Limitless Podcast

Ejaaz:
Okay, the AI talent wars are back and Meta is bleeding after spending $25 billion

Ejaaz:
to acquire the best AI researchers ever.

Ejaaz:
They just lost eight of them in the last week. And Josh, Sam Altman is laughing and fighting back.

Ejaaz:
He just spent $1.1 billion to acquire a new startup and some of the best AI researchers.

Ejaaz:
And Anthropic quietly raised another casual $13 billion, which now values them at $200 billion.

Ejaaz:
And I heard some whispers on the grapevine that Apple might be making a comeback in AI.

Ejaaz:
Folks, we have got a jam-packed week of news updates, and we're going to get right into it.

Ejaaz:
But let's start with Meta Superintelligence Labs, which, if you remember,

Ejaaz:
was the new superhuman AI core unit that Zuckerberg set up and actually spent

Ejaaz:
a lot of time poaching some of the best people from OpenAI, Anthropic,

Ejaaz:
and investing in this startup called ScaleAI around $15 billion to form this

Ejaaz:
kind of like Avengers of AI.

Ejaaz:
And the hope was that Meta, who has consistently been dragging behind on AI

Ejaaz:
models, will jump and leapfrog to the top with a new AI model that is better

Ejaaz:
than ChatGPT and whatever you might say.

Ejaaz:
But within two weeks, Josh, of them forming this team, eight executives,

Ejaaz:
you heard that correctly, Eight executives have left with these guys highlighted

Ejaaz:
over here being some of the main ones.

Ejaaz:
And if you were thinking, maybe these are just some casual engineers or people

Ejaaz:
that got caught in kind of like

Ejaaz:
the org shift from the old meta AI team to the new one, you'd be wrong.

Ejaaz:
These are the executives, some of the leaders that were appointed to this new team.

Ejaaz:
It doesn't signal the strongest amount of confidence.

Ejaaz:
I remember when we were talking about Zuck taking this aggressive move in the

Ejaaz:
AI talent wars, you know, three weeks ago.

Ejaaz:
We were very confident that Zuck is making the right move here.

Ejaaz:
He's done kind of similar moves in the past when he acquired WhatsApp,

Ejaaz:
when he acquired the Instagram team.

Ejaaz:
And we kind of thought this was going to be the same type of move as well.

Ejaaz:
But this doesn't inspire confidence to me, at least. Josh, do you maybe have

Ejaaz:
another take or do you feel the same?

Josh:
Yeah this seems like things are getting messy i mean when you move this quick

Josh:
i mean it's funny back in the day uh mark zuckerberg and facebook's ethos was

Josh:
move fast and break things that was the theme of their company that was their

Josh:
motto and that's exactly what they're doing now i know that wasn't always the

Josh:
plan but that seems to be the case that what they're doing now actually if you

Josh:
can go back to that list you guys i just want to kind of walk through a few of those members

Josh:
it's important to note that some of these people have been around for a very

Josh:
long time so one of them worked with meta for more than eight years spent five

Josh:
years at meta uh eight years at meta

Josh:
a lot of since 2024 so a lot of these people have been there

Josh:
for a long period of time these are the executives that have been

Josh:
around that have been building with the company presumably very happy with the

Josh:
company who are now leaving as this new order comes in so i'm not sure we could

Josh:
view this as totally bearish because this very much feels like an instance where

Josh:
the old guard is just kind of like not really interested in this new mission

Josh:
as they pivot as a company as they bring in all this new talent

Josh:
What I would be concerned about is if the new people who are recently hired

Josh:
weren't doing well and wanting to leave because that's where I would start throwing

Josh:
red flags. I'm like, OK, old people make sense. They've been around.

Josh:
They've probably secured more than enough money to take care of themselves and

Josh:
their families. And they're ready to move on and let this new like young blood come into the company.

Ejaaz:
Well, that's actually what's happening, Josh. If you look here,

Ejaaz:
one of the senior vice presidents of Scale AI,

Ejaaz:
which was the company that Zuck basically spent $15 billion to acquire their

Ejaaz:
talent, I think less than a month ago, left, right?

Ejaaz:
And a few other executives also left. tenant ones

Ejaaz:
it's a huge red flag and i was kind of thinking

Ejaaz:
about like why this might be the case like you know

Ejaaz:
you've just signed 100 to 300 million dollar

Ejaaz:
um bonus packages um you're set to probably make a couple billion but for staying

Ejaaz:
at meta and at least giving it a shot maybe give it more than two weeks right

Ejaaz:
and then i was thinking well maybe they just kind of took the 100 million sign

Ejaaz:
on bonus and then quit um but chi hao wu who is a former ai and ml specialist with Meta,

Ejaaz:
he was kind of like interviewed about why this might be happening.

Ejaaz:
And he said, speaking generally and not for myself, a lot of people in the AI

Ejaaz:
team maybe feel things are too dynamic.

Ejaaz:
There were a lot of organizational changes. And in fact, my manager was changed

Ejaaz:
several times. So we might just be seeing kind of like the effects of churn

Ejaaz:
happening throughout the team and the organizational movement.

