← Big Technology Podcast
Big Technology Podcast
Mass AI-Driven Unemployment, NVIDIA Surges, CEOs' AI Avatars Unleashed
00:51:53
Loading summary
Transcript109 lines
- [00:00]
Alex Kantrowitz
Is AI going to drive mass unemployment or are urgent warnings about job loss just marketing? Nvidia, meanwhile, turns in stellar earnings. Mark Zuckerberg and Palmer Luckey team up to build war goggles and CEOs are using AI avatars for their earnings calls. We'll cover it all on a Big Technology Podcast Friday Edition right after this.
- [00:25]
Jessi Hempel
Hi, I'm Jonathan Fields. Tune in to my podcast for conversations about the sweet spot between work, meaning and joy. And also listen to other people's questions about how to get the most out of that thing we call work. Check out Sparked wherever you Enjoy podcasts from LinkedIn News. I'm Jessi Hempel, host of the hello Monday Podcast. Start your week with the hello Monday Podcast. We'll navigate career pivots. We'll learn where happiness fits in. Listen to hello Monday with me, Jessi Hempel on the LinkedIn podcast network or wherever you get your podcasts.
- [01:03]
Alex Kantrowitz
Welcome to Big Technology Podcast Friday Edition where we break down the news in our traditional cool headed and nuanced format. We have a big week of news to speak with you about today, starting with the prophecies of Anthropic CEO Dario Amodei that we're about to see mass unemployment due to AI. We'll also touch on Nvidia earnings. We'll talk about this partnership between Meta and Andrew to build these War VR goggles, which is quite interesting and might signal a shift in Silicon Valley. And of course we're going to talk about CEOs dispatching their AI avatars to their earnings calls and maybe they will come to a meeting near you. Joining us as always on Fridays to break down the news with us is Ranjan Roy of Margins. Ranjan, good to see you. Welcome.
- [01:45]
Ranjan Roy
Well, at least when I lose my job to an AI avatar, I will have war goggles. So this week makes me feel better.
- [01:52]
Alex Kantrowitz
It is interesting. Every time we talk about AI technology, there's this combination of what will it work? Won't it work? And this is going to be great and this is going to be terrible. And I think we're just kind of hitting all of those emotions in one this week. And so let's start with this prophecy from Dario Amodei, the CEO of Anthropic, about what is going to happen to white collar jobs. He tells, he tells Axios that there's going to be a white collar bloodbath. He says AI could wipe out half of all entry level white collar jobs and spike unemployment to 10 to 20% in the next one to five years. He said AI companies and governments need to stop sugarcoating what's coming. The possible mass elimination of jobs across technology, finance, law, consulting and other white collar professions is especially entry level gigs. So let me just turn it to you right away, ranjan. I mean, 50% of all entry level jobs within five years. I don't think that this is entirely out of the realm of possibility, but wouldn't you agree that this would have to just be like, it's weird to say best case, but the best case scenario for this technology, in order to come anywhere close to that, it would have to, you know, meet and exceed all of our expectations to actually be able to do something like this.
- [03:19]
Ranjan Roy
Yeah, this still feels a bit like marketing hype for me. And I think to me, if we break it down to a couple of different pieces, yes, I think the jobs of today are fundamentally going to change. I'm a big believer that especially white collar work, which was not threatened in the same way as more blue collar or manufacturing type work in the last 30 years is going to be threatened. I actually, my, my theory on this is entry level jobs are actually going to be safer because they're going to become different and the type of workforce that's going to be entering the market is going to be a lot more AI native than a lot of existing, especially more senior people. So if I'm junior, if I'm entering the workforce, I would much rather be entering now than 10 to 15 years ago.
- [04:09]
Alex Kantrowitz
Okay, I hear some music in the background. Is this the. It can't be. It's the hype or true jingle.
- [04:28]
Ranjan Roy
Listeners cannot see my jaw is on the floor. Alex just took the worst name game of all time. And I guess we're doing this. I guess we're making a thing out of it.
- [04:39]
Alex Kantrowitz
I ran it. Thanks to AI, we are in the thick of it. High poor, true Dario Amo days prediction that 50% of entry level jobs will be wiped out. So let me take the other side, that this isn't marketing just for the sake of conversation. Right. I mean we are seeing this technology improve dramatically and we're also already seeing some evidence that it's harder for people coming out of grad school to get jobs today. And AI is definitely in the workplace, especially in areas like coding for instance. And we're going to talk about it in a moment. But Amazon for instance, is a company that has smaller teams responsible for the same amount of code, just with like less people to do it. So this idea that if the technology keeps improving the way that it is and we go into this world where we do get agentic technology and we do get AI that can go out and do the deep research for us with fewer hallucinations. Maybe it's not so crazy that Dario, who sees the trajectory is going out there and telling us that, hey, listen, this might be an issue.
- [05:50]
Ranjan Roy
But again, I still look at this as it's self interest in the idea that Anthropic is a company that directly benefits, if that is the truth. But to me, I mean, we just mentioned coders or software engineers or developers. That job at that, the scale that it is today didn't exist nearly in the same way 20 years ago. So to me it's just going to be a shift and maybe it's a little bit overly optimistic. I do think his call that like governments or the civil civil society needs to recognize that things are going to change is important. And I do think there needs to be genuine conversations around this. But again, jobs change, people adapt. And I don't know, maybe, maybe I'm too hyped up from that song that you just played. But if we're talking about innovation, in what other world could we have a hyper true jingle that quickly? That's, that's a net positive for society. That's all I'm saying.
