Are You a Communist? TikTok CEO Verbally Abused by Congress

Speaker

I've got sunshine on a cloudy day When it's cold outside, I've got the month of glory Everybody say, I guess you'd say What can make me feel this way? It's my girl, my girl, I'm talking about my girl My girl, I've got sunshine on a cloudy day March the 23rd, 2023. It's 9 p.m. in the evening in San Francisco so it's already Friday for most of you and it's Friday in our minds because it's my favorite time of the week where I talk to my old friend Keith Tyr about this week in tech. That was the week in tech for Keith and he asks all of us are you a communist? I know Keith was or probably still is in some ways. What's being a communist, Keith, got to do with tech this week? So this is a reference to McCarthyism where the question have you ever been a communist or are you a communist and have you ever been one? We all ridiculed now that we post the McCarthy era but today in Congress the CEO of TikTok was basically accused of being a conscious spy on behalf of the Chinese Communist Party explicitly stealing data from American users simply to fuel the database and knowledge base of the CCP and maybe a hundred different representatives or senators asked him questions and for the most part he wasn't allowed to answer. He was just being accused without reply of all kinds of sins and crimes so I thought it was appropriate this week to start with that question are you a communist which implies by the way that if the answer is yes you know bad things should happen to you. And your editorial was was equally outspoken I'm quoting you when I woke up at about 7 a.m. Pacific time today that was today Thursday I turned on CNBC to see the CEO of TikTok testifying to Congress it was an astounding experience puzzling and worrying in equal proportions his questioners this is the the CEO of TikTok who happens to be from Singapore not China his questions were like a pack of McCarthyite hounds to my ears and eyes they grandstanded on their pet issues they gave him no time to form answers this was grandstanding Keith is there anything real about this I mean it's it's Congress people being appropriately reactionary playing to their audience this is a punch bag convenient they hate the Chinese they hate big tech they hate social media so it all comes together well there isn't very much real about it I mean the first thing to say is that TikTok has basically nothing to do with China except that its parent company ByteDance is domiciled there I doubt very many of the ByteDance management team live there and the you know the kind of the 1984 or brave new world view of China is that there's pipes into every database with the Chinese Communist Party sucking out the data for intelligence to use teenage girls what they're eating and what they're wearing it's hard to imagine where the national security threat is you link to a couple of interesting articles one in the information by Martin peers suggesting that US tech should support tick-tock at this moment I couldn't agree more are there any is there any support amongst big tech or even small tech especially in Silicon Valley for what's happening yeah well that article stood out there was a others that had a similar kind of theme that I that I used and the the the answer is no I mean face the point of that article was why isn't Facebook pounding the pavement in defense of tick-tock it you know if the government is able to do this to tick-tock and and about two-thirds of the narrative against tick-tock has nothing to do with China is to do with teenage girls committing suicide is one of them the other is stealing data from users both of which Facebook gets accused of an Instagram and the like so there isn't really a coherent narrative in defense of tick-tock anywhere and I think that's because people are afraid of being accused of supporting China which you know smells of a terrible xenophobic atmosphere where you can't really speak out so I just well the press is I mean the information which is anything is hardly a left-wing yeah magazine or online publication and motherboard vice led with a story about banning tick-tock is unconstitutional ludicrous and a national embarrassment you and I would agree on that so the press is being I mean at least the progressive tech press is being reasonably outspoken on yeah but not the tech companies I mean I haven't seen a statement from Google or Facebook or I mean is it to be fair to Google and Facebook is it for them to come out sympathetically to tick-tock I mean these are companies they're not political actors yeah but I think you have to strategically think through the consequences of your silence I don't think it really serves Facebook Google Microsoft or any of the others snapchat and so on to allow tick-tock to go down accused of these heinous crimes which quite frankly is completely innocent of because if it does it won't be the last and and I think we you know you and I both track the regulatory zealotry that exists in Congress vis-a-vis big tech tick-tock is is a little bit like the easy target it's a little bit like when it comes to content everybody always talks about people who manipulate children because why because we all are all against that so it's the easy target but it's used then to control content in general so I think that relationship between taking on tick-tock and section 230 was a big theme today in Congress