E171: DOJ sues Apple, AI arms race, Reddit IPO, Realtor settlement & more

Bestie Intros: Don't spoil Dune 2! (00:00:00)

• Dune is worth seeing twice in IMAX.
• There are five great scenes in the movie.

DOJ drops antitrust suit on Apple (00:00:55)

• The US Department of Justice (DOJ) filed an antitrust lawsuit against Apple for allegedly abusing its market power in the App Store.
• Apple is accused of five categories of abuses: super apps, cloud gaming apps, messaging apps, smartwatches, and digital wallets.
• The lawsuit highlights the issue of interoperability, with the government arguing that Apple needs to make its apps and devices more compatible with other ecosystems.
• The DOJ is also suing Apple for refusing to make its iMessage messaging service interoperable with other platforms.

Apple reportedly in talks with Google and OpenAI to power AI features on iPhone (00:23:36)

• Apple is in talks with Google and OpenAI to enhance AI features on iOS, potentially challenging its long-standing partnership with Google as the default search engine.
• Apple's investment of $30 billion in R&D last year raises questions about the allocation of resources to AI development, especially in light of Microsoft's substantial investment in AI, including its acquisition of OpenAI.
• The tech industry is witnessing a growing alliance between Google and Apple against Microsoft in the AI space.
• Reddit is preparing for an initial public offering (IPO).
• A settlement has been reached in a lawsuit against Realtor.com.

NAR settlement: how it impacts residential real estate going forward (00:32:17)

• The National Association of Realtors (NAR) has agreed to pay a $418 million settlement after a federal jury found that the NAR conspired to artificially inflate agent commissions.
• The settlement prohibits the NAR from listing buyer's agent commissions in the MLS and requires buyers to be responsible for paying their agents' commissions going forward.
• This change is expected to lead to a 30% reduction in commission payments and could eliminate about half of the 1.6 million active NAR members from the industry.
• The Department of Justice (DOJ) is suing Apple over its App Store practices, alleging that the company has a monopoly and is engaging in anti-competitive behavior.
• Reddit, the popular social media platform, is planning to go public through an initial public offering (IPO).
• Advances in AI and the digitization of real estate information are expected to further disrupt the residential real estate agency industry, leading to a more automated and direct marketplace for consumers.
• The high cost of real estate agent commissions, which can be as high as 6% of the sale price, can discourage people from selling their homes and may lead to less competition in the market.

Microsoft's "Shadow Acquihire" of Inflection (00:44:30)

• Microsoft hired most of the team at Inflection AI, including the CEO, Mustafa Suleyman.
• Inflection AI had raised $1.5 billion over the last two years to build a foundational model like OpenAI and Anthropic.
• The investors in Inflection included Bill Gates, Eric Schmidt, and Reed Hoffman, who played an important role in the deal.
• Microsoft acquired the talent from Inflection AI but left the shell of the company to do some enterprise stuff.
• The investors got to keep their equity in Inflection, but it might be worthless.
• This deal structure is similar to what Satya Nadella threatened to do with OpenAI if they didn't take the deal.
• Microsoft may have done this to avoid antitrust issues.
• This deal could be seen as a bailout for the investors of Inflection AI.

How the besties would deploy $40B in AI as a sovereign wealth fund (00:48:43)

• The Saudi Public Investment Fund is planning a $40 billion AI fund, the second largest Venture fund of all time.
• David Sacks and Fred Wilson emphasize investing in open-source projects, robotics, and verticals with positive ROI for enterprises.
• Andrew Freenberg highlights the potential for traditional business model advantages in the application layer, particularly in enterprise robotics tools and vertical solutions for labor and automation.
• It's recommended to reserve between 40% and 50% of a total fund size for reserves and allocate 2/3 of the remaining funds to hyperscalers and cloud compute providers in exchange for free compute credits and performance benchmarks.
• The value capture in the AI industry may go to traditional businesses that can leverage AI tools and capabilities rather than new technology companies.
• AI advancements will significantly impact industries with existing scale and infrastructure, such as chemical manufacturing, drug development, and general manufacturing.
• The application level of AI holds the most value, with opportunities for both existing companies leveraging AI innovations and startups building new applications.
• Hosting and development of niche AI models presents a significant opportunity, similar to how open-source models have been integrated into cloud computing environments.
• The robotics space is poised for success, with potential for substantial profits for those developing fundamental hardware and application-level experiences.
• Saudi Arabia's investment in AI should focus on attracting developers and fostering innovation rather than solely relying on financial commitments.

Reddit IPO: is risk-on back? (01:01:57)

• Reddit's successful initial public offering (IPO) with an $8 billion valuation and a 50% stock price increase on the first day reflects the current speculative market behavior, characterized by investments in assets like meme coins and Reddit's stock.
• The Federal Reserve's anticipated three interest rate cuts this year have generated excitement and speculation in the market, despite concerns about persistent inflation hovering around 3%, which casts doubt on the certainty of the expected rate cuts.
• President Biden's low approval ratings and unpopularity, despite a strong economy and stock market, could impact his reelection chances.
• A Wall Street Journal article revealed that only 25% of commercial real estate loans were fully paid off last year, indicating a substantial number of underwater buildings and a reluctance to foreclose, causing distress for landlords and banks that have loaned them money.
• If interest rates remain high for an extended period, it could lead to significant distress, particularly in the regional banking system.

Science Corner(s): Universe expansion, first pig kidney transplant in human, Neuralink (01:07:17)

• The Hubble Space Telescope and James Webb Space Telescope observations suggest that the universe is expanding at different rates in different regions, challenging the current understanding of the Big Bang theory.
• Scientists are investigating explanations for this phenomenon, including the possibility of a "bubble" in the local universe that is expanding faster than other regions.
• Researchers successfully transplanted a pig kidney into a human after genetically modifying the pig's genes to make them compatible with the human immune system.
• A man with end-stage kidney disease received a Neuralink chip that allows him to play games using his mind.
• Elon Musk's Starship had an impressive performance, but his interview with Don Lemon was a missed opportunity due to Lemon's focus on sensationalism.
• Tucker Carlson and Don Lemon received multi-million dollar payouts from their respective networks and are now pursuing internet-based projects.
• The All-In Podcast team created a fan account that helped grow the All-In brand, and the podcast will soon have a CEO announcement and start making its own clips.
• The All-In podcast is approaching 500,000 subscribers on YouTube and aims to reach 1 million subscribers by the end of the year, at which point a party will be thrown and fans will be invited.
• The podcast can be found on various social media platforms by searching for "Allin," and clips are regularly posted on the YouTube channel along with graphics and charts.