- [06:49]
Alex Kantrowitz
I think it's already, just because we have that jingle, it's already outweighed all the negatives of all time that we might see with inn AI. But Dario, in his conversation with Axios, actually goes through step by step how he sees this happening. And yes, innovation always creates job loss and job creation, but the idea is that this technology is potentially so powerful that it just puts this process on steroids. Or as you said last week on acid. Okay, so here's the step by step. Number one, OpenAI, Google, Anthropic and other large AI companies keep vastly improving the capabilities of of their large language models to meet and beat human performance with more and more tasks. This is happening and accelerating. The US Government, worried about losing ground to China or spooking workers with preemptive warnings, says little. The administration and Congress neither regulate AI nor caution the American public. This is happening and showing no signs of changing. Most Americans, unaware of the growing power of AI and its threat to their jobs, pay little attention. This is happening too. So do you have an argument that any of those three steps are incorrect?
- [07:59]
Ranjan Roy
I would actually still again argue with number one, but that's more of a just improvements in large language models. I don't think is going to actually see adoption in Implementation, I don't think that's the issue or the problem. I think there's a lot of other points of resistance. So I would disagree with that. One, I like number two, the idea that to avoid spooking the population, I mean it's a good little conspiracy theory. That's.
- [08:25]
Alex Kantrowitz
That is a great conspiracy theory.
- [08:27]
Ranjan Roy
Yeah. And I mean again it seems completely plausible in the political climate. But again, in number three, I think unaware of the growing power of AI, this is where I would actually vehemently disagree that AI, the promises made by the industry are at such a scale that it's my, again my mom, whenever I go home she's like, so what do I do with AI? And she's retired. And like, I mean it's, to me it's not that there's a lack of awareness, it's just there is a lack of actually adoption and implementation. I do think it's not because of a lack of awareness, I think it's because of a lack of how focused these tools are. We've been talk last week about how Anthropic and Claude are going to potentially move much more towards coding and software development, which shows that it's not working in other areas. So over overall, I don't know. May I. As regular listeners know, I can be a bit cynical about a lot of topics, but I genuinely don't think it's as much of a threat as he's making it out to be.
- [09:30]
Alex Kantrowitz
Yeah, this is the part where I started to veer more into the hype side where he says then almost overnight business leaders see the savings of replacing humans with AI and they do this in mess. They stop opening up new jobs, stop backfilling existing ones and then replace human workers with agents or related automated alternatives. I think this just completely underestimates how change management works in most companies and how slow most companies are at implementing even the most helpful software. And this idea that this could happen almost overnight to me is far fetched. Now is this something that you could see happen over 20, 30 years if the technology keeps accelerating at the pace it's been accelerating? Which is an open question maybe, but this idea that we're going to see it within one to five years, that just doesn't really seem to meet the reality. Test for me.
- [10:24]
Ranjan Roy
Yeah, no, I completely agree because Dario came from again he had his PhD at Princeton, I think work one of his two PhDs.
- [10:32]
Alex Kantrowitz
Yes.
- [10:33]
Ranjan Roy
Yeah, I mean two PhDs. That's not. In terms of not needing to learn about change management at organizations. I Think that's like a pretty clear idea. And then the other thing that you.
- [10:44]
Alex Kantrowitz
Have a multi billion dollar company right now. So I won't take that away from him.
- [10:47]
Ranjan Roy
But okay, yes, fair, I won't. But the part that he's missing in that whole thesis is growth. That it assumes kind of like a steady state of economic output and then underlying that there's fewer jobs. But if we take the other side and again the more optimistic side that this actually unleashes new waves of growth and new types of companies, I think then new jobs are created, there's different types of jobs are created. I never thought I'd be this optimistic but on this one I still believe. Still believe.
- [11:23]
Alex Kantrowitz
It is interesting to me that he is taking that pessimistic perspective given where he sits. Like he doesn't believe that if you are an entry level developer rather than a company like not hiring you, his tooling could help make you a 10x developer and then help the company grow much further than if you weren't there. So I think that is pretty telling telling in terms of it falling on the hype perspective. And there's this kind of great slash funny CNN article by this woman, Allison Morrow. She says if a CEO of a soda company declared that soda making technology is getting so good it's going to ruin the global economy, you'd be forgiven for thinking that person is either lying or fully detached from reality. Yet when tech CEOs do the same thing, people tend to perk up. She says the point is that Amoday is a salesman and it's in his interest to make his product appear inevitable and so and so powerful. It's scary. He stands to profit off the very technology claims will gut the labor market. But here he is telling everyone the truth and sounding the alarm. He's trying to warn us. He's one of the good ones.
