rooms.

[C]

Yeah. And. But you can only sell a certain portion directly. It's like 2,000 cases a year, which Is plenty. And you can do tours and all that good stuff. They still play the same excise taxes as everyone else. Remember we're in Nevada, so Las Vegas, those kinds of things. Excise tax is important, but the excess taxes are not that expensive.

[A]

Yeah. There's no state income tax here. So they need.

[C]

They need that taxes. It's $3.60 per bottled gallon.

[A]

Okay.

[C]

Okay. Which not.

[A]

It's a tax that's not too bad.

[C]

Not outrageous. But it's up there.

[A]

But it's not 90 cents a bottle of whiskey.

[C]

So they make their tasting room in 2014 and they. that time they don't have any whiskey again. This site's gone. Right. They've eliminated this site from existence. They had. They did one run of brandy which I think was what they used up the last of their wine with and they never do it again. They make a gin that wins awards. They make an absinthe and they make a vodka.

[A]

But starting to see a pattern. A lot of these whiskey places, you

[C]

gotta start with a quick distill.

[A]

Yeah.

[C]

Because you need money.

[A]

Yeah. Yeah.

[C]

Right.

[A]

Yeah. They sell gin and vodka. First.

[C]

All those things. First.

[B]

You didn't make anything out of it.

[C]

Yeah. By 20. But that website disappears in 2019 because

[A]

now they've had five years.org doesn't have cool stuff on there that is interesting. You gotta know all the history is there.

[C]

Yeah. I held it all out.

[B]

Right.

[A]

It's very interesting.

[C]

But now it's five years that they've been. So they laid up whiskey right away while they're making their gins and so forth. Now it's five years old. They start to get a decent addition. And so now as that 20 at the end of 2019, it's only bourbon. And that's where the 1854 narrative come from. That's where all that stuff comes from. It's just to give that look of. We're always been a whiskey place. So they're 80% of what they make today is the straight bourbon we had last night. And it's. It's.

[B]

You had.

[C]

Yes.

[B]

Now traditionally you remember. But somebody hard stop on a bench

[C]

suddenly went to bed and again, traditionally bourbons are three grains. Right. It's always corn with a little bit of barley for the a.m. right. Five to 10% barley. But typically more than six corn in the middle. Grain call a flavor grain. Often rye, sometimes wheat.

[A]

But this is a four grain is unusual.

[C]

They do wheat and rye. Right.

[B]

Corn. You're saying corn is not a flavor.

[C]

No, corn is sweet and Cheap is what it is. So the mash bill for the bourbon is 67% corn. Although they make a note, non GMO corn. 11% winter cereal rye. Okay. 10% winter wheat, 12% two row barley, which is pretty high on the barley side. I don't know that you could taste it. It tastes like bourbon.

[B]

Right?

[C]

Right. Is it spicy? No, not really. It's very smooth.

[A]

You don't get that rye coming through.

[C]

Not that real big bite, but we see that a lot. They're bigger than the typical craft distiller. They have a pair of Vendome still setup, which is classic, very American. Right. So they have a. They have a 24 foot column still and they have a five gallon pot still. But they run it differently for most operations. Like if you go to Makersmart, goes through the column still first up to 60%, then Polish to 69, 70% in the pot still. These guys run the pot still first, then finishing the column still. Does it make a difference? The argument is it's more grainy forward. Right.

[B]

It leaves a lot more of the

[C]

grain flavor in again. Drinking it last night, I couldn't have told you it tasted like bourbon. Their production lots, the mash cook and so forth, all 5,000 gallons. That's big for craft. They also have a beer well. I don't know why they mentioned this, but a beer well is where you store your beer after it's finished fermenting, before you feed it into the pot still. But that's typically used for column distillation because it's a continuous feed. You can be making runs and loading.

[A]

I should make this clear. Making beer. They just call it the beer.

[C]

It is beer. At that point when you, when it's

[A]

just a low alcohol.

[C]

It's not low, it's high. Oh, it's 9%. Yeah. You try and go as high as you can.

[A]

Oh, okay.

[C]

But it's not, it's no hops or anything. It's not polished. It's brewers beer. Right. It's the beer you make to turn.

[A]

You'll later distill.

[C]

But you try and get as much alcohol as you can out of that yeast. Like you'll, you'll let the yeast go all the way until it die. The a alcohol killer.

[A]

It. Right.

[C]

Because you're just trying to get every bit of alcohol you get there. Makes it easier to distill from. It's not. I've drank it. Don't.

[A]

It's not tasty. No.

