← Slate Money
Slate Money
The Spinning Wheels Edition
00:39:46
Slate Money on the auto industry, artificial intelligence, and Apple’s new headquarters
Loading summary
Transcript164 lines
- [00:00]
A
The following podcast contains explicit language.
- [00:11]
B
Hello and welcome to the Spinning Wheels edition of Slate Money, your guide to the business and finance news of the week. There are round things on the show this week. I am Felix Aminer, Fusion. I am joined as ever by Anna Shymansky.
- [00:31]
A
Hello.
- [00:31]
B
Who was born in Detroit. Detroit. I am also joined by Jordan Weissman.
- [00:38]
A
Round things on the show include your glasses.
- [00:40]
B
Right now I'm wearing round glasses. I am going to be talking about a round building which has just opened up in Cupertino, California at a cost of 5 billion. I am also going to be talking to these lovely people about artificial intelligence. Is it the new mobile? I don't even know what that means, but apparently that's sounds good. That's what Google says we're all going to be doing. So we need to start putting our futurist hats on and trying to work out whether we're all going to be just talking to devices in the future. But Anna, for all that she was born in Detroit, has not got a driver's license. That means that it is down to Jordan.
- [01:25]
A
Wait, you really don't have a driver's license?
- [01:27]
C
I don't have a driver's license, no.
- [01:28]
A
Even I, I grew up in Manhattan. I failed my driver's test three times.
- [01:32]
C
I spent high school getting rides from other people and being very annoying.
- [01:35]
A
I one time failed my driver's test cause I talked too much. Like literally. He told me at the end, he's like, you, you just talked too much.
- [01:42]
B
And you really didn't learn your lesson.
- [01:43]
A
No, I didn't. I'm now talking on two to you right now, dear listener. So cars, get to the point. So cars, they're important to the US economy. Turns out, it turns out there are, you know, if any, aside from housing, arguably the single most important industry to the basic functioning.
- [02:02]
B
You're an drive to work.
- [02:05]
A
Yes, among other things. Also, they are our biggest manufacturing industry. They're our biggest retail industry. They are. They're the largest purchase. Yeah, they are cost purchase. Yeah, they are the big purchase for most households. And for the last several years they've been doing kind of splendidly. Last two years they've been setting record. They've been record car sales about 17.5 million per year. And all of a sudden things are starting to sputter. The wheels are starting to spin out and I promise that's the last pun I'm going to use on this edition. But they've, I think April sales are down about 4%. And this is a little bit frightening. I Think for some people, because it's, you know, one just in general, when car sales decline, it can bring us down towards a recession. I mean, it is a big part of what determines the business cycle. But beyond that, there's also just all these other factors kind of hovering around it that we've discussed on the show. Things like the subprime lending boom that has kind of fueled auto sales. And so I guess one thing among others I kind of want to talk to is just how worried should we be at this moment, now that we're seeing.
- [03:10]
B
Question here? I feel like I'm down with this idea that cars are a key part of the US Economy. We're a very suburban country here and everyone drives everywhere and you drive to school and you drive to the shops and you drive to work. And so we all need our cars and they're important things to make the economy go smoothly. But if cars are lasting longer and people are buying fewer of them, fewer of them because they're lasting longer and they're getting safer and they're getting more reliable and stuff like that, you know, it kind of makes sense that we might be buying fewer of them. And I'm not completely convinced that that long term trend is a bad thing. It's probably a good thing.
- [03:53]
C
I agree. I mean, I think the question is, is Detroit actually part of its own problem and that it's creating better, longer lasting products so people don't have to replace cars as frequently? And then I also wonder, just with a lot of industries, are we just seeing a change in the industry? And also, if you look at long term trends, where we are right now, we're below normal peaks. Normal peaks are run between 21, 22 million. Right now we're between 17 and 18, I believe. So point is, if this is a peak, it's a low peak. And that could be a concern about moving forward, whether we're just simply not going to be selling as many as we used to.
- [04:31]
B
If we, if we have lower highs and we don't peak as high as we used to. Again, Jordan, explain why this is a bad thing.
- [04:42]
A
Well, okay, so if you look at business cycles, right, if you look at when the economy's doing well, when it's growing and when it's contracting, a big part of the contractions tends to be housing and cars. Those are the two things. When you looked at the Great Recession, when you look at the industries that were contracting and responsible for that decline.