- [12:30]
Ranjan Roy
Yeah, actually that's a really good point. I think if you have this technology and you're generally worried about it and you are the CEO of a multi billion dollar company, either you are the most altruistic person alive or you're doing it for self interested reason. Again. So does CEOs did not tell the world that our soda will become so addictive it will unleash a wave of obesity? It just happened and people made money. Like I think the idea that I'm going to. I don't know. Is he trying to risk the entire business of anthropic by saying this? I think it's, it's good we've seen this for three years now. AGI, asi, AI, like killing all of humanity is a threat now. White collar bloodbath. I think that it works from a marketing perspective. So we'll keep seeing this.
- [13:22]
Alex Kantrowitz
Okay, let me one more time try to make the case for Amodei and then we can move on. I think if you're being super charitable to his perspective, you would say he's interested in building AI that's going to have a big impact on the world. Things like he talked about in this interview with cnn, curing cancer and helping us with medical applications, creating abundance. But he also sees that there's going to be a downside. And maybe he truly believes, and I don't know does. Is there 100% chance that he's wrong in this, that he believes that his technology will have an impact? And if you do believe that, then maybe it is in your interest to go out and say, yeah, there could be problems. And in terms of being the one that's developing it, well, I think maybe there is something to be said about being the person who wants to develop, develop the technology and steer it in a way that's impactful versus destructive.
- [14:11]
Ranjan Roy
All right, I will actually, I'll end on a charitable note as well. I think on the topic of regulation, Amade came out when there's this proposed 10 year moratorium on any kind of AI regulation and he said that's not a good idea. So in fairness, he is advocating for at least some kind of steering the industry in the right direction.
- [14:37]
Alex Kantrowitz
And I think we should talk about what happens in the near term, which is not necessarily going to be job loss. Uh, but in some companies, and I think in some companies that aren't really viewing this the right way, it will be a change of job, one that will require harsher requirements on employees versus one that will sort of free them to do higher impact work. And this is the thing that I hinted at at the beginning of our discussion about Amazon. This is from the New York Times. Very interesting story at Amazon. Some coders say their jobs have begun to resemble warehouse work. And the article says the more immediate downside of AI for software engineers appears to be the change in the quality of their work. Some say it's becoming more routine, less thoughtful, and crucially, much faster paced. Three Amazon engineers said that managers had increasingly pushed them to use AI in their work over the past year. The engineer said that the company had raised output goals and had become less forgiving about deadlines. And, and it even encouraged coders to gin up New AI productivity tools at an. At an upcoming hackathon. One Amazon engineer said his team was roughly half the size it had been last year, but was expected to produce roughly the same amount of code using AI. So is this kind of what the world looks like where companies say you no longer have these long timelines to build the thing that you want to build? Because effectively I know that you can use AI to build it. We've seen similar things from Shopify, for instance. You know, the AI first company episode we did a couple weeks ago kind of hits on this idea.
- [16:20]
Ranjan Roy
I have a hard time feeling sympathy. I know Amazon is a rough culture, so like an aggressive culture and many and often in a good way. So I'm not, I'm guessing those were not cushy jobs. But yes, work is changing. This is happening. Like even the idea. It's like they were encouraged to come up with the AI tools at an upcoming hackathon. That's not bad. That's like people like in your interview where with Sergey Brin the other day, he said this is the most. If you're a computer scientist, this should be the most exciting time for you. I actually would expand that that if you're at all interested in technology, this should be the most exciting time for you. And yes, for software developers and coders, work will look vastly different. It was a good 20 to 30 year run. It's not going to be the same for the next 20. And that's okay.
- [17:13]
Alex Kantrowitz
Yeah, I think that's, that's a very good perspective. Okay, so, but, but what about this? Maybe you don't have time to think as deeply about projects as you did. This is again from the story. The new approach to coding at many companies has in effect eliminated much of the time the developer spends reflecting on his or her work. This is when developers say, or another study. This is a, an analyst. It used to be that you had a lot of slack because you were doing a complicated project. It would take a month, maybe two months, and no one can monitor. Now you have the whole thing monitored and it can be done quickly. So maybe this idea can. Can we end up seeing less deep work or less reflection and then bigger thinking because you have to do things so quickly and be so reliant on the AI to program for you.
- [17:55]
Ranjan Roy
I think that conflates two different things because on one side, almost by definition, this should allow for more deep work. This is taking care of the more monotonous, repetitive things people did instead of having to rewrite an entire code base from scratch. That kind of work you're able to do. The question of monitoring work, that's to me not an AI question. That's a culture question, that's a technology question that's increased dramatically, especially since the pandemic and when more work is being done on and digital surfaces. So I think, I think those are two different things. And I think some companies like in Amazon will very closely monitor and that's how it works, and other companies will work differently. But again, to me, AI almost by definition should free up more time for reflective, deep work.
- [18:51]
Alex Kantrowitz
And it is kind of interesting that I guess a company like Amazon will just say, okay, now you're kind of like, you know, the delivery driver with the AI systems monitoring your every move and every second optimized to a T.
- [19:04]
Ranjan Roy
I mean, yeah, probably the people who built those systems to monitor the delivery drivers are the ones anonymously being quoted.
