The Unlikely Anthropic & SpaceX Marriage, OpenAI Trial Revelations, AI Layoffs Or Cope?

Anthropic and SpaceX partner up in an epic collaboration that could change the AI race. We're awash in revelations from the OpenAI trial, and our AI layoffs just cope. That's coming up on a Big Technology Podcast Friday edition right after this. This week, I'm live at Knowledge 2026, ServiceNow's annual conference in Las Vegas, where enterprise AI moves from promise to production. I'm sitting down with ServiceNow's president and CPO, Amit Zaveri, on the platform strategy powering it all, their people and technology leaders on what AI means for the workforce, the engineering team behind ServiceNow's NVIDIA partnership on what it really takes to ship AI at scale, and Ultra Beauty on deploying AI across 1,300 stores. These are the conversations you won't hear anywhere else, and new episodes are dropping this week on my YouTube page. We've all heard the stat, 95% of AI initiatives fail. It's not because the technology isn't ready, It's because you don't have the right process or the right partner. Meet Aboard. Aboard is your partner for AI transformation, which means they listen, use their very own powerful software tools, and deliver exactly what your company needs to thrive in the age of AI. Working with big and small clients, Aboard always delivers in weeks, not months. Your AI revolution is just beginning. Visit Aboard.com to get your AI rollout right. Welcome to Big Technology Podcast Friday edition, where we break down the news in our traditional cool-headed and nuanced format. Well, it's tough to pick what to lead with this week because we have lots of big news about the AI race, including news that Anthropic and SpaceX will partner up where Anthropic will use SpaceX's capacity. We also have lots of stunning revelations from the OpenAI Musk trial and a number of big layoffs happening in the tech industry. Are they actually AI displacing people or just cope? We'll talk about it all. Joining us as always on Fridays to do it is Ranjan Roy of Margins. Ranjan, welcome. Man, those text messages. I cannot wait to get to that, but I think certainly space compute is always a good place to start as well. I was tempted, very tempted to begin today's show with a dramatic reading of the text messages between Sam Altman and former OpenAI CTO and former OpenAI interim CEO Mir Maradi that came out in court this week. Don't worry, listeners and viewers, Ranjan and I will be doing that. We will be giving you that dramatic reading in the middle of this show. But I resisted the temptation because I believe this Anthropic and SpaceX deal is, I think, about some of the biggest news you will get in the AI race this year, and we will take you right there. So here's the story from the Wall Street Journal. Anthropic Inc. deal to use all of SpaceX's Colossus One compute capacity. Anthropic will use all the computing capacity from SpaceX's Classus One data center in a new agreement with Elon Musk's rockets and artificial intelligence company. SpaceX will supply 300 megawatts of new computing capacity using more than 220,000 NVIDIA GPUs by the end of the month. Anthropic said Wednesday. Anthropic also expressed interest in a partnership with SpaceX to build AI data centers in space. Long, one of Musk's top priorities. the agreement comes as Anthropic has struggled to gather enough computing power to fuel enormous demand for its AI models. I don't even know what adjective to use here. Stunning, shocking, mind-blowing. I mean, Elon Musk has spent the better part of, I don't know, a year longer railing on Dario talking about how Anthropic is actually misanthropic, and now he is renting them effectively an entire data center worth of GPUs to help them pursue their goals. What's your reaction here, Ranjan? Yeah, what is the adjective to describe this deal? I don't know. I agree. I'm having a hard time. I think the problem with so many of these deals, and I'm putting that in quotation marks, is they're over a longer period of time. They start to provide access, but everything with Oracle and OpenAI, everything, like these giant compute deals all feel as much signaling as reality in terms of kind of delivering compute. Yes, Anthropic is in dire need of compute and rate limiting and all this has been one of the big issues that's actually been hurting them recently. The idea that Elon Musk and SpaceX are going to kind of come to the rescue of Anthropic is just, it's both shocking and mind-blowing, but it's also, as SpaceX is looking to IPO, having this massive new revenue source where you basically become like, what is the fastest growing company in the world? Who are they completely dependent on? Us. So I think I see that side of it. But do you think one year from now that SpaceX will be a major provider of compute to Anthropic? Yes, yes. And I am stunned to hear you downplay this news. Let me tell you why I think that this is significant. First of all, this is all but an admission by SpaceX, which of course is the company above open, sorry, XAI, which Elon Musk basically, Elon Musk merged X into XAI and merged XAI into SpaceX. So SpaceX is the company that holds all of them. There was a time not that long ago where XAI was considered one of the top players, or at least one with a great shot. Remember, it had used this capacity to develop benchmark-breaking AI models. And here we are. It's in May 2026. This is effectively it giving up. It's saying it doesn't know how to effectively use this compute capacity to train models. Or if it did, it wouldn't be worth the expense because it would still be behind OpenAI and Anthropic. And so therefore, it's now turned its business to renting data centers, right? It's now the new core weave as opposed to the new OpenAI. So I think that is a fascinating development here. And I also think that, yes, it is, if you think about it from where the race stands, this will have a meaningful impact because the way that this race has been setting up, you've had OpenAI, which has had more compute and has sort of now following Anthropic in this sort of code model with codex as Anthropic has CloudCode. And we're going to get into the demand about CloudCode in a moment. It's crazy. And then you had Anthropic. And the big thing