[C]

So they're able to put out about 10,000 cases of spirit A month. And they only distribute in California and Nevada. And it's. There are a few specialty shops elsewhere in the US that have it. But, you know, it's rare. They do their warehouse storage. Very. It's warehouse style storage, not dunnage storage. So concrete floors, wooden racks, barrels on their sides, six, seven high. Big, big storage. They don't rotate or so forth. But I think temperature controls here are reasonable. It's deserty area. It's cool in the wintertime and so forth. And again, that bourbon is the bulk of what they make. But they're messing around. And if you go to the distillery and I would like to do this, it's very far from here, but if I was further north, I'd go. They make all kinds of distillery, only small boxes, like 375 mils. They're playing with oats.

[A]

Oh, interesting.

[C]

And they're playing, you know, different grain combinations and things like there.

[A]

So.

[C]

And they. They figured out how to malt their corn mart. The rye. Rye. And so. So they've tried malting combinations. So they're having fun with it. But it's really small. It's still small operation. Two states. They're not trying to go national and so forth. Buy this stuff direct if you can buy it.

[B]

Right. I mean they're.

[C]

And we can get it here in Las Vegas for $45 out of total wine.

[A]

Nice.

[C]

Right. Or walk down to the bar here in the mandalay.

[B]

That is $45 a shot.

[C]

I think we got two doubles for 45.

[A]

Oh, wow.

[B]

It was expensive.

[A]

Was it good though?

[C]

Yeah, yeah, it's legit.

[B]

It really is. Yeah. It's good enough that it should just be everywhere. Yes, it's very good.

[C]

You know, it's.

[A]

And I think I like their motto on the website though.

[C]

That's, you know, making dust or eating dust.

[A]

Yeah, if you're not making dust, you're eating.

[B]

What does it mean to make dust?

[C]

Best to work. Ah, right.

[B]

Oh, I don't. That's why I didn't understand it.

[C]

Yeah, yeah. Colby phrase very big on. I like being a farmer. It's like. I'm pretty sure you were also a winemaker. Like he is playing a character.

[B]

Yeah.

[C]

Right. Well, I see.

[A]

No, I think it's marketing.

[C]

This is a grain to bottle operation and I love those. Every time. Like that's very cool to me that these guys grow all their own grains. I think they buy from the local market. They've worked out their bottling solutions and

[A]

they like telling a good story.

[B]

But it's Way better than it should be. I, I, it's like this is good enough to be national.

[C]

Sit on any shelf. Yeah, absolutely.

[B]

It really, it really is.

[C]

This will sit beside any other 40 to 50$.

[B]

And I say that because we have a lot of local stuff where we live. We have in Mexico too and you know it quality varies but this, this has the taste and feel of something that's been around for a long, long

[C]

time and it's just not, there are no age statements. You never know. Whiskey, right?

[A]

They're not Ray Ranch F r e y ranch.com and one of the very.

[C]

There's only a handful of distilleries now in, in Nevada.

[A]

Really?

[C]

It's just half a dozen or so.

[A]

Yeah, they're more consumers than makers here.

[C]

Yes, well definitely. But it's not an easy place to work. Right? Like there's easier train to be in

[A]

and you know, 108 degrees out there and we're going to stay inside. But we are so glad you all came out for this. Thank you Richard for flying down from Canada. We appreciate it and thanks Stacy for bringing you and thanks Stephanie for bringing you Paul coming all the way up from Mexico City. And thanks to all of you for watching. We special thanks to our friends at Threatlocker with longtime sponsor here at at the Windows Weekly show and they let us use their booth and it's been quite nice. Thanks to all of you for watching. We do Windows Weekly. Normally we do it 11am Pacific, 2pm Eastern, 1800 UTC on well we do it from our own respective places of work but we stream it to our club. If you're a club member you can watch it in the Discord. I think you know most of the Discord watchers watch on YouTube. Frankly YouTube is good. Twitch TV, X.com, facebook, LinkedIn or Kik. But if you're not here live 11am Pacific, 2pm Eastern, 1800 UTC you can always can also watch after the fact anytime. The website is TWiT TV WW. There's audio and video. You get both. You can watch it on YouTube. There's a channel dedicated to Windows Weekly. In fact all of our channels [e-mail] twit you can find each individual channel there or subscribe in your favorite podcast client. You'll get it automatically the minute we are done. Thanks to Kevin King. Was going to edit this all up. Thanks to Anthony Nielsen who who brought all the gear down, set it up I think did a great job. Thank you Anthony. This is really working well if you are watching live. Stay tuned, because we're gonna take a little break and then it'll be special security now. And I think Paul and Richard might stick around for that. So that'd be a lot of fun. Steve Gibson will be here. So that's, I guess, everything there is to say from coming to you from the Black Hat Conference. We're gonna try not to get hacked. And be back in just a little bit. Thanks for watching. We'll see you next time on Windows Weekly.

[B]

Bye.

[A]

Bye.