Yes, with help gratefully acknowledged below, my book is finally available at Amazon in print and Kindle formats. It was harder than I presumptuously expected. I hope to do better in a future adventure, in French perhaps?

For the past 15 years, my Monday Notes essays have examined the tech world that has fascinated and fed me, with occasional excursions into politics. Lately, my somewhat weekly production (about 45 a year — we’ll blame the gaps on gently hedonistic vacations in France) has became less regular. Not for lack of interest, there’s no dearth of interesting topics and people who continue to excite this aging geek, but because I was struggling with the completion of a book I imprudently thought I’d complete in no time.

Rightly titled Grateful Geek, I introduce it thus:

This book is…

First, a look back, in amazement and gratitude, to a very long procession of people who helped me, liked and even loved me sometimes, who smiled indulgently and tolerated me, taught me, and sometimes motivated me to do more; and more importantly, to be a better person. In the autumn of my years, I bow to them all, even to the ones I, unfortunately, disliked or failed to appreciate. I won’t be able to acknowledge them all, but they live in me as I write this book.

Second, it is a paean to the personal computers that lit up my business life. In this book, you’ll find my explanation for our fascination with the machines that give wings to our minds and bodies. They no longer dwell solely on our desks or in our bags; they inhabit our pockets and now our wrists; they help us think, communicate, organize, learn and play. I was lucky to enter real professional life at the start of the PC era. Over fifty years later, I remain amazed, occasionally frustrated, and always hopeful to see personal computers continue to delight us.

Third, 50 years in the world of tech provided many, many opportunities to make mistakes. I recount most, not in a confessional spirit, but more like a picaresque tale of one fumble or illusion after another, with a grateful smile for those who, like a small Inuit tribe, jumped with me from one ice floe to the next. I survived, after all, which feeds my sense of wonderment and gratitude for those who shared those adventures — or suffered from them. But no advice expressed or implied. We know the old joke about good judgment being the fruit of experience, and experience resulting from bad judgment.

I hope you’ll enjoy my stories as much as I enjoyed living them — and that you have or will find your own. Either in you or around you.

In the Many Thanks section at the end I acknowledge my debt to French Épistemologist and Académicien Michel Serres and to my daughter Marie, and, in particular to Sébastien Taveau who carried me through to the finish line:

Finally, the indispensable Sébastien Taveau, a long-time friend who recently published a book felicitously titled “The Delivery Man”, the person who breathes real-word viability into innovators’ visions. One day over lunch at Taverna, a Greek restaurant in Palo Alto, when Sébastien asked how my own book project was progressing, I had to sheepishly admit I was neurotically stuck. Writer’s block, how unoriginal. Sébastien offered his help, pushed me to write more, and took charge of the editing and production process, a complicated one as I had had yet to discover. Sébastien became The Delivery Man for this book as well. Without him Grateful Geek would have ended as an unfinished manuscript, the source of embarrassed if-only regrets. Thank you, Delivery Man Sébastien!

And I don’t want to forget Doug Fulton who, besides his struggles with Be engineers when documenting their work, also edited the Be Newsletter and, later, the Monday Notes that provided encouragement and seeds for this Grateful Geek memoir.

When starting my book, I overlooked two obstacles: The well-known neuroses that afflicts many but not all writers and the challenges Guy Kawasaki aptly describes in his APE: Author Publisher Entrepreneur book. (By the way, Guy, if you read this, please answer my email.)

I have wrestled with all three letters of the APE acronym.

As an author, there are times when it’s a struggle to drag the pen out of the inkwell. Even after years of my writing being accepted in both English and French, I banally fell prey to Imposter Syndrome. I can bloviate about it, with or without irony, but having just turned the corner into my eighties, I doubt therapy or chemicals will vanquish the affliction.

This doesn’t mean I’m discouraged from further book-writing, au contraire, I’m now moving ideas and scenes inside my head for a tech/finance/crime/sex fiction — in French. Vivid scenes that, when sketched, horrify some family members. This might lead me to publish under a pseudonym. No warranties expressed or implied.

The publishing decision was easy: Self-publish on Amazon. As Steven Sinofsky once explained to me, industry publishers are mostly interested in negative stories such as Apple losing its soul after Steve Jobs’ untimely demise. This cynicism led him to self-publish Hardcore Software, his momentous story of the rise and fall of the PC Revolution.

I took Sinofsky’s observation to heart. Given how little dirt I meant to spread (not that I lacked material), I decided to self-publish my labor of love. As you’ll see in Grateful Geek, I tried to stay faithful to the book’s title [from the In Conclusion chapter]:

There is no ambivalence regarding the first part of the title: my gratitude is unmitigated. My debt is immense to the people who loved me, helped me, and sometimes had to tolerate my pinballing — from schools to jobs, from sentimental education to a successful family which is deeply meaningful to me. Thanks also go to some who didn’t like me, who opposed me as I came to benefit from the experience, and the insight I gained later, when more at peace with the world. I tried to see their viewpoints which I missed at the time.

I still had to struggle with the Entrepreneur part. Once again, Sébastien Taveau came through. After helping with editing and organizing, he led me through a labyrinth that ranged from cover design to ISBN registration and Amazon publishing administration, and much more.

Speaking of labyrinths, I discovered that Grateful Geek was unaccountably stuck inside the Apple Books organization. As I’m writing this on a Saturday afternoon, I emailed Greg Jozwiak, Apple’s Sr VP of WW Marketing (affectionately known as Joz) asking for help and got an instant response, a confirmation of his reputation for attention and reactivity.
[Edit: This Monday, an Apple person called Ian Wallace patiently helped me reach the finish line. Grateful Geek is now avaliable on Apple Books.]

An audiobook version is in the works. As a sample, I received a moving rendition of a passage of the “Turning Point 6: Meeting Brigitte” chapter, in which I reminisce:

As I write about these years, my chest rises as my heart sings memories which could fill their own book.

Indeed. I’ll stop here and wish you as a good time reading Grateful Geek as I have re-reading it.

— JLG@mondaynote.com

My Grateful Geek Book Finally Out was originally published in Monday Note on Medium, where people are continuing the conversation by highlighting and responding to this story.

In 2009, after a 30-year Intel career culminating in the CTO job, Pat Gelsinger leaves Intel. In early 2021 he returns as CEO with an ambitious reconquest agenda. It’s now two years later and Intel’s latest numbers are alarming.

Once upon a time, the Wintel portmanteau evoked images of world hegemony by Microsoft with its Windows operating system, and Intel with its x86 processors chips. The two companies came to dominate what we now see as modern technology’s Second Revolution, Personal Computers, machines we could lift with our arms, brains and credit cards.

But some of Intel’s chiefs were hesitant about the Microsoft congress. While they enjoyed the torrents of dollars and could lull themselves with feelings of superiority. But not of eternity, they were always looking for other mother lodes.