holding Anthropic back was it was unable to deliver the models because of capacity constraints. And so now you have Elon and Dario teaming up to effectively take on OpenAI here, which is fascinating. I know I shouldn't be this, not cynical about these announcements. I think what is interesting about these kind of like big types of alliances and announcements is when they're so clearly beneficial to both parties in their own specific way, even when it's, you know, so clearly like it makes for a great story. Elon and Dario have been at each other's throats. Is this actually kind of teaming up against OpenAI in this case? And maybe it isn't. That would make the most sense to me. But still, Anthropic needs to come up with a story around how it will deliver compute as it moves towards an IPO. SpaceX needs to deliver a greater narrative around its revenue streams going forward as it moves towards its IPO. And it just feels like kind of signing on the dotted line here. It was a very, very convenient way of pushing that. I know. I know it's, I mean, there's been too many of these announcements over too long, especially with an Elon Musk involved that, I don't know. I'm going to, I like to wait beyond the announcement for stories like this. Look, as a reporter, I really appreciate the skepticism and wait till the announcement passes. And, you know, maybe that's my one weakness is that, well, not one, one of many is that. No, no others. No, that one of many, I'll admit it, is that sometimes I'm too quick to believe these things. But we do have the evidence right away that this is going to help Anthropic. Here's what Anthropic says. First, we're doubling Claude Code's five-hour rate limits for Pro, Max, Team, and Seat-based enterprise plans. Second, we're removing the peak hours limit reduction on cloud code for pro and max accounts. Third, we're raising our API limits considerably for cloud opus models, as shown in the table below. And of course, they put a table. We won't make you suffer through reading that. But this is instant impact. I just crunched the numbers. The data center that they are going to be able to lease from Elon Musk is a $5 to $6 billion data center that's fully built, right? That's just from the GPU cost alone. It's fully built. and ready to work to help Anthropik deliver these services. That was the company's one weakness, right? Is that it could not deliver the compute. And therefore, OpenAI had this chance to pass it because it does have that capacity. This changes that significantly. That's what I'm saying. And we can see the proof in the rate limits. No, no, you're right. You're right. The rate limits, again, like I still saw plenty of complaints on Twitter around, especially the weekly resets around rate limits with Claude Code and the opacity around that, I think. But you're right, this is direct. They're at least correlating this action directly with that increase in compute. But I don't know, I still think this is one of the most interesting parts as the market rises again today. And the more people I've been talking about, and again, working in the industry and seeing where this technology is going to go and believing this is going to transform enterprises and most knowledge work as well. But it's still more everyone from a Google to a Meta to OpenAI to Anthropic to now SpaceX as the core vehicle for Elon Musk outside of Tesla. Like everyone has the same story to tell. There's going to be this unlimited, insatiable, insatiable appetite for compute and anyone who can go to fill it. And then there's the same customers buying up the compute, providing the compute. It's such a small circle of companies that all benefit from these kind of transactions in this story, having to move in this one direction. I think I've become definitely more skeptical in the last two to three weeks around, even though I'm watching firsthand how valuable this technology is, whether this story actually will play out in the way everyone wants it to. Wow, interesting. I mean, I think that if you look at the capacity demands, how can you really argue with that? Well, I think over the last six to eight months, everyone had a free license to do whatever they wanted, especially in the enterprise. And it was everyone's first kind of foray into Claude Code and Claude Code and autonomous knowledge work products like Writer. And we've talked about this since last November and October. anyone could do what they wanted no one questioned anything around tokens so the actual like the graph for that usage which was essentially zero because the token consumption pre-reasoning and especially pre-agentic knowledge work or agentic coding was so minimal relative to what agent the token consumption of agentic work so the graph was has been insane over the last six to eight months but that's because no one cared about anything you could spend whatever you wanted if you are to now everyone is extrapolating that level of growth rather than will there be a cheaper model? Will there be cheaper ways of approaching this? Will companies actually bring token consumption instead of token maxing, people actually be optimizing for tokens? I think the story is over the last eight months, which I've watched firsthand, no one cared about anything. We literally came up with token maxing the industry to say more is better. And now everyone assumes we're going to grow like that. So it really, even though I believe strongly that agentic AI will kind of like have a massive impact on the world and certainly the enterprise, I don't know, all these compute stories really push around, let's just blindly extrapolate over from the last six to eight months. Well, okay, so there's two sides of this here, right? There is the demand for compute, And then there's also the model makers are going to make their models more efficient. And they have been making their models more efficient, and they will be making it more efficient. But you'll still have the demand here. Just one example. Everyone who's used Anthropix Opus 4.7 model has certainly experienced some frustration where they try to get it to do some simple thing. And it burns like half a data center's worth of tokens, only to come back and be like, oh, shoot, this was a simple operation. and I tried to like