A $300bn breakup

Key Takeaways

Hey, Apple Friday. This week, Open AI and Microsoft are breaking up. Apple had a really nice launch event. And door handles on cars might never be the same again. Welcome to the Friday checkout. This video was sponsored by Brilliant. Okay, for my first story of the week, Microsoft and Open AI are breaking up in a pretty dramatic way. To start with, the Wall Street Journal reported that Oracle and OpenAI are to sign an insane $300 billion cloud deal. This is supposed to be for the mythical Stargate project, which means massive buildout of AI centers for OpenAI, and that money is apparently not going to Microsoft Azure services. Neither firm has explicitly confirmed the deal yet, but Oracle did say during an earnings call that they now have quote $455 billion in outstanding contract revenue, which pretty much tracks with what the Wall Street Journal claims. And because these numbers are like impossible to wrap your head around, just for comparison, all of Twitter was bought for $44 billion. All of LinkedIn was bought for $26 billion. And the entire Nokia handset division was bought by Microsoft for $5.6 billion. So just open AAI alone will spend tens or even hundreds of times as much on just Oracle data centers over just the next 5 years as whole massive companies have been bought for altogether. The Wall Street Journal also points out to that data centers will consume electricity worth more than two Hoover dams or the amount consumed by about 4 million homes. Cool. And also extreme is that Oracle, according to the Wall Street Journal, has a 427% debt to equity ratio, which means that most of their buildout so far has been financed simply by loans. These numbers are so huge that if any part of the AI industry turns out to be a bubble at all and it pops, it's going to take huge chunks of the economy with it. But hey, so far Oracle stock went through the roof and the co-owner and pre-life bond villain, Larry Ellison became the richest man in the world. So somebody is definitely celebrating. Meanwhile, Microsoft of course isn't sitting by idly either because just this week we learned that Microsoft ended its OpenAI exclusivity in Office by adding models from rival Anthropic as well. And of course, just two weeks ago, you might also remember that Microsoft launched its very own two in-house AI models too, which they specifically designed in case they want to replace those of Open AI. In other words, both parties seem to be decoupling themselves from the other, and that could have massive consequences, especially at this insane scale. Okay, and for my second story of the week, Apple had its big launch event. And I bet you already know that they launched a bunch of new devices, including new iPhones, Apple watches, and AirPods. But I wanted to highlight the trend that I haven't seen anyone else mentioning just yet, and that is just how old school this event actually was. Specifically, I was really surprised that there was basically no mention of AI at all. Apple just launched a ton of new devices and spent all of its time highlighting all of the actual hardware changes that they made. They have brand new designs, including a phone that is thinner in the form of the Air. They have another phone that has better cameras by using much bigger sensors in the form of the Ultra. They now have selfie cameras with sensors that are square shaped so that they can do either portrait or landscape photos regardless of how you hold your phone. Their earbuds have heart rate sensors so you can actually track your workouts without a watch. And they also have foam ear tips where the foam itself is integrated under the silicon for a better seal. Apple launched its first ever in-house Bluetooth and Wi-Fi chip in iPhones called the N1. and also a new wireless modem called the C1X just 6 months after the company's last modem came out. Perhaps most importantly, we finally also got a 120 Hz screen on the base iPhone 17 as well and so on. Basically, the whole event and all the headlining features were just cool regular hardware and software upgrades rather than teasers for yet more halfbaked text summarizers or emoji creators or whatever. Now, of course, Apple did talk about AI earlier at WWDC, and they probably avoided it here because they cooked roasted for Apple intelligence being pretty unimpressive, but I really enjoyed the fact that Apple, for a change, tried to convince people that they have cool stuff the old-fashioned way. Really, the only thing that I didn't like was the misleading way that they keep saying that their cameras have quote optical quality zoom. >> Optical quality zoom to get even closer to the action >> when they just mean a digital crop that isn't too horrible. Like on the Pro models for example, they have a 4x zoom lens and also a pretty big sensor which they then crop into and call 8x optical quality zoom. That is so misleading. I had a friend who actually watched the event and came away with the main conclusion that wow, this new phone has 8x optical zoom because of course they did because Apple told them it had 8x optical quality zoom. How is a normal person supposed to know the difference? How is this even legal? Anyway, moving on to our third story of the week. We have to talk about door handles on cars apparently. Specifically, a Chinese source called Mingjing Pro claims that the Chinese government is looking into banning the types of door handles that retract into the body and typically need electricity to open. This came out on the same week as a big Bloomberg article on how Tesla's flush door handles, especially on older models, have proven to be dangerous because they might lose power in a crash and they might end up trapping people inside their cars in dangerous situations. But the phenomenon is not unique to Teslas. And Car News China, for example, lists examples of frozen door handles, as well as electric short circuits due to flooding and more from various brands. And they also say that quote, "Crash tests revealed that vehicles with electronic door handles achieved only a 67% door popout success rate in side collisions, starkly contrasting with the 98% success rate of mechanical handles. Oof. Tesla has started adding mechanical latches to open doors in newer models in case of a power failure. But good luck finding those after you got in a car crash and your car is damaged or on fire. And the various sources that I found claimed that the aerodynamic benefits of having flush door handles is actually pretty minimal. So the calls for banning them seems to be pretty