Ejaaz:
And maybe things settle down over the next couple of months. I don't know.

Josh:
It seems like this is probably too early to judge the success of these decisions.

Josh:
I mean, he spends a lot of money. I assume it's going to ruffle a lot of feathers

Josh:
internally as well as externally.

Josh:
And they're just kind of in a period where they're figuring out this new structure

Josh:
because there's a whole new leadership hierarchy, right?

Josh:
I mean, they hired Alexander Wang here and they brought him over and it seems

Josh:
like it's going well, but apparently it's not.

Josh:
They may have overpaid, which might be like a gross unjustification because

Josh:
like clearly they overpaid, but how much did they overpay? I guess is my question I have to you, Ejaz.

Ejaaz:
I just want to say when Zuck originally was announced to spend this amount of

Ejaaz:
money on Scala and Alexander Wang specifically.

Ejaaz:
There was a massive question mark above that, right? Now, we've seen a lot of

Ejaaz:
crazy stuff happen in AI investment.

Ejaaz:
We've seen billions being spent on compute and video chips and all that kind of stuff.

Ejaaz:
And this was kind of like the next step in that directional trend, right?

Ejaaz:
Is it worth spending $15 billion on an AI data company? More in so,

Ejaaz:
is it worth spending that much on one person?

Ejaaz:
And people thought, well, Zuck's been right before. Maybe he'll be right again.

Ejaaz:
But the criticism that we're seeing now that some of these key executives from

Ejaaz:
the exact company is leaving is is causing a lot of worry.

Ejaaz:
And Alexander Wang is kind of like caught in the crossfire between all of this happening.

Ejaaz:
You'll see like one of the points being made on this tweet over here is that,

Ejaaz:
you know, Surge and Mercore, which is a reference to Scale AI's competitors,

Ejaaz:
are doing as good, if not better, a job than Scale AI. You know,

Ejaaz:
they do pretty much the same thing.

Ejaaz:
And I'll value that only a fraction of what scale AI is. So the question now

Ejaaz:
becomes, well, maybe has Zuck overpaid?

Ejaaz:
I'm kind of thinking yes right now. But again, it's too early to call.

Ejaaz:
We have to see what they actually produce. I say give it a couple of months.

Josh:
Okay, this is what I was going to ask. Do you still feel confident or do you

Josh:
not feel confident in Meta's ability, in Zuck's ability to turn this around,

Josh:
to become a real competitor in the AI space to the likes of like Anthropic,

Josh:
OpenAI, XAI, the whole crew?

Ejaaz:
Okay, I'll tell you what my gut is telling me. Short term, yes.

Ejaaz:
But long term, I'm undecided. And the only reason behind that is Zuck hasn't

Ejaaz:
really shown his proficiency in infrastructure before.

Ejaaz:
He's a consumer guy, you know, he's made some of the best consumer apps,

Ejaaz:
consumer experiences that people have ever seen.

Ejaaz:
And I'm confident in him translating that towards AI apps.

Ejaaz:
I just don't know whether he can kind of like operate that at the foundational

Ejaaz:
level and AI models. very much operate at that layer.

Josh:
Yeah, I was excited to disagree with you, but I actually totally agree.

Josh:
I trust Zuck's judgment, but again, he hasn't done anything like this before.

Josh:
He's never rolled out actual infrastructure. He's never rolled out tools at the scale.

Josh:
So I guess the answer is we will wait and see.

Josh:
But that's not all the news for this week. What do we have next?

Ejaaz:
Well, I kind of just wanted to kind of rain on your parade a little bit,

Ejaaz:
Josh, because I know you're such an Apple fan.

Ejaaz:
But despite, again, Meta bleeding so much, despite them losing so much money

Ejaaz:
on this talent acquisition, they still have, you know, enough money to poach

Ejaaz:
Apple's best in terms of AI.

Ejaaz:
This broke this week that Zuck poached Apple's robotics chief from Meta's robotics

Ejaaz:
studio. I just thought that in the midst of all of this happening,

Ejaaz:
Apple still somehow bleeds, even though they are not at the frontier of AI yet.

Ejaaz:
And especially because Tim Cook is probably the only other guy that could compete

Ejaaz:
with Zuck at the consumer AI app level.

Ejaaz:
So I don't know. I just thought it was pretty funny. Yeah.

Josh:
The robotics chief implies that there is a robotics segment of Apple that I

Josh:
think the whole world is just grossly unaware of.

Josh:
So I guess we don't know how important this will be.

Josh:
Maybe they're not even going to build. I mean, they were supposed to make a

Josh:
car. They were going to make a TV. They had all these things in R&D.

Josh:
Who knows how much that really means, but that's not the only company that

Josh:
OpenAI has acquired, correct?

Ejaaz:
No, it seems like there's been a bit of a snowball effect for the rest of the AI industry.

Ejaaz:
Elon Musk, you know, owns and started XAI, which is another frontier AI model competitor.