do advanced calculus to figure it out. Just one example, I asked it to make a PDF for me yesterday. It spent like 30 minutes trying to find this PDF and I'm like sending commands. I'm like, you created the PDF, just export it. Just export it. It's like, oh, plugging into tools, every tool in the book. And then it finally comes back to me and it says, I owe you an apology. I went down a rabbit hole worrying about a constraint that wasn't actually blocking us. The file's there. Send me the file. So they're going to fix this stuff though. That's what I'm saying. This is what I'm talking about, though. And again, we have talked about, I've thrown this out in the past, that kind of like nudging systems towards greater levels of consumption. Do you remember, what was OpenAI's product that would work all night for you to give you a news update in the morning? Pulse. Pulse. You talked about this. That's right. Yes. This was my theory, that nudging people towards greater levels of consumption was actually going to be part of things. And again, like what you're talking about, one of two things is going to happen. Either Anthropic will fix that and actually make it work in a much more efficient manner which will be good but also changes the compute story a little bit as a direct extrapolation Or users will kind of fix that themselves because they don't want to pay for those tokens. So I think that mindset shift of, do I watch what I'm spending on an AI platform? Because it's no longer blindly $20 a month or even $200 a month. So I think that's going to be a big shift. shift. Well, this gets back to the whole Jevin's paradox conversation. And of course, if you've been paying attention to it, the argument in the AI industry is, you know, as a valuable good gets cheaper, you'll actually use more of it versus less because it will enable you to do more things. And I would argue, let me just throw this out there for the sake of argument, and you can decide to rebut it or agree with it, is that we've seen so much model improvement over the past, let's say, year and a half, that those who might've been skeptical in the deep seek days, where this Jevons Paradox thing, well, it's just going to do the same thing and it'll be cheaper. So no one's going to spend more on AI. I think this Jevons Paradox idea is more plausible than ever. That if they bring the cost down, you'll be able to do much more. And you might have, let's say, more agents running in parallel. You disagree? I agree. I agree. but I think what that says about the kind of is it an exponential demand for compute or more of a linear one? I don't think it's necessarily exponential in the way everyone is looking at it right now and the way these deals are being done and the way people are chasing it and again, when it benefits both parties involved I do think that it can be more of a linear path than an exponential one again, when everyone has such a vested interest in it playing out in a specific way, it moves away from, and when it's a very small insular group, I do think every, I don't know, it just moves it away from necessarily being the way it's going to play out. Now, if you're saying, all right, maybe there's a percentage of this that is gamification and inefficient models, I would agree with you for sure. Obviously that's the case. The question is, how much of that gamification and token maxing would you say accounts for the growth in the industry? And we're seeing a lot of growth. And Anthropik had its Code with Claude event this week in San Francisco. And Dario Amadei, the chief executive of Anthropik, was on stage. And here is what he said, according to the New York Times. Dario Amadei, the chief executive of Anthropik, said on Wednesday that his artificial intelligence company had planned for growing about 10 times as big this year, only to reach a growth rate that could make it 80 times as big this year instead. He said last month, Anthropic, he said, let's see, Anthropic had been overwhelmed by the rate of growth and that's increased the company's need for computing power to deliver its AI products for customers. I hope, this is from Dario, I hope that 80 times growth doesn't continue because that's just crazy and it's too hard to handle. I'm hoping for some more normal numbers. That can't all be gamification. No, it's not gamification, but 80 times, is it 60? Is it 40? And that's, again, when Claude Code was kind of in a league of its own and there was no competition. I think when you're saying gamification or gaming the system, basically, I had two separate instances. I think I'd spoken about this recently, where very senior executives I had casual conversations with in passing, bragged about their level of spend. It was definitely more on the CTO, CIO side, but people are bragging about how much they're spending because it's become a badge of honor to say, I'm spending an ungodly amount of money. Now, no one is talking about their cloud bill and puffing out their chest anymore. Do you know what I just spent on Azure last month? So when you're having that kind of, when you look back and you're going to, those are those kind of moments I've been experiencing more and more where you're like, that was a clear sign that no technology executive should be bragging about how much they're spending and not talking about what they're actually doing when it comes to something like this. This is from the Financial Times. Anthropics annualized revenue, which extrapolates full year revenue based on recent weeks, is expected to cross $45 billion imminently, a fivefold increase from $9 billion at the end of last year. Now, Ranjan, I know you have your feelings about annualized revenue, but again, let's just go back to it. If this was lighting money on fire broadly, that would be one thing, but it's not. I mean, you can't have $45 billion of annualized revenue and that sort of just being smoke and mirrors. You can't have $45 billion of actual annualized revenue, but you can certainly have a couple hundred mil of just like budgets being thrown at AI. I mean, what is the difference? I mean, God, come on, Financial Times. I would have looked to you to at least not get caught up in the ARR. But actually, I mean, I guess the FT. Like even the way they said that, they didn't