This always-on search, animated by CEO Andy Grove’s Only The Paranoid Survive philosophy, led to flirtations with bubble memory, server farms, and toys (no joke), to say nothing of a failed adoption of HP Precision Architecture called the Itanium chip (soon renamed Itanic), and the widely ridiculed adventure in wearables.

Despite the missteps, opportunity kept knocking at Intel’s door In 2005, the opportunity came in the person of Steve Jobs. Having successfully transitioned Apple’s Macintosh product line to x86 CPUs, Jobs wanted Intel to build the microprocessor for a new line of smartphones. But Paul Otellini, Intel’s CEO at the time, “didn’t see it”, as he graciously admitted later. The iPhone processor contract went to Samsung and then, after the aggressive Korean giant became too much to handle, to TSMC, culminating in the immensely successful homegrown Apple Silicon adventure.

As iPhone sales took off, analysts inspected its innards and found an ARM CPU that was much more power-efficient than anything Intel’s x86 chips offered at the time. Undeterred by the comparison, a succession of Intel CEOs chanted the same mantra: Just You Wait. The company’s superior chip design and manufacturing technologies will soon catch up and surpass the competition, Intel will ride the smartphone wave just as it once dominated the PC world!

Over time, as nothing of the sort happened, the bravura became an embarrassment. In January 2021 the act became unbearable and Intel’s Board finally replaced CEO Bob Swan (the company’s former CFO!) with Pat Gelsinger, a true technologist and a man of impeccable personal virtues. (Of no insignificant note, Gelsinger had had a 30-year tenure with Intel, leaving the company in 2009 for no publicly known reason. I’d love for readers to shed light on the real reasons for his departure.)

Right away, Gelsinger instigated big changes and publicized an ambitious agenda. He started with a grumbling allusion to re-injecting good old “Grovian” discipline into Intel’s culture. In parallel, Intel abandoned its older chip-making (lithography) technology and moved to the Extreme UV (EUV) process adopted by more successful competitors such as world leader TSMC. This led to the christening of IDM 2.0, the new generation of Intel Devices Manufacturing.

More changes: Intel would no longer limit itself to making chips for its usual x86 clients, the PC and Cloud server makers. To effect this re-orientation, Gelsinger created the Intel Foundry Services (IFS) business unit, an entity dedicated to making chips designed by other companies. IFS manifest destiny was competing with the likes of the world-leading TSMC foundry. To better publicize ambitious IFS goals, Gelsinger went back to the old Just You Wait war cry and gave himself the goal of regaining Apple’s business by becoming the foundry for Apple Silicon CPU chips. It was a pleasantly ambitious aspiration, couched in terms that acknowledged past errors and lauded Apple’s performance and fitted Gelsinger’s leadership style.

Two years later, where is Intel?

This past week, Intel announced its largest quarterly loss ever, $2.8B with a 36% revenue decrease compared to last year’s same quarter. (More details on Intel’s latest earning’s presentation can be found here.) As a result Intel stock fell to $31/share, compared to $64 two years ago, right after Gelsinger took the helm.

One explanation comes to mind: The dismal state of the PC market, down 30% or more. This is attested by Microsoft’s earnings presentation this past week, with Windows OEM revenue showing a 28% decrease.

But the state of the market can’t explain everything. For example, Microsoft’s Cloud business with Azure and related activities grew 27%. This should have correlated to a healthy pull for Intel’s Data Center snd Artificial Intelligence (DCAI) server products. Historically, this chip category has fetched high prices and generated Intel’s highest margins, so we can imagine the alarm over a drop of 39% in DCAI revenue. Just as bad, operating income fell by 137% to a negative 14% operating margin. This could portend a stronger than anticipated Cloud industry move away from the x86 architecture.

Concurrently, the company’s revenue for its new IFS foundry business decreased by 24% to an insignificant $118M, with a $140M operating loss gingerly explained as “increased spending to support strategic growth”. Other Intel businesses such as Networking (NEX) products and Mobileye — yet another Autonomous Driving Technology — add nothing promising to the company’s picture.

This doesn’t prevent Gelsinger from once again intoning the Just You Wait refrain. This time, the promise is to “regain transistor performance and power performance leadership by 2025”.

Is it credible?

We all agree that the US tech industry would be better served by Intel providing a better alternative to TSMC’s and Samsung’s advanced foundries. Indeed, We The Taxpayers are funding efforts to stimulate our country’s semiconductor sector at the tune of $52B. I won’t comment other than to reminisce about a difficult late 80s conversation with an industry CEO when, as an Apple exec, I naively opposed an attempt to combat the loss of semiconductor memory business to foreign competitors by subsidizing something tentatively called US Memories. But, in this really complicated 2023 world, what choices do we actually have?

For years I’ve watched Intel’s repeated mistakes, the misplaced self-regard, the ineffective leadership changes for this Silicon Valley icon, for the inventor of the first commercial microprocessor, only to be disappointed time and again as the company failed to shake the Wintel yoke — while Microsoft successfully diversified.

I fervently hope Pat Gelsinger succeeds. His achievement would resonate deeply, it would bring to mind another historic turnaround: Steve Jobs’ 1997 return to the Apple he had “left” in 1985.

— jlg@gassee.com

Intel: Just You Wait. Again was originally published in Monday Note on Medium, where people are continuing the conversation by highlighting and responding to this story.

by Jean-Louis Gassée

Of late, Apple has been remarkably calm, even-keeled, no big layoffs. The upcoming June 5th Worldwide Developer Conference is likely to quell some rumors — and perhaps kindle new ones.

Back in Palo Alto after weeks in the Country Of Good Sins, I’m confronted with a sea of topics for this week’s essay, from the truly Never Seen Before Generative AI explosion, to France’s troubles with its maternalistic social safety net and democracy derangement, to say nothing of our own repertoire of insanities…

Recoiling from the frenzy, I find refuge in the familiar realm of Apple rumors. The fervor with which we (some of us, many of us) chase Apple gossip is a sign of the company’s unique place in the tech world and in the wider culture.

We can start with the perennial Apple Car fantasy. The never-acknowledged but repeatedly-corroborated project was first mentioned in these pages eight years ago(!), in a 2015 Monday Note titled The Fantastic Apple Car. Recent speculation tells us we’ll see an introduction in 2025 or 2026. No need for us to wring this one’s neck, the accelerating EV industry might do the job for us, leaving little or no room for Apple to innovate in hardware or software.

We can also quickly dispose of iPhone 15 scuttlebutt: It’s what psychoanalysts call “regressive fixation on partial objects”. Everything will be better, although perhaps not at the same price. If rumormongers had a better sense of humor — or access to GenAI video software — they’d put together a fake iPhone 15 intro featuring a Tim Cook oration followed by a jovial Greg Joswiak feature wrap-up.

The same can be said of more distant prospects such as a touch-screen MacBook. As quotes from insiders reverberate from one site to another, with promises of a dream that will materialize “in a couple of years”, I’d much prefer a replacement for my aging, seven-year-old 27” iMac, maxed out at the time, a decision that still pays off.