and there are a lot of congressmen and congresswomen who would like to see section 230 removed I mean from Facebook's point of view though isn't shutting tick-tock down or banning it from the United States from a business point of view that would be in their interest you might think so but I think if you ask the question to what extent the Chinese companies rely on American revenue versus American companies relying on overseas revenue the American companies are way more dependent on revenue outside of their home country so any trend which tries to close down companies to exist only within borders would be on the face of it not a smart decision and is this part of a broader de-globalization trend the Europeans are making it harder and harder for big tech American companies to operate there my understanding is that most big American tech is not certainly online tech is not available in China Apple has an odd relationship with the Chinese some countries Iran the Russia the these companies are banned from yeah so is it just part of a broader de-globalization of tech no I think it's all specific now I mean you're quite right about China either not allowing or sometimes voluntarily the big tech companies leave China like Google did but there's others like Apple that and Tesla for that perfectly good relationship where content isn't their main business so I I'd say that China is an exception no no one would defend the Chinese government's attitude to content absolutely not but it's kind of strange isn't it when American politicians say we should be more like China and act vis-a-vis tick-tock as if they were like China what why would that be a good thing for America's reputation yeah I mean I agree I think it's unconscionable it's America and at its worst parochial reactionary anti anti-Chinese probably some people might even say racist yeah there was a piece that I sent you that you I think you forgot that you've you forgot to add it was it was in the Wall increasing domination now of Microsoft and Apple that we have the end of what was once called the fangs and now we have a duopoly in tech of Microsoft and Apple which is ironic given that we're supposed to be at such a radically disruptive moment in in tech in the history of tech and yet it's the old companies dominating everything but I wonder it's all very well calling on Google or Facebook to speak out I can't imagine Facebook speaking out because they're in a difficult position wouldn't it be responsibility of the two elder statesmen in tech that the two seriously big tech companies Microsoft and Apple you'd think that Tim Cook who of anyone in Silicon Valley seems to have a he would say something I would like to see Tim Cook say something but I you know I think Apple is super good at understanding the difference between business and politics that's why it survives in China it doesn't play the role of politician anywhere really it just survives by the local laws and gets on with it but I would like to see Tim Cook speak out I think that would be great he has done the opposite briefly which was to imply that tick-tock might be removed from the App Store I don't know if it was him or someone else Apple but that that rumor at least was around a few months ago which seems to have gone away I don't really like the Wall Street Journal's removal of Netflix and Amazon from fang I think I think Facebook Amazon and Netflix have all made a huge comeback by the way yeah but when you look at this chart I mean the the numbers I'm kind of there are you can't argue about these numbers key can you know the well these two are big but Facebook Amazon and Netflix are also big but they still are and they're not going anywhere I mean the most things that happen that are large happened to one of those companies Netflix by the way stock went up quite seven or eight percent just today you'd think Elon Musk is supposed to stand up for free speech too he's never been shy of a political fight why hasn't he said anything good question I we should ask him Elon dude what's going on this is this is your moment to defend free speech and and by the way you have a lot of business in China so why not go for it but is this really about China I mean I don't want spend the whole of the show keep talking about this issue but what what will be the outcome is is it conceivable that tick-tock could be banned from the United States totally not gonna happen mostly when Congress people want something it doesn't happen and this is gonna be one of those times I think what will happen is tick-tocks Project Texas which is there isolating themselves from Chinese servers and having only US-based servers where all the data is here in the US will be sufficient to prevent them being banned and I think that this is really more about a rational part of American foreign policy American foreign policy believes China needs to be slowed down it does believe China inevitably is going to become the largest economy in the world it does believe China is going to export not just have a domestic economy you can see that with Chinese electric cars starting to appear in mostly in northern Europe for now and they're good they're really good electric cars and and so I think American foreign foreign policy basically says well we can't stop them but let's slow them down that's kind of rational if you live in a world of nation-states where economics is fought between nation-states