OpenAI’s New Structure, Apple Replacing Google With AI?, Cheating With ChatGPT

Summary

Big Technology Podcast: OpenAI’s New Structure, Apple Replacing Google With AI?, Cheating With ChatGPT
Hosted by Alex Kantrowitz
Release Date: May 9, 2025

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Introduction

In the Big Technology Podcast Friday Edition, host Alex Kantrowitz delves into significant developments within the tech industry, focusing on OpenAI’s organizational restructuring, Apple’s potential shift away from Google in search services, and the alarming trend of academic dishonesty fueled by ChatGPT. Joined by Ranjan Roy of Margins, the episode offers a nuanced analysis of these pivotal topics, enriched with insightful quotes and discussions.

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1. OpenAI’s Organizational Restructure

A. Leadership Changes and New Roles

The episode opens with Alex announcing major changes at OpenAI, highlighting the appointment of Fiji Simo, former CEO of Instacart, as the new CEO of Applications. This move signifies OpenAI’s intensified focus on its application layer rather than solely on its foundational models.

• Alex Kantrowitz [02:00]: "OpenAI is nothing but applications. I mean, of course the models work, but their moat are their applications."
• Ranjan Roy [06:34]: "That's a good division of power and labor and skill set. They have not been able to tell a clear business story and now hopefully Fiji Simo will try to wrap her head around that and actually come up with one."

Sam Altman, the current CEO, announced that he will retain his role but shift his focus to research, compute, and safety systems, reflecting his prioritization of long-term AI safety and the pursuit of superintelligence.

• Alex Kantrowitz [04:53]: "Sam is going to remain CEO, but he's starting to delegate a lot of his responsibilities to others and like core company responsibilities."

B. Implications of the Restructure

Ranjan discusses the strategic implications of Fiji Simo's appointment, noting her expertise in scaling consumer businesses and advertising—a critical area where OpenAI seeks growth.

• Ranjan Roy [07:46]: "She built out Instacart's advertising business very well. If OpenAI wants to introduce ads into ChatGPT, she could crack that."

C. Control and Financial Structure

A significant shift is OpenAI’s move back from a for-profit model to a public benefit corporation (PBC), ensuring the nonprofit parent retains control. This change addresses concerns from civic leaders and regulatory bodies, positioning OpenAI to continue fundraising while adhering to its mission.

• Alex Kantrowitz [25:35]: "The nonprofit will continue to control the company. It's a major shift that maintains the contours of how OpenAI is currently set up."
• Ranjan Roy [26:06]: "Matt Levine notes the nonprofit will control the PBC with super voting stock, making it just nonprofit enough legally but not entirely a traditional nonprofit."

D. Relationship with Investors and Microsoft

The restructuring process faces challenges, particularly with Microsoft, a major investor. Microsoft seeks to retain ownership rights to OpenAI’s models and amend provisions related to AGI, complicating the transition to a PBC.

• Alex Kantrowitz [30:05]: "Microsoft is no longer just a major investor but increasingly a competitor, especially in enterprise software."
• Ranjan Roy [31:14]: "Satya Nadella’s influence keeps Microsoft’s control strong, potentially hindering OpenAI’s restructuring efforts."

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2. Apple’s Potential Shift Away from Google in Search Services

A. Eddy Cue’s Testimony and Statements

Apple’s executive, Eddy Cue, testified in federal court, suggesting the integration of AI search engines like OpenAI, Perplexity, and Anthropic into Apple’s Safari browser, potentially replacing Google’s search service.

• Alex Kantrowitz [35:37]: "Eddy Cue testified there is a chance that AI search engines will eventually replace standard search engines such as Google."

B. Financial Implications

Google currently pays Apple $20 billion annually to remain the default search engine on iPhones. Apple's shift to AI-driven search could significantly impact Google's revenue.

• Ranjan Roy [35:37]: "Google’s $20 billion a year from Apple could be at risk, but the competitive bidding from AI providers makes it unlikely Apple can replace Google entirely."

C. Market Reaction

Following Cue’s statements, Alphabet’s stock saw a significant decline, while Apple’s stock experienced a modest drop.

• Alex Kantrowitz [34:00]: "Alphabet was down 7% after the news, while Apple was only down 3%."

D. Future of Search

The conversation explores the future landscape of search, contemplating a hybrid model where users can toggle between traditional and AI-driven search functionalities.

• Alex Kantrowitz [38:04]: "I see it as a toggle between traditional search and AI search, enhancing the user experience with more detailed and contextual answers."

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3. Cheating in Colleges with ChatGPT

A. Rising Academic Dishonesty

The podcast highlights a New York Magazine article detailing how students are increasingly using ChatGPT to complete academic assignments, undermining the educational process.

• Alex Kantrowitz [47:45]: "College is just how well I can use ChatGPT at this point."

B. Impact on Education Systems

Ranjan emphasizes the need for educational institutions to adapt their teaching and assessment methods to counteract the misuse of AI tools.

• Ranjan Roy [49:29]: "If universities don't innovate their assignment structures, students will continue to rely on AI, rendering traditional assessments obsolete."

C. Proposed Solutions

Potential solutions include oral defenses of AI-generated work and integrative methods that require critical thinking beyond what AI can provide.

• Ranjan Roy [47:45]: "Use ChatGPT to create your paper and then give a verbal defense of your argument. That’s a better approach than traditional written assignments."

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4. Discussion and Implications

A. Balancing Innovation and Control

The episode underscores the delicate balance OpenAI must maintain between rapid innovation in AI applications and the necessary control structures to ensure responsible development and deployment.

• Ranjan Roy [28:26]: "The mission comes first, but this helps us in our fundraising. That's it. That's OpenAI in a nutshell."

B. Ethical Considerations in AI Advertising

A significant concern raised is the ethical implications of integrating advertising within AI platforms, especially those perceived as personal assistants or companions.