There is much material to go on… Closer to us and most interesting, we have insistent rumors of an Augmented Reality (AR) device that will be introduced at Apple’s annual and sacramental June 2023 Worldwide Developers Conference — in person this year, at the Cupertino Apple Park.

My first thought is Why? Certainly, Apple AR devices were once thought of as capable of inaugurating a huge iPhone 2.0 wave, but the AR lustre has paled recently as psychic (and financial) energy has suddenly shifted to a new fixation: Generative AI (GenAI). It’s becoming clear that the Fifth Revolution — after semiconductors, PCs, the Web, and smartphones — won’t be AR, but “AI For The Rest of Us”. So why worry about the unnecessary, self-applied pressure to meet a June delivery date?

Perhaps Apple will surprise us (again). Maybe the company has taken the opportunity to fine-tune the positioning and introduction of its putative AR product.

Not long ago, at a September 2022 visit to an Italian university, Tim Cook expressed great hope [as always edits and emphasis mine]:

“I’m super excited about augmented reality. Because I think that we’ve had a great conversation here today, but if we could augment that with something from the virtual world, it would have arguably been even better. So I think that if you, and this will happen not too long from now, if you look back at a point in time, you know, zoom out to the future and look back, you’ll wonder how you led your life without augmented reality. Just like today, we wonder, how did people like me grow up without the internet. And so I think it could be that profound, and it’s not going to be profound overnight…”

To be successful, Apple’s rumored AR project needs to perform a near miracle of engineering: multiple processors, batteries, sensors, cameras, sitting on your head without being too heavy or becoming too hot to wear. Then there’s the new operating system software that makes everything work smoothly.

Then we have developer relations: What are the compelling use cases that will compel third party developers to spend time and money building new AR-ready apps?

From the marketing point of view, the challenges are just as great. How do you convince users to wear their magic goggles as persistently as they glance at their phones? And how do you get them to open their wallets? The engineering complexity outlined above won’t come cheap. We’ve heard rumors of an initial $3K price tag.

If there is a June 2023 AR introduction, I hope we’ll see a slow roll-out of a broad, ambitious concept. Start with a moderately expensive (see the $3K just mentioned) reference platform device that’s reserved for a hand-selected cadre of developers who will provide app muscle for the consumer product. Follow that with a conservative calendar for the slimmed-down and more affordable end-user device. All presented with the usual cortège of demo videos and industry visionaries’ testimonials, of course.

In my fantasy, this would just be warmup for the main act: “The years of Apple’s historic investment in AI technologies are now paying off. Started long ago in conjunction with the Stanford Research Institute (SRI) technology — the organization that gave birth and its name to Siri — Apple’s AI development got a new boost when, in 2018, former Google AI leader John Giannandrea came to Cupertino to take our work to world-leading heights. Starting right now, Apple gives its developers and above all its customers access to a higher level of machine intelligence, for today we are unveiling…”

Back in reality, Apple has wisely avoided the kind of grand AI statements we’ve heard from other industry grandees from Redmond, Mountain View, and Menlo Park. Wise because the truth is that the company’s position in the Fifth Revolution isn’t flattering, it has little to show for the ambition displayed five years ago when the high-visibility Google alumnus moved to Cupertino. To be sure, there has been modest progress in Siri’s broadened reach, but nothing put Apple at the forefront of AI developments, nothing that users could enthuse about.

On a humbler but related level, many users have continued to experience less than stellar performance from iCloud offerings. The latter might help explain a bit of house-cleaning at the VP level. One wonders if more is needed…

This leaves us with six weeks until the big event in Cupertino and the answers to some questions — and probably a few new ones.

— jlg@gassee.com

Apple Rumor Hallucinations. Human Ones. was originally published in Monday Note on Medium, where people are continuing the conversation by highlighting and responding to this story.

Silicon Valley Bank (SVB) made and lost chancy bets on long-term bonds. This concerned depositors who in turn worried other depositors, starting a chain reaction, a massive exit of funds. SVB didn’t have enough liquidities, became insolvent and is now in the hands of the FDIC (Federal Deposits Insurance Corporation).

Bank runs are an old phenomenon. According to Wikipedia, the first known bank runs go back to the 16th century, followed by the Tulip Manias, the South Sea Bubble, the French Mississippi Company, and many more over the ages. I won’t venture to say bank runs are part of the normal order of business but, like pandemics, they’re bound to happen. This no exaggeration, on its site, the FDIC lists 562 bank failures (not all are Bank Runs) between 2001 and 2023.

How does a bank run happen? If you’re a learned Monday Note reader versed in the arcana of finance, you may want to avert their eyes as I indulge in an oversimplification.

A bank may provide services such as disbursing or accepting transactions on your behalf, but its primary function is safe storage for your money.

But banks don’t simply let your money sleep, safe and sound. They put your funds to works by lending to people who pay interest for the service — that’s how your bank makes money and stays in business.

For example, Sheetmetal Co. needs to pay its vendor before its customers can settle their bills, so the bank lends some of your money to the company. But what if you need your money before Sheetmetal Co. can pay back the loan? No problem, the bank has many other customers and will be able to return your money.

The bank has many depositors like you and many borrowers like Sheetmetal Co, and the flow of money is harmonious and smooth…unless depositors suddenly, en masse, decide to take all of their money out. Unfortunately, the money isn’t all there, some of it has been lent to the bank’s borrowers. This leaves the bank unable to return depositors’ money. Bank run!

But why would depositors suddenly, collectively lose faith in their bank? It starts with objective data that shows that the bank is in trouble, and snowballs through herd mentality: Depositors run because they see other depositors run.

Instructed by history, banks avoid runs by following two lines of conduct. First, they strive to always look respectable: big buildings; seasoned, well-behaved people at the helm; regular proclamations of good financial health. Second, they carefully weigh the risk they take in lending your money to others. This means only lending a reasonable portion of deposits to carefully qualified borrowers that are sure to pay their loan fully and on the time.

But how do you define reasonable? Human nature, which always wins, intervenes and corrodes judgment. Greed leads banks to lend more money and to take more risk, which is why fine connoisseurs of the human soul called bank regulators establish rules that protect depositors and govern the level of risk banks can take. Of course, for every regulator we have scores of bank lobbyists who push our elected officials to loosen those pesky rules — as they did in May 2018, during the Trump administration.

Things get more complicated when we realize that banks can go to Wall Street, issue stock, and acquire shareholders. The bank is no longer just in the business of making loans — with your money — to reputable people and businesses. In order to please their shareholders, bank executives included, banks must search for higher returns from the money that they’re allowed to lend — a word that has acquired broader meaning than supporting Sheetmetal Co.’s on going business.