- [04:58]
B
In gdp, you're saying that if there is a recession, then the number of Cars being sold goes down, which I completely understand. But does that mean that if the number of cars being sold goes down then you have recession?
- [05:11]
A
No, no, no. Actually that. So they're not.
- [05:13]
C
It tends to be an indicator.
- [05:14]
A
Yeah, it tends to be an indicator. So when the number of cars sales go down then you expect essentially factory lines get idled, people aren't working car, you know, the car salesmen are selling less inventory, less goods. That has knock on effects throughout the local economy.
- [05:28]
C
The multiplier effect for the auto industry is something like 5 to 7 in terms of the, the effect that the auto industry like has on overall economy and jobs in terms of like what one job here, the effect it has on creating other jobs in other industries.
- [05:41]
B
And how does that compare to other industries?
- [05:45]
C
It's high.
- [05:45]
A
It's extremely high. And you know, the thing is again the way the auto industry works is they have these big factories and they're kind of wind times are good, they run at full throttle. Right. And then when times are bad, they idle them. That's what. And so they've gotten a little bit better at that. But like it's still, it's, it's still part of how it all works.
- [06:05]
B
And when you say idling, because I'm a bearer of very little brain, that means they close down the factory and the people in the factory lose their jobs.
- [06:13]
C
Not really because of the way union contracts work. They're usually kind of let go and then they're hired back.
- [06:17]
A
Yeah, exactly. It's like a temporary layoff.
- [06:19]
C
Right, exactly.
- [06:19]
A
And so this is something that like factory towns have gotten used to these cycles.
- [06:22]
C
Cycles.
- [06:23]
A
But so yeah, when you see car sales decline, you actually can have knock on effects in the real economy. And that's why it's something to be a little bit nervous about. And I think it's one of really the only things anyone's kind of nervous about right now because everything else seems to be doing okay, but cars are not. And so it seems like if there are any canaries in the coal mine, this might be.
- [06:42]
B
And do you think, I mean, what is the cause of the slowdown in auto sales?
- [06:50]
A
I mean there are a few things, but one is that auto sales have been fueled in big part by really cheap debt for the last few years. Right. We've talked about how you know, you've had this boom in subprime auto lending and that's one thing that has managed to keep the whole industry kind of afloat. And a lot of that has contributed to used car sales. But it's all over. And so now all of a sudden that you have a defaults rising, plus the Fed slowly rising, raising interest rates, you sort of expect to see a clampdown on. You're probably going to see a clamp down some of that kind of debt. That's one thing. Is that people nervous, is that.
- [07:23]
B
So wait, you're saying that people are buying fewer cars because they're finding it harder to borrow the money to buy the car.
- [07:30]
C
The auto industries, if they're having lower profitability, their ability to extend credit to lower quality candidates is going to be less.
- [07:40]
B
And is that true with the companies making less money, are they seeing lower profitability?
- [07:45]
C
So Ford didn't have a spectacular first quarter. Granted a lot of that actually has to do with increased costs of production. But there is some concern about moving forward profitability in the auto industry.
- [08:00]
B
So Ford just announced it was laying off lots of people or like it was going to get smaller maybe without layoffs. Jordan, what was that news?
- [08:08]
A
Yeah, so they're laying off about 20,000 white collar workers and it's about 10% of their workforce in Asia and the US and so this is, this is more of I think less. I think this is less to do with just, you know, what's happening with sales at the moment or you know, kind of the up and down of the business cycle and more to do just with kind of the future of the industry. Right. And they're trying to kind of readjust their business for, you know, the days of a shifting industry. Yeah. Self driving cars and things like that. And when you know, Uber is going to be more powerful and maybe lower car ownership altogether.
- [08:41]
B
Wait again. I mean you guys understand this and I don't so I'm asking really stupid questions. But if the industry is shifting and you need to sort of completely reposition yourself for like a different looking industry, does that mean. I guess that I'm trying to, I'm trying to understand why that means you lay off a bunch of people. Like is, is, is the repositioning. Wouldn't you want to be hiring people to be able to compete with the.
- [09:10]
C
Well so with Ford in particular, it's because they need to be leaner because they're spending more money on research and development. So part of it is they're essentially having to offset that increased R and D cost. So to get into.