actually clearly define it. They said, wait, how did it read again? A few weeks? Yes, based on recent weeks. Recent weeks, week, month. But yeah, I mean, I think, what do you think is happening? And what do you think will happen? And should we extrapolate based on what's been happening? Well, okay, I don't want to lose sight of the bigger picture here because I think I brought this in to really talk about how this added compute and this teaming up of SpaceX and Anthropic is going to answer one of Anthropic's biggest problems and has made the AI race much spicier, right? Because now you have Anthropic and its key models against OpenAI, and they're both less constrained by compute than they were previously. I mean, OpenAI was less constrained, and now Anthropic is also less constrained. So this is going to be a heavyweight battle. I do see them as being the likely winners. I do think they'll be able to get the models to act more efficiently. I mean, goodness gracious, after my experience with 4.7, I hope Anthropic does. And so therefore, we've seen a consolidation and a solidifying of this race. And yeah, I mean, are there going to be bumps in demand? Sure, right? I mean, you're working in enterprise AI. I'm doing a lot of reporting on it. The number one thing I here is that a lot of this is just boards telling CEOs you need an AI strategy and them spending money, right? And without really figuring out what the problem is or diagnosing how they would solve it. So yeah, there's part of that does exist. But I think the broader story is, can't really deny, I mean, neither of us will deny the progress that these models are making and the progress that, to go to your point, the industry is making in sort of building the appropriate scaffolding or harness or orchestration layers around it to make it useful. And so, and so this goes from, I mean, this goes from, this goes, we still have notes of, is this a bubble? There are probably parts of it that are a bubble. We still have notes of it or of, is this going to destroy certain companies or industries? You know, there's a good chance there, but I think ultimately it has now transformed into a lot of this is working despite people people skepticism. And it is going to be this heavyweight business story between two companies with a tremendous history and Elon Musk now stepping in and saying, if I can't win, I'd like the enemy of my enemy to win. Actually, I want to get into the Elon Musk angle about this in a moment, but do you know what's going on with Stargate right now? Oh, yeah. MG Siegler and I just spoke about that on Monday. So Stargate has basically become this sort of catch-all phrase for OpenAI's compute efforts. And it has shifted from them effectively building their own compute to securing it through partners like a CoreWeave. wait hold on but the oracle softbank what was announced when was that probably like a year and a half ago january february that they're walking away from right it's unclear i mean as with okay things in this infrastructure build no no but that that's so that captures why'd you bring it up that captures everything perfectly big announcement and in that case obviously like Like, I mean, when you think about everyone who was up there from a Larry Elson standpoint, from a Masa Sun, from a, I mean, you got the all-star crew of like, you know, people who can certainly sell things well when it benefits their own companies. And then just it's, what is it, 14, 15 months later, it's just kind of fizzling. It's unclear what's happening. There's certainly groundbreaking and things being built, but there's still an ongoing discussion around compute shortage, which that's theoretically should have kind of really solved and put us in a position even within 18 months to actually be very strongly positioned for. So I think that's kind of what I see happening with this announcement. But this is already built. That wasn't built. Colossus 1 is built. Yeah, no, no, I know. But I don't know. I don't know how it will happen. Ronjan has been burned too many times. I'm going to wait. Fair enough. Until my cloud rate limit is quadrupled or quintupled, then maybe. But even, hold on. I don't know. Like, you included this tweet in our prep doc. To me, on the Elon side where we reserved. So just as SpaceX launches hundreds of satellites for competitors with fair terms in pricing, First of all, I love like clearly the entire industry got the memo when after what Sam's saying now, magic at hyperscale is what OpenAI is about. But Elon is talking about achieve a great future with amazing abundance for all. But do you think this is going to be his out in like two weeks over Anthropic? I mean, it's possible. But I think, aren't you missing the forest for the trees here? And I noted this, Don, also. I mean, you could have not found someone that dislikes someone more than Elon Musk disliking Dario. he's constantly tweeting how it's misanthropic and way too woke right and he's on that whole bandwagon and anthropic has performed so well and become such a successful company going after the same market as spacex spacex has now become an enabling technology for anthropic doesn't matter how long it lasts that in and of itself is remarkable it's the ultimate revenge for dario It is, but do you know what I've been thinking about is I really believe a lot of Anthropics power has also come from X. And like, I mean, even within the industry, everyone you talk to, like everyone talks about like seeing the power of Claude and Claude Code and the use case on X. It's LinkedIn. Nah, it's X. X as well. That's the platform of, that's the AI platform. That's the AI platform. Yeah. And Elon has his finger on the dial and can control that in whatever direction he wants. And I still imagine kind of leads Dario in, reels him in, and then actually shuts off. You're not engaging in actions that are good for humanity. And I mean, honestly, 4-7, the backlash you got. We've used it. It's a little wonky. So we all feel it. It's not just being made up, all the complaining around it. But like, it is kind of crazy to think about the power that still remains now. And that's amplified by now being your provider of compute. Okay. Yes. But now actually I'm going to revise a statement I made just a couple