• Alex Kantrowitz [20:03]: "Advertising within a chatbot that users confide in is a dangerous territory with potential privacy and ethical pitfalls."

C. Future of Technology and Society

The discussions reflect broader themes about the future role of AI in society, the transformative impact on traditional business models, and the necessity for institutions to evolve in response to technological advancements.

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Conclusion

The Big Technology Podcast episode provides a comprehensive analysis of OpenAI’s strategic realignment, Apple’s evolving search strategies, and the challenges AI poses to academic integrity. Through engaging dialogue and expert insights, Alex Kantrowitz and Ranjan Roy navigate the complexities of these developments, offering listeners a clear understanding of the rapidly changing tech landscape and its profound implications for businesses, education, and society at large.

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Notable Quotes:

• Ranjan Roy [06:34]: "They have not been able to tell a clear business story and now hopefully Fiji Simo will try to wrap her head around that and actually come up with one."

• Alex Kantrowitz [28:06]: "Sam Altman says the mission comes first. But we were trying to go fully for profit, but the mission comes first. It's bizarre."

• Ranjan Roy [20:03]: "They have to be extra careful because one, that can affect their overall, like the utilization of the product. But two, in terms of overall privacy concerns, their branding on that. And they've discussed that privacy is not great."

• Alex Kantrowitz [44:34]: "Yes. And yes. And it's a media company and it's the thing that lets you eventually take the actions."

• Ranjan Roy [51:02]: "If universities don't innovate their assignment structures, students will continue to rely on AI, rendering traditional assessments obsolete."

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This summary encapsulates the key discussions and insights from the podcast, providing a clear and detailed overview for those who haven't listened to the episode.

Transcript

[Alex Kantrowitz]

OpenAI shakes it up again with a new structure and a new top executive. Apple's Eddy Cue says the company may replace Google with AI and everyone in college is cheating with ChatGPT. That's coming up on a big Technology Podcast Friday Edition, right after this.

[Andrew Seaman]

Hey, you, I'm Andrew Seaman. Do you want a new job or do you want to 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.

[Jessi Hempel]

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, Jesse Hempel on the LinkedIn podcast network or wherever you get your podcasts.

[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 great show for you today. We're going to talk about this new structure at OpenAI and what it says about the company moving forward. Of course you know, or maybe you don't, but this is new news coming out this week that OpenAI has abandoned its quest to become a for profit, or at least have the for profit make all the decisions and the nonprofit will control the company moving forward. We'll talk about the implications of that. We also have this pretty fascinating statement from Apple's Eddie Q saying the company might substitute Google with AI, even though the company makes a lot of money from Google. And everyone, of course, is cheating with ChatGPT in college. Joining us as always on Friday is Ranjan Roy of Margins. Ranjan, great to see you. Welcome to the show.

[Ranjan Roy]

Everyone's cheating in college. It's just not worth that 120k anymore, Alex. Or is it even 120k now?

[Alex Kantrowitz]

That's probably more.

[Ranjan Roy]

Yeah.

[Alex Kantrowitz]

But of course we should start with the big news that white Smoke flowed from OpenAI headquarters this week as they named a new CEO of applications. I guess I'm not introducing the segment very well, but it is pretty cool that there is an American Pope, Bobby.

[Ranjan Roy]

Prevost from the shy. He's really made it.

[Alex Kantrowitz]

He has. Did you see the Chicago Tribune headline?

[Ranjan Roy]

No, what was it?

[Alex Kantrowitz]

It was just da pope, like da bears.

[Ranjan Roy]

Have you seen Conclave?

[Alex Kantrowitz]

Not yet, but his brother was saying we play Wordle. We play Words with Friends. And I recommended that he watch the movie Conclave. So he's watched it. You've seen it.

[Ranjan Roy]

I, I watched it over a Christmas break with my family and my parents and sister said it was really boring. And I was able to hold that over them this week as the conclave began. And suddenly I was the most informed about how these things work. It was pretty good. It was slow, but it was very Oscar Y.

[Alex Kantrowitz]

Okay. So anyway, I was personally excited about that news and I had to find my way to shoehorn it into this show. But let's talk about Fiji simo, the Instacart CEO. She is joining OpenAI as the CEO of applications. And I think this is interesting from an OpenAI standpoint because it is not just Fiji Simo joining as the CEO of Applications, which is very interesting because as we've spoken about in the past, this company is nothing but applications. I mean of course the models work, but their moat are their applications. But Sam Altman recently made Brad Lightcap into the head of day to day operations. And as he named Fiji the CEO of Applications, he writes this message. In this new configuration, I will be able to increase my focus on research, compute and safety. These are critical as we reach superintelligence. He also has to had to note that he will remain CEO of OpenAI. Kind of. We talk about how this company is very interesting but also just filled with weird stuff. And this was definitely weird to me to see that Sam is going to remain CEO, but he's starting to delegate a lot of his responsibilities to others and like core company responsibilities. And he's also made Simo the person who is now the boss of Sarah Fryer, who was the OpenAI, who was the Nextdoor CEO and is now the OpenAI CFO. So Fryer comes over to OpenAI from Nextdoor to become the CFO and now she's reporting not even to the CEO of OpenAI. It's weird.

[Ranjan Roy]

This is now an org chart podcast in addition to a Pope podcast because we're trying to unpack this. It was interesting. And also to note from the blog post that OpenAI put out. Sam Altman will increase his focus on research, compute and safety systems. So that's the, that's like his main area now. Brad's going to be heading day to day operations and then Fiji is the head of CEO of Application. So in some world I actually see that as a good division of power and labor and skill set. So I think that actually does make sense. I think the most interesting part of this to me is actually on our recurring is it the product or the model? This is kind of like cementing that they want to really focus more on the product side of things. Again, masters at building great UIs and great product experiences, but actually building a business out of it. Remember, their revenue forecasts are always just things of just incredulity. Like I mean on the current one, SoftBank is going to be a large, like massive part of their enterprise business. A year ago, or maybe it was only six months ago, they were going to be much more heavily into consumer revenue as opposed to enterprise revenue. So my read on this is they have not been able to kind of tell a clear business story and now hopefully Fiji Simo will try to wrap her head around that and actually come up with one.