- [09:23]
B
Okay, so if you're spend so dollars on R and D involve a relative handful of people, whereas the same dollars spent on whatever they were spending them on before involve more people. So Net, net. They wind up losing people despite the fact they're spending.
- [09:39]
A
I don't know what Ford's long term workforce is going to look like. I mean, they're announcing 20,000 layoffs. It could be that over time they're going to, I mean, maybe over time they end up hiring a lot more machine learning people, who knows? I mean, that is one of the.
- [09:51]
C
Things it's hard to say. It's interesting to look at like Germany's auto industry, which actually is much more like robot intensive but still employs a lot of people. It's actually an indication of how we can talk about this more in later segments about how actually robots can increase productivity, increase different lines of business and actually potentially increase employment of humans.
- [10:13]
A
Yeah.
- [10:14]
C
But right now the US auto industry still appears to be a little behind the curve.
- [10:20]
B
So I'm going to just come back to my last question, which is why is the number of cars being sold going down if it's just part of. Well, interest rates are going up. When interest rates go up, car sales go down. I'm like, well, fine, that's what happens when interest rates go up. We're in a rising interest rate cycle. Again, this seems perfectly normal.
- [10:42]
A
No, I mean, yeah, I think it is partly. It's not something that's never happened before, obviously.
- [10:50]
C
I think it's just sticking out because we're getting so many positive. I mean, at least in terms of consumer sentiment, we're getting a lot of positive economic indicators and then we have this enormous segment of the industry where we're seeing a decline.
- [11:05]
A
Yeah.
- [11:05]
C
And I think that it's basically the.
- [11:08]
A
Fly in the ointment. Right. Like everything else, seems like we're getting great jobs numbers. GDP is not great, but it's okay. You know, their consumer sentiment's fine. Most industries are pretty happy because they think Trump's not going to mess with them. And then there are autos.
- [11:21]
B
And what's happening to my favorite indicator, which is VMTs, vehicle miles traveled, which was very low during the recession and then bounced back up with really quite nasty implications for vehicular deaths. Basically the amount of people who get killed on the road is in direct proportion to the number of miles that people drive. And the number of miles that people drive has been rising quite a lot.
- [11:51]
A
That's still going up. And I would sort of expect that to kind of move with gas prices. I mean, that's. In fact, I mean, after the recession it dropped. And I think part of that had to do with, with just, you know, people trying to Save money, essentially, on fuel. And so now that fuel's cheap and there are jobs, people are going to drive more and kill more people.
- [12:08]
B
Yeah, so, but I feel like. Yeah, but if, if you. If people are driving just as much as they used to and they're just keeping their cars for a bit longer, I don't know, I feel. I can't get. I can't get upset. I can't get worried about this.
- [12:21]
C
I think the concern is this is a large part of America's economy and are we seeing a future where with just statically fewer cars sold, that although, yes, we'll still see peaks and valleys, we're not going to see the same levels. And if you look at the way the auto industry impacts other sections of the economy, what is that going to mean going forward?
- [12:43]
B
On which decisive note, since we've obviously worked out whether this is good or bad, we are going to move on to the next question of, like, Felix.
- [12:53]
A
Is comfy with recessions. Felix doesn't. Felix's recession. Why is that? A bad, like, economy is heading for a downturn, maybe. Whatever.
- [13:02]
C
Yeah, well, granted, business cycles would suggest we're headed for a downturn.
- [13:07]
A
Yeah, this is.
- [13:08]
B
Anyway, so let's move on to Google, which is one of the companies, along with Amazon, which has really invested a huge amount of money in artificial intelligence and voice recognition. Apple is probably number three in this. All of them have these devices, Google Home and Amazon's Alexa and Apple's Siri and obviously Android as well, which you can talk to and start having conversations with, and they'll tell you things, and it's kind of magical. You just kind of say, Alexa, what is 3 pounds per liter in dollars per gallon? Which is one of those things which is quite complicated and you don't know how to work it out on a calculator. But she'll just tell you, and it's awesome. And now what Google is saying is that this is a huge, like, epochal shift of a magnitude roughly consistent with the shift from desktop computing to phones. And that just as we have all moved from, like, doing things on our desktop computers to doing things on our phones, we are similarly going to shift from pressing screens with our fingers to just talking to our devices.