of minutes ago, which is when I said you couldn't find someone that dislikes more than Elon dislikes Dario. Yeah, you could. It's Elon disliking Sam. He dislikes Sam more than he dislikes Dario. And I wouldn't discount the IPO math here. because let's say you're Elon Musk and you want to kill OpenAI. So you bring them to trial over their conversion from a nonprofit to a for-profit. Okay, so he's doing that. Now, what else do you do? You think about the IPO calendar and there have been reports that Anthropic is trying to go IPO this year. So now think about it this way. SpaceX will be the one that IPO is first out of this. I think we can both agree there. Then if Anthropic goes ahead of OpenAI and uses this compute to support that ADX demand growth and can show exceptional demand, you know, an exponential curve of demand before it hits the public markets and then leaving OpenAI to sheepishly walk in third and, you know, with its reputation damaged after the trial and with its compute advantage, not erased, but minimized because of this deal, you potentially, and it needing to raise more capital to continue to serve its use case, that to me is potentially the way that you go about trying to kill OpenAI and maybe that's what Elon's doing. Okay, okay. I like this theory. I like this theory. See, this makes more sense to me than actually like the numbers around demand and whether it's meeting supply and shortage compute. What you just explained actually makes way more sense to me of how this would have come about and how this is playing out Actually one question I curious your thoughts Because we been talking about this I now view everything these companies do in the lens of everyone racing to IPO as fast as possible. Avva, why do these companies need to IPO? Oh, that's a great question. can I my suggestion here is that they were actually not planning to IPO this fast in fact the news of the SpaceX IPO I guess that might have been planned but the news of the Anthropic IPO and the OpenAI IPO is rather new my theory is that they were actually going to try to raise one more round of private capital and they might still do it from the final boss of private capital and that is the Gulf States. And this Iran war made the Gulf States more hesitant to put all this money into US companies and hence they have to go IPO. Okay, that I agree with 100%. It took us a half hour, but finally a harmony moment here. That makes all this sense. No, I mean, because I really was wondering, like money in private markets remains feeling infinite. Like, and again, is mass public market investor exposure really going to be that different? Like, it's just felt like, it's made me wonder why everything feels so urgent all of a sudden when they've just been, again, what was OpenAI's last round? 122 billion. 122 billion. That is bigger than vast, vast majority of most IPOs in terms of- No, no, sorry. Right. That's bigger than any IPO. No IPO has raised that amount of money. Wait, not even the financial one? The largest, I think, was Saudi Aramco, and that was $29 or $39 billion. So this is at least 3x to 4x larger than the biggest IPO ever. Okay. Okay. See, so that's why it has been odd to me how intense this pressure of everyone chasing towards IPO has felt very recently. You made it all make sense, though, so I'm going to give you credit on that one. I will note Anthropic is likely going to raise at least one more round. It looks like they're going to raise $50 billion at a $900 billion free money valuation. Here's an investor. It told the Financial Times, people are ready to throw any dollar amount at Anthropic. It's just about when they want to pop their heads up and say, we're ready. I still can't be. Do you know what? I think like it didn't, you're on a roll right now. It did not hit me until that the largest fundraiser in history at the Aramco was only $30 billion in terms of actual funds raised. Oh, yeah. This is making even less sense to me right now. This is just like you're getting $122 billion in the private markets, and you're like this energy and intensity to go public. Well, I think, yeah, they will go public. You know, they will go public. They will try to raise as much money as they can on the private markets. but it's a balance there because you don't really want to be this third AI company to go public. No, you don't. There's going to be limited money out there to fund you. You don't? Or maybe not. That's why, no, no, I think that's the intensity of who's getting out and when. I think that's why it's so intense right now. All right, let me see if I can just build on my winning streak here for one more little fun thing here. And that is, was Mythos marketing or was Mythos real? This is from TechCrunch. Anthropics Mythos has written Firefox's approach to cybersecurity. In a post published on Thursday, Mozilla said Mythos has unearthed a wealth of high security bugs, including some that had lain dormant in the code for more than a decade. That is a significant improvement from what AI security tools were capable of even six months ago. Until now, AI bug finding tools have come with severe drawbacks. but Mozilla's researchers say the latest generation of tools have turned a corner particularly now that agentic systems can assess their own work and filter out bad results. The results are striking in April 2026. Firefox shipped 423 bug fixes compared to just 31 a year earlier. This is from a distinguished engineer at Mozilla. Things are actually suddenly very good. We see that our own internal scanning, we see that on external bug reports, and we see that in all sorts of signals across the industry. They jumped from teens of bug finds to 423. No, sorry, 31 to 423 year over year. Still not coming around. You had a streak, but I'm still not coming around on this one. Okay. Now I'm going to go back to one, a 15-year-old error in how the browser parses an HTML element was one of those 12 bugs that they published details on. Is that a vulnerability that is kind of like, like one of these bugs were just true vulnerabilities that could kind of like cause catastrophe and take down a system. I think that like finding bugs and bringing more attention to software bugs and are these things that like, it's cool. I mean, that is the promise