[Alex Kantrowitz]

Yeah, but it's interesting because Sam, you would think that he'd want to be on the core as the CEO, but instead he's going to be on. If you're saying that this is. That they're going to focus on applications, he's saying I'm going to focus on the non core, if you go with your logic. So you have. It's a very interesting moment where you have a CEO of one of the most promising tech companies in decades saying that my core focus is not going to be on the core competency of the company, which is applications. What do you make of that?

[Ranjan Roy]

Yeah, but that's, I mean it's logical, it's accurate. That's him, that's her. Like that's what they both have done separately their entire careers. Again, she is a masterful operator. That's like helped build out Facebook's ad business, was at Instacart, actually built out instacart's advertising business very well. Like that's what she does well. And maybe now does that mean ads are coming to OpenAI and ChatGPT sooner than we thought we should. We could definitely discuss that, but I think overall it's clear that's the part of the business that needs help. And to their credit, they found someone with a strong track record.

[Alex Kantrowitz]

I'm curious what you mean by needing help because like Sam has said in Testimony this week, OpenAI's ChatGPT has 500 million weekly active users. Those are the most public numbers. I feel like the number numbers are more. At least he's indicated that the numbers are higher. To me, I think what Sam is saying is that you could sort of delegate this type of work. And his focus on research is saying the models matter more. And notice how he says these are critical as we approach superintelligence and not AGI. Right. So he's already he's now leveling his AGI's gone from AGI to super intelligence.

[Ranjan Roy]

Yeah. Okay, I agree that the idea of like he does believe there will be one model to rule them all. It will be the all powerful model and he wants to drive building that. But I think recognizing again like when, when 500 million users is great, revenue is going to be what matters at a certain point like net income will start to matter. I, maybe this is a sign of maturity that he's starting to recognize these kind of things. Like if you think about on one hand they've had incredible product rollouts but from a pricing standpoint it's all over the place. Like again, 200 bucks is deep research part of it now? Deep research is part of the 20 bucks. And I get this stuff is all fluid and everyone like Gemini and workspace was $20 a seat. Now it comes with it. Like this stuff is fluid at many levels, but this is the kind of area they're, they're going to have to get their house in order if they're going to actually become the business they say they are. So I, I, I don't think this is like a recognition by him that this is kind of like a throwaway role and still it's going to be one business, one model to rule them all. That's going to bring us to ASI and that's going to be the end all, be all. I think he doesn't probably, I agree, I don't think he wants to do that stuff, but I also think he found someone who can do that stuff.

[Alex Kantrowitz]

What do you think about the fact that the CFO is going to report into Fiji? Simo that seems more than just a CEO of applications in terms of stuff.

[Ranjan Roy]

He probably doesn't want to deal with. I think the operational financing, the line by line financing. Like, come on, do you think that's what Sam wakes up and wants to do?

[Alex Kantrowitz]

Well, no, I don't think so. So I think I should take a moment to talk about Fiji because I've gotten the chance to interact with her a few times when she was at Facebook. So she's going to come in, she's going to be the CEO of applications. This is of course we Talked about how OpenAI is a consumer business. This is going to be her tripling down on OpenAI's consumer business. You need someone that understands consumer applications. If you have a lead and you really want to build on it and she is that person. In my conversations with Fiji, I found a few things to be true Number one, she's a pretty clear communicator and a very clear thinker about the role of product we talked about on the blue app on Facebook, even though it's had its ups and downs, the role of groups there. And I believe that groups has really reanimated the Facebook product in a way that few tweaks have in a long history, since it's languished after the French sharing moment. So I would say credit to her for that. The other thing that I have known about Fiji is that she is not like a Game of Thrones style corporate operator. She won't make a run for the CEO job. She will be very loyal and supportive of Altman. She's been on the board for a while, just as she was a incredibly loyal executive for Zuckerberg and obviously that parlayed, she was able to parlay that into the CEO of Instacart and she of course ran the Facebook app for a while. The one thing I'll say is that Sam at OpenAI has really struggled to keep a number two. We know that Ilya left, we know Miro Muradi left, we know that Greg Brockman had to take time off. So everyone, there's that meme of the picture of these are the founders of OpenAI and they all disappear and Sam Altman has left and he really needs stability in his lieutenants. And of course he's been able to keep Lightcap for a while and Friar and now Simo. And I think this is actually quite a positive sign that he's decided to bring Fiji in because if anyone seems like they can ride the chaos of that company out, it's her.

[Ranjan Roy]

Yeah, I agree. I mean, I think it shows a level of stability. It shows again, Sarah Fryer, very senior executive at some pretty large companies. But I mean, Fiji, Simo has been a very powerful executive at the largest consumer companies in the world. So I think it. I agree on that. It's going to be very interesting to watch how it plays out, how she even communicates her own role, because again, like the announcement came out in a kind of amazing way that she sent an email, I believe internally at Instacart, because it was going to be leaked into the press and published. So she wanted to get ahead of the story, but she still didn't give a lot of clarity. We have Sam Altman's blog post on the OpenAI blog that starts to explain this a bit, but it will be very interesting, kind of how she talks about her role with OpenAI publicly, right.