when it gets out of control economic conflict often turns into military conflict and we all hope that doesn't happen and we hope the US is smart enough to realize that the game is cooperation between themselves and China yeah and you know this is a show about tech rather than politics so I don't want to get into that is there any truth to these accusations that tick-tock is a company controlled and by the Chinese state well I'd say it's a complicated question and and and the city I may be at least a glimmer of a truth yeah well look the Chinese Communist Party is not really a political party it's the elite in Chinese society that joined the Communist Party a little bit like Americans John golf clubs if you want to be you know with the boys and girls you have to join the Communist Party you almost for sure are not a communist you're just getting on with your life and doing what is required and the entire social structure in China therefore is run by people are members of the Communist Party just like in America you know the entire political infrastructure is run by people who are either Democrats or Republicans depending which one's in power so you're saying that be the equivalent in America of the country being ruled by the golf club but by whatever society you have to join to be in with the in crowd and that that's who plays golf these days Keith no one has time do you play golf no one in Silicon Valley plays golf they actually do I never did but I can tell you at the Palo Alto Country Club here or the Menlo Park Country Club there's a lot of golf going on does Bill Gates play golf you have an interesting piece from him about the age of AI is beginning is he a golfer Bill Gates I don't think he's got time for that I I've got to believe that his hand to eye to ball coordination wouldn't make him a good golfer but who knows whether he's tried he may have tried it's interesting actually this week I want to get to AI and Gates's observations but nothing about Silicon Valley Bank Keith in this newsletter is I asked you last week or before where there was a storm in the teacup you suggested it probably was they've just gone away now well the issue hasn't gone away First Republic Bank and Credit Suisse of and as has a huge week on the negative side 17 billion dollars worth of bonds were written off when UBS acquired Credit Suisse and First Republic Bank stock is down at about $12 a share from $160 when this whole mess started and Signature Bank has been sold for pennies on the dollar so Silicon Valley Bank isn't that much in the news mainly because the government taken it over and is is running a sale of its assets the theory or the rumor at least is that it's putting the active assets into buckets and selling them because nobody wanted to buy the whole thing so so there isn't a lot to say it's a little bit like Manchester United not getting the second bid what by the time of the deadline they seem to have a lot in common those two so let's talk about the big story of this week of this month of this year of this decade maybe of even this century the story of AI Bill Gates believes that the age of AI has begun artificial intelligence Gates argues is revolutionary as mobile phones and the internet we've heard that one before is Gates saying anything we haven't heard before Keith on AI? Well he's not saying anything that we haven't heard before but he's saying something he hasn't said before which is he's saying that this is as significant as the internet it will change everything it is the new canvas that you know trillions of dollars of value will be built on top of and don't question it go all in. He missed the internet famously doesn't sound as if Microsoft is missing the age of AI in some ways they're leading it aren't they? They're definitely leaning in and they they did a smart tactical move by partnering with open AI this week Google I didn't put it in because it wasn't interesting enough but Google launched BARD B-A-R-D. Which in itself is a comment on Google's footnote at least at this point to the revolution. Yeah and apparently it's terrible they were so worried about it being out of control they constrained it to the point where it isn't interesting and I don't know if that was conscious or just it isn't very good one of those two. On the other hand character.ai today which I tried in fact the one of the paragraphs in my editorial was written by character.ai see if you can guess which one. It raised money at a billion dollar valuation it's one of two unicorns minted this week. Yeah you're running ahead of the show Keith on character.ai we will come to them yeah and then just as Google at least at this point seems to be a loser certainly Microsoft's a winner obviously open AI is a winner Amazon's also a loser you you you you link to an interesting piece in the information about Amazon facing a moment of truth on Alexa. Has chat GPT and this revolution are they making Alexa and Siri redundant overnight? Well they're definitely making them look old a little bit like the iPhone did to the BlackBerry and I think it's it's all three of them the the Google Assistant Amazon's Alexa and Siri all look super old and and not very clever compared to chat GPT I I think that's that's huge I've got an app called rewind which you should all check out it's a startup but it's built it's called chat me into rewind and what rewind does if you give it permission it's