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- [00:00]
Christophe Beck
AI is transforming industries, but the data centers powering it require more energy and water than ever. At the break, join Christophe Beck, chairman and CEO of Ecolab, for insights on using water effectively while safeguarding this critical resource for future generations.
- [00:19]
Patrick Coffey
Welcome to Tech News briefing. It's Friday, January 9th. I'm Patrick Coffey for the Wall Street Journal. When Meta launched Reels on Instagram in 2020, it seemed like little more than a TikTok copycat, and it didn't generate any revenue. Now it's set to bring in as much as Coca Cola and Nike, and it's got plans to get even bigger. We're diving into how reels became a $50 billion business and where it's heading next then. AI has a questionable reputation in the legal world, where there have been headlines about lawyers submitting briefs with errors and even cases that were entirely made up. But it's not just lawyers. Increasingly, it's being used by judges. We look at how the tech is being used today and ask, are chatbot judges next? But first, Meta CEO Mark Zuckerberg said on a recent earnings call that Reels had surpassed a $50 billion run rate, meaning it's on track to make that amount of revenue in the next 12 months and become a bigger source of ad sales than YouTube. Journal reporter Megan Bobrowski tells us how Meta created a solid business from a platform that many initially dismissed as a TikTok wannabe. To start with, the TLDR question how did Reels become such a big business?
- [01:38]
Megan Bobrowski
It took them a while. It took them five years to reach this point. I spoke with an Instagram executive and she told me that they had to reconfigure the algorithm from scratch to make this work. Instagram used to be a place where you would go to see content from your friends and your family and people you follow pretty much exclusively. And this Instagram executive told me that they had to figure out a way to essentially make Instagram more like TikTok. So it shows you content from people who you don't follow. And that required basically a whole reconfiguring of the algorithm. They had to figure out a way to get signals from the content people were watching, but not from the people that you're following, which is what TikTok did really well. TikTok, the content they show you, is based on how much time you spend watching a video. Instagram had to figure out a way to do something similar to that. Another thing they did was prioritize original content on the platform. From our previous reporting, we Also know that they paid creators to post on Reels.
- [02:47]
Patrick Coffey
So fast forwarding to today, Reels is finally big. The ad sales numbers, namely the fact that Reels is expected to bring in more than YouTube this year, really shocked me. What do you take from that?
- [03:00]
Megan Bobrowski
Yeah, to me, this showed that Reels is a real competitor in the space and deserves to be taken seriously. It's no longer just this TikTok wannabe, and meta has made this into a serious product. It's also interesting because Meta made the argument during their antitrust trial that they're not a monopoly because they face competition from YouTube and TikTok. And while Reels is by no means a monopoly, and its growth shows that it's become a real competitor in this space.
- [03:29]
Patrick Coffey
So the idea that a user's behavior, rather than who they follow, is what really drives their feed. It's also in keeping with Meta's new argument that Adam Mosseri has made that it's not social networking business, it's an entertainment business. How pervasive is that thinking internally?
- [03:46]
Megan Bobrowski
That's kind of the line that Meta executives talk. Now. It's interesting because the executive that I spoke with pitched Reels as the social viewing experience. So it's something that you do with your friends, you watch reels with them, but it's not inherently social in the way that we used to think of social networks as in seeing content from your friends online. They sort of are now talking about Instagram as a social experience. Is more watching things akin to tv.
- [04:18]
Patrick Coffey
Is that where Meta wants Reels to go from here?
- [04:21]
Megan Bobrowski
Yeah. So last year, YouTube became the most watched video provider across all TV. A lot of people watch YouTube together with their friends. They kind of see Instagram Reels as being akin to that. So late last year, they started offering the Instagram app on Amazon Fire tv, sort of as a test to see how this goes. If that goes well, they have plans to roll out the Instagram app. So to more TV devices in 2026.
- [04:53]
Patrick Coffey
That was Journal reporter Megan Bobrowski. Which video app are you scrolling through these days? If you're a listener on Spotify, let us know in the comments. Coming up, judges are increasingly using AI to help decide legal disputes. How the new tech is working in the courtroom. That's after the.
- [05:18]
Christophe Beck
How can enabling Smarter Water Management help AI scale responsibly? Here's Christophe Beck, chairman and CEO of Ecolab.
- [05:25]
All water of the earth that we can drink is 35 miles wide. That's all we've got for the whole planet. So we'd better find ways to reuse water. That's especially true for AI. But here's the good news. With technology that can reuse water in that process of the chips manufacturing and the technology that we bring is ultimately at every step of the process in the chip manufacturing to reuse it.
- [05:53]
Patrick Coffey
You might think that the court of law would be one of the last places to experience AI creep. Not so recently, we've seen headline making scandals about lawyers using AI generated briefs. Citing fictional cases. Some judges have banned them from using AI in their courtrooms or sanctioned attorneys for submitting inaccurate AI generated information. But even so, WSJ reporter Erin Mulvaney tells us a growing number of judges are embracing the technology themselves. So, Aaron, can you give us a sense from your reporting of how judges are currently using AI?