Ejaaz:
Previously been like the darling child on their show, actually.

Ejaaz:
I think you and I will agree that we both love Musk. We love what he's doing with XAI.

Ejaaz:
This startup is less than two years old, and they already caught up to the frontier.

Ejaaz:
Grok4 is performing at, you know, crazy feats.

Ejaaz:
But even they are leaking talent.

Ejaaz:
One of the main stories is they're suing this guy called Shui Chen Li,

Ejaaz:
I hope I pronounced that correctly, for allegedly stealing the entire Grok 4

Ejaaz:
code base and then moving to OpenAI for a job.

Ejaaz:
This quickly moved from being allegedly to being confirmed.

Ejaaz:
Elon Musk actually confirmed this in a tweet. I was trying to find it, but I couldn't find it.

Ejaaz:
That he has proved in the logs that he downloaded the entire code base and is

Ejaaz:
moving to OpenAI. So obviously, this is a massive copyright infringement and

Ejaaz:
concern for Musk and XAI at large.

Ejaaz:
And so he's trying to sue him and prevent him from joining OpenAI.

Ejaaz:
And just to add kind of like a little bit more spice to this whole affair,

Ejaaz:
this employee in question also cashed out $7 million worth of XAI shares during

Ejaaz:
the move. So just an insane turnaround of events.

Ejaaz:
And again like just a reminder here like these guys are being traded around

Ejaaz:
like some of the best super sports superstars ever right we're talking about

Ejaaz:
100 to 300 million dollar contracts and they're cashing out millions as they're

Ejaaz:
doing so this might be actually the quickest way that you could make money in

Ejaaz:
any kind of industry void of just tech alone um i just found this insane.

Josh:
Yeah it's pretty amazing that uh he was able to cash out seven

Josh:
million dollars invested stock after just one year of being at the company and

Josh:
then move over to open ai but this this is an interesting idea that i've been

Josh:
thinking about a lot which is um just the the fragility of these companies and

Josh:
the ip that exists within these companies because a lot of the breakthroughs

Josh:
that happen exist on a code base and

Josh:
Perhaps the breakthrough is as simple as like 20 lines of code.

Josh:
And it's just a small iterative thing that changes how a transformer works.

Josh:
And those 20 lines of code that can optimize and save billions of dollars of

Josh:
GPU training space, or it can optimize and create a model that blows all of

Josh:
the others out of the water.

Josh:
It's literally 20 lines of words. And if someone is able to get into a company,

Josh:
figure out what those 20 lines are, extract them and make them public or give

Josh:
them to another company, then you've essentially devalued billions of dollars

Josh:
of value from a company by taking 20 lines.

Josh:
And what we saw here is not just 20 lines, but the entire code base.

Josh:
So I think this is to the detriment of a lot of companies because it's going

Josh:
to be very challenging to battle on the frontier of actual AI efficacy versus

Josh:
building applications and value for the users on top.

Josh:
It's as fragile as a couple lines differentiating between the best models in

Josh:
the world versus just the average company. And I I wonder what OpenAI is going to do with it.

Ejaaz:
I was just thinking like, how valuable are your employees and how much kind

Ejaaz:
of restriction can you place on them or should you place on them?

Ejaaz:
I remember us doing an episode like four months ago, maybe five months ago,

Ejaaz:
Josh, kind of shitting on Sam Altman's approach to his employees.

Ejaaz:
We were like, he's being too constrictive.

Ejaaz:
He's not allowing them to sell shares. These are the stars of the show.

Ejaaz:
And he's placing this kind of like garden leaf ban on them. So if anyone leaves

Ejaaz:
OpenAI, you can't basically join any major frontier lab for a couple of years.

Ejaaz:
And I remember he eventually overturned it because he faced a lot of pressure in the media.

Ejaaz:
We were kind of very bearish against Sam Altman and OpenAI. Turns out he might

Ejaaz:
actually have been right.

Ejaaz:
Because as you said, like, whether these guys download the code base or not, they have it in here.

Ejaaz:
They know what kind of like parameters they're using, how they're training the

Ejaaz:
model, how much compute they're using.

Ejaaz:
And so these individual employees become the most valuable assets of these companies.

Ejaaz:
And if you aren't placing restrictions on it, it becomes way too easy to poach

Ejaaz:
and then suddenly become the frontier lab.

Ejaaz:
And, you know, we've seen Meta poach a lot of OpenAI. We also know that X has

Ejaaz:
poached a few open AI employees in the past, not to the extent that Meta has,

Ejaaz:
and that Anthropic has done the same and back and forth and vice versa.

Ejaaz:
So, you know, this becomes kind of like the main thing. And X isn't immune to this, right?

Ejaaz:
You know, I've got up on our screen here and yet another employee announced

Ejaaz:
that they were transitioning and moving on.

Ejaaz:
So I'm just seeing this general trend of these AI researchers being the stars of the show.

Ejaaz:
They know their value. I think some of them, and this might be a hot take,

Ejaaz:
are just cashing out on money because they probably see some kind of AI bubble forming.

