Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
It is Colorado's Morning News Marty lens Ginagonde. Good morning,
Elon Musk's artificial intelligence startup XAI suing Apple and open Ai,
accusing them of suppressing competition for the AI market.
Speaker 2 (00:10):
Yeah.
Speaker 3 (00:10):
The lawsuit claims Apple and OpenAI have a monopoly on
AI because it's integrated chat GPT into iPhones and other
Apple products. Joining us now on the KWA Common Spirit
Health Hotline for our Tech Tuesday conversation. As ABC News
Tech reporter, It's Mike Tbuski. Mike, thank you so much
for your time as always. Okay, So if we're looking
at this, if XAI or GROC I think is what
(00:31):
people know it more as is a direct competitor with
open Ai, then why is Apple legally obligated to have
to promote a competitor in any way?
Speaker 2 (00:39):
Yeah, good morning guys. So on Monday, Xai sued both
open Ai and Apple, as you said, and their argument
here is that open Ai and Apple's partnership is conspiring
to suppress their products in the marketplace, namely Grock. Now,
Apple and OpenAI do have a partnership. Some of open
AI's models are built into Apple Intelligence, which is kind
(01:02):
of their umbrella term for a lot of their AI products,
and it comes standard on a lot of new Apple stuff,
namely the iPhone. Xai says in its lawsuit that this
represents an anti competitive practice, and as we know from
the wide variety of antitrust cases that we've talked about
in Silicon Valley in the past, all of this comes
back to whether or not the companies in play are
(01:24):
giving people enough choices. Xai is arguing that by baking
in an AI chatbot from a third party, in this case,
from OpenAI, at the system level, right, they've baked it
into the iOS operating system that denies people the ability
to make choices about what kind of chatbot they want
to use on their phone, or their iPad or their Mac.
(01:45):
In this lawsuit, they say, and this is a direct quote,
in a competitive marketplace for generative AI chatbots, the usage
of chatbots would be determined by customer choice, and that
if a chatbot comes pre installed on a device, when
you take it out of the box, there's little incentive
for peas to download another one. They say this conduct
prevents chat GPT's rivals such as grock from fairly competing
(02:06):
with chat GPT and as a result, customers are harmed.
They say, customers have less choice and receive generative AI
chatbots with fewer features and capabilities than they otherwise would
have in a competitive marketplace. They're also alleging that Apple
is kind of manipulating the app store so that open
AI's products are preferenced over other AI companies. They say that,
(02:28):
you know, in the must have apps sections of the
app store, that's where chat GPT shows up at groc
and x the form social network formerly known as Twitter,
they're not there as often, and that's also an anti
competitive practice. And as a result of all this, XAI
is now asking a judge in Texas to undo this
anti competitive scheme and to recover the billions of dollars
(02:49):
in damages they've lost.
Speaker 1 (02:50):
Mike, this is just sounds like this is the closed
system that you get with Apple when you buy a
computer or a phone. You got to buy their phone coreter,
you got to find one, is it? But how is
this different as it because AI and it's submurgeoning technology.
Speaker 2 (03:02):
I think it's a little bit of both. Right. There
are some sort of whispers of the Google antitrust lawsuit
and you know, eventual verdict against Google in this case
where you know, part of Google's case was that, hey,
people you know, use our service because they like our service,
but the Department of Justices case was that, hey, you're
tying all these services together, namely like Google Chrome and
(03:25):
the Android operating system, so that people don't really have
a choice of what kind of search engine they use.
That's a similar argument here to what Elon Musk is making.
But there's some other important context here, guys. For one,
Elon Musk co founded open Ai. He and Sam Altman
did this all the way back in twenty fifteen. They
founded this company as a nonprofit. It's currently trying to
(03:46):
maybe change into a for profit business, though it seems
like they may have walked away from that recently. And
Elon Musk is suing open ai and it's CEO, Sam
Altman for breaching contract right for changing sort of the
founding princes of this company. These two guys know each other, right,
and they're not fans of each other. It seems they've
gotten into it on social media very publicly in the past,
(04:08):
so that's hanging over all of this as well. Elon
Musk is a fan of throwing out lawsuits and just
seeing what happens, and some of them go somewhere and
some of them don't. This is kind of the latest
in the long line of this type of thing, but
we'll have to see where it goes, because people are
really interested to see, you know, whether this case progresses,
whether we can define what the AI market is even
(04:30):
and what result it will have on Apple and Open
AI's business.