- [06:28]
Aaron Mulvaney
They definitely aren't quite using it to just plop in and say, hey, here's a decision. ChatGPT, tell me what to do. They seem to be being pretty discerning, but they're using it to look at tons of documents, maybe synthesize all the different laws, all the different arguments that lawyers have made, and hundreds of thousands of documents, maybe a few have said that they are saying, hey, what questions should I ask in this hearing to lawyers based on the record so far, and just a few things to speed up the process, they're really just dipping their toe and using some of these products to maybe make things a little more efficient.
- [07:09]
Patrick Coffey
So they say that they're using it for back office or routine work rather than influencing their decisions. That's a very familiar argument when it comes to AI across industries. You know, they're saying that we're just getting rid of the rote stuff that takes too much time. But in the case of the court system, it feels like that could be a very blurry line. I mean, how do we say when the tools are starting to influence their decisions in some way?
- [07:36]
Aaron Mulvaney
That's a really fair point. And maybe one reason that a lot of judges would balk at even the idea of using it at all whatsoever, because they don't want to have any kind of question of whether their decision was influenced by a machine or some kind of past decision that they didn't analyze carefully or a mistake being put in is even worse. But I think that's why judges really are trying now to learn how the tools are actually working. That's why it's early days. So the folks that I interviewed, they are probably the contingent of pioneers in this area. I would say the much more common tact is that judges have been referees against lawyers that are submitting and using ChatGPT to cut corners.
- [08:21]
Patrick Coffey
In some ways, you say that they're really just starting to experiment. Do we have any sense of how many judges are using the tools and or how widespread the use of AI in trials or decisions might become?
- [08:35]
Aaron Mulvaney
So LexisNexis is one of the main providers. There are tools that have some basic research functions and some they can synthesize documents those are available to all federal judges and they don't share publicly the data on how many judges are actually using it. It's available in chambers to everyone. And then these other tools that are specifically designed for courts and judges, I'm sure they're leading into it. Law clerks are probably using basic tools as well. They do a lot of work for judges. It's really anecdotal at this point. Often the news comes out when something really negative happens. I assume it's happening more than we realize. But I do think it's a pretty small group of crusaders who are really big proponents.
- [09:19]
Patrick Coffey
From your reporting, it seems like there's a bit of tension around this within the legal community because we have judges coming up with standards for lawyers who are using the technology, some banning it and some being sanctioned for submitting inaccurate AI generated information. How do you think the system overall is navigating that?
- [09:41]
Aaron Mulvaney
Right now? Judges just are trying to really make sure that if any of these tools are being used, that there's still a human involved in the most important decisions and going over things carefully. Even the judge I quoted who's a big proponent of it, said, you know, he would never trust anything wholesale with these tools. But judges have these really important roles adjudicating over things that really matter to people's lives, you know, matter to the world. And so I think they are probably going to be slower to jump ahead than other industries just because of that role. I talked to one judge who said that there was a lot of drama about using fax machines in courts because it was possible that that document, people are going to see it. Like, that's how slow this area.
- [10:31]
Patrick Coffey
It seems pretty wild to ask a question like could AI replace lawyers and judges? But I mean, I was shocked just by the idea of federal judges using it in any way.
- [10:42]
Aaron Mulvaney
I actually was too, because when I was speaking to these judges think their willingness to talk to me was because kind of the main story out there, hallucinations and mistakes showing up in these courts is the story that we've been hearing up to this point. And I Imagine, just as technology gets better, we'll be seeing the other side of the story more and more. And the argument these judges would say is the more knowledge you have about how to use them responsibly, that'll be the answer to the future, rather than ignoring technology.
- [11:14]
Patrick Coffey
That was WSJ reporter Aaron Mulvaney. And that's it for Tech News Briefing. If you're a listener on Spotify, be sure to take this episode's poll or leave us a comment. Today's show was produced by Julie Chang. Patrick I'm your host, Patrick Coffey. Jessica Fenton and Michael Lavalle wrote our theme music. Our supervising producer is Katie Ferguson. Jessica Fenton is our technical manager. Our development producer is Ayesha Al Muslim. Chris Zinsley is the deputy editor and Falana Patterson is the Wall Street Journal's head of News Audio. We'll be back later this morning with TNB Tech Minute. Thanks for listening. Foreign.
- [11:56]
Christophe Beck
How are data center operators working to improve sustainability and water savings at every stage of the data center lifecycle? Here's Ecolab's Christophe Beck with some thoughts.
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The Mach 7 or the Mach 4 are the ones who are really so focused on high tech, are the most forward looking. They have the means, they have the mindset, they have the passion for innovation and they're really open to try new things. Well, because everything is new with AI and with that technology as well. I think even if we're not where we wanted to be with that industry right now, we will be ahead in the next few years because innovation that's coming up right now is working much better than we thought. And it's really thinking in circular ways, being in a data center or in a microchip manufacturing plant.
- [12:40]
Learn more about ecolab@ecolab.com Custom content from.
- [12:44]
Patrick Coffey
WSJ is a unit of the Wall Street Journal Advertising Department.
- [12:47]
Megan Bobrowski
The Wall Street Journal news organization was not involved in the creation of this content.