Ejaaz:
But the other side of me also tells me that they kind of want to work on something

Ejaaz:
that is meaningful and purposeful for them.

Ejaaz:
We saw that with Zuck offering, I think, what was it, $3.5 billion to poach

Ejaaz:
the CTO of Thinking Labs or Thinking Machines, rather, which is Mira Murati,

Ejaaz:
the ex-co-founder of OpenAI, which is setting up her own AI thing.

Ejaaz:
He rejected it, right? He was like, no, I kind of want to work on this vision

Ejaaz:
and purpose. So I see those two conflicting views.

Ejaaz:
But the rapidness of what I'm seeing here of employees kind of moving from company

Ejaaz:
A to company B after two weeks just kind of sounds like a cash grab to me.

Ejaaz:
But maybe that's just because of my experience in crypto. Maybe I'm too cynical.

Josh:
Yeah, well, I mean, the money was flowing around not only with employees,

Josh:
but also with other companies, too. OpenAI was in the news for another reason

Josh:
this week, which is their acquisition of Statsig.

Josh:
For people who don't know Statsig, I just learned this week because I didn't.

Josh:
Statsig, and Ejaz, please correct me if I'm wrong, but I believe is kind of

Josh:
like an A-B testing company, which led me down a lot of rabbit holes.

Josh:
So basically what models can do that integrate Statsig is they're able to kind

Josh:
of serve two results and then people can choose the better result and you kind

Josh:
of iteratively get better through this system.

Josh:
Now, I was thinking of like, why would they want this, right?

Josh:
Why do they want to have these a b testing well one is just

Josh:
to make the model better one is just to improve outputs but also i mean

Josh:
benchmarks are getting a little stale right uh benchmarks don't work that well

Josh:
people are kind of maxing out on them so perhaps they kind of create their own

Josh:
new benchmarking system where they can compare not just their model results

Josh:
to um themselves but also to other ais so i'm curious what do you think what

Josh:
was the reasoning behind purchasing static it's a

Ejaaz:
Huge amount of money and also they did that to pretty much acquire one person

Ejaaz:
by the And we can dig into that, into Vijay, who is now the new CTO of OpenAI

Ejaaz:
applications in a second.

Ejaaz:
The reason I think they spent that amount of money is, well,

Ejaaz:
number one, to your point, Josh, benchmarks are terrible. I don't care what anyone says.

Ejaaz:
These AI benchmarks were maybe like good a year ago. Now they suck.

Ejaaz:
Now every Frontier AI model lab is tweaking or fine tuning the new models that

Ejaaz:
they release just so that it passes an exam.

Ejaaz:
And I'm not really interested in that. I want to know how effective it is in real life.

Ejaaz:
And actually to use the example of Meta, who we were just talking about,

Ejaaz:
Void of AI, every new social media feature that they've launched on Instagram,

Ejaaz:
on WhatsApp or whatever, Josh, they're A-B testing it across 10 different countries

Ejaaz:
or communities every single moment.

Ejaaz:
I've actually been privy to this, right? Where I've got a new feature on my

Ejaaz:
phone and my girlfriend hasn't, right?

Ejaaz:
So they're constantly testing things to see what works and what doesn't and

Ejaaz:
how to like properly launch a feature.

Ejaaz:
This is incredibly hard to do in a landscape or tech sector that's never been tested before, right?

Ejaaz:
And AI moves so quickly. So how do you know what to tweak, when to tweak,

Ejaaz:
and who to pitch it to are all questions that no one has any idea how to answer.

Ejaaz:
And StatSig basically formalizes all of that, and they make a ton of money doing

Ejaaz:
so. One thing that I found interesting is.

Ejaaz:
$1.1 billion was used to buy this guy called Vijay, right? And you might be

Ejaaz:
wondering, well, who the hell is Vijay?

Ejaaz:
He is a tenured employee at Meta in his history before he started Statsig.

Ejaaz:
In fact, he was doing this exact job that Statsig does at Meta for a decade.

Ejaaz:
And he was working alongside a little someone called Fidji Simo.

Ejaaz:
And if that name sounds familiar, that's because Fidji was appointed as the

Ejaaz:
CEO of OpenAI Applications, of OpenAI applications, not OpenAI,

Ejaaz:
that's still Sam Altman,

Ejaaz:
but she's the head of basically all the new consumer applications and enterprise

Ejaaz:
applications that OpenAI is going to launch over the next couple of months.

Ejaaz:
So it's a pretty big role.

Ejaaz:
And they worked alongside with this

Ejaaz:
guy called Vijay, AB testing all the applications that she did at Meta.

Ejaaz:
And so she was probably thinking, hey, Sam, we're kind of reaching the point

Ejaaz:
where we're going to launch a bunch of really cool things at OpenAI.

Ejaaz:
I need a guy like Vijay here to do this. And he was like, okay, name your price.