[Alex Kantrowitz]

And so I gave all the spiritual reasons why Fiji might make sense for this job. But Ranjan, I'm actually curious to hear your perspective as, you know, thinking about someone who was the Instacart CEO or who still is, who will be the Instacart CEO for a moment. Is it interesting, and of course she was on the board, but is it interesting that somebody coming from a partner that OpenAI would have to integrate if it was going to be like the catch all app for all computing, she's going to run applications? Like, it almost seems like Fiji will say to the doordashes of the world and any other company that ChatGPT might gobble up. Look, I was on the other side as the Instacart CEO. I worried about traffic to my app and all this other stuff. But here's how I would think about it as someone in your shoes. You know, if this, this to me is one of the biggest signs ever that OpenAI wants to be effectively the everything app with ChatGPT or even the new Internet. I mean, Altman again was in Washington this week testifying that he thinks AI could be bigger than the Internet. Which I guess is something you would say if you're doing full time marketing, you know, now that you don't have to have the CFO reporting to you. But it just seems to me like that is another signal as to where this is going. And I'm curious what you read into it.

[Ranjan Roy]

See, I disagree. I don't think this is WeChat style everything app. My call on what this means for me and it's the same thing. When she went over to Instacart, the big conversation was around. Instacart had started to build out their advertising business. DoorDash had Uber had basically all these consumer apps with thousands, or I mean, sorry, hundreds of millions of users that had commercial intent within them realized we can start to inject advertising. So they started to build out these businesses. Do you know how much instacart's ad revenue is right now?

[Alex Kantrowitz]

I don't have it right here. Do you?

[Ranjan Roy]

Yeah, $9 billion. Like they got up to $1 billion. So like she built that out from over the last few years. It had started growing, the foundation was there, she scaled it. So my call on this ads are coming to ChatGPT in some way and in reality, like I do believe there is going to be some kind of advertising model that is, that enters this whole world. Perplexity has I think started to launch some ads where they certainly talked about it and they have, like, they've been pushing an advertising model. Sam has said he, like, doesn't want ads like Larry and Sergey once did. Like, it's coming, I think. And if someone cannot again figure out a creative way to do it, I think she could be the one to crack. What does advertising look like in an AI chat?

[Alex Kantrowitz]

Well, if this is the case, this has made me tremendously depressed because I don't know if you caught my conversation with Gary Marcus this week, but towards the end, on Wednesday, we talked about how these things, people are opening up to them in a way they never did to Facebook. And what, like, you're gonna now start telling it all your intimate secrets? And all of a sudden this AI that every now even we're talking about Mark Zuckerberg talking about how AI could be your friend or your therapist. Like, if you use it for these purposes, you're gonna share more with ChatGPT than you would with any service on the Internet, and that data is gonna be used for ads. I mean, it's. It's like, maybe I'm naive and being upset about this because this was obvious. We have a headline from the financial times in December 2024 saying that OpenAI is exploring ad revenue, but it just feels like ad revenue from a chatbot that many people are going to view as a friend, a companion, a therapist is an extremely tricky road to go down because of the amount of data and intimate thoughts people are sharing with these bots. I'm curious what you think about this. Am I right to be depressed?

[Ranjan Roy]

You're right to be depressed on it, but I'll also go with the naive to be depressed because. Come on, like, come on. In terms of the. The idea that OpenAI would not go down that road, given the sensitivity of a lot of the chat, I think, I mean, they almost cannot do that given their valuation, but I'm not sure ethically they would actually be against it anyways. But I think overall it is going to be interesting to me that people are more personal because there are not ads. So then you get into a. Would they become less personal if they're worried about ads? Like, I think maybe that does start to degrade the overall intimacy of the product a bit. But to me, I guess first it feels like, I mean, that is inevitable or the ethical boundaries will never have stopped that and has never stopped advertising. And then also, even though we're not like, Google Search has a more intimate knowledge of you than Facebook posts. But in the end, maybe I'm too cynical, but I feel Advert. The ad ecosystem knows everything and anything about all of us.

[Alex Kantrowitz]

But even still, a lot of the ads that we get don't feel so tailored to us, don't feel personal. And wouldn't you agree that if they do this the wrong way, that this is a potentially catastrophic hit to their brand?

[Ranjan Roy]

Of course, I mean, definitely, like, and first of all, like, I feel meta to their credit, even after iOS 14.5 and like identity tracking was supposed to be more difficult. It's like ungodly how good their ad algorithm is. Twitter and slash X worst ad algorithm imaginable. So like people are able to do it and figure it out. But I do agree that it could be a risk where, okay, let's say they start to get too weird and sensitive in terms of the ads that they show you given the type of data that they'll have on you. In a way they have to be extra careful because one, that can affect their overall, like the utilization of the product. But two, in terms of overall privacy concerns, remember at the enterprise level, like it's always the starting point that people worry OpenAI is going to train on your data or doesn't respect privacy. They're branding on that. And we've talked about, about this a lot is not great. So I think they could blow any goodwill they have up if they go down the wrong path with this.

[Alex Kantrowitz]

And I also think it's worth pointing out that there are various degrees of targeting that you can do with each degree higher becoming more lucrative for you. So let's just talk this out. The bottom level here is just, you know, sort of broad targeting, the type that you do in tv. So that could be like, you know, targeting for basically location, maybe age, gender, but really audience and frequency. Right, the reach and their frequency, that's the basic level of targeting. And ChatGPT can definitely do that with 500 to let's say 800 million users that it has now. The second level is intent based targeting. Right. And this is similar to Google. So that would be OpenAI potentially using the chats that you are engaged in at the moment to surface things to you. For instance, like let's say you say I need some help researching a car that I'm interested in buying. Well in the moment OpenAI could say, all right, well here's like Hyundai and Toyota, but you might also be interested in Nissan, which is a partner of ours. But I found a good deal for you. Okay, so that wouldn't be too different from Google. And I don't, I think it could get away with it. But there's this third type of targeting that's the most lucrative, that is also, I think the most dangerous to OpenAI and maybe I'll even say our society, if they end up going this route and that is building and it's totally possible to do this and advertisers will want you to do this. Building a psychological or some sort of Persona profile of the individuals based off of the entire history of chats that they have with you. Now of course that's tough to scale, but there are shortcuts you can take and algorithmic groupings you can do to put people in cohorts. But if you start to advertise to someone based off of the entirety of the personality and the history of the chats that they've shared with you, that to me is the red line. Even though you can make a lot of money from doing that. OpenAI, I just want to say right now to you, please don't do that. That is definitely not the move intent. Fine. Building these like psychological profiles of your users, it's tempting. We know other companies have done it. If you do that, it's going to be a disaster. So please don't do it.

