Monologue: Jony Ive and OpenAI's New BS Machine - Better Offline

Summary

Podcast Summary: Better Offline - "Monologue: Jony Ive and OpenAI's New BS Machine"

Episode Details:

Title: Monologue: Jony Ive and OpenAI's New BS Machine
Host: Ed Zitron
Release Date: May 23, 2025
Description: In this episode, tech veteran Ed Zitron delivers a critical monologue focusing on OpenAI's acquisition of Jony Ive's design firm, Love from. Zitron dissects the financial implications, the mysterious nature of the acquisition, and questions the value and future impact of this move within the tech industry.

1. Introduction and Context [00:55]

Ed Zitron opens the monologue by addressing the recent news of OpenAI acquiring Jony Ive’s company in a deal valued at $6.5 billion in OpenAI stock. He expresses immediate skepticism about the acquisition's transparency and value:

"These aren't even real stock units... the air quotes of a buying are because they bought the entire company in $6.5 billion of OpenAI stock in a company that is unprofitable." [00:55]

2. Lack of Clarity on the Acquisition [01:30]

Zitron criticizes the ambiguity surrounding the acquisition, highlighting the absence of concrete information about what Jony Ive's company, IO, actually does. He points out that the announcement was made via a vague 9-minute video without substantive details:

"What device is that? Who the fuck knows?... It sounds like they have no idea." [03:10]

3. Speculations on the New Product [02:15]

Referencing reports from the Wall Street Journal, Zitron discusses speculations about the new product being developed. Despite hints about a device capable of being "aware of the user's surroundings" and intended to be a third essential device alongside the MacBook Pro and iPhone, he remains unconvinced:

"By the middle of 2024... all stock deals at this stage isn't a victory, it's a sign that something is financially rotten at America's dampest AI startup." [05:45]

4. Critique of Jony Ive's Recent Work [04:00]

Zitron delves into Jony Ive's activities post-Apple, questioning the tangible outcomes of his design firm, Love from. He lists various projects Ive has been involved in, such as redesigning Airbnb, creating a new font, collaborating with Ferrari on an electric vehicle, and working with Moncler on an outerwear line. However, he notes the lack of impactful or widely recognized products stemming from these collaborations:

"It's just people just put what he says in the thing. They don't go and find the clothes... No one seems to have a single detail other than the fact that they can't tell you what they're working on." [07:20]

5. Financial Concerns and OpenAI’s Viability [06:50]

Zitron raises alarms about OpenAI's financial health, citing massive losses and questionable investments. He highlights OpenAI's continuous burn rate, the ambiguity of their liquidity, and the impracticality of relying on stock deals to sustain operations:

"OpenAI burned $5 billion in 2024 and is on course to burn over 10 billion... it's a desperate move made by OpenAI to try and bolster the valuation of a company that's lost the plot." [09:10]

6. Doubts About the New Hardware Product [08:30]

Expressing doubts about the feasibility of developing and launching new hardware, Zitron points out the complexities of hardware production, especially for a company like OpenAI that lacks Apple’s manufacturing prowess. He questions the lack of a defined user interface and the sustainability of the proposed device's operational costs:

"They have no chance in hell that using this device won't require you to subscribe to ChatGPT... which are expensive and unsustainable and unprofitable to run even." [10:05]

7. Leadership and Strategic Missteps [10:50]

Zitron criticizes the leadership decisions within OpenAI, particularly the appointment of Instacart CEO Fichi Simo as CEO of Applications OpenAI. He argues that this move is indicative of deeper organizational issues and a struggle to manage the company's rapid and seemingly unfocused expansion:

"It's just this whole deal is such a fucking mess and Simo... will now oversee a company that has fundamentally changed since she took the position and be left to deal with the fallout..." [11:15]

8. Conclusion and Final Thoughts [12:20]

Wrapping up, Zitron reiterates his skepticism about the acquisition and OpenAI's strategic direction. He emphasizes the lack of transparency and tangible outcomes from both Jony Ive's recent endeavors and OpenAI's investments, suggesting that the acquisition is a superficial attempt to mask underlying financial and operational issues:

"I should also add that if there's one thing that Sam Altman has proven, it's that he's fundamentally bad at production... This device suggests a fundamental lack in ChatGPT as a product." [13:05]

Key Takeaways:

Skepticism About the Acquisition: The $6.5 billion deal between OpenAI and Jony Ive’s firm lacks transparency and clear value propositions.
Unclear Product Vision: There is no concrete information about the new hardware product, raising questions about its feasibility and purpose.
Financial Instability: OpenAI's significant financial losses and reliance on stock deals signal potential instability.
Questionable Leadership Decisions: Appointments and strategic moves within OpenAI appear misaligned with successful production and product development.
Impact of Jony Ive's Involvement: Despite Jony Ive’s prestigious background, his recent projects under Love from have not yielded significant or impactful products.