Speaker 3 (04:34):
Mike, real quick, when we talk about the AI market,
I mean back in the day, I remember we discussed
the dot com bubble and what we can expect when
it came to dot com. Now we're looking at what
could be an AI bubble. So companies spend all this
money on AI technology, but are they struggling to find
ways to justify the cost.
Speaker 2 (04:50):
At this point, it seems like that question is being
asked more and more often, and over the last week
there's been a number of stories that have kind of
raised the hackles of investors asking them a question and
whether we're actually in a bubble when it comes to
some of these AI companies. Large language moodles, You're absolutely right,
are incredibly expensive to build and to train and to run,
and so far, none of these big AI companies are profitable,
(05:12):
and none of the major tech companies that run AI
wings are running them profitably right, They're all running out
a loss. There's also this scaling paradox idea where you know,
every successive jump in capability comes with a outsized jump
in resources and cost. So that's something to think about
as well. We recently saw this with the much hyped
(05:33):
release of GPT five from open Ai, which we talked
about in the past, but even that kind of left
AI super fans a little disappointed. It didn't quite measure up.
We're not jumping forward with the huge, you know, leaps
forward in capabilities that we were just a few years ago.
And beyond all this, guys, there's just the question of
whether AI really works in the real world. MIT recently
(05:54):
put out a report that found ninety five percent of
the AI pilot programs that companies have deployed have failed
to deliver any dessert discernible financial savings or uplift in profits.
And as such, over the last week, we've seen the
stock price of a lot of big AI companies like
core Weave, Microsoft, and Alphabet go on a little bit
of a roller coaster. One last thing to keep in
(06:16):
mind here guys. Tomorrow in Nvidia is set to release
its second quarter earnings. This is the company that makes
all the computer chips that underpin a lot of these
AI models, often seen as a bell weather for the
larger industry.
Speaker 1 (06:27):
ABC News Technology reporter, it's Mike Debuski.
Speaker 2 (06:30):
Thank you,
It is Colorado's Morning News Marty lens Ginagonde. Good morning,
Elon Musk's artificial intelligence startup XAI suing Apple and open Ai,
accusing them of suppressing competition for the AI market.
Speaker 2 (00:10):
Yeah.
Speaker 3 (00:10):
The lawsuit claims Apple and OpenAI have a monopoly on
AI because it's integrated chat GPT into iPhones and other
Apple products. Joining us now on the KWA Common Spirit
Health Hotline for our Tech Tuesday conversation. As ABC News
Tech reporter, It's Mike Tbuski. Mike, thank you so much
for your time as always. Okay, So if we're looking
at this, if XAI or GROC I think is what
(00:31):
people know it more as is a direct competitor with
open Ai, then why is Apple legally obligated to have
to promote a competitor in any way?
Speaker 2 (00:39):
Yeah, good morning guys. So on Monday, Xai sued both
open Ai and Apple, as you said, and their argument
here is that open Ai and Apple's partnership is conspiring
to suppress their products in the marketplace, namely Grock. Now,
Apple and OpenAI do have a partnership. Some of open
AI's models are built into Apple Intelligence, which is kind
(01:02):
of their umbrella term for a lot of their AI products,
and it comes standard on a lot of new Apple stuff,
namely the iPhone. Xai says in its lawsuit that this
represents an anti competitive practice, and as we know from
the wide variety of antitrust cases that we've talked about
in Silicon Valley in the past, all of this comes
back to whether or not the companies in play are
(01:24):
giving people enough choices. Xai is arguing that by baking
in an AI chatbot from a third party, in this case,
from OpenAI, at the system level, right, they've baked it
into the iOS operating system that denies people the ability
to make choices about what kind of chatbot they want
to use on their phone, or their iPad or their Mac.
(01:45):
In this lawsuit, they say, and this is a direct quote,
in a competitive marketplace for generative AI chatbots, the usage
of chatbots would be determined by customer choice, and that
if a chatbot comes pre installed on a device, when
you take it out of the box, there's little incentive
for peas to download another one. They say this conduct
prevents chat GPT's rivals such as grock from fairly competing
(02:06):
with chat GPT and as a result, customers are harmed.
