Summary of Windows Weekly (Audio) Episode WW 906: "Turnip Boy Robs a Bank - Recall delayed again, Prism update, ChatGPT search"
Release Date: November 6, 2024
Hosts: Leo Laporte and Paul Thurrott
Producer: TWiT
Recorded: Wednesday, November 6, 2024
1. Introduction
In this episode of Windows Weekly, host Leo Laporte is joined by long-time Microsoft insider Paul Thurrott. Regular co-host Richard Campbell takes the week off, leaving Leo to steer the conversation with Paul. They outline the main topics for the episode: Microsoft's latest earnings, a review of Paul's favorite gaming laptop, delays with the Windows Recall feature, updates to the Prism emulator, and the integration of ChatGPT into Microsoft’s search functionalities.
2. Microsoft’s Earnings and Business Segment Shifts
Timestamp [02:48] - [08:16]
Paul Thurrott delves into Microsoft's recent earnings report, highlighting significant changes in the company's business segments. Microsoft has reclassified some revenue streams, notably moving commercial revenues from the "More Personal Computing" division into the "Microsoft 365" category under "Productivity and Business Processes." This shift underscores the growing importance of Microsoft's cloud and productivity services over traditional Windows revenues.
Notable Quote:
Paul Thurrott [07:23]: "Microsoft 365 is now the biggest business unit at Microsoft, moving ahead of Intelligent Cloud and More Personal Computing."
3. Microsoft’s Massive Investment in AI
Timestamp [10:25] - [17:35]
A significant portion of the discussion centers on Microsoft's aggressive investment in artificial intelligence (AI), specifically their Copilot initiative. Paul explains that Microsoft is currently spending approximately $19 billion per quarter on AI development, with revenues from AI reaching around $2.5 billion. This results in a net loss of about $16.5 billion each quarter dedicated to AI.
He expresses skepticism about the sustainability and profitability of this investment, comparing it to past initiatives like HoloLens that did not yield expected returns. Paul questions whether the current AI spending will eventually lead to significant profits or remain a financial strain.
Notable Quote:
Paul Thurrott [15:54]: "They're betting that AI will become the next big thing. So Google does this with its search dollars... but do they ever bet the company on a moonshot? Microsoft is doing that with AI."
4. Impact of the Activision Blizzard Acquisition
Timestamp [04:57] - [08:16]
Paul discusses the financial implications of Microsoft’s acquisition of Activision Blizzard. While the acquisition has boosted Microsoft's revenues, it has also introduced substantial operating losses due to the overhead costs associated with Activision Blizzard. Paul anticipates that future earnings reports will provide a clearer picture of the acquisition’s long-term benefits.
Notable Quote:
Paul Thurrott [16:25]: "Every quarter since they acquired Activision Blizzard, there's an enormous overhead... So short term it has not been paying off."
5. AI Integration into Windows Apps: Paint, Photos, and Notepad
Timestamp [28:19] - [54:50]
The hosts explore the integration of generative AI features into native Windows applications like Paint, Photos, and Notepad. These updates include capabilities such as generative fill and erase in Paint, and text creation and editing in Notepad. Paul expresses mixed feelings about these additions, appreciating the enhanced functionalities but questioning their necessity and the potential clutter they may introduce to simple applications.
Notable Quote:
Paul Thurrott [52:36]: "Generative erase, generative creation... It's like turning Notepad into something it wasn't intended to be."
6. Windows 24H2 Update and Prism Emulator Enhancements
Timestamp [09:00] - [41:07]
Leo and Paul discuss bugs in the Windows 24H2 update, particularly issues affecting File Explorer's menu display. They also highlight updates to the Prism emulator, which now supports additional x64 and x86 instruction sets, enhancing compatibility with more applications like Adobe Premiere Pro 25 on ARM-based Windows devices.
Notable Quote:
Paul Thurrott [40:04]: "The Prism emulator is now adding additional x64 and x86 instruction sets, allowing it to run more apps, not natively, but through emulation."