recording my voice now and yours and I can search this show a year from now by words but it also lets me chat with it saying what did Andrew and I talk about a year ago and and it will bring it up so I think this this mechanism of having a chat interface to rich data and being able to search and retrieve things on on demand I mean goodness me I mean what a what a change what a difference to Siri and and and Alexa and the Google the Google Assistant it's close. Is it a Gutenberg moment you linked to a piece by Paul Kodrowski and Eric Norlin about software's Gutenberg moment is it as profound as that is it the equivalent to the invention of the printing press and if that's the case it's probably even more disruptive and profound than the invention of the Internet. Exactly I think it is one of those moments and Paul Kodrowski is a venture capitalist. Yeah he's been on Keen On he's a very smart guy. He's really smart I've known him super well for many years Eric Norlin is also is a techie who works with Paul this is a very long essay with lots of support it's at least a 30-minute read and then you're gonna have to think about it after that but I put it in because it's panoramic in its in its grasp of what's happening and historically giving a context I think it's really good. So what do they say I mean in contrast with Gates why is it the Gutenberg moment? Well they're more detailed than Gates in saying why it's a Gutenberg moment they talk about the relationship between humans and creativity being now supported by machine learning in such a way that the human is the smaller part of the puzzle and the you know that like like when I wrote my editorial today my work was maybe 15 minutes because I used character.ai and I also use chat GPT to kick me off and it gave me and I told you what I wanted and I shaped how it thought about it because it you can force it to go into character so I could force chat GPT to become me and write an editorial from my point of view and then I could edit it to be in my voice removing things I disagreed with and and the whole experience was completely different to what it would have been before chat GPT and they talk about the details of that and they give all kinds of history by the way of how this came about the history of large language models and where we are today. How far are we then according to them from you and I being able to do this without even showing up? They don't really address that but but the what I didn't put it in but there was this week the first text to video AI was was put out there it's not very good yet but the fact that it even works at all was kind of amazing. We better be on our toes Keith, we better be good otherwise we're gonna be redundant we're gonna be we're gonna be that lumpenproletariat we're gonna be those Luddite workers who burnt the the the the factories in early 19th century northern England where you're from you got a bit of Luddite in you don't you? I don't actually no I was always against the Luddites but but I will say if somebody trains on on our shows and there's I don't know two or three hundred of them online you probably could create Keith and Andrew talking about this week in tech. Yeah it's easier you just say I'm always negative and saying it's terrible you're always saying it's brilliant so. Ah but I think if you look at the history that isn't true you're remarkably you and I think remarkably alike these days we've influenced each other. Yeah I think we're we're boring now we need to disagree a bit more. Other companies are doing interesting stuff I'm a big admirer of Adobe I use their software for video and for all my podcast stuff they've launched Firefly. Does this AI revolution does it offer an opportunity for companies like Adobe to reinvent their software? Well it does because it because of Photoshop and Premiere and and also Audition Adobe is a huge player in the creation of video images and audio and the combination of them as well and what Firefly is is the Dali it creates images from text. I will say none of these engines are really that good yet you can the way you can tell is if there's any text in the images they always mess it up text and numbers so it's not really good enough yet but it's good enough for some use cases and Adobe is just getting in the game which is smart because they're they they compete with Getty Images they have a whole stock image portfolio that people use and to be able to generate images not from stock or from a license but for the first time ever bring things to life that's got a big future I think. This whole revolution is lit a fire under all these companies I mean companies like Adobe that for all these companies the big and small alike it's a it's an existential moment because businesses no longer can be as usual on any front can it? Well of course it depends on the business. Well I mean a tech I mean maybe you you mentioned Netflix I guess but I you know I went out last week with Edward Sarchie is the son of Morris Sarchie he's got an AI movie startup in San Francisco. Oh interesting his dad was an investor in Siberia Cafe. Well we'll we'll have some off-screen conversations about that but um even for Netflix then I mean especially for all content players especially the online newspapers. Yeah I think games might be the first thing I I can imagine AI creating games quite easily with graphics and game plots I think that's easier than movies