- [19:12]
Alex Kantrowitz
Yeah, sorry, can't say you're surprised. But meanwhile, we're going to have an opportunity to really figure out what's going to happen because the surge in infrastructure building shows no sign of slowing down. We saw this in Nvidia's earnings that came out this week. This is from the Wall Street Journal. Nvidia's business is booming despite being shut out of China. The company's revenue reached 44 billion for the first fiscal quarter. For its first fiscal quarter, a 69% increase that was curtailed. So limited to just a 69% increase that was curtailed by Washington's new limits on China chip sales. The company was unable to ship 2.5 billion of its H20 processors and projected an $8 billion, $8 billion in lost revenue for the current quarter due to that policy. So that's lots of money lost to China and, and, or lost to not selling to China. And, and the company is still growing, yet we still see a tremendous amount of spending coming in from the tech giants Microsoft, Amazon, Alphabet, Google and Meta. They are all going to be boosting their spending on AI. And analysts expect combined spending by those four companies to alone top 345 billion this year, up 41% from last year. And the data center business is going to be up A surged 73% over last year to 39.1 billion. So two things here, Ranjan. Obviously, Nvidia is healthy, no doubt about that. Even with the China stuff, it's still growing tremendously. And then second, like, if scale is going to be one of the ingredients that make these model, makes these models better, we're still in the finding out stage. Like this infrastructure is still just booming.
- [21:01]
Ranjan Roy
Javon's paradox. Welcome. It appears to still be the reality. I think we've seen more and more about. Again, to reference the Sergey Brin interview again, I really liked you said it's going to be algorithms rather than compute than create the next round of advances. I think how the actual modeling works and how these things are built could change and it appears to be changing. But as of today, May 30, 2025, everyone's playing the same game and it's a compute game. So that's definitely not changing. And Deep Seek, but that this is a 6 to 12 to 24 month thing that we'll see rather than Deep Seek happened and then it's gonna, you're gonna see a cut in spending the next day.
- [21:52]
Alex Kantrowitz
Do you think that the export restrictions that I just mentioned are working when it comes to restricting the exports to China? Now Jensen of course is going to be against them because there's lots of money to be made if he can sell to China. But this is from Bloomberg. He said the Chinese competitors have evolved. They've become quite formidable. So speaking specifically of Huawei, he says the latest AI chip is similar to the performance of Nvidia's H200 chip, a component that was state of the art until its replacement in recent months used. You cannot underestimate the importance of the China market. Wang said this is home to the of the world's largest population of AI researchers. And he basically says like you know, it's important for the US to at least be in there and be steering the way that they do it as opposed to restrict them and then they're going to go ahead and do what they want anyway on almost as good technology. What, what is your perspective here?
- [22:49]
Ranjan Roy
Yeah, I think again the, the details of our export restrictions working are difficult for me to like, I mean very directly say. But I think overall, I mean that idea that I mean Nvidia to expand, seeing increased competition from Chinese suppliers, it's definitely going to be, it's, it's going.
- [23:12]
Alex Kantrowitz
To evolve pretty rapidly and now we have a new Deep SEQ model. Speaking of which, so this came out this week, there's a new upgrade to Deep Seq's R1 model that the company says reasons better and hallucinates less. The Chinese startup Deep Seq said Thursday that it up its upgraded artificial intelligence model can perform mathematics, programming and general logic better than previous versions. Its overall performance is now approaching that of leading models like OpenAI's O3 and Google's Gemini 2.2.5 Pro. This is according to Deep Seek in a post on the AI model platform hugging face. So Deep Seek still keeping, keeping pace.
- [23:54]
Ranjan Roy
It seems like Deep Seek still deep Seeking. I think it's a reminder like the competitive dynamics of what's going to happen are still completely in flux in a good way. I think we're going to see more and more competition at the foundation model level. And I think this is just a reminder that like we just came off a couple of good weeks of Google I O and OpenAI announcements and all these kind of things, but the competition is going to be there and only increase as long as those Nvidia earnings are so juicy. Their margins are. What's the Jeff Bezos thing again? Oh, they're margins. Our opportunity.
- [24:32]
Alex Kantrowitz
Exactly.
- [24:33]
Ranjan Roy
All of our opportunity.
- [24:34]
Alex Kantrowitz
Yeah, yeah, that's right. So just to sum up this, this segment. So I think we both agree that Nvidia still has a lot of room left to run in terms of being able to sell its chips and produce them. And there's no sign of slowing down. Like if you're thinking just about the hardware side of the AI trade and of course Nvidia has software that you use to train the models, but like thinking about the thing that makes them the most money, that's in good shape.
- [24:59]
Ranjan Roy
It's in great shape. It's in incredible shape. That has not slowed down. And I know there was a lot of talk after Deep Seek that it would, but it hasn't yet. So there will be more deep seats and I think I feel very confident in saying that.
- [25:15]
Alex Kantrowitz
Okay, and let me ask you this. As Deep Seek continues to rise, is there going to be any value in building these proprietary models? Returning to one of our old questions.
- [25:25]
Ranjan Roy
Yeah, that's. I still believe that overall increased competition we'll see commoditization at the model layer. I believe that the one model to rule them all, one giant model, is going to wipe out 20% or 50% of white collar jobs. Like, I just don't see that happening. So, yeah, I think the model layer will get commoditized. What about you?