Ejaaz:
Should we just acquire his company and his tooling? is that worth

Ejaaz:
it and she probably said yes and that's pretty much what

Ejaaz:
has happened um and then you might be thinking well

Ejaaz:
okay jazz you've just said your thesis but

Ejaaz:
is there any proof behind this like who were the customers of this

Ejaaz:
well that's pretty big customers one of their biggest actually being anthropic

Ejaaz:
um who i don't know how much they were paying them per year but um it was for

Ejaaz:
this thing called telemetry services where basically clawed code which is anthropic's

Ejaaz:
main and product on what's made them super famous.

Ejaaz:
Is plugged into Statsig to A-B test a bunch of coding features that they're launching.

Ejaaz:
And so you could think that Statsig itself has acquired quite a hugely valuable

Ejaaz:
data reserve of all of Claude Code's users and behaviors.

Ejaaz:
Now it says here in this screenshot that apparently the data is encrypted.

Ejaaz:
I don't know how true that's gonna be. And you know what this reminds me of,

Ejaaz:
Josh, just to kind of like finalize my point here,

Ejaaz:
Do you remember when Meta invested $15 billion in scale AI? We just spoke about it.

Ejaaz:
Do you remember who their biggest customers were? It was Google.

Josh:
It was OpenAI. Yeah. It's also incestual.

Ejaaz:
And they pulled their customers immediately. Yeah, it's crazy.

Josh:
Yeah, it is crazy. What I understand is the data itself is encrypted,

Josh:
but that encryption only goes down to a certain level and you still get a lot

Josh:
of the top level data that is valuable.

Josh:
It just lacks the personal data. so they still they do collect a lot of data

Josh:
for this i love that open ai now is assigning

Josh:
sub ceos to the ceo and building out actual executive

Josh:
and c-suite teams around just creating applications and

Josh:
products because i mean like we mentioned a little bit earlier these models

Josh:
probably become commoditized at some point where like

Josh:
they just everyone squeezes out the same efficiencies they're all pushing towards the

Josh:
same frontier eventually the competition is going to happen on

Josh:
the app layer and open ai is i mean they are probably ahead

Josh:
in this by a long a large margin where they

Josh:
actually have an entire c-suite dedicated specifically to

Josh:
creating these applications creating a better user experience and

Josh:
i think that's part of the reason why i mean the rest of the world they have

Josh:
the most users but also why we keep coming back why i keep coming back is their

Josh:
applications just they rock and if they're going to stack a hardware device

Josh:
on top of that and they're going to keep rolling out these cool new apps i mean

Josh:
sign me out i'm bullish on the ai open ai but again this is not the only crazy

Josh:
news for this week we have another big announcement uh

Ejaaz:
Yeah so anthropic casually raised 13.1 billion i think josh this week in a series

Ejaaz:
f which values them at drumroll 200 billion dollars this is a private company

Ejaaz:
what sorry hang on i'm gonna stop talking for a second like what are we doing here.

Josh:
183 billion dollars okay this

Josh:
is fascinating so from from may of 2023 to

Josh:
september of 2025 which is two years and change um they went from a four billion

Josh:
dollar valuation to a 183 billion dollar valuation that is a multiple oh my

Josh:
god what 20x in two years i can't

Ejaaz:
Do math i can't yeah.

Josh:
No 20 no 20x would be 80 that'd be

Josh:
40x, 50x?

Ejaaz:
Tune in on Josh and I just being one-shotted by ChatGBT and we can't do basic mental math.

Josh:
We're going to go with roughly 45x. That's my guess. In two years,

Josh:
in 24 months, that is outrageous levels of growth.

Josh:
And I mean, it leads everyone, I think, to ask themselves, how much further can this really go?

Josh:
Like, where does the strain stop? Can they really do another?

Ejaaz:
Okay, Josh, I'm just going to ask you flat out. Are we in a bubble?

Josh:
I think we are. In some instances, and in some instances, we're not.

Josh:
So this very much feels unsustainable.

Josh:
We cannot, Anthropic will not grow, cannot keep doubling from here.

Josh:
I mean, two more doubles and you're at a trillion dollars, basically.

Josh:
But AI is the most formative tech of our generation by a pretty large margin.

Josh:
And it's not going anywhere, and it's going to keep providing lots of value.

Josh:
So where everything is valued

Josh:
at now is probably very high for the

Josh:
current time yeah but where it will be at relative

Josh:
to now and even just five years from now feels

Josh:
very undervalued so it's probably a matter

Josh:
of of the rate at which we're accelerating which probably

Josh:
is too high it probably is some sort of a bubble but i'm not sure the bubble

Josh:
necessarily needs to burst it is just really this this pivotal transformative

Josh:
thing that takes decades to play out and we are in we're still decade number

Josh:
one so it doesn't it feels like there is there's overvaluation but the long-term

Josh:
effects of this are just up only i think that's yeah that's my take at least do you have any

Ejaaz:
I do have different dates. I agree with you on the long term,

Ejaaz:
but I think we are in a pretty big bubble.

Ejaaz:
I don't think we're anywhere near to it popping. I think things are going to get a lot crazier.