of AI. And I think, is it mythos specifically? or did Anthropic invest and use the previous models to do the same kind of work? Or did it just bring attention to it now? I don't know. Sandwich in a park, Mythos, until we hear more about it, see something concrete. And again, we can say this is concrete, but do you believe this firmly confirms Mythos is not marketing? I'm going to just go with Ethan Malek, the AI expert in Wharton professor. He says, I realized that mythos as hype means two different things to different groups. For insiders, it means mythos was not a magical step change in AI ability. For outsiders, it means mythos couldn't really find zero day exploits. The latter was wrong. The former was likely right. Wait. So the second one. So mythos can find zero day. So that's what I'm saying. So now I agree with you. Now I agree with you. That's what I'm saying. It's not a magical step change in AI ability. But I can find zero-day exploits. Okay, let's just agree there. Yeah, yeah. All right, we agree. Cool. All right. So before we go to break, we have to go to break because we're going to need to spend at least a good chunk of our time now reading from the OpenAI and Elon trial and some of the evidence there. But before we go to break, I want to talk a little bit about our AI summit that we have in San Francisco on June 18th. look folks i attempted to post a short episode wednesday morning talking about what was going on with this event somehow for some of you there were some ads that were playing in front of that it was supposed to be an ad-free episode i tried to take those ads down didn't work let me tell you about the ai summit right now we're gonna have this thing called the big technology ai summit it is in san francisco at the commonwealth club on june 18th it is a day of conversation starts Doors open at like 12 or 1230. Conversations start at one. They run till five. We'll have a wine reception on the roof. Very small. It's going to be 200, 250 people. It's properly priced. I believe it's under $100 right now, although the tickets will rise as demand goes up. And we have a great lineup. We have Greg Brockman from OpenAI who's coming, the president of OpenAI, Arvin Cernivas, the CEO of Perplexity, Aaron Levy, the CEO of Box, Lauren Good, The senior correspondent from Wired is going to be there. And we just confirmed that Dylan Patel from Semi Analysis is going to be there. It's an all-star lineup. It's going to be a really great day. So if you check out summit.bigtechnology.com, you can grab a ticket while they still are out there. We're on our way to being sold out, so you should definitely do that while you still can. San Francisco, June 18th, Commonwealth Club. Be part of the first one of these things, summit.bigtechnology.com. Now we go to break. We'll see you on the other side with a dramatic reading of Sam Altman and Mira Marati's text. Back right after this. 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Let's start from the beginning. Okay. All right. November 19th, 2023. Can you indicate directionally good or bad? Satya and others anxious. directionally very bad okay can you wrap up soon lots of pressure from microsoft for an update sam this is very bad can i come in they don't want you to what do you want to make it better i'm still willing to walk away if that helps if they are ramped up for crazy lawsuits against me then i'm not sure what can you please tell them i just want to resolve this however and would like to join? They are convinced about their decision. For me to be fired or some new thing? Yes, for you to be gone. Okay. Then can I come in and talk about a path forward with them? They're saying no and need more time. More time for what? They've walked me through all the reasons and the issues with you and why you can't be CEO. Can you ask why they've been saying all weekend they wanted me back? They want a new CEO in place. Can you say you will call back in 10 minutes? They want to have have a new CEO in place tonight. Not me. Do they know who? Can I tell Satya? Is this final or should you add Satya in? Trying to add Satya now. They'll don't want me? New guy is rando twitch guy. And scene. Oh my God. It really gives you a feeling of like what it was like to be there at that time. How stressful. I also, I mean, the fact that Mira became interim CEO adds to the whole thing. But rando Twitch guy is definitely the line from the entire thing. I think he's got to be worth over a billion dollars. He's like a founder of Justin TV, CEO of Twitch. I mean, this is an incredibly successful entrepreneur. And all he gets is rando Twitch guy. he wrote he wrote on his twitter it's an honor just to be nominated and i think he made this background rando twitch guy yeah but it's funny because what i mean i'll just say this like when this whole thing um continued and when this whole thing sort of seemed to wrap up you and i had a discussion and we both agreed in no uh uncertain terms that the drama within open ai was just not anywhere close to being over uh that the structure still lent itself to uh exploitation and not exploitation, to instability. And clearly we're like seeing that now. Oh, yeah. I mean, I think we've said this. It is crazy that that was two and a half years ago maybe I mean certainly the internal drama has not gotten any less I mean, remember, all those departures were just two to three weeks ago, right? But it is amazing to know that Sam, knowing how intense and stressful that was, appears to be firmly in control right now. Oh, absolutely. I mean, they did eventually, you know, they brought him back. And yeah, he's definitely in control. But the question is, like, can Elon still use this sort of, I mean, it's interesting that this drama is coming out now. I guess my initial reaction was like, well, what does that have to do with Elon's, you know, control of the argument against the nonprofit side of things? But I guess it's all it's all related because of this. It's all about the structure, basically. And the structure is still not settled. No, not only. And it's also about the IPO of everyone's respective company invested interest in this, as we were just talking about. But yeah, I think, do you think Elon is doing this for the good of humanity and making sure that nonprofit structures forever remain intact and respectable? No, we know that he's doing it because he invested 30 plus billion dollars and feels betrayed. Wait, 30. In that nonprofit. 