- [14:28]
C
I think this is more than just voice recognition, though, when you're. When you're hearing what Google's saying about the possibilities of AI. Because what Google's really talking about is creating this software and the chips that the entire AI infrastructure then is going to be built on, which is just. There's so many possibilities of what machine learning and deep learning could actually do to just revolutionize the economy. And Google's trying to create the foundation for that.
- [14:56]
B
And Google has always thought of itself as an information company. And if you want certain bits of information, the sort of Google 1.0 of like I type in a word and Google crawls the Internet to see where that word appears and then shows you the web pages where that word appears, you can see how like we're obviously a lot more sophisticated than that now, but also how it could get a lot more sophisticated still.
- [15:24]
A
You know, there are a couple things that strike me about this. One is it's a sort of self serving description of the future for Google because this is what they're actually good at, right? Like you know, this is, this is what they've always been dedicated to. Whereas Apple's been good at making hardware and basically usable software. Although that's becoming, that's skill set is sort of seems to be falling by the wayside for them. So you know, they're in a way they're getting up and saying, you know, the future is going to be defined by thing we're good at. And so you know, invest in us, you know, where we should bet on us. But so you know, beyond that I think that you have to, you know, I think that there is at least it's hard to think of where else mobile computing goes. Right. Like at this point it feels like in a way just the smartphone itself is sort of a mature product. And so. Well what, what, what comes next? Well it's like just like predictive software. It's like it gets better at figuring out what you're going to do during the day. And so the features they're talking about now are things like when you take a photo so it tells you to share it with. That's what they mean when they're saying about AI right now. And so but in that kind of, that is, it's less of a revolution. It just seems like sort of the next logical step forward I think.
- [16:30]
C
But I really think if you look beyond like the assistant that they're talking about or the actual products but the chips they're designing and the software they're designing that are going to create an entire new ecosystem for AI product development. Because I think when you're talking about the smartphone, it has obviously had implications in the workspace, but the implications for AI in the workspace I would argue are magnitudes greater.
- [16:53]
B
Okay, so yeah, follow that thought.
- [16:56]
C
So in terms of. Because if you're really looking at what machine learning does. It's essentially pattern recognition and then it's teaching itself to be able to pick out. You need enormous amounts of data sets and just enormous data sets for these products to essentially work. But then what that could mean in terms of fraud detection, what that could mean in terms of cybersecurity, what that could mean in terms of biotech and medicine, this is tremendous. And I think we keep asking why we're seeing all these technological advancements, but we're not seeing increases in productivity. And I would argue maybe that's partly because a lot of the products that recently we've been developing are more consumer focused. Whereas I would argue that AI has really a huge business potential and potentially that this could be the tipping point.
- [17:46]
A
So Google's going to end the great stagnation is basically.
- [17:49]
B
But this is interesting because Google has been a very consumer facing company up until now and virtually all of its revenues come from advertising companies which like want to reach consumers. And what you're saying is that there could be a shift here and it could be much more of a sort of enterprise scale.
- [18:11]
C
They're talking about seeing their future in the cloud because that's also what they're doing now. They're offering actually a lot of these, like the, the, the software they have and these new chips that are specifically designed for AI. They're going to enable other people to use them, but in order. And some of them like the software they're actually allowing people to use for free. But then you're locked into the Google cloud system.
- [18:33]
A
Yeah.
- [18:33]
C
So it's really smart actually because where you have Amazon, which is right now has bigger market share in the actual products if you think of like Alexa. But what Google is trying to do is actually again create the foundation that everything else will be built on and then it'll all come back to Google.
- [18:49]
B
But Amazon has that too, right? With EC2 and AWS and all of their cloud services.
- [18:54]
C
It's not like they're cloud services, but not the actual chips and software that everything is based on.
- [19:00]
A
Can I ask a slightly different, maybe stupid question, but what's the difference between a chip for AI and a regular chip?
- [19:04]
C
So right now what a lot of the so and so, if you're looking in your computer you have like these CPU chips and those don't have the potential, the, the power that you would need. So then you have these other chips that, these GPU chips that were designed for graphics but then people later found they could also use them for AI. Technology, but they still don't have quite the power you need, especially when you talk about deep learning, because deep learning, again, you need massive, massive data sets. So what this new chip has been designed, this is the second generation of it. The power here is like 33 times the power of the last one, which is so much more powerful than the.