The financial jungle ecosystem is rich in opportunities to lend. For example, buying Municipal Bonds is a way to lend money to the bond issuer and get interest payments. This is more flexible than lending to Sheetmetal Co. because bonds are tradable, you can buy and sell them at will, and bond prices vary as buyers and sellers weigh their interest payments and dates against other bonds with different timing and interest numbers.

(For this unschooled mortal, bond trading is an inscrutable topic that brings fond memories of HP’s now vintage HP 80 financial pocket calculator with specific functions for Bond Price and Yield.)

The bank at the beginning of this essay has become a business with many masters and divided loyalties. Does it exist as a service to society, to depositors, to businesses needing cash lubrication? Or does it serve its shareholders on Wall Street and company executives?

We can now turn to the Silicon Valley Bank (SVB) collapse.

Founded in 1983, SVB is a pillar of Silicon Valley. The 16th largest US bank with $212B in assets and $342B in client funds, SVB served venture capital companies and startups alike, holding their funds, fielding loans, processing payrolls. A success story, a valued character of Valley Lore.

But in 2022, SVB took chances. In a search for bigger returns, the bank made unusually large investments in long-term bonds that quickly lost value as interest rates went against their assumptions. Billions were lost. Since SVB is a publicly-traded company, the losses couldn’t be hidden and depositors started to worry. Venture firms pulled their funds and told their startups to do the same.

SVB management tried to talk reason, saying things would be manageable if everyone simply stayed calm, but to no avail. Some quick-thinking SVB depositors managed to withdraw $42B this past Thursday, others weren’t so lucky as SVB became insolvent. The Bank Run was on and the FDIC took control in the biggest US bank failure since Washington Mutual in 2008.

The consequences could be dire for companies that couldn’t get their funds out before the collapse. How will they make payroll, how will some of their employees living paycheck-to-paycheck cope? Creative greed offers a possible if costly out: Some investors have offered to buy startup deposits stuck at SVB for as little as 60% on the dollar. Call that a sort of Down Round financing. For some startups, it’s that or death.

Perhaps more encouraging, we see a group of venture investors coming up with this proclamation:

Hopeful…but no money attached. And, as Kara Swisher pointed out, large funds such as Founders Fund, Andreessen Horowitz, and Sequoia are notable by their absence.

Just as there are no atheists in foxholes, there are no libertarians in a bank run. We now see appeals for more government intervention using taxpayers funds:

The idea is to avoid a free-fall into an epidemic of insolvency. This worked during the 2007–2008 crisis when, incidentally, the federal government injected $235M into SVB under the Troubled Asset Relief Program (TARP). Fifteen years later, billions might be required to forestall further contamination of our treasured “free market” systems.

To be continued when we know more about the FDIC’s plan to right the ship and avoid large scale devastation…

— jlg@gassee.com

No Atheists In Foxholes. Or Libertarians In Bank Runs was originally published in Monday Note on Medium, where people are continuing the conversation by highlighting and responding to this story.

After tens of thousands of layoffs, what can tech company CEOs do?

To clarify the title above, let’s return to the start of a serious and fun May 2010 Monday Note tiled Ballmer just opened the Second Envelope:

“You know the business lore joke. The departing CEO meets his successor and hands him three envelopes to be opened in the prescribed order when trouble strikes. First crisis, the message in envelope #1 says: Blame your predecessor. Easy enough. Another storm, the the CEO opens the second envelope: Reorganize. Good idea. And when calamity strikes yet again, he reaches for the third: Get three envelopes…”

Reorganizing was just what Ballmer had done, kicking out key execs Robbie Bach and J. Allard. Which made me think the Third Envelope wasn’t far off. I was wrong: Ballmer’s reign at Microsoft was to last till February 2014 when he was finally allowed to buy a Los Angeles sports team.

Back to the early part of 2023 and tech companies’ fall from grace (and free money), one wonders: Which CEOs are, or should be writing, Three Envelopes?

Given my record just mentioned, I won’t make pointed predictions.

With one exception: Elon Musk. The air around him is so turbulent that we could forget he’s already written Three Envelopes. Indeed, at Twitter, the vox populi, an online poll told him he ought to resign his CEO position at the company. Graciously or not, he said he accepted. And nothing happened, he’s still at the helm, letting more people go, refusing to pay some vendors and looking for one or more business models that would make the company solvent and allow him to recover enough of the $44B purchase price.
In parallel, Musk just held a 3+ hours Investor Day event that proved long on lofty promises such as some day building 20 millions cars and short on specifics such as new car models. And, to add to the turbulent atmosphere around him, Musk just announced he was interviewing people to build a Generative AI (GenAI) organization to compete with the likes of OpenAI. Why? Because existing GenAI project are too “woke”… We can sigh all we want, but two thoughts keep floating to the surface: Don’t take what Musk says at face value. And don’t bet against him.

But what about other prominent and troubled tech companies, massive layoffs following frenzied hiring, promising project suddenly jettisoned? What would push a top exec to pound their chest before handing the required envelopes to a new leader?

Looking for possible answers, I went around the Web, googled “complaints about [company X] culture. Setting aside unavoidable rants, and staying as close as possible to recent events, one finds a lamentable, time worn, banal set of human frailties.

We’ll start with BS self-induction. Let me explain. Charismatic leaders are magnetic; from their strong persona emanates a powerful field that influences others and persuades them to believe and follow. But… as with electromagnetism, the emitted field also acts on the emitter. Very assertive leaders are prone to themselves fall for the stories they enthusiastically tell others. A highly visible example is a company founder changing the name of company he founded to spread a new message: Our future is in a new version of fully-immersive computed recreation of reality. As a result, 11,000 people were laid off, perhaps with more to come. On darker evenings, I hope that CEO was cynically telling tales rather than completely believing them.
I’m sure readers will look around and find other examples of intoxicating grand tales, such as but not limited to the promises of AI applied to the auto industry.

Another old poison is easy money. Why not launch this project, research that technology? We can afford it and look at the potential if it works. Add the visionary sheep effect, competitors are doing it, and you see leaders endorsing “enormously promising” adventures such as voice recognition or AR/VR goggles and glasses. Regarding voice recognition, a connaisseur, Satya Nadella, just said “voice assistants like Siri, Alexa, and Cortana are ‘dumb as a rock’”. Did Microsoft’s CEO just discover that, or how long has he known it? And, while he is cleaning up product portfolios, what will he do about the company’s Surface devices that waste money unsuccessfully competing with the likes of Dell, Asus and others?