- [25:52]
Alex Kantrowitz
Yes, for sure. And maybe that's why we're saying it's.
- [25:56]
Ranjan Roy
Not the model, it's the product.
- [25:58]
Alex Kantrowitz
No, I think better. No, there's nuance here. Better commoditized models will lead to better products. It's not about. It's so interesting. We have this debate all the time actually. I think we're just going to converge here. You want better models and better products. I guess the question is what drives the improvement in the AI industry, I think. Yeah. Even if the models are commoditized, then better models are going to matter more.
- [26:21]
Ranjan Roy
What leads to the white collar bloodbath.
- [26:23]
Alex Kantrowitz
Yeah, exactly. Better models and better products coming. Okay. By the way, just one quick. No, I mean, Lord almighty. Meta. There was a story this week how Meta's lost lots of of its AI researchers as Deep Sea continues to surge. The conversation around Meta's llama models has certainly fallen off in a big way. And I, I mean they've made some changes to their organization this week, minor ones, but I would watch that space very, very closely.
- [26:52]
Ranjan Roy
Yeah, I think, I mean, yeah, where metal still lives in this is. It's interesting because they actually manage to be, maybe I have to support it, more product focused. It sounds like they separate out the research conversation from the product conversation, which is kind of a reminder there is. They're a pure consumer company and they're able to separate the two. So meta AI, meta Ray Bans, all these things. You don't really see or hear as much hype around. I don't even. What llama are we on now? I can tell you. Jump four.
- [27:29]
Alex Kantrowitz
Okay, yeah, like, but don't we think that if their models were better then people would be using their chatbots more? I mean they have bet a lot on voice and their voice AI is just not as on par with Met.
- [27:42]
Ranjan Roy
AI is pretty good. Meta AI is pretty good. And I say that with a. Like, it's, I think it's on par.
- [27:50]
Alex Kantrowitz
You're the first person I've heard I've heard say that. So really, maybe I'm not asking enough people.
- [27:56]
Ranjan Roy
All right. Yeah, you're, you're not asking the Metacrat. See, this is why maybe they're going after the everyday consumer while we're talking to the, the people who actually use and stress test anthropic open AI.
- [28:10]
Alex Kantrowitz
That's true.
- [28:10]
Ranjan Roy
Gemini.
- [28:11]
Alex Kantrowitz
Yes. It's a great reminder for, for reporting on this stuff. It's important to look outside of New York and, and San Francisco and to.
- [28:19]
Ranjan Roy
The people using Meta AI.
- [28:21]
Alex Kantrowitz
But I still think that the Meta AI is not as good. So.
- [28:24]
Ranjan Roy
Yeah. Okay.
- [28:26]
Alex Kantrowitz
All right, so we're going to talk a little bit about this very interesting Grammarly story. But before that, let's just talk a little bit about this other area that Meta is going down, which is that they are going into defense tech with a very unusual alliance, shall we say? This is from the Wall Street Journal. Metafired Palmer Luckey. Now they're teaming up on A defense contract with him. Meta Platforms had a messy split with its virtual reality chief, Palmer Lucky. Now the two have reconnected to build high tech headsets for the U.S. army. Lucky's defense company, Andrel and Meta, said Thursday that they will together build a line of new rugged helmets, glasses and other wearables that provide a virtual reality or augmented reality experience. Kind of the details of the system is crazy. Here, I'm just going to read this. The system, called Eagle Eye, will carry sensors that enhance soldiers hearing and vision. Detecting drones flying miles away or sighting hidden targets, for instance, will also let soldiers operate and interact with AI powered weapon systems. Andre's Autonomy software and Meta's AI models will underpin the devices. I think this is a very interesting story. It shows, of course, Silicon Valley getting like fully getting back and, or getting into war technology in a way that you wouldn't see from like, let's say Meta or Google years back. And this device itself is kind of interesting to me as well. What do you make of this partnership, Ranjan?
- [29:48]
Ranjan Roy
Well, first, is this the first mention of the term war goggles on this podcast ever?
- [29:54]
Alex Kantrowitz
This is our first. Well, we had Polymer Lucky on, so I have to check the transcript for the, you know, just to see that. We've definitely talked about defense tech, but this is war goggles. This is definitely a new product idea.
- [30:05]
Ranjan Roy
Hold on. War goggles. War goggles. It's a good one.
- [30:07]
Alex Kantrowitz
War goggles, baby.
- [30:08]
Ranjan Roy
Yeah. War goggles. I like it, I like it. I mean, the question of this is another one where Silicon Valley was founded on like defense technology. So much of our American innovation was founded on defense technology. And to me, I guess I, yeah, I don't have a hard time stomaching this. I think it's not a bad thing to have the technology industry close to the defense. Defense industry and companies like Anduril and others are definitely, you know, defense first. So, yeah, I think I'm genuinely curious of like how crazy and cool this technology is. And I mean, I know it is for war, but yeah, I think innovations often has started in the defense sector and if we're going back to that, it's not the worst thing.
- [30:59]
Alex Kantrowitz
Yeah. Who do you think made the first call? Palmer or Zuckerberg?
- [31:02]
Ranjan Roy
That is the more important question.