Ejaaz:
I think we're going to reach trillions, like double digit trillions, dollar market caps.

Ejaaz:
Nvidia is well on its way there. I think that's like a 2x, maybe less than a 2x from here.

Ejaaz:
But I was also looking at the fundamentals of this anthropic raise, Josh.

Ejaaz:
Um january this year they

Ejaaz:
were making one billion dollars annual recurring

Ejaaz:
revenue now simply eight months later they're now making five billion dollars

Ejaaz:
of annual recurring revenue and i'm looking at this valuation and i use my trusty

Ejaaz:
calculator that is a 36.5 x value multiple to their ARR, right?

Ejaaz:
Which I don't know if that's a lot or if that's overvalued.

Ejaaz:
I would guess it probably is. But like you said, AI is the darling chart.

Ejaaz:
Literally, the MAG7, so the top seven companies in the S&P 500,

Ejaaz:
are purely responsible for keeping the S&P 500 positive this year.

Ejaaz:
And it just broke all-time highs.

Ejaaz:
So on one side, you could argue, it's massively inflated.

Ejaaz:
But on the other side you could say well if it wasn't for that the economy would

Ejaaz:
be dying right now so you know it remains to be seen but i'm going to call bubble

Ejaaz:
at this point i don't know when it's going to pop but but i'll take the bubble side all.

Josh:
Right bubble it is so on the topic of bubbles and

Josh:
sharks that go up into the right we have another one that is brought

Josh:
to us today by grok our good old friends at

Josh:
xai which just hit the number one

Josh:
model on open router grok code this is

Josh:
a brand new model that they just released and my understanding is

Josh:
it is incredibly lightweight very fast and

Josh:
very cheap and as a result what we're seeing here is

Josh:
96.5 billion tokens generated

Josh:
by the model making it up 53 percent relative

Josh:
to others and taking the number one slot on open router now for those who don't

Josh:
know about open router we actually had the ceo on a few weeks ago and the way

Josh:
open router works developers come they plug into the open router infrastructure

Josh:
and then the actual router decides where to route traffic through based on the

Josh:
needs of the developer. So what we're seeing here is

Josh:
developers are requesting a model from Open Router and Open Router is deciding

Josh:
over and over and over again that the best model to serve the users is Grok Code.

Josh:
Now, Ijaz, do you have an idea why this is, what makes this so special,

Josh:
why it's gone from nothing to a huge deal?

Ejaaz:
I remember when Alex, the CEO and founder of Open Router, came onto our show

Ejaaz:
and we asked him this exact question.

Ejaaz:
We were like, you know, why do some of these models that get listed get used so aggressively?

Ejaaz:
He said that he has the largest community

Ejaaz:
of ai developer nerds that anyone's

Ejaaz:
ever seen so if you want to test your product or

Ejaaz:
your new model specifically the coding element you kind

Ejaaz:
of want to be on open router you kind of want to access that community and so

Ejaaz:
i think this is a positive signal be it

Ejaaz:
small and kind of concentrated and i think we're actually going to see the kind

Ejaaz:
of wider effects of how good this AI coding model is in the next couple of months

Ejaaz:
when regular developers that are working in completely different or maybe even

Ejaaz:
adjacent tech sectors start using it for their work that isn't AI specific, if that makes sense.

Ejaaz:
And you mentioned, Josh, that, you know, it was 96 billion tokens.

Ejaaz:
They actually crushed that record. I think it was yesterday or two days ago

Ejaaz:
where they set a new all-time record of 138 billion tokens in a single day.

Ejaaz:
Um that is insane that that metric

Ejaaz:
has literally not been achieved with claude code's uh

Ejaaz:
sonnet model which was previously the kind of darling child

Ejaaz:
that wasn't even achieved on codex which is open

Ejaaz:
ai's coding darling so um there's

Ejaaz:
a lot of demand for this thing and i remember when they released croc 4 josh

Ejaaz:
um croc 4 uh alone um its coding function was amazing and it beat claude sonnet

Ejaaz:
so the fact that they have like released another coding model so soon so quickly

Ejaaz:
after indicates that this is a niche within AI.

Ejaaz:
That is progressing,

Ejaaz:
potentially faster than the actual llms themselves and something to keep an

Ejaaz:
eye on i i my bet is we're going to see a software coding agent actually outperform

Ejaaz:
senior to mid-level engineer mid-level to senior engineers much sooner than we anticipate it's.