- [19:36]
B
Previous GPU chips, which you're not selling to companies. No, no, no. Chips which you're putting in your data center in Iceland or wherever it is. And then whenever anyone wants to do any kind of machine learning on a data set, they need to use your chip in your data.
- [19:52]
C
Exactly. And then what also Google is doing is they're, they're designing these systems that they're basically giving companies the building block. Then the companies can use those building blocks to create their own AI products. It's almost the way that right now it's so easy to create a website so different than what it was say 15, 20 years ago. So this is what Google is seeing, this is what AI products will be creating an AI product will be that simple, but then you'll all be tied in to the Google system.
- [20:17]
B
So in, so a little bit like Amazon has created this cloud based system for web services, Google is trying to build a cloud based system for machine learning?
- [20:29]
C
To a certain extent, yes.
- [20:30]
B
That's really interesting. And it does seem like from all of the conversations I've been having about this, that Google in general and their subsidiary DeepMind in particular is the sort of bleeding edge of this. That for all that IBM loves talking about Watson, it's just they're nowhere near where Google is.
- [20:49]
C
No, I mean, and their CEO has made it very clear this is the future of the company, this is the identity of the company moving forward.
- [20:55]
B
And that's kind of amazing, given how embedded Google is in the consumer experience, to kind of do that massive existential pivot into something which barely exists yet.
- [21:13]
A
There's also, I mean, when you're moving into something like enterprise and you're trying to get companies to use your products, there is good rationale for getting to, or it's handy to be really embedded in consumer experiences. You know, one of the ways they're getting into offices is people are just used to using Gmail. And so people want their office to be on Gmail. And so, you know, we begged here at Slate, we begged people to get to, you know, management gets the hell off Outlook. And so, you know, the more people who do that, the more clients Google is going to have on enterprise and then the more People might be willing to use their web services, I guess. So it all, it's all sort of of a piece, it seems, and I.
- [21:46]
C
Think it's just really interesting because in the same way that when the smartphone was first developed, we just couldn't have imagined what, what would come out of it. I think in the same way with AI right now, we just have no idea what the real possibilities are.
- [21:59]
B
So I guess my last question about this then is if this really does turn out to be the technology which finally gives us the productivity growth that we've been looking for for the past 20 years, to what degree is it kind of scary that it is so concentrated within one company?
- [22:21]
C
That's actually an interesting question because historically these type of advancements would have been funded by the government normally, I mean, and now because they're being funded by industry, because frankly industry is just investing far more. The question then becomes what does that mean for the overall marketplace?
- [22:37]
B
Because if, if we are going to enter this sort of machine learning revolution and there's only one and a half companies which are really benefiting from it in terms of like selling those base services to everyone who needs them, that's, that's kind of monopolistically scary, right?
- [22:55]
C
But I don't know if it'll be because the whole point is that Google is giving other companies the architecture to build products that will then help their own business. Because Google is not saying I know what's best for your business, they're saying, I'm going to give you the building blocks, you know your business, so then you can create products.
- [23:09]
B
I'm not saying it's bad for their clients, I'm just saying that they have a monopolistic position and that I, that.
- [23:14]
C
I do agree with. I mean, I think there is a big difference between having kind of government funded initiatives and private funded initiatives.
- [23:22]
B
On the subject of private funded initiatives, this is the perfect segue. My former colleague Ryan McCarthy and I used to talk about billionaire whimsy, the kind of weird things that billionaires do with their money. And the most ridonkulous example of billionaire whimsy is opening up in Cupertino, California. It is 2 million square feet of donut shaped Apple HQ. It's which, which cost $5 billion.
- [23:56]
A
Yep, yep.
- [23:57]
B
So yeah, is this just the most ridiculous folly and sign of corporate hubris that we've ever seen and does it portend the beginning of the end of Apple or is this just like Steve Jobs was a bit crazy and this thing exists?
- [24:14]
A
But you know, I got the latter what else, what the hell would you rather them do? Spend more of that money on a buyback?
- [24:20]
C
Exactly.
- [24:21]
A
Like what the hell else are they going to do with the money? Like, and also like, I mean this is, you know, esthetically this has to be an improvement for Cupertino. Right? Like this is, there's something. Would be an improvement.
- [24:31]
B
So this is, this is one interesting thing which we have to jump in and explain. Silicon Valley is for all that it drives innovation globally. It is architecturally one of the most miserable places on planet.