- [31:04]
Alex Kantrowitz
I think I have a feeling.
- [31:07]
Ranjan Roy
What do you think?
- [31:08]
Alex Kantrowitz
I think it had to have been Zuckerberg. I think Palmer clearly did not like what happened to him at Facebook at the end there. And he wasn't going to go pitch Zuckerberg on this idea. I think Zuckerberg saw that he had lost tens of billions on Reality Labs and sort of needed a new way to do it. He's also had this like, sort of political rebirth Zuckerberg, and is now someone who seems like he'd be open to this stuff more than he was previously. I have to say it was. I almost certainly believe that it was Zuckerberg who made the call. And Palmer gives him some edge or cool factor that he. He wouldn't have without Palmer. I think he needed Palmer more than Palmer needed him.
- [31:51]
Ranjan Roy
Okay, I. Again.
- [31:54]
Alex Kantrowitz
What, again?
- [31:56]
Ranjan Roy
Oh, again. Yeah, yeah, no, no, actually, that's. That's a good point. I think, actually. Have we seen cool Zuckerberg in any kind of virality or memes recently? Has he not been posting less? I feel there was like a. A wave of time where he was just, you know, the handsome Mark Zuckerberg with a chain, singing with T pain. All these things were just like every week. Has that died down or.
- [32:20]
Alex Kantrowitz
I think that probably coincided with the ascent of Meta's Llama project. And after Deep Seek. We haven't seen anything like that or less. We've seen less of that. So I think he's feeling himself less these days than he was before.
- [32:34]
Ranjan Roy
Okay, okay. Well, either way, I. I will agree with your who called who theory. I think Zuck had to call Palmer.
- [32:44]
Alex Kantrowitz
Okay, so I definitely want to get to this Grammarly story that you mentioned. So let's talk about that. We might have time to talk about Elon Musk leaving the Trump administration. And we definitely want to get to this story about CEOs, you know, using their avatars to deliver their earnings reports. So let's do that right after this.
- [33:07]
Ranjan Roy
Hey, you. I'm Andrew Seaman. Do you want a new job or do you wanna move forward in your career? Well, you should listen to my weekly show called Get Hired with Andrew Seaman. We talk about it all and it's waiting for you. Yes, you wherever you get your podcasts.
- [33:27]
Jessi Hempel
Will AI improve our lives or exterminate the species? What would it take to abolish poverty? Are you eating enough fermented foods? These are some of the questions we've tackled recently on the Next Big Idea. I'm Rufus Griscom, and every week I sit down with the world's leading thinkers for in depth conversations that will help you live, work and play smarter. Follow the next Big Idea wherever you get your podcasts.
- [33:57]
Alex Kantrowitz
And we're back here on Big Technology Podcast Friday edition, breaking down the week's news. So many fascinating stories to talk about this Week and one that popped into our document just as we started to record, courtesy of Mr. Ranjan Roy, is a new interesting story about Grammarly's funding and a new funding model. Very interesting. Rajan, why don't you lead us, lead that story for us.
- [34:20]
Ranjan Roy
Okay, so I see the headline Grammarly has raised $1 billion, which is still surprising but not, not like inconceivable in the current market. They definitely have been positioning themselves as more AI. But then the more you read about it, I realize all this talk about AI and technology, we're forgetting about America's greatest innovation, financial engineering because this story was I did not know this model existed. So Grammarly did not raise $1 billion in the traditional sense. We all talk about of equity. They secured a $1 billion commitment from General Catalyst Customer Value Fund CVF. The way this money works is, is it's non dilutive, it's not equity, it does not affect the cap table at all. And basically they are allowed to now use this $1 billion to spend on customer acquisition, on sales and marketing and then any revenue they generate from the money that they put in from this, this pot of money. The return goes back to General Catalyst up to a certain point and those details weren't leaked. But again it's basically a loan for your marketing budget which any online business, the customer acquisition cost or CAC and then payback periods. These are the things everyone talks about all the time. And if you have a relatively predictable model like that, it's so fascinating to me and it actually like is one of those that I think will catch on because the more businesses have like very predictable cash flow models like this or acquisition models and payback models, it makes sense that we want to scale our revenue dramatically rather than diluting our cap table more. We'll take money in from General Catalyst. What's interesting though is apparently they do not have to pay. General Grammarly does not have to pay back the money if it does not see the return. So it's quite a bet. But it's capped up to in previous examples, Lemonade, the insurance company, they had public filings on this that they had received similar money and it was that they were able to pay up to 1.4x the initial investment. So 40% return.
- [36:44]
Alex Kantrowitz
That's basically.
- [36:45]
Ranjan Roy
Yeah, basically funding is changing. This is like I've never seen this before. I really think this kind of funding model could be used at so many different companies. And it just made me remember America's greatest innovation. For all the large language model stuff, this is where we're the best.
- [37:05]
Alex Kantrowitz
So do you think Gram really has their marketing operations so dialed in that they could like legitimately go $1 spent, $40 made and put a billion dollars in to increase? I mean it's. The TAM is like, must be crazy how many people need AI tools to correct their grammar.