30 million. Million. Did I say billion? Million. Yeah. And nowadays, what's the difference? I think it's quite significant, but I won't debate on that. For us normies, but we're talking about fundraising. Well, I mean, yeah, that's why I don't think $30 million is significant to him at all. I think it's strategic. I think it's related to, I mean, I don't even think it's XAI. I think also, I agree. Actually, yeah, going back to your earlier point, I think he dislikes Sam significantly more than he dislikes Dario. Yeah, exactly. Who is the dark horse that kind of somehow appears and comes? Is it Masa Sun? Or who would be the most unlikely character that somehow becomes directly involved in the Elon, Sam, Dario triangle? Satya Nadella. I mean, Satya is going to testify on Monday. And Elon is blaming Microsoft for giving OpenAI the money and sort of pushing this for-profit move. because sort of it had to pay back Microsoft. What do you think Satya is going to say or do? I think Satya is going to fully throw OpenAI under the bus. 100%, 1,000%, yeah. And we already have this very interesting email chain between Microsoft executives in 2018 trying to decide whether they should invest in OpenAI. And I mean, they eventually did make $13 billion of investments in OpenAI. and not after like some real hesitancy among the executives. So there's this great, the email chain is actually out there. It was a great Wired article out there talking about it. This is what Satya Nadella's email was to like a whole group of senior leaders about whether they should help funding them. He goes, overall, I can't tell what research they are doing and how, if shared with us, could help us get ahead. From what Elon is telling everyone, he feels opening eyes at the verge of some big AGI breakthroughs. They clearly are pushing AI at a level none of our first party or third parties are. Microsoft CTO Kevin Scott said there could be some PR downsides associated with not funding them and having them storm off to Amazon in a huff and shik-talk us and Azure on the way out. He goes, I'm highly skeptical of imminent breakthroughs in AGI. In my opinion, they're treating us like a bucket of undifferentiated GPUs, which isn't interesting for us at all. They are not out there saying there's a critical piece of research that we can do only on Azure because of its technical differentiation. If they were, then it could be interesting marketing. Another executive, my worst case scenario is that having them ditch Azure for AWS and badmouth us on the way over. I mean, it's amazing that this was what they were thinking in Microsoft, but they eventually did it. And maybe credit to them for doing it. But they eventually got so sort of exasperated with OpenAI that we've seen that they've just been pushing further and further away from the company. Do you know what I love about this? What do you love about this? Everything is comms in the end. Everything. Yes. Yes. This validates when I get nervous that I look at everything in the guise of like that it's communications. but like this is a multi-billion dollar investment. They're talking about Azure's technical differentiation from AWS and all like in the end, they're just worried about how they look and what it's going to look like. I love it. I love it. This is the secret we are giving to our listeners. We did get a listener right in and say, you guys are talking about comms too much. And like, fair enough, you know, we take that to heart, but also maybe we're not. Look behind the curtain. Look behind the curtain. Okay. So look, I think that we will continue to review the evidence in this case as it comes out. Obviously, it's a jury trial. So as much as what we see in terms of the facts of this case matters, and it does, and I'm not going to shortchange the jury, the emotional appeals, the jury matter a lot. And I think that's what you see both of these camps trying to sort of push out in public. So we will continue to talk about the case, which should resolve relatively soon. But we'll have another week of explosive testimony, I'm sure, this week. So Ranjan, I want to finish this week talking a little bit about the layoffs that we're seeing out there. I mean, of course, you have the block cutting, I think, what was it, 40 or 50 percent of the company. This week, you have Coinbase saying that 14 percent of its workforce is going to be gone. And of course, what is the rationale? The rationale is one. And I think Brian Armstrong, the CEO of Coinbase, gets credit for this. He says, first, we're currently in a down market and need to adjust our cross structure now so that we emerge from this period leaner, faster, and more efficient for our next phase of growth. And then ring the bell. What's the other reason? It's AI. AI is changing how we work. Over the past year, I've watched engineers use AI to ship in days. What used to take teams weeks, non-technical teams are now shipping production code. and many of our workflows are being automated. The pace of what's possible with a small focus team has changed dramatically and it's accelerating every day. So we have to basically saying we have to restructure Coinbase to do it. The question I asked at the top of the show is the question I bring to you, which kind of maybe will bring us full circle from our whole discussion today. You know, is this AI like actually being able to do the work of many people or is it just cope? Both. This one, I have to go both. Again, all of these companies, just looking at Coinbase's compounding annual growth rate of employees over the last five years. Actually, it's like 10%, which isn't as bad as some of these others. These companies got very big, and especially in big tech and the metas and the Googles of the world. So I do believe just having kind of like, and also Brian Armstrong is an entrepreneur. I get this firsthand. If your company starts to feel more bureaucratic in general, you would love to be able to flatten it, clean it up, which is what they said they were doing. I do like the ideas around, I think everyone has to be an individual