Notable Quotes:

"They bought the Entire company in $6.5 billion of OpenAI stock in a company that is unprofitable." — Ed Zitron [00:55]
"It's complete bullshit... All stock deals are quite common in large public corporations... But OpenAI is neither public nor a corporation." — Ed Zitron [05:45]
"This device suggests a fundamental lack in ChatGPT as a product... It feels more like a smokescreen to convince people that this company isn't washed." — Ed Zitron [13:05]

Conclusion: In this episode, Ed Zitron delivers a passionate and critical analysis of OpenAI’s acquisition of Jony Ive’s design firm. He highlights significant concerns regarding the transparency, financial viability, and strategic direction of OpenAI, while also scrutinizing the tangible outcomes of Jony Ive's recent projects. Zitron's monologue serves as a cautionary perspective on the intersection of high-profile acquisitions and the pursuit of innovation within the tech industry.

Transcript

Ed Zitron (0:00)

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Ed Zitron (0:55)

Hello and welcome to this week's Better Offline Monologue. I'm your host Ed Zitron. All side and I am going a little insane. You've likely seen the news that OpenAI is buying and that's in air quotes. By the way, famed Apple designer Joanie I've startup IO you may think that I'm about to explain to you what this company does other than build devices or why it was acquired and I cannot tell you. Oh and by the way, the air quotes of a buying are because they bought the Entire company in $6.5 billion of OpenAI stock stock in a company that is unprofitable. These aren't even real stock units. I'll get to that later. By the way, Joni I've worked at Apple. He worked on designing products at the ipod, the imac and iPhone, worked closely with Steve Jobs, dined out on that for many years. He left Apple in 2019. Now this announcement came in the form of a 9 minute long video that does not explain anything about the company. But there's been some reporting, if you could call it that. Now let's quote the Wall Street Journal's Berbidgeon who I generally really like. But there is a piss take happening here. Ortman and I have offered a few hints at the secret project they've been working on. The product will be capable of being aware of the user's surroundings in life, will be unobtrusive, able to rest in one's pocket and on one's desk, and will be a third core device a person would put on a desk after a MacBook Pro and an iPhone. Now that wood and wheel, those are load bearing by the way. I continue though the Journal earlier reported that the device won't be a phone and that Ivan Altman's intent is to help wean users from screens. Altman said that the device isn't a pair of glasses and that I've been skeptical about building something to wear on the body ortman and I've offered details about how the collaboration grew over the past few years. 18 months ago, OpenAI Vice President of Product Peter Wellander began working with I've's team. The two sides became excited about a specific device last fall. What device is that? Who the fuck knows? Print it, baby. There's also a thing in this article about this effectively tripling or quadrupling the value of OpenAI. It's complete bullshit. In fact, we're all of this sounds like complete bollocks to me. Why are you announcing this now? What is it you're buying? Who knows? The Journal also claims that Altman believes that they will ship 100 million of these theoretical devices by late 2026, the magical year when everything from AGI to powerful agents are meant to work. The bullshit year. I can't wait. Anyway, Jony I've also gets to keep his independent design studio Love from, which has already been working with OpenAI and Will, according to Bloomberg, take over design for all of OpenAI, including its software and Appare. Joni and Sammy initially met up to improve the interface of ChatGPT. When did that fucking happen? Bloomberg also reports that Altman and I've have yet to work out a user interface for the new hardware product, which is a big deal considering it's meant to be out in like a year and a half. What the. What are we doing here? Why? I understand that objective reporting requires you to just say the things that But I feel like. I feel like at some point you have to just say all of this is theoretical, it's complete wank. And all signs point to this venture being a load of bollocks. It's a smokescreen. A desperate move by OpenAI. A desperate company. All stock deals are quite common in large public corporations that are quite liquid, but they have stock that has value that can then be sold, right? But OpenAI is neither public nor a corporation. It's the for profit arm of a nonprofit desperate to convert its for profit arm into a public benefit corporation. They don't have stock. They don't have stock. They have these goddamn profit participation units. It's so silly. It's all very silly. And Joni Ivan, his team of 55 people, they're working on a very real thing and they were acquired with $6.5 billion of very real paper profit participation units and a company that burns billions of dollars and has never turned any profit. To be clear, the company I.O. is somehow different to love from his design firm. 55 people work at I.O. i think like that many work at Love from. Really not clear what they work on at IO though. No one seems to know. No one seems to have a single detail other than the fact that they can't tell you what they're working on, which sounds a lot like they have no idea. Now you may also wonder what Joni I've been up to since he left Apple in 2019. The answer is extremely vague. In 2020 he founded Love from in 2019 the design firm and in 2020 they signed a non specific multi year partnership to design the future of Airbnb. Apple has apparently kept working with Love from in some way that I can really not find any information about. Loverom also worked on some sort of seal for King Charles of England to give away to and I quote recognize private sector companies that are leading the way in creating sustainable markets. They also designed an entirely new font for it which does not matter in the slightest to any. Led to some reporters writing entire stories about it because Johnny fucking I've was involved. In 