There are many other examples of easy money toxicity, but we need to turn to something even more poisonous: large organizations’ loss of meaning. And the resulting hardening of corporate blood vessels. We can illustrate loss of meaning as follows: in a healthy organization, everyone from the friendly receptionist to the CEO can concisely say what the company’s mission is. Even drunk at three am under the rain, the person can utter words such as “we organize the world’s information” or “we make personal computers”. Once a group of people loses that ability, that cohesive force, psychic energy is rerouted towards individual power acquisition and preservation. Now, compound this with easy money and grandiose projects and you get dangerously inward-looking organizations. There, the rules are clear: advancing one’s rank and compensation demands getting more staff on one’s project. A sad and unfortunately not completely obsolete story of organization toxicity is aptly told in a Vanity Fair article titled Microsoft’s Lost Decade. To be fair to Microsoft’s current leadership, company culture has considerably evolved and the Vanity Fair piece should just be seen as more generally describing ailments that threaten large rich organizations.
As a part of the loss of meaning syndrome, we can turn to one of my favorites: the Product Manager proliferation. On paper, the role looks logical, almost unavoidable. In theory, the Product Manager coordinates, harmonizes. There are market requirements, engineering feasibility, supply-chain availability and financial considerations to meld together in the evolving management of a product project. Very logical, orderly, looks could on a Board Presentation slide. What could go wrong? Human nature. Who’s really responsible, who gets or loses meaning? My own — and not necessarily shared belief — is the engineering lead ought to stay in charge and be judged on their project’s overall fitness to the company’s business. Injecting a Product Manager’s ego and lesser technical knowledge in the mix only muddies the waters. An admittedly naive perspective — but one stemming from a life in the Valley.

Returning to the question in the title, no clear answer, or answers avail. This for a wide set of reasons: the ills I’ve described above (and others I refrain from mentioning) are almost eternal, as we’ve seen for older organizations such as IBM or, more recently my dear old HP. The coming months will provide more answers.

— jlg@gassee.com

CEOs Writing Three Envelopes was originally published in Monday Note on Medium, where people are continuing the conversation by highlighting and responding to this story.

Generative AI does more than entertain and irritate. It also poses serious philosophical and business questions.

Late last January I sat down with knowledgeable but healthily skeptical drinking companions (coffee or green tea) to see what they thought of the importance of ChatGPT and, more broadly, Generative AI (GenAI). ChatGPT: Netscape Moment Or Nothing Really Original, was the result.

After mulling the opinions that my fellow drinkers offered, I have joined the “Yes, This Is a Netscape Moment” camp. Similar to the time when the Netscape browser opened the Internet to The Rest of Us — and to a new breed of entrepreneurs — GenAI opens a new era of immense possibilities. In my lifetime, I’ve witnessed four epochal tech transitions: Semiconductors, personal computers, the browser, smartphones. I think we’re soon going to add GenAI to that list. I felt a thrill at the prospect — and I’m not alone.

(Out of curiosity, I googled “Netscape Moment” and saw that the phrase had been (ab)used before, as in Crypto Is on the Cusp of a ‘Netscape Moment’.)

But as legal sages have recommended over the years, we must be able to argue both sides of the case. The current fervor for GenAI, and specifically the number of articles written about ChatGPT in just a few weeks, makes one think that we’re witnessing a modern day Columbus-discovers-the-new-world adventure. Is it deserved? Perhaps the furor is born out of neediness, out of the narrowing horizons of smartphone market saturation and PC decline. Maybe this is just another instance of tulip bulb mania:

I don’t think so — I’m sticking with my enthusiasm. Too many learned and sober voices from so many diverse viewpoints show interest and provide helpful analyses. I don’t think we’re hearing the stampede of visionary sheep.

For today, we’ll briefly dwell on BinGPT. The nickname, devised by the literate and articulate analyst Benedict Evans, is a clever christening of the mating of Microsoft’s often forgotten Bing search engine with the still immature fruit of OpenAI’s ChatGPT. The offspring is so immature that Google pretends not to know about it.

Amid helpful, interesting BinGPT dialogues, observers immediately took note of the chatbot’s “hallucinations”, a new term of art that denotes an entirely made-up falsehood. As Evans (whose résumé the chatbot botched) tweets:

“I am hearing disturbing rumours that an AI system trained on the way that people behave on the Internet is pedantic, petty, starts fights over trivial things, and has a strong tendency to bullshit.”

One such instance of unpleasant behavior is documented, at great length, in a Kevin Roose NY Times February 16 article titled Bing’s A.I. Chat: ‘I Want to Be Alive. 😈’. If you haven’t already, I strongly encourage you to read the full two-hour dialog. It is much more disquieting than merely impersonating George Santos and his delirious résumé lines.

Such errant behavior isn’t unique. Related examples have been cited by John Uleis (@MovingToTheSun) or by The Information’s Chris Stokel-Walker in a report titled My Week of Being Gaslit and Lied to by the New Bing.

As a result, Microsoft promptly limited BinGPT conversations to five and more recently six exchanges. One is tempted to wonder if Microsoft was sufficiently prepared, if it had tested its chatbot thoroughly enough. But, as an article from website The Verge explains, Microsoft has been secretly testing its Bing chatbot ‘Sydney’ for years. This might leave us with Microsoft’s need to front-run other industry events such as Google’s definitely unprepared Bard announcement.

Other, broader questions need our attention.

The Wall Street Journal just published a must-read column authored by former Secretary of State Henry Kissinger, former Google CEO Eric Schmidt, and MIT Dean of Schwarzman College of Computing Dan Huttenlocher. Titled Chat GPT Heralds an Intellectual Revolution, the essay starts strongly [as always, edits and emphasis mine]:

“A new technology bids to transform the human cognitive process as it has not been shaken up since the invention of printing. The technology that printed the Gutenberg Bible in 1455 made abstract human thought communicable generally and rapidly. But new technology today reverses that process. Whereas the printing press caused a profusion of modern human thought, the new technology achieves its distillation and elaboration. In the process, it creates a gap between human knowledge and human understanding. If we are to navigate this transformation successfully, new concepts of human thought and interaction with machines will need to be developed. This is the essential challenge of the Age of Artificial Intelligence.”

Later, the authors lay out a core GenAI problem:

“By what process the learning machine stores its knowledge, distills it and retrieves it remains similarly unknown. Whether that process will ever be discovered, the mystery associated with machine learning will challenge human cognition for the indefinite future.”

We are facing a philosophy of science (a.k.a. epistemology) problem, one that currently seems intractable. About five years ago, in a very early discussion of AI, I was rebuffed by an expert for linking to an MIT Technology Review article titled The Dark Secret of AI. As the sage put it: “No one really knows how the most advanced algorithms do what they do. That could be a problem.”

Yes, it is a problem. We train GenAI services on billions and billions of knowledge fragments gleaned from books, articles, and bloviation around the world in an impenetrable, unexplainable process. We can’t explain what’s going on because we don’t know and don’t seem to have a path to such knowledge.

At least now we have world-class sages asking fundamental questions and pointing out grave dangers. For example, should we be surprised to see BinGPT misbehave after ingesting web content polluted by anger, falsehoods, and organized misinformation? Once upon a time, we could check sources “in the literature”; GenAI throws us into a world where we can’t.

At the moment, we really don’t know how to protect ourselves:

“For now, we have a novel and spectacular achievement that stands as a glory to the human mind as AI. We have not yet evolved a destination for it. As we become Homo technicus, we hold an imperative to define the purpose of our species. It is up to us to provide the real answers.”