- [24:46]
A
Technical term is drab as fuck. Like that is.
- [24:49]
C
It is just.
- [24:50]
B
There has historically never been any interest in Silicon Valley in building interesting architecture. And now Apple has come along with something which, whether you love it or hate it, is definitely interesting architecture. It's this massive $5 billion Norman Foster. Yeah. Circle.
- [25:08]
A
Yeah, it is a circle. It's a donut.
- [25:11]
B
It's a donut.
- [25:12]
A
It is a circle.
- [25:12]
B
It's a Taurus, I believe would be the gist.
- [25:15]
A
The little thing you throw in the air to a dog, like, you know, a spinning saucer.
- [25:19]
B
It's, it's, it's a little like the Pentagon but with infinite sides.
- [25:23]
A
Yes.
- [25:24]
C
What really struck me about it though is that it seemed like. It actually seems more retro than futuristic to me. In the sense that it seems like what someone who was raised in or came of age in the 70s and 80s would think the future looked like. It doesn't seem like what someone now would think the future looks like. The fact that it's this isolated kind of suburban campus seems very old fashioned to me.
- [25:47]
B
And yeah, compared to the things that like Bjarke Ingalls is doing for Google or the stuff that Amazon is doing in Seattle or even for that matter what Salesforce is doing in San Francisco, which is about building like density and skyscrapers and that kind of stuff. You're right. It does feel like they're just walling themselves off in a little bit. Like the Pentagon does.
- [26:10]
A
Yeah. And the inflexibility of it is interesting because it, you know, this is the kind of thing that could become an albatross for a company that didn't wasn't just sitting on a giant hoard of gold like, you know, like Smaug, like, but like it could be, you know, it is there, it's permanent.
- [26:27]
B
Exactly. And in a world where things are changing, work is changing, the ways that people work are changing, you know, this thing is opening up and already there are all of these headlines about it doesn't have any childcare and there Might have been a perfectly rational decision five years ago about why they didn't want to have any childcare facilities in this, you know, building. But they also, in making that decision, basically made the decision that they would never want childcare facilities for the next 50 years or whatever. And if they want them, it's going to be really hard to re architect this thing in order to get them.
- [27:01]
C
Which is so similar to how Steve Jobs wanted everything designed, which made sense for products that could potentially be later replaced or you have new products. It's a really different when you're talking about a massive building and especially in comparison to what you were saying with what's happening with Google and actually designing a building that can evolve and change, which is a much more modern idea.
- [27:20]
A
Yeah. And as far as philosophies or buildings as symbols of the future of the economy go. Right. Google's seems to sort of be a much more apt metaphor. It's like the economy is about information and data flow and invisible things that can move and morph and change with times. Whereas you know, Steve Jobs, this is very much Steve Jobs of like a unified, impenetrable fortress that I have, I have like sprung from my brain and will be, you know, be perfect upon completion.
- [27:47]
C
Strikes me as like a statue to Steve Jobs more than a what it pretends about the future of the company.
- [27:54]
B
So what the other thing which everyone really notices about this headquarters is this very Apple like, you know, fits and finish, attention to detail, rejecting doorknobs, rejecting doorknobs which take like $10 million of R& D to make absolutely perfect. You know, book matched marble or whatever it is everywhere. If Apple obviously does this, you know, they have incredibly exact specifications for all of their hardware. Tesla does it like, you know, when, when the Model S came out everyone was like, wow, this is a really perfectly finished car in the way that is very hard to achieve. There is, there are a couple of companies, I mean basically it's Apple and Tesla have this kind of super gleaming perfect finish thing going for them. Is that good? Is that bad?
- [28:48]
C
You could argue that's part of their overall branding. Part of the reason spent people spend the money they do on Apple products is because of that focus on detail and not just the thing itself, but like what it suggests about what they're buying. But that does create a larger argument about Apple's strategy moving forward. There are only so many people who are going to spend money for that type of design imperfection.
- [29:14]
A
One of my favorite things that's been written about this this headquarters and kind of Apple more largely is by Ian Bogust at the Atlantic. And he talked about how this, the building is sort of a symbol of, of Apple's approach to design. But it's not about perfection. It's. It's about having a wonderful exterior and having all these trappings of perfection, like the doorknob that they rejected because it was a few nanometers off. But in fact there are things about it that don't really make sense functionally in terms of like the way people are kind of segmented off into these little offices and warrens where they can't necessarily all collaborate together.