They say, customers have less choice and receive generative AI
chatbots with fewer features and capabilities than they otherwise would
have in a competitive marketplace. They're also alleging that Apple
is kind of manipulating the app store so that open
AI's products are preferenced over other AI companies. They say that,
(02:28):
you know, in the must have apps sections of the
app store, that's where chat GPT shows up at groc
and x the form social network formerly known as Twitter,
they're not there as often, and that's also an anti
competitive practice. And as a result of all this, XAI
is now asking a judge in Texas to undo this
anti competitive scheme and to recover the billions of dollars
(02:49):
in damages they've lost.
Speaker 1 (02:50):
Mike, this is just sounds like this is the closed
system that you get with Apple when you buy a
computer or a phone. You got to buy their phone coreter,
you got to find one, is it? But how is
this different as it because AI and it's submurgeoning technology.
Speaker 2 (03:02):
I think it's a little bit of both. Right. There
are some sort of whispers of the Google antitrust lawsuit
and you know, eventual verdict against Google in this case
where you know, part of Google's case was that, hey,
people you know, use our service because they like our service,
but the Department of Justices case was that, hey, you're
tying all these services together, namely like Google Chrome and
(03:25):
the Android operating system, so that people don't really have
a choice of what kind of search engine they use.
That's a similar argument here to what Elon Musk is making.
But there's some other important context here, guys. For one,
Elon Musk co founded open Ai. He and Sam Altman
did this all the way back in twenty fifteen. They
founded this company as a nonprofit. It's currently trying to
(03:46):
maybe change into a for profit business, though it seems
like they may have walked away from that recently. And
Elon Musk is suing open ai and it's CEO, Sam
Altman for breaching contract right for changing sort of the
founding princes of this company. These two guys know each other, right,
and they're not fans of each other. It seems they've
gotten into it on social media very publicly in the past,
(04:08):
so that's hanging over all of this as well. Elon
Musk is a fan of throwing out lawsuits and just
seeing what happens, and some of them go somewhere and
some of them don't. This is kind of the latest
in the long line of this type of thing, but
we'll have to see where it goes, because people are
really interested to see, you know, whether this case progresses,
whether we can define what the AI market is even
(04:30):
and what result it will have on Apple and Open
AI's business.
Speaker 3 (04:34):
Mike, real quick, when we talk about the AI market,
I mean back in the day, I remember we discussed
the dot com bubble and what we can expect when
it came to dot com. Now we're looking at what
could be an AI bubble. So companies spend all this
money on AI technology, but are they struggling to find
ways to justify the cost.
Speaker 2 (04:50):
At this point, it seems like that question is being
asked more and more often, and over the last week
there's been a number of stories that have kind of
raised the hackles of investors asking them a question and
whether we're actually in a bubble when it comes to
some of these AI companies. Large language moodles, You're absolutely right,
are incredibly expensive to build and to train and to run,
and so far, none of these big AI companies are profitable,
(05:12):
and none of the major tech companies that run AI
wings are running them profitably right, They're all running out
a loss. There's also this scaling paradox idea where you know,
every successive jump in capability comes with a outsized jump
in resources and cost. So that's something to think about
as well. We recently saw this with the much hyped
(05:33):
release of GPT five from open Ai, which we talked
about in the past, but even that kind of left
AI super fans a little disappointed. It didn't quite measure up.
We're not jumping forward with the huge, you know, leaps
forward in capabilities that we were just a few years ago.
And beyond all this, guys, there's just the question of
whether AI really works in the real world. MIT recently
(05:54):
put out a report that found ninety five percent of
the AI pilot programs that companies have deployed have failed
to deliver any dessert discernible financial savings or uplift in profits.
And as such, over the last week, we've seen the
stock price of a lot of big AI companies like
core Weave, Microsoft, and Alphabet go on a little bit
of a roller coaster. One last thing to keep in
(06:16):
mind here guys. Tomorrow in Nvidia is set to release
its second quarter earnings. This is the company that makes
all the computer chips that underpin a lot of these
AI models, often seen as a bell weather for the
larger industry.
Speaker 1 (06:27):
ABC News Technology reporter, it's Mike Debuski.
Speaker 2 (06:30):
Thank you,
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