Techmeme Ride Home – Episode: Amazon Haul (Wednesday, November 13, 2024)
Host: Brian McCullough, Ride Home Media

In this comprehensive episode, Brian McCullough covers a spectrum of significant developments in the tech world, ranging from anticipated regulatory changes and major corporate strategies to emerging social media platforms and the evolving landscape of artificial intelligence. Below is a detailed summary of the key discussions, insights, and conclusions from the episode.

1. Anticipated Changes in Tech Regulation

New Leadership for the FTC and DOJ's Antitrust Division

Brian begins by addressing the potential appointments of new leaders to the Federal Trade Commission (FTC) and the Department of Justice’s (DOJ) Antitrust Division, which are set to influence the future of tech regulation in the United States.

• Frontrunners for the FTC:
  "Sources tell the FT that Gail Slater, a top aide to J.D. Vance, and Mark Meader, a former enforcer at the DOJ's antitrust unit and the FTC, are the frontrunners to lead the FTC." (00:04)

Slater and Meader are viewed as likely to continue the stringent enforcement approach championed by current FTC Chair Lina Khan and DOJ’s Jonathan Kantor. This stance aligns with progressive officials under President Joe Biden but also attracts attention from MAGA populists supporting J.D. Vance.

• Market Reactions and Expectations:
  "With Vance at its vanguard, either Slater or Meader are unlikely to disappoint dealmakers hoping for a radical change from the Biden administration…"

Vice President-elect J.D. Vance has acknowledged Lina Khan's effectiveness, stating, "doing a pretty good job and said Google should be broken up for the DOJ." This endorsement suggests a potential mix of continuity and change in regulatory policies.

Potential Impact on Big Tech:
The incoming leadership is expected to sustain or intensify crackdowns on major tech firms like Google, Apple, and Amazon, reversing what the Biden administration described as a period of lax enforcement. Contrastingly, Trump's transition team might prefer a more traditional antitrust approach, reminiscent of pre-Khan and pre-Vance strategies, to balance the party's diverse factions.

2. Amazon's Strategic Move: Launch of Amazon Haul

Introducing Amazon Haul: Competing with Temu and Shein

Amazon has unveiled Amazon Haul, a new storefront within its app aimed at offering extremely low-priced items to compete with Chinese e-commerce platforms like Temu and Shein.

• Pricing Strategy:
  "Shoppers can buy $1 eyelash curlers and oven gloves or a $3 nail dryer." (Timestamp around mid-episode)

Amazon Haul offers free shipping on orders over $25 and a nominal fee of $3.99 for smaller orders. The trade-off for these rock-bottom prices is longer delivery times, with most orders arriving within two weeks, depending on the customer's location.

• Market Positioning:
  "Amazon is betting shoppers will wait longer for products in exchange for rock bottom prices."

This strategy marks a shift from Amazon’s traditional emphasis on rapid delivery, which previously set it apart from competitors. By importing directly from manufacturers in China, Amazon can manage costs similarly to Temu and Shein. However, Amazon differentiates itself by limiting returns on items priced at $3 or less.

3. Surge in Activity on Blue Sky Social Platform

Blue Sky's User Growth Post-Election

Blue Sky, a social media platform initiated by former Twitter CEO Jack Dorsey, has experienced a significant uptick in user activity following the U.S. election.

• User Growth Statistics:
  "Blue Sky has gained more than 1 million users in the last week since the U.S. election, now totaling 14.7 million users." (Around 15:00)

Prominent figures such as rapper Flavor Flav, author John Green, and Democratic leaders like Representative Alexandria Ocasio-Cortez have joined the platform, contributing to its rising popularity.

• Reasons for Migration:
  "Users are not so much fleeing X for political reasons as much as they are fleeing Threads for product reasons."

The influx is driven by dissatisfaction with Threads' algorithm, which users feel stifles debate and reduces engagement. In contrast, Blue Sky is perceived as offering a more open and discussion-friendly environment akin to Twitter’s original model.

• Expert Insights:
  Shannon C. McGregor from the Hussman School of Journalism and Media notes, "There has been a feeling of momentum on Blue Sky since the election," highlighting both political and product-driven motivations behind the migration.

4. Apple's Foray into the Smart Home Market

Development of a New Smart Home Display

Apple is making significant strides into the smart home sector with the development of a new 6-inch wall-mounted display, codenamed J490, designed to serve as a central hub for home automation, video conferencing, and AI-driven app navigation.

• Product Features:
  "The device has a roughly 6 inch screen and looks like a square iPad… There’s also a camera at the top front, a rechargeable built-in battery, and internal speakers." (Around mid-episode)

The display will heavily integrate with Siri and Apple’s AI platform, offering functionalities such as:

• Controlling home appliances

• Facilitating FaceTime intercom sessions

• Providing access to Apple apps for browsing, news, music, and photo slideshows

• Potential robotic limbs for enhanced interactivity in higher-end models

• Market Positioning and Competition:
  "The product will compete with Amazon's Echo Show and Echo Hub smart displays, as well as Google's Nest Hub."

Apple aims to capitalize on its design and ecosystem strengths to carve out a significant presence in the smart home market. The device is expected to launch by March next year, with pricing strategies varying to compete effectively with existing smart displays.

5. Challenges in Artificial Intelligence Development

OpenAI’s Orion Model and Industry-Wide Setbacks

The AI sector is experiencing a period of stagnation, with leading companies like OpenAI, Google, and Anthropic facing hurdles in developing more advanced models.

• OpenAI’s Orion:
  "Orion fell short when trying to answer coding questions that it hadn’t been trained on." (Around 17:00)

Despite completing initial training, OpenAI’s Orion model has not met performance expectations, failing to significantly outperform its predecessors like GPT-4. This shortfall is attributed to insufficient high-quality training data and escalating development costs.

• Industry-Wide Challenges:
  "It's become increasingly difficult to find new, untapped sources of high-quality human-made training data."

Other companies are encountering similar issues:

• Google’s Gemini: Not living up to internal benchmarks

• Anthropic’s Claude 3.5 Opus: Delayed release due to underwhelming performance improvements

• Expert Commentary:
  Margaret Mitchell from Hugging Face remarks, "The AGI bubble is bursting a little bit," reflecting growing skepticism about the scalability of current AI development approaches.

This downturn challenges the prevailing belief that scaling computational resources and data will continually drive AI advancements, raising questions about the feasibility of achieving Artificial General Intelligence (AGI) in the near future.

6. Additional Highlight: Rad History Podcast on the Rubik's Cube

Towards the end of the episode, Brian briefly mentions the release of the Rad History podcast's latest episode, which celebrates the 50th anniversary of the Rubik's Cube. This segment serves as a cultural nod to the enduring legacy of one of the most iconic puzzles in the world.

Conclusion

Brian McCullough's episode of Techmeme Ride Home provides a thorough examination of current trends and shifts within the technology sector. From impending regulatory changes poised to impact major tech giants to Amazon’s strategic pricing maneuvers, the rise of Blue Sky as a social media contender, Apple's ambitious entry into the smart home market, and the broader challenges facing AI development, the episode encapsulates the dynamic and multifaceted nature of today’s tech landscape. For listeners seeking to stay informed on these pivotal topics, this episode offers valuable insights and expert perspectives.