- [29:45]
C
Just supposed to be the whole point of the circular design.
- [29:47]
A
Exactly. Collaborate. It was designed for collaboration and nobody can collaborate. I mean the thing like the childcare center. And in a way that also reflects in Apple's products that they you this beautiful kind of slab that's very sleek, but then all of its add ons like the power adapters and things are horrible and kind of janky and have to be kind of, you know, you have to replace them all the time or you buy outside products because they're made better. And so in a way, this kind of speaks to their approach in general is that they're very good at making things that gleam, but not necessarily if you look inside. Yeah. And which is funny because Steve Jobs used to talk about how it has to be perfect on the inside too. And that was almost never true. That was sort of, sort of a front.
- [30:22]
B
But Ali, I do like the trees. They're bringing a lot of trees.
- [30:26]
C
The drought resistant trees.
- [30:27]
B
They're drought resistant trees and they're bringing greenery back into Cupertino. And they've, you know, they didn't put quite as many parking spots underground as they originally wanted.
- [30:39]
A
Is it the world's largest parking deck?
- [30:40]
B
There are, there are actually signs that they economized and they actually changed the plans in order to save money in place or two. Once it reached $5 billion, they were.
- [30:53]
C
Like, okay, Buster, I will say that's the only thing that seemed kind of modern about it was not just the focus on kind of like eco friendly, but also like breaking that line between inside and outside. I thought that was kind of interesting.
- [31:03]
B
Yeah. There is a bunch of talk about how, you know, they want people to be a little bit warm when it's warm outside, a little bit cold when it's cold outside.
- [31:13]
C
Favorite part of the building. As a girl who is also always cold, the fact that they don't have air conditioning makes me so happy I would work there just for that.
- [31:22]
B
And they have, and it's got lots of solar power. There are definitely things to like about this building. But as I say, the thing which I like about it on a sort of meta scale is just that finally we are having some architecture in Silicon Valley and maybe on an esthetic slash design level, the Google one will be better. But it's great that Apple and Google and Amazon are finally waking up and doing architecture because Google, God knows that, you know, Hewlett Packard never did.
- [31:49]
C
Right. And these are now mature companies. These aren't just the companies that are working out of their basements. And so their buildings that they're working in can essentially just look like basements. Like these are now the major companies in the United States. So I think it makes sense that they're growing up.
- [32:02]
B
Finally, finally, finally. Okay, numbers round. Anna, what's your number?
- [32:08]
C
$1.45.
- [32:10]
B
That's a not very much money.
- [32:12]
C
No.
- [32:12]
B
What is it?
- [32:13]
C
That is the cost of the One Belt One Road toothbrush set.
- [32:17]
B
Ooh. We knew that China was getting, getting in.
- [32:23]
C
So if you don't know, One Belt One Road is this massive infrastructure investment initiative that China's working on. They just had this summit with like 100 different countries. It's this kind of Pan Eurasian infrastructure plan. So the reason I bring up the toothbrushes is that China is pretty much putting this on every product. They have jingles, they have videos, they're in like the hedges around Beijing are being shaped in or being made in the shape of camels for One Belt One Road. This is how China is viewing itself. Like, this is like the symbol of what China means in the modern world. And I think that that's really interesting in light of everything that's else that's going on in the global economy right now. Especially if you look at like how the, the U.S. and how Europe are positioning themselves. The fact that China is saying to its citizens like this is what it means to be Chinese, is it toothbrush? No, it's a fact. It's the fact that they're putting it on a toothbrush, that they're putting it on everything. And I almost think of it.
- [33:25]
B
And so I remember, you know, well to this day actually if you go to Japan and you take the legendary Japanese trains, they all say ambitious Japan on them because they want you to associate these super efficient and reliable and high tech trains with the country. And this is the Chinese version.
- [33:46]
C
Right, Right, exactly. And I just think it's very interesting in terms of what it means globally, especially for trade.
- [33:54]
B
My number is 40. This is a WannaCry number. Of course, there was this exploit in Windows XP which was, which turned into a bunch of ransomware and a bunch of old XP computers which hadn't been patched, partly because they had, weren't supported and Microsoft didn't release the patch for free, got hacked and a bunch of people asked for bitcoins to basically unlock the computers. And 40 is the number of bitcoins that they ended up getting paid because bitcoin is all done on a public leisure. You can see how many bitcoins were transferred to those three Bitcoin addresses and the answer is 40. So that works out at about $68,000 they've made from basically ruining 230,000 computers. It's not a lot of money.