attractive. Next, a big camera show happened this week. So our entire release monitor is full of really new cameras. Starting with the first ever device that is branded both a Nikon and a Red at the same time. Nikon, of course, bought RED earlier, and their first co-branded device is a surprisingly affordable $2,200ish model called DCR that combines high-end cinema features like Red Code RAW and 32-bit audio recording, plus a massive 4-in screen with things like Nikon's very nice lens mount system. There are definitely some odd choices like a micro HDMI port, but that's still super aggressively priced. And then still with RED, we also got a VRaptor XE, which is a quote budget big boy camera that brings some of the more high-end RED features down to a price tag of quote only $15,000. Not bad, I guess. In a similar vein, Fujifilm has just revealed their first ever cinema camera called the GFX Eterna 55. And apart from the usual cinema camera features, one standout is that it also has Fujifilm film simulations, which is nice. And last on our release monitor, Canon also announced the EOS C50, which they call their most compact cinema camera yet. It costs $3,900 and it has a completely new full-frame sensor capable of recording at 7K 60fps, but it does lose a bunch of high-end features like having a stabilized sensor, an electronic viewfinder, and more. Oh well. All right, and then onto the brief, which we start with my favorite messaging app, Signal. Signal has finally introduced secure backups. They said this was their most common feature request and it's rolling out in a beta release for Android while it's coming to iOS and desktops later. All of your text messages and the last 45 days worth of media can be backed up for free. While if you want more than 45 days of media, there's a paid plan for about $2 a month. We already had a backup feature on Android and we can stick that manually to a cloud ourselves, but this being automatic is great. It's especially going to be useful for iOS users. Nice. And talking of neat new features, Spotify has finally launched support for lossless music streaming after teasing it for what feels like a decade. Specifically, 24-bit 44.1 kHz flack quality streaming will become available for premium subscribers and select markets, and you have to enable it in the app for it to work. Hooray. And then in more good news, Microsoft also made it free to do developer registration for individual developers on the Microsoft Store. This means no fees or credit cards are needed to publish an app, unlike with Apple and Google. Nice. And another feature is that YouTube's multil- language audio tool is also now rolling out broadly. This means that a creator can upload multiple audio tracks which will play for various people around the world. This could be really useful though I really hope that YouTube gives us toggles to turn these things on and off because I hate it when they auto translate things from languages that I already understand and speak and YouTube should know that I understand them. Anyway, and remember that just two weeks ago we said that a Chinese robot vacuum maker announced that they're making a Bugatti competitor. Well, they released teaser images and uh they sure look like AI generated Bugatti knockoffs. I think the AI even put an IC engine behind the rear window despite this supposedly being an EV, of course. Plus, some of the spokes don't seem to be touching the center of the wheel. You can see the grill looking like a complete mess, especially where the Bugatti logo would be, etc. So, I think this might be a nothing burger after all. But next, actually real is Tiny Vinyl, which has launched as a new format for vinyls that contain one song per side. This looks extremely cute, even if I have zero interest in vinyls. And apparently, it's designed for the streaming era, where artists much more often release singles than whole albums now, but where fans might still want to own those on physical media. Cool. And then less uplifting is that Nova Launcher, one of the most beloved tools on Android, is officially shutting down. The main developer, Kevin Barry, posted that he had been the only one working on Nova for the past year and that the branch, the company that had earlier bought Nova Launcher from him, asked him to stop working on Nova Launcher and the open- sourcing effort, which many had hoped would be its ultimate fate. I've installed Nova Launcher on like a dozen different devices over the years, including devices of my friends and family. So, I'll be sad to see this go, but if you're looking for a recommendation for an alternative, then I'd say give Negara a try. That's probably the custom launcher that I'm the most excited about these days. And then in funding news, the French AI champion Mistro raised €1.7 billion or about €2 billion, which is a huge boost for what's Europe's most valuable AI company. And most interesting is that their lead investor is actually the Dutch firm ASML, who makes everyone's favorite EUV machines for making chips, and who also claims that they want to embrace Mistrol's models fully for their own operations. Now, at the heart of both artificial intelligence and chip manufacturing lies some really fascinating engineering. And if you find those interesting as well, then why not learn how those actually work? With Brilliant, you can do exactly that. They have fantastic interactive courses that cover a ton of topics around engineering, science, computer science, maths, and more, which are all designed to help you think like an engineer or a scientist. Topics like how AI works, which breaks down this whole new wave of large language models into its core components, and then gives you a really fun and new exercise to practice your lessons each time you learn something new. Or if you're more into chips, I think you might really enjoy learning about circuits, which is at the heart of all of them. Brilliant special sauce is breaking these really large, complicated topics into many smaller chunks and then designing really clever interactive exercises that are not only proven to be more effective than just absorbing knowledge passively, but also just way more fun. It's great if you want to explore a new career or also if you just want to learn something for the sake of it. To try Brilliant for free, visit brilliant.org/tfc /tfc or scan the QR code on screen now or you can also click in the link in the description. And if you do, you'll get 20% off an annual premium subscription. So check them out. Happy learning and I'll see you next Friday. [Music]