[Ranjan Roy]

I like listeners cannot see. Alex is currently in Paris, he has a big bookshelf behind him and I feel you're getting very existentialist today in the conversation.

[Alex Kantrowitz]

Well, what's not true about that though?

[Ranjan Roy]

I agree well on one and meta can actually, I mean extract what is in the image that you post and understand your emotional well being based on what the captions you're posting are, what kind of messages you're sending and all that data is already there and can advertise or certainly target based on that kind of like psychographic data and well being. So, so I, I agree that almost by default people public posts are always going to be slightly more censored hopefully than what they're really entering to ChatGPT. But I don't know, between what people search on Google, between what people actually post publicly and that advertisers already have access to. I don't know, maybe I'm too cynical.

[Alex Kantrowitz]

On this one, but I think, yeah, I think you are. I think this is a degree deeper that you can go with chatbots. You know, if someone's telling ChatGPT I'm depressed, I don't have plans this weekend. This they know that you live in a certain area, they know what you typically search and you say hey, I'm feeling sad because we know again that therapy is one of the top uses and it says, well, here's an ad for a movie or a restaurant that you can go to and uses that data to sort of exploit your current state. I feel like that is dangerous territory to get into.

[Ranjan Roy]

It's like your therapist, you're talking to them and suddenly they're like, well, let me hold up this product. I think this can help you right now.

[Alex Kantrowitz]

You know what real self care is? Hims. It's because you're bald. Hims Hims I've gotten doesn't sponsor the show, by the way.

[Ranjan Roy]

Affiliate model therapy. That's what the world needs right now.

[Alex Kantrowitz]

No, but look, I totally hear you that the companies already know a lot about us to begin with. But anyway, I'm kind of getting creeped out just thinking through these possibilities because it could get really dark. And now we know that OpenAI is going to move to a more traditional company structure. Or maybe not. This is from Bloomberg. OpenAI walks back it's for Profit plan and the Nonprofit is Going to keep control so OpenAI is backtracking on its plans to become a more conventional for profit company after facing mounting pressure from former employees, academics and rivals, including the billionaire elon musk. The ChatGPT maker said Monday that it's moving forward with an effort to restructure its for profit division as a public benefit corporation. But the overall business will instead remain under the control of its nonprofit, a major shift in its plans that will effectively maintain the contours of how OpenAI is currently set up. So the nonprofit continues to control the company. This is from Brett Taylor. We made the decision for the nonprofit to retain control of OpenAI after hearing from civic leaders and engaging in constructive dialogue with the offices of the Attorney General of Delaware and the Attorney General of California. The one good thing I think is that the company structure is going to resemble a much more normal structure so that there's no more this capped profit sharing deal. It's just going to be like you have normal shares in the company, but the nonprofit will continue to control it. What's your view on this Ranjan? Good.

[Ranjan Roy]

This one makes my head spin. Not quite as in a dire way as ChatGPT creating an advertising profile based on your deepest darkest secrets. But I I mean it just gets more and more convoluted. Again, like Matt Levine had a good he's like note the nonprofit will continue to control the public benefit Corporation and will be become a big shareholder. It suggests that the nonprofit will be a minority shareholder. The nonprofit might own say 30% of the economic value of the for profit company, but will have super voting stock given it control of the board. Like basically it's just nonprofit enough to be a nonprofit legally, but it's not really a nonprofit. But it's also not quite a for profit. I think to me, all of these decisions, the only thing I think I try to think about because otherwise again, I get a headache, is what does it mean for their funding and what does it mean for potential exits and outcomes? Because to me, they don't really operate by normal rules anyways. And remember SoftBank, in that $40 billion funding round, they committed 30, but supposedly it can be reduced to 20 if they don't become a truly for profit corporation. So I don't know, but it still wasn't even clear. Did this new structure mean that SoftBank can renege on $10 billion?

[Alex Kantrowitz]

Well, this was definitely the week of great Sam Altman quotes. So first of all, here is the first thing he says about the structure. By the way, remember, he talks as if somebody else tried to make this structure transition. He says, I won't pretend that it wouldn't maybe be easier if we were a fully normal company, but the mission comes first. We believe this is well over the bar of what we need to be able to fundraise. So, you know, the mission comes first. But we were trying to go fully for profit, but the mission comes first. It's bizarre.

[Ranjan Roy]

I mean, I actually, I love it. I think it capped that quote should be on a poster. And that captures everything about OpenAI better than anything either of us could have said. So thank you, Sam, for clarifying everything, at least emotionally, even if not logically.

[Alex Kantrowitz]

Sure, sure.

[Ranjan Roy]

I mean, I'm telling you the mission comes first, but this helps us in our fundraising. That's it. That's OpenAI in a nutshell.

[Alex Kantrowitz]

I guess so. So Speaking of the SoftBank stuff, he also said that SoftBank will not freeze the rest of its funding with the new structure. And then OpenAI, like we said before, announced it will remove a cap on the financial returns its investors can earn, a move likely to appeal to current and future backers. So yes, the fundraising will continue. Now, let me say the however part, however, what is going to happen with Microsoft? This is from Newcomer. Microsoft wants to retain its rights to have access and ownership rights to OpenAI's model, whereas OpenAI is trying to claw that back. The topic has cropped up numerous times between the companies, so this is still not settled, even though the announcement has been made. Finally, Newcomer continues to write. Microsoft wants to amend an AGI provision that gives OpenAI an out once it develops artificial intelligence, general intelligence. These issues were an obstacle to Altman's planned for profit conversion, and they remain an obstacle in the new plan to make the business a public benefit corporation that's still controlled by the nonprofit parent. No restructuring process can move forward until this is figured out. So what newcomers are saying is this ain't over.