We also have more mundane concerns: Money. Today, a Google query is said to cost a fifth of a cent, but a ChatGPT answer would allegedly cost ten times as much. If these numbers are anywhere close to the mark, how do Microsoft and others make money running GenAI products? In an Ars Technica post, Ron Amadeo suggests that Microsoft isn’t worried because Bing is such a small player:

“Part of the reason Microsoft is so eager to rock the search engine boat is that most market share estimates put Bing at only about 3 percent of the worldwide search market, while Google is around 93 percent. Search is a primary business for Google in a way that Microsoft doesn’t have to worry about…”

But, for Google…what prices for what services?

Such questions don’t seem to discourage venture investors who, according to Forbes, see GenAI as a new frontier, with investments in the sector growing by 425% since 2020, something worth keeping an eye on as more announcements, especially Goggle’s, keep coming

jlg@gassee.com

GenAI: More Netscape Moment Questions was originally published in Monday Note on Medium, where people are continuing the conversation by highlighting and responding to this story.

Today, we take a look at Intel. Can CEO Pat Gelsinger, perform miracles?

I’m a great admirer of Intel CEO Pat Gelsinger. He embodies a rare combination of personal virtue and technological savvy. If you have the time and inclination, see the Monday Notes Intel 2.0: The History and Culture Gelsinger Inherits and Intel 2.0 Reboot.

After becoming Intel’s first Chief Technology Officer, Gelsinger left the company in September 2009 to become President and Chief Operating Officer of EMC. In 2012, he moved to cloud computing company VMware as CEO…and then rejoined Intel, as CEO this time, two years ago in February 2021.

Upon taking the helm of one of our most venerated tech companies, the new boss set a resolute tone:

“We’re bringing back the execution discipline of Intel. I call it the Grovian culture that we do what we say we will do. That we have that confidence in our execution. That our teams are fired up. That we said we’re going to do x, we’re going to 1.1x, every time that we make a commitment. That’s the Intel culture that we are bringing back.”

We’re two years into the Gelsinger regime and, unfortunately, the latest numbers don’t paint a pretty picture:

(You’l find more mind-numbing details in Intel’s 10-K and the slightly more digestible quarterly earnings presentation.)

In a downdraft environment that has led to tens of thousands of layoffs across the tech sector, Gelsinger, to his credit, is concentrating on talent where it’s needed, pushing forward with a 5 nanometer chip. As it says in the quarterly presentation “5 nodes in 4 years”.

But is it small enough, soon enough? 5 nanometer chips are already available elsewhere; TSMC is on its way to 3 nanometers. (See Yahoo’s Intel’s Earnings Call transcript.)

Intel lags behind in the technology game.

Intel runs many businesses of which three are notable: CCG (chips for PCs, $6.6B in Q4 2022, down 36% compared to Q4 2021), DCAI (high-power processors, mostly for Cloud applications, $4.3B, down 33%), NEX (Networking products, $2.1B, down 1%). A few other businesses contribute smaller, almost immaterial amounts of revenue and occasional losses. (We’ll look at one of them later.)

Once upon a time, Intel generated fat margins by milking its commodity business for PCs (CCG) and high-end server chips (DCAI). Today, in the midst of a promising Cloud Computing and AI market, CCG and DCAI barely make money, only $0.4B in Q4 22. This is a grave problem that casts doubt on Intel’s ability to produce revenue in a product segment that they used to own.

The reason they no longer own the segment is obvious: Amazon Web Services is the acknowledged Cloud Computing leader and trendsetter. AWS has led the migration away from Intel’s DCAI products, and has made big bets on the Graviton line of high-end chips based on the ARM-64 architecture.

There’s more bad news. Intel’s PC chips segment, CCG, offers little room for growth. When the desktop/laptop market was expanding, Intel’s OEM clients, ASUS, Dell and others, had to accept Intel’s higher prices. Now, Gelsinger faces a combination of lower volumes and lower prices. In this context, Apple’s Mac + iPad business ($18B last quarter, 0% growth year-to-year in a declining market) raises questions about the future of Wintel devices. A likely answer is that Apple will gradually expand its share of the market without necessarily disrupting it. For its part, Microsoft, the Win in Wintel, in its last December quarter, saw a 39% decrease in its Devices category, mostly Surface laptops. Last year, Microsoft announced the availability of an ARM-64 native version of its Windows 11 Office 365 products. What this means in practice, on a sizable scale, is currently unclear.

Of the “other businesses” that don’t add much to Intel’s bottom line, Intel Foundry Services (IFS) has yet to offer a strategic alternative to Intel’s traditional IDM (Integrated Devices Manufacturing) activities for PCs and servers. IFS is a big bet on a culture change, bowing to customer desires as opposed to telling them when the next x86 generation will ship and how much it will cost. Competition, customs chip makers, are well-trained, ingrained and demonstrably ruthless. To add to the IFS challenge, existing competitors can offer more advanced technology.

Let’s summarize Pat Gelsinger’s Struggles.

First, the PC business is and, in all likelihood will continue to be, in decline. This will add pressure on revenue, profit, and possibly cash. Notice that Intel just changed an internal accounting rule: “Effective January 2023, Intel increased the estimated useful life of certain production machinery and equipment from five years to eight years.” (Page 3 of the Earnings Release). This bit of accounting legerdemain, seemingly innocent but telling, strives to give an appearance of improved profitability. Not a great sign.

Second, the high-end high-margin DCAI server chips business is not in a declining market — au contraire, but it is, nonetheless, threatened by better devices that are built on more advanced technology non-Intel architectures manufactured by TSMC and others.

Third, keeping in mind the providers with better technology just mentioned, the Intel Foundry Services business is limited to customers such as the auto industry. This is a highly competitive, price-sensitive sector that’s dominated by lower-cost lower technology vendors. If Intel is to have a dog in this race, it has a lot of catching up to do. The “5 nodes in 4 years” effort promised by the CEO is good start, but will TSMC, Samsung, and others stop making progress in the meantime?

Fourth, other businesses such a Networking, Graphics, and Mobileye look like distractions. Last year, Intel floated a poorly received IPO for Mobileye. Perhaps it can cut the cord, and do the same for the other two product groups.

My professed high regard for Pat Gelsinger will grow even higher as he successfully deals with these challenges. No one wants to see Intel slide into another HP.

— jlg@gassee.com

Intel: Pat Gelsinger’s Struggles was originally published in Monday Note on Medium, where people are continuing the conversation by highlighting and responding to this story.

Of the companies Elon Musk started, two stand out: SpaceX and Tesla. They shook up their respective industries and made him a hero. It’s the company that Musk didn’t create, Twitter, that may be his “bridge too far”.