contributor and can't be only in manager. I think that there can't be more than five levels of hierarchy from the CEO. I think these are really interesting ideas. And I do think they also, and it's not just AI too. A lot of these companies just got fat and got bloated. And it's that as well. And using AI is kind of the excuse there. But of course, like, I mean, I do see this more and more. And I do think it's right that like the whole, if you're not getting on board the AI train, I do think it's, there's a reality to it that if people are just being completely resistant to changing the way they're working, companies are going to get more and more and more aggressive. Very interesting. So there was a post from a meta engineer named Arnav Gupta that is sort of the counter here. And maybe it is the same side of the coin or the other side of the same coin. He wrote this, the layoffs will continue until we learn to use AI. Gergay from the Pragmatic Engineer framed this really well. He writes that his point is that a lot of these layoffs could be backwards. They are probably happening because more AI spend doesn't correlate with better business results, at least yet. This is directly from the Post. These layoffs, even if they are not because AI is replacing you, and even if they are some form of AI washing, these layoffs are still because of AI, and these layoffs will continue till we learn to use AI. Till we figure out how the GDP of the world actually grows because of AI, we have to offset the $70 billion of combined open AI and anthropic enterprise revenue of annual token spend by cutting some salaries. until we figure out how to unblock each other faster, we can always be removed from the org chart itself. Basically, the argument here is if AI was going to be, you know, if AI was going to help the company be more productive, then, you know, they wouldn't need to cut these people. They're cutting the people because they haven't yet found a way to make themselves more productive with AI. And therefore, they must cut until they do. Your thoughts? I mean, I do think, I don't know, I see this more and more that the difference between AI makes good people great, like the ones who are kind of taking it on and your level of productivity, but it doesn't necessarily shift the entire organization. So what I do think, and I think this is the right thing to be thinking about, everyone is thinking about what does an organization three to five years down the road look like? And there's going to be a lot of fundamental shifts. Like, I don't know, I've been thinking about this a lot. And like, the way a corporation is structured as of today, it's not that, I mean, it's the last 30 to 50 years. But even in the last 15 to 20 years, like IT departments were more kind of like a small part of organizations. and it was the internet and then cloud and these things that really blew up how big IT organizations were. So the idea that companies aren't going to have to completely change the way they're structured in the next few years, I think is nonsensical. So people are going to start figuring it out. And also, again, going back to incentives and comms, not to bring everything back there, when you're at a moment that the market will reward you for just saying layoffs and AI. I mean, why not? Bound to happen, right? Yeah. I mean, I like what this guy Rohit Kirshnan had to say also. One bearish sign of all the AI layoffs is that companies couldn't figure out how to produce even more by keeping the people and adding AI. I'm not entirely sure how to think about this. I mean, ultimately it is. I think this is sort of what you're getting at. It's a change management and a company type of problem, right? As opposed to a technology problem, maybe. I don't know. Or maybe there's a point here. Maybe AI hasn't really increased productivity at all. And we're just deluding ourselves. And Elon Musk and Dario can partner all day long, but it's a bunch of phooey. See, I think in aggregate, it has not yet because it's still, again, at the enterprise level especially, it's still other than coding. it's still not widely adopted at any kind of scale, especially on the agentic side. And that's something like it's picking up, but it's not just massively adopted. But I don't know. I think like to me it's kind of if 15, I remember like in the early days of Microsoft Word and word processing, imagine someone's like, no, I'm just going to write this on a notepad for you and I don't want to use a computer. I don't know. Do you think this is fundamentally different than past technological shifts? Or I'm not going to do this on email. I'm going to just send a letter. Is it comparable? I do think that it's different than past technological shifts, I would argue. I just think that the tools are more powerful this time around. To me, I guess, yeah. To me, it's still not significantly different than manufacturing automation in the 2000s and what that did to blue collar work in the US and also outsourcing within China. And this is a whole other discussion right now. We only got two minutes left, but to me, it's still, it's just happening in knowledge work right now. So it's a much louder story. Okay, bottom line then before we go. So you say both, what is it more? Is it more sort of posturing, more AI washing, or is it actually more productivity with AI? It's more preparing for an AI future. It's not that it's already happened yet, but everyone gets, they got to figure it out now. Otherwise they will have issues later on. I will mostly agree with that. Let's just say this. I just said it wasn't comms. I just said it wasn't comms. But I will say this is what I'll nuance, I'll caveat with two of the biggest companies that have done this, crypto companies. And we know crypto's on the outs. So it leads me to believe it might be business realities versus AI movement. Funny that Brian Armstrong and Jack Dorsey have both seen the light about AI as crypto hits his downturn. Let's end on that just so we get some angry comments on the way out. God. All right. There goes the show's ratings. Ronjan, thank you so much. Great to see you. All right. See you next week. See you next week. Thanks, everybody, for listening and watching. And we'll see you next time on Big Technology Podcast.