[Ranjan Roy]

It never is, it never is, he says.

[Alex Kantrowitz]

The fact is that Microsoft has OpenAI in a tight spot and knows it at a high level. Relations are still strong. Altman welcomed Microsoft CEO Satya Nadella to their offices the other week. Beneath the Surface, though, the competition is rising. Microsoft is no longer just a major investor in the company, but increasingly a competitor, especially in enterprise software. A source close to the matter said the changing dynamic is influencing the proceedings. Some at OpenAI worry that Microsoft is setting up such a high bar barriers to a deal as to make one impossible. So this is the only place I've heard of this. But assuming that this is correct, is it possible that Elon Musk wasn't the biggest barrier to this OpenAI restructuring? It's Satya Nadella and Microsoft who realize that they have a big say into what the future of OpenAI looks like and they will hold it back from being able to move forward, which means basically holding it back from being able to do anything else because of course the SoftBank money will be diminished unless its terms are met. What do you think?

[Ranjan Roy]

That's actually I like this because the idea that Masa is coming in 30 billion strong and like one would assume in any normal company that would give a very clear decision making capacity and very clear ownership. And in reality, because everything is so murky and muddled that Microsoft is still able to legally pull the strings in weird ways to benefit themselves. And I think that gets even more fascinating and interesting as Microsoft becomes a much more direct competitor to OpenAI. So I think like Satya is still in the background right now. That becomes clear from that I am like interested of what his visit to their offices must have been like. How does that work? What does that look like? What do they talk about?

[Alex Kantrowitz]

Yeah, and I should note that this is coming from the Newcomer substack and Newcomer has Tom Dotan writing for him. And Tom Dotan was writing about Microsoft for the Wall Street Journal. Not just writing, but reporting on the company deep inside the company. He's been on the show before. Tom knows his stuff and you know, it's not a surprise to me that he came out with this report because he's been close to Microsoft and he figures he has a good, good read on what this company is up to. So something that bears watching. And I know we've done a lot of inside baseball, so to speak, on the first half of this show, but this is going to determine the future of where AI is moving. I think that OpenAI has the best set of models right now. I don't care what the leaderboard says. Using O3 is pretty amazing. And yet every time we say something positive about OpenAI, it seems in the next breath we talk about its weird structure. And that's certainly the case today.

[Ranjan Roy]

Great company, terrible structure.

[Alex Kantrowitz]

Exactly. Maybe a little bit less complicated now.

[Ranjan Roy]

No. And this actually just made everything more complicated to me. We don't have to talk about profit capping any longer, but still, what is happening, who gets what, ownership? All these kind of things have not been clarified to me in any way.

[Alex Kantrowitz]

Great company, weird structure, but the mission comes first. That is the inspirational poster that Ranjan would make with Sam Altman, like with a bunch of rays of light standing on a cloud or something like that.

[Ranjan Roy]

That's it.

[Alex Kantrowitz]

All right. So in other news, we have a major hit to Alphabet stock after Apple talks about potentially replacing the Google search engine on the iPhone. We're going to talk about that when we come back from the break right after this.

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[Alex Kantrowitz]

And we're back here on Big Technology Podcast Friday Edition talking about all the week's tech news. Ranjan, fascinating story this week from within Apple executive ranks where Eddy Q. He was testifying in a federal court in Washington and he told the court there is a chance that AI search engines will eventually replace standard search engines such as Google. And he said he expects to add artificial intelligence services from OpenAI, perplexity and anthropic as search options in Apple's Safari browser in the future. As we Know, Google pays Apple $20 billion a year to be the default on search. So with Apple services revenue becoming the most important part of that company's financial makeup, what do you think is happening?

[Ranjan Roy]

What's going on this one? I think this actually might be my most interesting news story this week because what it means for Apple, what it means for Google, I think it's huge ramifications for both. I mean, you figure it's clear that he is trying to make the case that, like, Google paying Apple for that placement in the search bar is not a monopolistic action on Apple's part. I mean, in a way, maybe they just assume that at a certain point, OpenAI and Perplexity and Anthropic will also pay them in the way Google did and that, that the revit, maybe it goes up because there's actually competitive bidding as opposed to just like one bid to rule them all. So from Apple side, I get why the stock was only down 3% after the news while Alphabet was down 7% after the news. It's funny to me because, like, on one hand, yes, it's breaking news. On the other, this stuff shouldn't be a surprise to anybody. Like, there is no way traditional Google search will be in the search bar in five years. Like, I, I, I just, I don't know, do you think it will be, or do you think it'll be some other kind of form of search?

[Alex Kantrowitz]

I actually think the search bar is the most natural place for a Google search to be because that's typically you're talking into the search bar on your phone when you need an answer quick, and you go into chatbots when you need something that thinks a little bit more or gives you a much more detailed answer. So I actually think the search bar on the phone makes a lot of sense for Google. But do I think it's gonna look exactly the way that it looks now? No. Like, it might end up being a default thing where you can not a default thing, something that switches where you put like a search keyword in and it gives you a search answer. And when you put like a question in and it gives you a chatbot answer, like, I think that's kind of where we're going with all this. I just don't see how Apple could ever replace Google's 20 billion a year. I mean, maybe it can, but I mean, we're talking about the numbers that OpenAI is raising, and again, they just raised 10 billion, and that was by far the largest private market raise in the world ever. So 20 billion a year, double that to Apple is crazy. And again, like, if everybody bids on it, yeah, it's not going to happen, I don't think. I mean, maybe this is a way for them to try to get more money from Google.