but but I think you're right I think lots of creative things are going to be created with the help of AI I I actually don't think AI replaces us anytime soon but I think it will survive this evening Keith. What and in this sense it's very much like the first wave of internet revolution when the creatives were on the front lines. What about open AI itself? You have a piece in the newsletter from Tech Crunch about open AI connecting chat GPT to the internet I don't quite know what that means but is open AI still leading the pack on on this revolution or are they just another company? No they're the they're the biggest wave in the ocean what they've done is they've created a plug-in for your browser that if you allow it to it'll watch your browsing history and you'll be able to ask questions about things that you've seen for example. So that's an enormous threat just in itself to Google and Chrome. Yeah and it's a personalized search engine in a way with a with a interface that you can speak to so that and they've built a platform as well to allow other people to build plug-ins so Expedia's built one and a bunch of other companies have built them so you're be able to almost any piece of software instead of clicking and filling in forms you're going to be able to say what you want and get it back. At what point I think you had a piece actually in the newsletter about Microsoft and an open AI eventually falling out at what point do you think they will begin to conflict for example if open AI decides to develop its own browser which would conflict with Bing? Well the the story was an information story and it was basically making the point that if Microsoft and open AI go after the same customers they will then fall out and that that was a reference to in particularly was a reference to going after developers and it you know my personal experience with Microsoft as a partner I had a very similar deal structure with them when I did real names to open eyes deal structure in fact I commented on that information article as soon as we were offering a solution to users and advertisers that bypass search results Microsoft closed us down. Right but that was more than 20 years ago and Microsoft was a completely different company in 1998. So it's it's it's certainly it's a fascinating moment I I had a cup of tea with Steffi Cerny today the who runs DLD she's in San Francisco she said she felt it was like back being back in the mid 90s in terms of the excitement and the enthusiasm the weather might be cold out here Keith but I think there is a genuine level of excitement isn't there? There is there is you know a lot of excitement and fear I mean even even Sam Altman recognizes that. Yeah but I I think the the the the real substance of what's happening is being driven by people like Sam Altman so the exit that you know whenever whenever something profound happens there's ripples and the ripples tend to be echoes the very very core of it is Sam Altman which is when you think of it on the face of it that's an astounding fact. I have to admit though that we called this it doesn't surprise me I mean you we've had a couple of shows on Altman from a couple of years ago I mean he's a really smart young man and he's not so young anymore the real question with him is whether he's just gonna repeat the same old playbook reading from the same hymn book or Bible that the first and second wave of Internet revolutionaries or whether he's actually learned anything we shall see. You mentioned character AI Keith they are your startup of the week tell me what do they do? There are more interactive version of chat GPT so they won't they won't write a full thousand-word article for you but they'll interact with you with your thinking to give you ideas back based on your prompts to do to if you were if you will iterate your I'm thinking in real time so I used it today and it was actually super good for what it does it was better than chat GPT in the narrow use case of an iterative conversation and you know it would give you back a paragraph not a whole story. Does character.ai does it compete directly with open AI or is it a compliment? A compliment I would say my editorial uses both this week. Andreessen Horowitz are major investors in both yeah and if anyone understands the opportunity here it's Andreessen who was perhaps the most influential figure in the first wave in Netscape and the Internet revolution so it's really interesting finally Keith you got a Twitter week from someone I've never heard of some obscure character on the internet where'd you find this one? Well I did it myself this morning you know. Oh my god it's Keith Teer on Twitter Tweet of the week. Maybe you should read it this week Andrew. I'm gonna read this quote from a man called Keith Teer at K Teer maybe it's just me but the at Congress people are being demagogic and intolerant they seem entirely uninterested in solutions or outcomes the CEO is being quite gracious in dealing with them that was from this afternoon so that is the famous Keith Teer who made his own tweet tweet of the week. Yeah and it's funny it's from this afternoon because I did it at 7 a.m. as I was watching that CNBC show and at that moment I decided the editorial this week had to be about it. Isn't there I mean ending Keith but isn't there an element of theater everyone knows this isn't for real it's it's kabuki to borrow some Asian concepts I mean it's