Josh:
Amazing to see their name higher than claude sonnet

Josh:
gemini 2.5 flash gemini 2.0 i mean all

Josh:
the leading models again after only existing for two years

Josh:
and change and i'm going to sound like a broken record but

Josh:
xai's rate of acceleration is unbelievably fast

Josh:
the rate that they're shipping these models but also the

Josh:
rate that they're shipping models that matter i think

Josh:
no one would argue that this is an actual better

Josh:
model than claude sonnet 4 which is kind of like the

Josh:
leading edge of code generation but they're optimizing for

Josh:
things that developers want they're optimizing for cost for efficiency and

Josh:
for just pretty good not great and i'm

Josh:
sure the great will come and i'm sure claude will then work on

Josh:
the pretty fast and pretty cheap but what they're doing

Josh:
is they're optimizing for the things that clearly developers want the

Josh:
most instead of going for the benchmark so i think while claude

Josh:
and gemini we mentioned a lot of these models were optimizing for benchmarks this

Josh:
is probably optimizing for raw utility and that's what

Josh:
we're seeing coming out of these tokens uh being at

Josh:
all-time 138 billion in a day that's outrageous

Josh:
crazy crazy and then

Josh:
for our last news of the day apple we have

Josh:
something about apple and it's positive it is not something negative i promise

Josh:
you it's actually cool it's exciting apple is doing something interesting in

Josh:
the world of ai and maybe this is a teaser for next week next week they have

Josh:
their iphone release event where they're announcing all the new hardware we

Josh:
will be covering that but before that they have dropped two new models.

Josh:
Ijaz, tell us what's going on here. Apple is now in the news for AI.

Ejaaz:
Okay. I'm glad that I can say something positive about Apple in the AI realm

Ejaaz:
because it has been excruciatingly difficult to do that in the past.

Ejaaz:
They've done a few things here that puts a massive grin on my face, Josh.

Ejaaz:
Number one, they've released two, not one, but two AI models.

Ejaaz:
And they've open sourced both of them.

Ejaaz:
You know, I'm a massive open source fan. I believe that This technology should

Ejaaz:
be for everyone and everyone should be able to modify it to their own tailored

Ejaaz:
niche and use case or whatever that might be.

Ejaaz:
It's a giving good that a lot of these tech monopolies don't usually do.

Ejaaz:
And I'm happy to see this kind of take place. But then the next question is,

Ejaaz:
OK, well, what do these models actually do?

Ejaaz:
Is it just another LLM? Is it going to be worse than ChatGPT?

Ejaaz:
Well, they actually did something pretty novel here.

Ejaaz:
They released two models, the first one being something called FASTVLM,

Ejaaz:
which stands for vision learning model.

Ejaaz:
Basically is an AI model that combines vision, which is like looking at images

Ejaaz:
with the ability to understand text or communicate what it's seeing via text.

Ejaaz:
So if you look at this demo here, you'll see it's a video of some kind of like Apple thing happening.

Ejaaz:
There's like a race car happening. There's robots falling over.

Ejaaz:
And the ability for an AI model to kind of like see what's on its screen and

Ejaaz:
accurately depict what's going on and communicate that is actually a very underrated skill.

Ejaaz:
The reason being is it's easy to kind of film a video and kind of like feed that to an AI model.

Ejaaz:
Very, very hard to get that AI model to understand what the hell's going on in that video.

Ejaaz:
That's why we've seen a slower rate of progression with AI video models or AI image models.

Ejaaz:
It's taken a bit of time versus LLMs, which are getting kind of like to PhD

Ejaaz:
level status here, right?

Ejaaz:
But it seems like Apple has been kind of working behind the scenes on a model

Ejaaz:
that does this in a super refined manner.

Ejaaz:
And these words that it's generating, you can see it on the screen,

Ejaaz:
if I can actually just blow it up, it's doing it in real time,

Ejaaz:
which is incredibly hard to do.

Ejaaz:
You know, it's saying, okay, there's a race car, Tim Cook has headphones on,

Ejaaz:
and he's speaking into the mic, talking to his employees, that's kind of talking about this race car.

Ejaaz:
And the point is these words can now be fed back into a model or an llm to make

Ejaaz:
it super refined and much smarter.

Josh:
So why is this important why does this matter because i

Josh:
think this technology you just it's existed before like models

Josh:
can do this models can see videos they understand this is not a this at this

Josh:
point it's kind of a trivial thing for an ai model to do i think what's interesting

Josh:
with apple and the reason why it's important and the reason why apple's model

Josh:
is different is because of how efficient and lightweight the model is when you

Josh:
think of apple they have their iphones they need models that can run on a mobile phone.

Josh:
You cannot run any of these models that we've talked about today on anything

Josh:
less than a hardware rack that would fit in like the size of an office,

Josh:
like a gigantic computer.

Josh:
These models, they can run on your phone. And it says in this post here,

Josh:
the models are up to 85 times faster and 3.4 times smaller than previous work,

Josh:
enabling real-time vision language models. So this is cool.

Josh:
This is interesting because it's applicable to us. This will be a model that

Josh:
can run on an iPhone. This can be a model that delivers on the promise of Apple

Josh:
intelligence that can be very lightweight and you could use it in your day-to-day life.

Josh:
So an example that I really like is that let's say you're at a restaurant and

Josh:
you have this gigantic menu with tons of stuff on it and all you have is your

Josh:
phone and maybe the menu isn't immediately accessible online.

Josh:
Well, you could just point your phone at the menu.

Josh:
It'll read all of the items and you could ask it, hey, what's the healthiest

Josh:
item based on my current diet?