[Ranjan Roy]

Yeah, I think the, the equally important part is the reaction showed. I mean, Google search business, it's gonna be in trouble. But to me it's still amazing. We talked about Google earnings, I think two weeks ago or a week ago where they're still cranking search revenue was up. Like they don't disclose the query of search and search volume though after this statement, they put out their own public response saying that search, overall search query volume is up. But then they kind of hedged it by saying now all types of search extend into maps and AI searches. And like they basically didn't directly say that people typing into a search bar is up overall querying things from Google properties is up. And they even made the point of saying these other things. But I mean, I don't know. I think we got into this maybe like a year ago when Gartner said 25% of searches are going to be AI in a year or two. I am more convinced of that than ever. Like it's, it's just such a better way to access information. And Google, to their detriment, maybe killed off traditional search themselves by making it unusable and stuffing ads from top to bottom.

[Alex Kantrowitz]

Yeah. I am also with you that this is the future of search. And I'm also less open to this argument that Google killed the web itself, I think maybe than I've ever been. And that's only because I'm not saying the web is good right now. We've talked about it a thousand times trying to get a recipe from the Internet. I mean, it's a fool's errand. But the detail you can get when you do AI search right is insane. It is so much better than anything traditional search could have ever hoped to have been. So I think it would be inevitable that people would have moved there anyway. And I think Q is totally right that eventually you'll have to have some form of AI as the default. And when I dismissed it out of hand, now I'm thinking about it a little bit more and I'm like, yeah, it's going to be a toggle. Toggle was the word I was looking for. It will be a toggle between traditional search and AI. I just want to give one quick example. I mean, you mentioned it. I'm in Paris, one of your favorite Cities. I think this is my first time here and what I've done. And I'm going to talk about this next week on a show with two AI critics, Professor Emily Bender and Alex Hanna, who have this book out called the AI Con. I'm a little bit more bullish on AI than they are, I would say. And although I have my own critiques, and we talk about those at the beginning of the episode. So that's coming up Wednesday. But one of the things I mentioned is that like every day here, I've uploaded two documents from friends of things to do in Paris to ChatGPT. And then I say, what's going on in Paris today? Take these documents into account. And I click the search button on ChatGPT and it goes out and searches the web and it proposes this great agenda with all these different options and it scanned so many sites, it's telling me about things that I had no idea existed. And it's of course translating lots of French into English and then presenting me the answer in English. Web search just could never do that. And so this is a step forward that no matter what Google did to the Internet, this is an improvement. And, you know, the more you use it, the more I've used it, at least I'll say, the more I'm just like, this will just take over everything.

[Ranjan Roy]

The one thing that needs to be figured out and there's going to have to be some kind of economic system around it, is that still that's like a generative AI layer of web search, right? It's like a still searching the web. It's just presenting the information and using some other context in a really smart way. But there's still that in someone, some like timeout Paris or whatever website posted some events, right? So will people be incentivized to do that? And why would they be? That monetary system was owned by Google and helped Google created that essentially and spurred it. So will people keep doing that? And then after a while, real time information, does that just go away or who's going to do that? I think that's the more interesting question.

[Alex Kantrowitz]

I don't even think so. It goes a level deeper here. You need timeout, because the writers for timeout would go to all these event like Ticketmasters and all these event ticketing pages and sort of pick it out when they're gonna go to your city and then write it up based off of like where the band's been and sort of their latest albums and stuff like that. What I saw ChatGPT doing is skipping the middleman and just going to the ticketing sites and explaining the venue and saying this is okay page. So they've. It's. It's unfortunate because I think it's terrible for the content business, but they've replaced that middleman and you don't need timeout because you have ChatGPT writing that up for you.

[Ranjan Roy]

No, no, you're right, actually, because if you think about it, there was this idea that timeout we're getting this is now a Timeout podcast and it's legacy media timeout. Yeah, I. And for those unfamiliar, if you're not like New York Paris, it's a magazine publication focused on tourism in a lot of big cities. The idea was that they curated all the noise and experiences and found things for you. But in reality, how much value is that curation element and the authors and the brand versus the. It actually was the easiest way to find stuff to do. It's not like they really were doing this incredible legwork of finding this stuff or in the know and. Yeah, I think that's a good point. And especially with context, with, as you said, you uploaded recommendations. Imagine you plug in your Spotify listen history or something like that. That.

[Alex Kantrowitz]

And I told it where I was and when I had to get back home and all these things.

[Ranjan Roy]

Yeah.

[Alex Kantrowitz]

And that was personalized for me.

[Ranjan Roy]

Exactly. It's your own personal timeout magazine, so.

[Alex Kantrowitz]

And that's why Fiji Simo is going to OpenAI. It's not to do advertising, it's to ingest everything.

[Ranjan Roy]

To ingest and create. It's a media company now.

[Alex Kantrowitz]

Yeah. Yes. And yes. And it's a media company and it's the thing that lets you eventually take the actions. That's where these services become magentic because they go from taking that content to making that software. They take the text, they. And then within the text, they make it software. So instead of being the timeout that sends you to Ticketmaster, you ask it what to do in Paris, it does the legwork that Timeout would have done, and then it lets you make the purchase right there in the chat window. And that's what the future is.

[Ranjan Roy]

I agree. Okay. Now you've made at least for that whole universe of content. You're right. That doesn't go away. Ticketmaster is still going to have a ticketing website or some way to buy tickets or that information. So I think that's a reasonable way of thinking about it.