- [37:24]
Ranjan Roy
Well, so they've definitely evolved into more general AI, I believe. I'm sure they're going to be like, kind of like moving more into overall just AI solutions for companies. Like, I mean you're not taking in that kind of money, which is riskier because it's a less predictable revenue stream. But, but in terms of, do they have a predictable model for this? They've been around for 14 years. The amount of like upsell and if you've ever installed it and didn't pay for it, the number of emails you get from them. And they're very good at that entire life cycle marketing. So I think for the traditional product they probably have a really, really good model. I think whatever direction they're going to try to move in this new AI world, it's going to be interesting. But to me, again, they don't have to pay it back. So that's up to General Catalyst. If it doesn't work.
- [38:24]
Alex Kantrowitz
Yeah, I think it's a very risky bet. And here's my hot take on Grammarly. I think they're going to go extinct. I think I wouldn't call them a rapper because they were around before large language models, but all this logic that they painstakingly built into their program and all the AI development that they did, you could legitimately just drop an article into ChatGPT and ask it for grammar and usage and spelling checks and it does a marvelous job. I am no longer using Grammarly. I'm just using ChatGPT for this. And it's even better than Grammarly was.
- [39:00]
Ranjan Roy
Yeah, well, I completely agree with that. So apart from the fascinating element of the financing, I do agree that a grammar checker, I don't see how that remains how it still works. But again they, I'm sure they're expanding into new like content generation efforts and stuff. If you have it plugged in, if it's already evaluated your writing, I would hope that there's, there's other areas on productivity, but it's a risky one. But I'm glad to see some, some activity in the whole financing space. Innovation. Not even activity, man.
- [39:36]
Alex Kantrowitz
What are they, 14 years old but they're gonna raise a billion? I don't know. Don't you Think at a certain point, you got to figure it out.
- [39:43]
Ranjan Roy
They were valued at $13 billion in 2021 off of a 300 million dollar raise or $200 million. They had some insane multiple. So to their credit, they, they stick around. They, they got the COVID bump. Things came off a bit. Now they're doing this. So this is a company, it's like a, it's a financial vehicle disguised as a grammar checking tool. My favorite kind of thing.
- [40:12]
Alex Kantrowitz
That is your favorite company. Absolutely. All right, let's do a couple minutes about Elon leaving the Trump administration. His time to be a special government employee is coming to an end. That's 130 days he's leaving. He's going to focus more on his businesses. He wrote the Doge mission will only strengthen over time as it becomes a way of life throughout government. But he also said that the spending bill making its way through Congress undermines the work that Doge is doing. Since it's adding, I think a lot. Well, it's adding billions, at least billions to the deficit or trillions even. The New York Post writes. So going to go to a conservative outlet to sort of touch on this. How did the New York Post cover this? With a story that Tesla shoulder shareholders are demanding elon Musk work 40 hours per week amid a crisis. And they sent a letter to the Tesla board chair saying that the board must require must to spend a minimum of 40 hours per week at the company and adopt new governance policies that would limit directors external commitments. They also called for a formal CEO succession plan. I guess, look, it's indisputable that Elon Musk's time in the government did not really end up being a good thing for his companies. So Ranjan, I guess the question for you is twofold. One, did it work inside the government? Did Doge work in any capacity? And two, can he now reverse the damage he's done to the companies?
- [41:44]
Ranjan Roy
Number one, I think I have to imagine most people are in agreement that it did not work. To me, the more fascinating part is how just anticlimactic the exit was. Like, I mean, if, just if we go back to the, the days of February and March, I mean, the level of intensity and energy around the Doge conversation, and then it just kind of fizzled away with doing a lot of damage along the way. But you know, like, certainly in terms of the savings that were promised, the trillions, none of that happened. I think the interesting question is what happens now to the Teslas of the world and SpaceX and stuff I think I don't see the reput the brand and reputational damage you can't just undo. Especially with, with Tesla being a like if it was a more progressive brand before the typical owner at least was more progressive and environmentally focus focused. I don't see how you get that back if they're to just kind of actually launch some just wildly industry leading products. I think that's interesting. But I don't know, I think there's long term damage that's going to be tough to undo. What about you?
- [43:04]
Alex Kantrowitz
Yeah, I definitely think there's going to be long term damage at the companies and, but we'll see. I think that we tend, people tend to be quickly forgiving. I don't know, you know, not always when it comes to a business leader entering politics in this way. But to me I think one of the interesting things is the way that this did come to an end. It was a fizzle, not a breakup with Trump, if you know what I'm saying. Like a lot of people expected this to blow up. But Musk has also said that he plans to keep his small office at the White House. Trump said he's going to be involved. So I think that the thing that really did Musk's effort in was politics. Like it turns out that politics is political and there's a, you know, when you're trying to change a system the way that he tried to change it, there are certain people you have to win favor with. And he ended up sort of sparring with a lot of cabinet secretaries in a way that sort of ended up dooming the, the initiative. Now we're going to have Bill Vass on who's the CTO of Booz Allen in a couple of weeks and he's going to talk a little bit about the way that these Doge priorities live on in terms of getting the government to use technology to be more efficient. But ultimately the, the Doge era, Elon's Doge era fell far short of the goals that even he said. And I think that is just the bow you tie on it.