Josh:
Or what's a gluten-free option for the person who doesn't have gluten at the

Josh:
table? And it can kind of be this...

Josh:
This enhanced system similar to what we imagine the glasses will be like,

Josh:
but currently in the form of a phone.

Josh:
So I think in terms of usability, this is much more practical than just about

Josh:
any other model we've covered today.

Ejaaz:
So I have an additional kind of thought about this, which is Apple probably

Ejaaz:
is one of the largest, if not the largest, holders of photo and video data.

Ejaaz:
ICloud, right? Everyone stores everything on iCloud. And I wonder if there is

Ejaaz:
an angle here where Apple is like, hey, we've got all this data.

Ejaaz:
I'm not just going to feed this to a Google or an open AI to train their own models,

Ejaaz:
but we can train our own models or use that data to kind of sell and kind of

Ejaaz:
like negotiate a specific partnership with Google to kind of use,

Ejaaz:
we get to use the AI model,

Ejaaz:
but exclusively using this data and this

Ejaaz:
feature that means apple gets a stake in this i i'm

Ejaaz:
kind of like um hypothesizing here because rumors have been going around that

Ejaaz:
um they might be partnering with google's gemini ai model or open ai's chat

Ejaaz:
gpt because i think they're kind of a bit behind to create their own foundational

Ejaaz:
model so that's a kind of like moonshot idea but we'll see if it maybe plays out i don't know.

Josh:
Yeah we're seeing this kind of split pronged approach where they'll they have

Josh:
the local compute and then they will have the cloud compute and it's

Josh:
becoming more and more clear that they'll probably have to offload that cloud compute the

Josh:
high computation stuff that takes a lot of time to think that requires a

Josh:
big model it's probably not going to be theirs they'll probably i

Josh:
mean they've been deferring to open ai maybe they'll do google they'll outsource

Josh:
that but the actual local models that run on the phone well they can get pretty

Josh:
good and they could still manage to deliver a lot of the promises that they

Josh:
they offered us at wwdc last year of apple intelligence using things like these

Josh:
new open source models so it's it's very much a step in the right direction

Josh:
it is not a seal of approval we

Josh:
We are pro-Apple in terms of

Josh:
their AI capabilities, but it is definitely a step in the right direction

Josh:
that we like to see, right?

Josh:
They're trying, they're doing something. I mean, the bar is literally on the floor.

Ejaaz:
Well, it is Tech-temper, as you said, Josh. That it is.

Ejaaz:
We have a huge month. This is traditionally the month where all the big dogs,

Ejaaz:
all the big tech companies come out with their latest releases.

Ejaaz:
This is across hardware and software.

Ejaaz:
And I'm excited for a new category of hardware around robotics.

Ejaaz:
We saw Meta is kind of like poaching robotics executives from Apple and stuff like that.

Ejaaz:
So I think it's going to be a really exciting month. I'm hoping,

Ejaaz:
no, I am praying that Apple comes out with a flagship AI model that crushes

Ejaaz:
OpenAI, but I think I'm being a little too optimistic.

Ejaaz:
I'm hoping Meta Superintelligence Labs stops bleeding their executive team and

Ejaaz:
actually puts out something that I would wanna use along with some consumer applications.

Ejaaz:
And I hope that a new burgeoning startup in the name of OpenAI and maybe even

Ejaaz:
Anthropic that are so lowly valued at $200 billion to $500 billion,

Ejaaz:
comes out with a suite of applications that can go head-to-head with some of

Ejaaz:
the GOATs, Meta and Apple. That remains to be seen.

Ejaaz:
Josh, I have nothing else to say.

Josh:
Do you? I just want to fill people in on our schedule for this month because

Josh:
it's packed. Next week, we have Apple.

Josh:
Apple, big event. This is the iPhone event. This is where they're releasing a lot of new hardware.

Josh:
The hope is that not only will we get hardware, but we will get supplemental

Josh:
AI software. So a lot remains to be seen.

Josh:
A lot will be unveiled next week. The following week, we have another exciting

Josh:
announcement, which is through Meta Connect,

Josh:
I believe is what the event is called, where Meta is going to release their

Josh:
hardware products and most certainly will be paired with a lot of software and

Josh:
AI offerings. So we will have all of the coverage of that.

Josh:
And then a few weeks later after that, we have OpenAI's Dev Day,

Josh:
which I'm sure they will announce even more features.

Josh:
And then a couple weeks after that, we have Microsoft Ignite,

Josh:
which is Microsoft's new hardware offering day.

Josh:
So it is going to be like a very crazy next

Josh:
couple of weeks and months uh so buckle up this

Josh:
was the news up to today for this

Josh:
week there's going to be a lot more we will be back for more

Josh:
episodes later this week next week the following week it is there's a lot to

Josh:
look forward to in this space and we will be right here along your side going

Josh:
through it all the highs and lows the ups the downs um as always if you enjoyed

Josh:
the episode please share it with your friends don't forget to like subscribe

Josh:
all the good things and we'll

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