2023 I've and his team redesigned Lynn Sondex LP12 turntable in and I quote, a respectful and gentle way. And in 2024 he teamed up with fashion brand Moncler to make an out to wear line. And his work appears to involve some kind of magnetic button that can click together different pieces which is kind of cool. I'd have loved to actually read about that. But that you can't. It's just people just put what he says in the thing. They don't go and find the clothes I'd have actually been interested in that can't find shit about it because no one actually holds any of these people accountable. They just go oh it's Joni. I've. I'll listen to whatever shit he's. Anyway, I'm very sorry, okay? I'm very sorry but reading about this really frustrated me and I've is also working with Ferrari apparently on a new electric vehicle. Can we see it? Do we know when it will be released? What kind? What's the range? What will it look like? No, none for you, none for you. You silly little. You silly little freak. How dare you ask Jony I've to tell you what he's doing. So in summary, since 2019 Joni I've has redesigned Airbnb in some way made a new font, made a new system for putting on clothing, made a medal for the King of England to give companies that recycle and made some non specific contribution to creating an electric Ferrari while also designing a non specific device that OpenAI intends to ship to hundreds of millions of people and to be clear like they are designing a product that another company run by Jony I've IO will manufacture. Joni I've has not from what I can tell worked on the consumer electronics product since he left Apple. And let's be really clear, Apple has not really been cooking since Steve Jobs died and their coolest shit in recent history came after I've left specifically the new generation of M series laptops, imacs and the like. By the middle of 2024 all of his designers left the company. And really I like the iMacs and MacBook Airs way more now and I know whatever like hindsight's 2020 like I'm sure like the original MacBook Air was kind of cool, but it's like how much did Jony I've actually worked on that and it's actually really difficult to find out what it is that Jony I've did at Apple other than be associated with things. What you can see however is how good Jony I've is at deals getting people to pay to be associated with Jony I've the guy who worked with Steve Jobs on big products that people like. Has he built anything people like recently, who knows. But because people are lacking in object permanence they believe I've still got it even if it doesn't really mean anything. In any case, this deal is ridiculous. A mere week ago Sam Altman announced that Instacart CEO Fichi Simo, who was already on the OpenAI board, would become the CEO of Applications OpenAI and is and I quote the Wall Street Journal, charged with helping the ChatGPT maker become a profitable global business while remaking an internal culture that has been mired in executive infighting and high profile departures. Yet as part of the acquisition Joni I've will take over all design and OpenAI along with his team of 55 people from IO I think love from will be as well. It's just this whole deal is such a fucking mess and Simo, when she joins in the summer, will now oversee a company that has fundamentally changed since she took the position and be left to deal with the fallout because her whole fucking job will be to take responsibility for the mess that Sam Altman's made and man What a mess. OpenAI burned $5 billion in 2024 and is on course to burn over 10 billion doll acquiring another company in an all stock deal at this stage isn't a victory, it's a sign that something is financially rotten at America's dampest AI startup. As I've discussed on previous episodes, OpenAI has maybe $15 billion of liquidity at any given time, and has promised $19 billion to complete the Stargate data centers, as well as allegedly offering $3 billion, though it's not obvious if this will be in cash or stock to buy the coding startup Windsurf. And when I say by the way they have $15 billion of liquidity, I mean that at max it could be way less, because that is just the combination of their funding and in and out revenue. And also putting aside the fact that neither IO nor OpenAI have actually settled on a product. Hardware is hard. Research and development is expensive. Apple spends tens of billions of dollars a year on it, and so is manufacturing, especially if this device is meant to be smaller than the smartphone, and especially in the era of tariffs, unless they assume that those will be gone by then, which they won't. Worse still, the margins on hardware are much lower, about 10 to 20%, and there isn't a chance in hell that using this device won't require you to subscribe to ChatGPT, which means users will have to pay the subscription fee on top of this theoretical device and also be pinging ChatGPT servers, which are expensive and unsustainable and unprofitable to run even. I swear I should be able to say I'm profitable by now. I say it enough fucking times. I should also add that if there's one thing that Sam Altman has proven, it's that he's fundamentally bad at production. While ChatGPT might be popular, it's hard to say what it really does, which you can get away with when your free software is hyped by every media outlet in the world, but can't with a device that will likely cost hundreds of dollars. OpenAI has also proven that it's not very good at making the kind of seamless and effortless product that companies like Apple are known for. And let's be real, with what money are they building this crap? You can't pay factories in stock. In any case, this is a desperate move made by OpenAI to try and bolster the valuation of a company that's lost the plot if they ever found it. If anything this device suggests a fundamental lack in ChatGPT as a product, and while boosters may frame this as the next generation of OpenAI, it feels more like a smokescreen to convince people that this company isn't washed. Members of the media treat this company with suspicion and demand that they actually show you something before claiming this is the biggest, most hugest move in Silicon Valley history. Don't embarrass yourself by humoring these twerps.