- [34:52]
C
Wasn't that also the point though that it was less about the actual money than about the disruption?
- [34:57]
B
But that's the. Well, I mean they want the ransomware, people wanted money. What they caused was enormous disruption, especially in the health service in the uk, in the Interior ministry in Russia. A bunch of economic damage was done, probably billions of dollars of economic damage was done by this thing. All for the sake of $68,000, 40 bitcoins.
- [35:23]
A
My number is $110.5 million. Felix, I'm getting a look of recognition right here. That's the amount of Basquiat paintings sold this week. It set a bunch of number of records. Most by an American artist, most by an American, African American artist or black artist, period, I believe. And then also most for painting painted since 1980. It was purchased by a Japanese businessman. And so I think there are a few things to kind of take away from this one. It's just a cool looking painting. I go suggest you look it up. It's a giant like multicolored skull with heavy lines.
- [35:59]
B
Mostly blue.
- [35:59]
A
Mostly blue. But it's great.
- [36:01]
B
I mean it's kind of interesting. I was skeptical that it would make this much money because it's blue. Expensive paintings tend to be red rather than blue, but it is in 1982. That was like the year for your top Basquiats. And I don't quite understand why this budding war happened. The one thing I would caution is that as ever, auctions are the tip of the art world. Iceberg. And this is the most this the most that for work sold at auction. We don't know what's been happening.
- [36:37]
C
It's a private sale.
- [36:38]
B
Private sale.
- [36:38]
A
This is true. The one thing about the story that kind of made me happy though, because typically you see, okay, big price on a painting, whatever global plutocrats will be or global plutocratin. But in this case, one of the reasons it's driving up the price apparently is that there just aren't a lot of big Basquiats left in private collections. Apparently they've kind of migrated to museums at this point. So in a way, like you can see sort of a very similar painting to this one at the Broad in la. There's an awesome skull painting he did there. And so in a way, this speaks to the fact that this artist has sort of made it. His best stuff is in the public sphere now, which is a happy story.
- [37:13]
C
That is a happy story.
- [37:14]
B
Oh.
- [37:18]
A
Okay. You may disagree if you think is my happy story wrong. Felix, you think this is a core. This is what I've been reading.
- [37:23]
B
But I, I don't know. I feel like every single time an auction house tries to sell a major artwork, they always say this is one of the last of this artwork in private hands. And it's just, it's a standard marketing pitch. I'm not, I'm nowhere near convinced that most major basquet are in public collections. I don't. That's really true.
- [37:43]
A
I will, I will leave it. I will leave open the possibility that the reporters who are writing on this story bought the marketing pitch. That's. Lord knows that happens sometimes, but. So maybe I shouldn't be so happy about this.
- [37:55]
B
Well, in any case, it's good for whoever sold it. I mean, Basquiat himself never really got that happy from making his art. But I guess the last person who bought this painting is now much happy that. On which note, we are going to close up shop at Slate Money Towers for another week. We will come back next week, but for the time being, I will just thank Dan Schrader, Steve Lichti, Andy Bowers, June Thomas. I will ask you to keep the emails coming. The email address is slatemoneyslate.com if you want to send us something in the mail, you can do that at 15 Metro Tech Center, 8th floor in Brooklyn. We just got a wedding invite in the mail. Lauren and Larry, thank you for inviting us to your wedding. We sadly can't make it because honestly, I mean, we could have done with a bit more notice.
- [38:54]
A
Yeah, it's on May 27th. Yeah, it's just like it's right around the corner.
- [38:58]
C
Otherwise we would totally have been there.
- [38:59]
A
Yeah, we'd have been totally.
- [39:00]
B
We would totally have come. But have a great wedding, enjoy the party and make sure that you're not too hungover to listen to Slate Money the following day. We will keep on, keep on broadcasting, or for that matter, the other Panoply shows, all of which can be found at Panoply fm. In any case, we will talk to you next week on Sleek Money.
- [39:27]
A
You spin me right round, baby, right round. Like a record, baby, right round. You spin me right round, baby, right round. Like a red baby, right round.