7. Microsoft 365 Subscription Changes and Pricing
Timestamp [85:22] - [97:50]
Paul explains upcoming changes to Microsoft 365 subscriptions, particularly the introduction of Copilot credits for consumers in regions like Australia, New Zealand, Malaysia, Singapore, Taiwan, and Thailand. These credits will allow users to access AI features within Windows applications, with the potential for additional usage requiring an upgrade to a Copilot Pro subscription. He anticipates that these changes may precede a broader price increase for Microsoft 365 services.
Notable Quote:
Paul Thurrott [97:50]: "It's a preview of a coming price hike that consumers are going to get for Microsoft 365, just like the one we got on Xbox Game Pass."
8. Integration of ChatGPT into Microsoft's Search
Timestamp [90:22] - [102:25]
The conversation shifts to Microsoft’s integration of ChatGPT into its search functionality. Leo demonstrates how ChatGPT can now access real-time information, enhancing the search experience by providing up-to-date results and citations. However, he criticizes the user interface as minimalistic and not user-friendly.
Notable Quote:
Leon Porter [100:35]: "The UI is terrible... It's a little too minimalistic."
9. Gaming Updates: Flight Simulator 2024 and Prime Gaming Perks
Timestamp [73:40] - [111:15]
Paul reviews his favorite gaming laptop, highlighting its impressive performance running Call of Duty: Black Ops 6 at high frame rates and excellent graphics settings. They also discuss Microsoft Flight Simulator 2024, noting its stunning graphics and hybrid model that leverages Azure cloud services to reduce local storage demands.
Additionally, they cover Amazon’s Prime Gaming perks, where Prime members receive free games every week across platforms like GOG, Epic Games, and Steam. Paul encourages listeners to take advantage of these offers, emphasizing that the games are theirs to keep permanently.
Notable Quote:
Paul Thurrott [74:18]: "This thing is getting between 90 and 120 frames per second consistently. It's nuts. And it looks great."
10. Intel’s Financial Struggles and Apple’s Continued Success
Timestamp [80:15] - [89:50]
Paul comments on Intel’s disappointing financial report, detailing a historic net loss attributed to their Lunar Lake CPUs and architectural challenges. In contrast, Apple reports robust earnings, driven by strong iPhone sales, defying earlier concerns about market saturation.
Notable Quotes:
Paul Thurrott [80:15]: "They reported a net loss greater than all of their revenues. The worst loss in the company's history." Paul Thurrott [89:50]: "Apple is an amazing business."
11. Security Tips and Windows Account Management
Timestamp [127:53] - [135:46]
Paul shares insights from his book The Windows 11 Field Guide, advising technical users on signing into Windows with a local account to minimize nagging from features like OneDrive’s folder backup. He explains methods to set up Windows with a local account and manage disk encryption without relying solely on Microsoft accounts.
Notable Quote:
Paul Thurrott [133:14]: "There are no AI features in Notepad and Paint that are free and would benefit from tokens or credits. So why pay another $20 a month?"
12. Sponsored Segments
Throughout the episode, sponsorship messages from companies like Melissa and 1Password are featured. These segments highlight services related to data validation and password management, emphasizing their importance for both enterprises and individual users.
Notable Quote:
Leo Laporte [36:45]: "Melissa is the best choice for your enterprise."
13. Closing Remarks and Upcoming Content
As the episode wraps up, Leo thanks Paul for his contributions and encourages listeners to engage with the show through various platforms, including Discord, YouTube, and the TWiT website. They tease upcoming content, such as coffee-related segments and movie recommendations, ensuring listeners have multiple avenues to stay connected and informed.
Notable Quote:
Leo Laporte [149:12]: "Subscribe in your favorite podcast client, audio or video. Either way, please watch every week because we love having you."
Conclusion
Episode WW 906 of Windows Weekly offers a comprehensive look into Microsoft's strategic shifts, particularly their heavy investment in AI and the financial repercussions thereof. Through insightful discussions, Paul Thurrott provides listeners with a nuanced understanding of the tech giant's current positioning and future prospects. Additionally, practical tips on Windows security and account management, coupled with updates on gaming and other major tech companies, make this episode a valuable resource for both casual listeners and tech enthusiasts.