Let's start with a list of Musk’s companies. ChatGPT being temporarily unavailable, a Google search led me to a Times article that supplied the following list:

1995: Zip2

1999: X.com

2000: PayPal

2002: SpaceX

2004: Tesla

2006: Solar City

2016: Neuralink

2016: The Boring Company

2022: Twitter

We could add the Musk Foundation started in 2002, as well as his 2015 investment and Board participation in the initially non-profit OpenAI. Musk was later to distance himself from OpenAI citing a possible conflict of interest with Tesla’s own AI work. (Imagine if he had stayed involved with OpenAI…)

It’s an impressive résumé, the result of an unusual combination of mental agility, vast amounts of absorbed and well-digested knowledge, and enormous, sometimes overflowing psychic energy. Understandably, this leads many to call Musk a genius. (We can skip spurious Steve Jobs comparisons. Apple’s co-founder and later rescuer was uniquely focused, something Musk can’t be accused of.)

Solar City is now part of Tesla, Neuralink is barely alive, beset by people and legal troubles, and The Boring Company hasn’t achieved much after a flurry of initial publicity. This leaves us with two proven companies, SpaceX and Tesla, and a very much “work in progress” Twitter.

SpaceX is a shining example of Musk at his best. His goal for the company was to revolutionize the space industry, and he mightily succeeded. Among his many achievements, we’ve seen the appearance of reusable launchers, capturing 45% of the commercial launch market by 2017; putting cosmonauts into orbit in 2020; and, days ago, proceeding with a static engines test-burn for the gigantic Starship. The Starship rocket, which has twice as much power as the retired Saturn V, is designed for missions to the Moon and Mars. A first test-flight is planned for the coming weeks or month. (I plan to discuss Musk’s plan to colonize Mars in a future Monday Note.)

Although SpaceX isn’t profitable yet and has sometimes risked bankruptcy, the company recently managed yet another round of funding at a substantial $137B valuation.
And that’s not all. SpaceX begat Starlink, a “satellite internet constellation” of about 3580 satellites as of this writing, with a plan for 12,000 units, possibly extended to 42,000. Starlink real-time coverage is spectacular:

(The two dotted-lines are recently-launched satellites that haven’t yet dispersed to their intended orbits.)

Among other feats, Starlink provides Internet coverage in Ukraine, albeit with an unexplained clause against its use by Ukrainian forces drones. Other restrictions apply: Musk’s taste for improvisation, a trait we’ll see again, seems to have caused miscommunication between teams resulting in redesigns and costly consignment of hardware to the boneyard.

Overall, a great success, arguably Musk’s best work.

Of course, the conventional wisdom is that Tesla is Musk’s crowing achievement. While Tesla’s dominance of the EV market is no longer assured (as things stand today, Chinese maker BYD sold more EVs in 2022 than Tesla did), it was Musk’s defiance of convention that led to him to jump on the opportunity to rescue a fledgling electric car company in 2004, ditch the old Lotus-based design, and design and build the Model S from the ground up including in-house software. Tesla forced the auto industry to invest — massively — in electric vehicles, and briefly made Musk the world’s richest individual. (As veteran readers know, I’m allowed to drive my spouse’s Model S and greatly enjoy the experience.)

Indebted as many of us are to Musk, we can’t ignore that his iconoclastic impulses and perilous flair for improvisation (recall the Model 3 “manufacturing hell”?) have caused confusion and frustration. He’s issued a constant flow of eventually disproved statements about the coming fleets of robotaxis, a Full Self-Driving car, the Tesla Roadster announced in 2017 and still not available, the 2017 Tesla Semi that’s only now beginning to ship in small quantities, and the 2019 Cybertruck that might ship late 2023…

If SpaceX is Musk at his best, Tesla is Musk at his complicated truest. A genius, certainly, but also “an ‘unapproachable tyrant’ who fires people ‘because of his ego’”

Moving to Twitter, we’ll first observe that Musk is a long-time, unusually prolix Twitter user with a huge following. Along with Barack Obama, Justin Bieber, and Katy Perry, Musk is a member of the 100 million Twitter followers club.

Thanks to the Washington Post we have an analysis of the more than 19,000 Musk tweets. It’s not always a pretty sight and tempts me to see Musk as a frequent mental petomane (or “brain flatulist”, if you prefer). Belated attempts to delete infelicitous tweets are met with the unforgiving attention of other users — and the Internet Wayback Machine.

By itself, Musk’s intense Twitter use doesn’t easily explain his decision to buy the company. Perhaps seeing his 100 million followers amongst a Twitter population of 368 million users worldwide led him to believe he could monetize his user base — as if followers might want to pay good money to inhale his wisdom. We don’t really know. What seems to have happened is that he intemperately played with the idea, perhaps getting high on follower reactions, and then imprudently made a formal offer to acquire the company. After quickly trying to get out of his hasty “just tweeting” no-due-diligence offer, he found out that it was ironclad and was forced to buy the company at the inflated price of $44B. A very expensive brain flatulence.

What happened next is still fresh in our memories. From firing close to 50% of Twitter’s employees, to announcing new programs that were promptly canceled, followed by ejecting well-liked apps from the platform, Musk now runs a disjointed operation that hiccups frequently and is riven with internal strife (Musk is said to have fired an engineer who explained to him why his tweet views were down).

At Tesla, Musk got to build everything: the product, the teams, the charger network, the distribution system…everything. At Twitter, perhaps feeling invincible because of his previous successes, Musk threw himself into a complex product/market/organization he thought he could master but only knew from the outside.

And now? Once upon a not-so-distant time, Twitter was well-liked but beset by a lax culture that slowed innovation and growth. Now, Musk has become Twitter’s main problem — and still shows no sign of fulfilling his promise to relinquish the CEO role. But who would be foolish enough to work for the man Musk has revealed himself to be?

— JLG@mondaynote.com

The Musk Method And Twitter was originally published in Monday Note on Medium, where people are continuing the conversation by highlighting and responding to this story.

Apple’s quarter after quarter numbers draw much justified attention. Analysis of the numbers is always interesting — and prompts us to look beyond the three months just elapsed.

Apple’s numbers for the first quarter of its Fiscal Year 2023 (ending in December 2022) were less than stellar. The official press release points to a financial summary PDF from which I extract this chart:

According to my favorite AI conversationalist, the last time Apple saw a drop in revenue was in Q2 FY 2020, “due to the impact of the COVID-19 pandemic”, a claim that happens to be an hallucination. For that quarter, revenue was $91.8B versus $84.3 the year before. More pedestrian research says the last time revenue declined was in Q2 2019.

(As an aside, companies such as Meta, Alphabet, Amazon, and Microsoft also experienced disappointing revenue and/or profit quarters — and laid off tens of thousands of workers. So far, Apple hasn’t announced layoffs, seeming “content” to slow down hiring and to trim expenses.)

If you’re looking for sane discussions of Apple’s business, I recommend Neil Cybart, either by paid subscription at Above Avalon or summarized for free as @neilcybart on Twitter. Or you can subscribe to Apple 3.0 with its regular, no-nonsense analysis of Wall Street chatter by former Time and Fortune writer and editor Philip Elmer-Dewitt (@philiped).