- [44:27]
Ranjan Roy
The bow you tie on it. I think that's the best interpretation of this.
- [44:32]
Alex Kantrowitz
All right, let's close this week with a, a discussion of CEOs sending their AI avatars to deliver their earnings report. So Sebastian Shimon Kowski who's been on the show, the CEO of Klarna, he, this is from TechCrunch, he's leaning all the way into the idea that his buy now pay later later IPO bound startup is an AI company. When Klarna delivered updated quarterly earnings on Monday, it was his AI avatar that presented the highlights, according to the company's YouTube video. And then after him, Zoom CEO Eric Wan. He followed suit, using his avatar for initial comments. He deployed his custom avatar via Zoom Clips, the company's asynchronous video creation tool. He says. I am proud to be among the first CEOs to use an AI avatar in earnings calls, he said. Or rather his avatar said. It's just one example of how Zoom is pushing the boundaries of communication and collaboration. Is this like just a sign that all business communication is sort of worthless and most of it is sort of worthless and we're just going to end up having people send their avatars to meetings instead of themselves?
- [45:42]
Ranjan Roy
Well, okay, I think three things. One, I think I gotta respect Klarna CEO more because he just did it even. And it obviously helps with the overall AI branding a bit. But it's not like product related where Zoom tried to make it more of a product demo saying that we're using Zoom clips to actually make this. It's just one example of how Zoom is pushing the boundaries of communication and collaboration. So that was a little bit too salesy and promo. I think that your point that does this show that business communication, a lot of it was pointless anyways? I think yes to, to me earnings calls, the CEO reading out the scripted part never made sense to me. Just send out the scripts and take the extra 15 minutes for the questions. That's the only important part. So this actually, I actually kind of love it because it shows the uselessness of the CEO ever actually delivering those remarks. So I think I'm not pro avatar. I'm pro make business communication worthwhile for everyone and don't waste our time.
- [46:53]
Alex Kantrowitz
I mean, did you see some of those VO news clips? Like, what else could you AI avatarize? Like, is it going to be news anchors? I mean, if it can be a CEO reading the earnings report, can it just be news anchors as well? Like, where does this end?
- [47:08]
Ranjan Roy
No, but to me, scripted language maybe doesn't wide updates? Yeah, no, no. But it does not need to be video necessarily. The earnings calls are the perfect example. News reports as well. Maybe if it's a scripted news report, not an actual interview or conversation or kind of like genuinely valuable piece of information that has like emotion tied to it, then it. To me it's more if you can do that with an avatar, maybe it did not need to be done in the first place. I think the same thing with like Generative AI. Overall, I think we're going to find a lot of written communication that starts to get be, you know, generated by AI. In reality, the discovery will be, we didn't actually need that communication.
- [47:55]
Alex Kantrowitz
Yeah, a lot of this was kind of like proof of work. Right. It's like you write a recommendation letter. Who cares what the recommendation letter says? You took the time to write it. And that's what AI sort of minimizes now is that it's just like, okay, well, here's a letter of recommendation. It took me one second to prompt on ChatGPT and I may or may not care about this person. Or, you know, here's an update to the company. Like a CEO's weekly update to the company delivered by its VR, their VR avatar. This is the world we're moving toward.
- [48:24]
Ranjan Roy
Wait, wait, so that is such a good point that like a recommendation or letter was less about the letter and more, as you said, this person took 30 to minutes to an hour to invest in this person's future CEOs communication to the company was about them connecting personally with their company rather than like the actual words being said. It's a lot more than the actual content. And if we lose those things, then maybe very quickly we realize a lot of that stuff was wasting all of our time anyway, so. So apparently this is the most optimistic Friday I've had in a long time. There's no white collar bloodbath. Communications will improve. Financial innovation is alive and well in America. It's going to be a good weekend.
- [49:12]
Alex Kantrowitz
I was going to say, if the CEO no longer reads the earnings calls, then what does the rest of the white collar workforce get rid of? And then you do eventually lead to an entry level bloodbath. Maybe Dario was right in the end. See, we can both twist that exactly the way we want to. So this is the beauty of media.
- [49:33]
Ranjan Roy
Beauty of media.
- [49:34]
Alex Kantrowitz
All right, Ron, John, thanks so much for joining. Great to see you as always.
- [49:37]
Ranjan Roy
Good to see you next week.
- [49:39]
Alex Kantrowitz
Thank you everybody for listening. If everything goes according to plan, we're gonna have Anthony Scaramucci on the show next Wednesday. And why don't we have a classic hit, play us out the famous and much beloved Hyper True theme song. Thank you everybody. Have a good one and we'll see you next time. We'll see you on big technology podcast.
- [49:57]
Jessi Hempel
Is it hype or is it true?
- [50:00]
Ranjan Roy
We've got the facts we'll give to.
- [50:02]
Jessi Hempel
You Turn it up, the time is.
- [50:05]
Alex Kantrowitz
Now Find the answers we'll show you.
- [50:07]
Ranjan Roy
How Hype or true what's the call.
- [50:11]
Alex Kantrowitz
We got the scoop, you'll want it.
- [50:13]
Ranjan Roy
All don't just guess, we'll break it through it's your favorite game hype or true.