[Alex Kantrowitz]

Okay, well, I will take that. That's a win for me today. Thank you, Ron John. All Right. So before we go, I want to talk about this great New York magazine article. The title is Everyone is Cheating Their way through college. ChatGPT has unraveled the entire academic project. I don't know if you saw this, but it's basically confessions from students who've basically said that they no longer basically try to do any of the work and they're just able, I mean, we know this is going on to cheat their way through school and that. This is a quote from one of the students. College is just how well I can use ChatGPT at this point. A student in Utah recently captured captioned a video of herself copy and pasting a chapter from her genocide and mass atrocity textbook into ChatGPT. So this is another quote. I spend so much time on TikTok, hours and hours until my eyes start hurting, which makes it hard to plan and do my schoolwork. With ChatGPT I can write an essay in two hours that normally takes 12. There are professors who are unable. Professors are basically unable to stop this. Here's a quote from Professor. Every time I talk to a colleague about this, the same thing comes up. Retirement. When can I retire? When can I get out of this? That's what we're all thinking now. This is not what I signed up for. Here's another one. The students kind of recognize the system is broken and there's not really a point in doing this. Maybe the original meaning of these assignments has been lost or is not being communicated to them well. So Roger, let me just put it this to you. I mean we've talked about whether AI is something that's assistive or is something that basically takes over for the brain and if it does, like what is going to happen to our society? And so I'm curious if you know through that lens, if you read this story as a blaring alarm that we're outsourcing all critical thinking and sort of thinking in general that we would have done in university to these bots and just going to make ourselves a population of much dumber people than we would have been previously. Or is there a way to say, like Sam Altman might say, this is just a pretty good calculator and we still do most of the processing or the higher level thinking in our own brains.

[Ranjan Roy]

I think for me this story, the most important part of it is it's a reminder that like how university educations work has not really changed in many years. And my hope is this like dramatically changes it because, come on, like writing essays, was that the most Valuable way to teach a concept. I, as a writer do find the most value in writing. That writing is thinking for me, I think I forget who said that, but like it 100%. That's how I structure my thought. So I'm not going to stop writing. If it's something I'm not actually interested in or I don't find truly valuable to learn, then I'm not going to write. And I would happily use ChatGPT to write that essay. So I think people like, I saw one post somewhere where it was like, you know what if it is? Use ChatGPT to create your paper and then give a verbal defense of your argument, like off the top of your head, stand up and debate this, talk through it, explain why this was included, why the, why this piece of AI content was included. I think that's interesting. I think that's like a better way to approach it than how most people, including myself, for a lot of papers in college, actually approach writing. I think they have to rethink what those day to day tasks and assignments are. And if they're not, then that's on the institution. These are very expensive institutions that are supposed to cater to, if you're a business, your customer, the current moment, the current demand, the current needs, and they should adapt.

[Alex Kantrowitz]

But don't you think there's a chance that this is like a once in a generation or once in a world tool that can sort of outsource a lot of the thinking for people and the universities really cannot adapt because again, like, I'm going to go back to the writing thing. Writing really is thinking like the pain that comes with writing does help you crystallize your thoughts. And if you're trying to come to conclusions about a tremendous amount of coursework you took in, then actually going ahead and writing that stuff is the thing that, I don't know, helps you think it through better than almost any tool. Now maybe there's a way around this where you just do all the writing in a class, in blue books, in lecture halls, as opposed to typed on the computer, and that you can maybe adapt, maybe you could go forward by going backward. But I'm curious if you think that there's a chance because again, like this is able to do a lot of knowledge work. Is there a chance that this is just different and there is no like, you know, use it as a calculator type of application here?

[Ranjan Roy]

No, I. But to me the issue is if universities or educational institutions don't come up with new ways to force people to think and teach them to think, then, yeah, like I do worry a lot. If, like you keep the exact same test structure and assignment structure, then of course the average college student is going to just wing it and cheat. I don't even call it cheating. We'll just use whatever tools are available to do it.

[Alex Kantrowitz]

And then, yeah, they're smart in that way.

[Ranjan Roy]

Yeah. No, and then the. It's the university failing to teach this. Their job is not to have them write an essay. The job is to teach them critical thinking. So with the given technology today, like, if there's a time I remember, like typing even still, I know some people who like handwrite because it may feel. They feel, it makes them think. There's that whole remarkable notepad, that that's the whole pitch, that it's like kind of digital handwriting, like that that's better than typing, that I think more when I write by hand. Like there's been some more minor technological shifts over time and we adapt to them. So I think, to me it's on the universities. Come on, Harvard, figure out how to teach your students better.

[Alex Kantrowitz]

Let me end with this. I mean, last week we talked a little bit and this got a lot of play in our discord and a very good discussion about how new grads were not getting hired and whether that was ChatGPT's fault or not. And I'll just say that, like, if you are doing what ChatGPT can do in school, like if you're just learning how to use ChatGPT and you realize that ChatGPT can do you, work for you as a student, then maybe it's not so surprising that when you come out of school, that entry level job is being done by ChatGPT.

[Ranjan Roy]

Yep. I mean, that's it. That's going to happen. Figure it out, Harvard.

[Alex Kantrowitz]

Figure it out. I think go backward, go forward by going backwards. Or maybe you have some ultra sophisticated way to make this technology a bicycle for the mind as opposed to the mind itself. But until we see it, I'm just saying break out the blue books.

[Ranjan Roy]

Alex spends a couple of days in Paris and now waxing philosophical, advocating for handwriting into blue books. Next, I want a cigarette in your hand as you podcast. Glass of wine.

[Alex Kantrowitz]

I think I've spent way too much time this week looking at paintings and thinking about the deeper meaning of things, but maybe it's given me a window into the human condition.

[Ranjan Roy]

I got nothing on that. I got nothing.

[Alex Kantrowitz]

Well, everyone, thank you so much for listening. Ranjan, thanks again for coming as always. Great to see you all right.

[Ranjan Roy]

See you next week.

[Alex Kantrowitz]

All right, everybody. Thank you for listening. Next Wednesday, we'll have Emily Bender and Alex Hanna. Thanks again. And we'll see you next time on big Technology Podcast.