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I've got about five longer pieces I'm working on at the moment – and that's after a flurry of output over the weekend. When it rains... it is raining here in London! Late Friday came news that Apple was walking away from the investment in OpenAI. This strikes me as legitimately a big deal because it's Apple, which rarely makes such investments, and because it was an obvious way to for them to "pay" for their forthcoming ChatGPT usage when it's baked into Apple Intelligence later this year. Now they're apparently back to the free model, which is great for Apple, but probably not so great for OpenAI and Microsoft! And their leaked financials from the should-close-this-week fundraise would seem to indicate as much... I was able to finally ship my thoughts on the Pixel Pro 9 Fold which, ridiculous name aside, is honestly a great little device. No, I'm not giving up my iPhone. But I do increasingly think that Apple may be off on their timing with the foldables market. Yeah, yeah, it's nascent now, but if the rumors are accurate that Apple is still 2-3 years away from the space at the earliest (and that may be with a foldable iPad instead of an iPhone, which may 'flip' rather than 'fold'), I think they might regret that timing. I get that there are still quality issues with such devices, but the leap Google made from the first Fold to this one is pretty incredible. But forget about all that – it's a great form factor. It can make an iPhone magically turn into an iPad. Apple should do this, sooner rather than later! One more thing I'm wondering about Apple: if they shouldn't have taken the approach with the Vision Pro that Meta is with their "puck" for the "Orion" AR glasses. I mean, I'd think this regardless – and have thought this before – but the fact that the device is physically tethered to a giant power brick while Meta is doing it wirelessly just drives it home. Obviously Apple debated offloading the compute, but it's pretty strange that they didn't for weight reasons alone. At least in this first version?! Megalopolis! Ooof! Honestly, I simply have to watch it now. Maybe even in a theater just to throw it a goddamn bone. An expected yikes, but still...
Some Thoughts...💰 OpenAI’s Complex Path to Becoming a For-Profit Company – For all the talk about turning OpenAI into a for-profit company, there hasn't been a lot written as to why this is so complicated. This is a good explainer by WSJ. The main issues, it seems, may ultimately come down to dividing up equity and placing a value on the current assets and figuring how to divide them up in a fair way with regard to the non-profit. Regardless, you can probably expect lawsuits galore – beyond just those filed by Elon Musk. And it puts Microsoft in an especially tricky spot as presumably they don't want their 49% stake in the profits of the non-profit (lol – it's more nuanced than that, of course, but what a sentence) to be fully converted to equity lest you-know-who come knocking... So if their equity is dished out differently (maybe they can argue the cloud credits should equal less equity?) what does that mean for the rest of the cap table? Amazingly, the drama could be just getting started! Who can blame Apple for walking? [WSJ 🔒] 🏦 SoftBank to Invest $500 Million in OpenAI – Speaking of... SoftBank's Vision Fund investing in OpenAI was as inevitable as it was predictable – as I predicted it a couple months back, before the round itself was even rumored (let alone the potential of Apple's involvement – before they just recently backed out): It seems likely that OpenAI is going to need a new major cash partner at some point. Maybe they hoped that would be Apple. Or maybe it will be the Saudis. Or even the ultimate backstop: SoftBank.
Again, not too hard to predict – not as good as my Apple prediction, which was far less obvious – though I'm sort of surprised it has taken this long. Both overall and in this particular fundraise. Which leads to the next question: are they taking the slug that had been allocated to Apple? [The Information 🔒] 📡 DirecTV Strikes Deal to Acquire Dish Network – Well that was fast. Just two weeks after it was first reported, the deal is done. The price? $1. Why? Because DirecTV had to pay something. The main element of the deal is the assumption of a massive debt pile – $2B of which is due in November. Money which Dish did not have. So this is a bail out. And it's also now the single biggest pay-TV service in the US. Which is a bit like being the tallest hobbit in the Shire – when it's on fire. Part of the reason why this happened so quickly is because it's really been in the works for over 20 years, when Charlie Ergen – which every story, no matter how focused on a business deal, is obligated to note that he used to be a professional blackjack player – the Dish Network chairman, tried to merge the companies only to have it blocked by the government. It seems unlikely they'll block it now given the state of the industry. But that leads to the question of why DirecTV and their majority owner TPG (after buying out AT&T's stake) even want this? I suppose just to bleed the money out nice and slowly... Dish parent EchoStar (which, importantly, is keeping their spectrum) and AT&T are certainly in a better place now without these albatrosses though! Congrats to all involved? [NYT] 🤖 California’s Gavin Newsom Vetoes Controversial AI Safety Bill – It feels like Newsom figured out the (relatively straightforward) political path to punt on the bill. He’s vetoing this version with the promise of working with industry leaders to come up with a different one. If nothing else, this buys everyone more time, which clearly seems like the right call here. And in passing a few other AI-related bills recently, Newsom bought himself the wiggle room for that time. And by the time that next bill is ready, AI will likely be in a pretty different state (figuratively, not literally now) to know more about what perhaps needs some level of government oversight and what doesn’t. But really, this should be done at a federal level anyway, as a piecemeal approach from individual states is a potential mess. If the law were to pass, every company would undoubtedly follow California’s lead to comply and this would highlight to other state politicians that they can grandstand and propose some truly crazy laws, thinking every company would have to follow them versus “pulling out” (IP restricting?) features in those states. The goal would be lost and it would be entirely politically driven by people who have no idea about the technology and don’t care about the technology. So yeah, this is better for now. California remains a better place to do business than the EU. Close call. Lol. [WSJ 🔒]
Some Analysis...
Some Links...- Lina Khan technically reached the end of her first three-year term last week. But she can keep going until told otherwise. It's still unclear what the next administration, no matter which side wins, is going to tell her... [NYT]
- I like the pick of Kyle Chandler (aka Coach Eric Taylor) to play Hal Jordan in HBO's upcoming Green Lantern show, but I'm even more intrigued that it's said to have a "True Detective vibe" and the showrunner worked on not only that show, but was the showrunner of Ozark. [THR]
- In other super hero news – the US Trademark Office has cancelled the "Super Hero" mark that Marvel and DC have jointly owned for decades. Their villain here? "Super Babies". I'm serious. [Reuters]
- There would appear to have been a spike in cancellations of Netflix tied to Reed Hastings announcing a donation to Kamala Harris. Spoiler alert: they'll be back. [Bloomberg 🔒]
- Speaking of California bills, one that Gavin Newsom did sign is related to protecting consumer brain data. [NYT]
- Amazon is apparently going to hire Brian Williams to anchor live coverage of US election night in November. It sounds like it will just be a test, but seems like a smart one – on top of everything they're doing with sports – given their massive moves (and early success) with advertising on Prime Video. If nothing else, they're an interesting ying to Netflix's yang in the continued march of streaming... [Variety]
And I Quote...“I do not believe this is the best approach to protecting the public from real threats posed by the technology. Instead, the bill applies stringent standards to even the most basic functions — so long as a large system deploys it.”
-- California Governor Gavin Newsom, in a statement as to why he vetoed S.B. 1047 – aka: the "AI Bill" (see: up above)
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