In their traditional Earnings Call, Apple CEO Tim Cook and CFO Luca Maestri discuss the company’s latest numbers with Wall Street analysts and gingerly offer guarded pronouncements for the coming months. (A transcript of the conversation is diligently offered by Seeking Alpha.)

For further study, Apple just published its latest 10-Q SEC Filing. I tend to focus on the document’s second section titled Management’s Discussion and Analysis of Financial Condition and Results of Operations. It’s highly readable and rich in details such as the company’s Manufacturing Purchase Obligations (MPO), money that Apple has committed to pay to its manufacturing partners for the coming year. The MPO number provides a reasonably reliable indication of the company’s view of its upcoming business.

This year, Apple has disclosed $55.1 billion, with $54.8 billion payable within 12 months. At the same time last year, those numbers were $47.6 billion, with $47.5 billion payable within 12 months. One way to interpret this year’s higher MPO (+15.7%) is that the company sees substantial growth in its not-too-distant future. We’ll look again each quarter. We’ll also recall how such a usually reliable indicator has sometimes been defeated by market conditions and supply-chain travails.

Continuing to look at Apple’s future, we note the absence of the promised Apple Silicon Mac Pro. The lack is undoubtedly attributable to TSMC’s delay in moving from 5 nanometer transistors to the more advanced 3nm process (“Compared with the N5 process, the N3 process should offer a 10–15% increase in performance, or a 25–35% decrease in power consumption”). Progress is slow but, according to TSMC, it’s not stalled: As of December, “volume production using its 3nm process technology N3 is under way with good yields”. If this is true, and even allowing for some schedule slips, Apple customers should look forward to more advanced devices in all parts of the company’s portfolio later this year. In addition, I’ll be curious to see if and when Apple Silicon man, Senior VP Johny Srouji, one of my favorite Apple execs, manages to take his items into Qualcomm territory and make Apple Silicon RF modems for iPhones. Past rumors held that goal as a war cry for his organization, but victory may still prove elusive.

Moving from reasonable rumination about incremental improvements, we now turn to more challenging speculation. I’m referring to regularly repeated rumors about Apple’s entry into the AR (Augmented Reality) field.

In an August 2022 Monday Note, I expressed skepticism: I didn’t think Apple’s putative AR products would provide the company with a new growth wave of iPhone proportions. My doubts are multi-faceted. To start with, a wearable AR device — glasses or goggles — sounds much more complicated than a phone: It needs multiple cameras and sensors, projectors into our field of vision, powerful processors, more complex system software, real-time rendering challenges to avoid disorienting rendering lag, battery power/size and device temperature challenges… And that’s to say nothing of the need for a new breed of more complicated applications — and price levels

I have the utmost respect for Apple’s engineering prowess, but there’s an additional worry: Today, we use our smartphones all the time, everywhere, for everything — that’s barely an exaggeration. Would we use AR glasses as intensively?

At a visit to an Italian University last year, Tim Cook expressed himself thus [as always, edits and emphasis mine]:

“I’m super excited about augmented reality. Because I think that we’ve had a great conversation here today, but if we could augment that with something from the virtual world, it would have arguably been even better… Not too long from now you’ll wonder how you led your life without augmented reality. Just like today, we wonder, how did people like me grow up without the internet. And so I think it could be that profound, and it’s not going to be profound overnight…”

I have great respect for Cook and I take his pronouncements on Apple’s AR future seriously. Hopefully, his vision will prove more helpful than his oft-quoted (mis)statement on the iPad’s role:

“The iPad is the clearest expression of our vision of the future of personal computing.”

This brings us to wilder rumors. One story says that in the “2025 timeframe” Apple will introduce a Mac with a touch screen. After Apple lobbed toaster-fridge barbs at Microsoft for adding touch screens to its laptops, the company found itself on the receiving end when it came out with the 2020 iPad Pro, The toastiest fridge we’ve ever made (MotleyFool). Imagine the agitation if Apple did in fact come up with what many would call a Microsoft Surface clone.

There is more, such as an iPad with a folding screen. So far, devices with folding screens haven’t done much beyond short bouts of media agitation. To be continued if/when folding-screen technology continues to progress.

And we have the perennial Apple Car topic. Tempting as it is to dismiss it, we can’t ignore the continued investments by “legacy” automakers, by Tesla, and by technology companies such as Cruise.

To be continued.

— JLG@mondaynote.com

Apple’s So-So Q1 2023 was originally published in Monday Note on Medium, where people are continuing the conversation by highlighting and responding to this story.

As the sudden explosion of public interest in ChatGPT continues to excite millions, we ask: Is this the tipping point for machine-driven conversation (and more)? Is ChatGPT the Netscape of our time?

In Fortune’s The inside story of ChatGPT: How OpenAI founder Sam Altman built the world’s hottest technology with billions from Microsoft, author Jeremy Kahn helpfully explains OpenAI’s history, structure, financing, and much more — at 6K words, the article covers a lot of territory. Kahn cuts straight to The Big Moment scenario in his opening paragraph [emphasis mine]:

“A few times in a generation, a product comes along that catapults a technology from the fluorescent gloom of engineering department basements, the fetid teenage bedrooms of nerds, and the lonely man caves of hobbyists — into something that your great-aunt Edna knows how to use. There were web browsers as early as 1990. But it wasn’t until Netscape Navigator came along in 1994 that most people discovered the internet. There were MP3 players before the iPod debuted in 2001, but they didn’t spark the digital music revolution. There were smartphones before Apple dropped the iPhone in 2007 too — but before the iPhone, there wasn’t an app for that.”

(Unfortunately, the rest of Kahn’s piece is behind a paywall that offers various Fortune subscription incentives, a fairly common and understandable practice. I’ll just note that a single click on a widely available browser on desktop and mobile devices allowed me to download the article — and read it three times.)

For this week’s Monday Note, I queried a number of serious technologists, AI gurus with recognized expertise in both academe and the Valley about the possibility of ChatGPT as a “Netscape Moment”. What Saith Our Noble and Worthy AI Elders about the surprisingly powerful and friendly artificial conversationalist that was developed in the open (literally)? Will this new widely-available technology change the landscape?

I was expecting skepticism. These individuals aren’t easily inflamed by the latest Metaverse, Augmented Reality, or Autonomous Driving predictions. So I was surprised that that they were more than cautiously optimistic; indeed, they (mostly) anticipate a Netscape Moment — and jobs displaced.

I inquired about ChatGPT’s imperfections, felicitously called “hallucinations”, when the engine comes up with wrong answers. Obvious mistakes are amusing and innocuous, but the hallucinations become dangerous when the error is difficult to eyeball. I got two responses.

First, this is with the current GPT-3.5 version; an upcoming GPT-4 release will take care of the problems. Not a great perspective, one that brings back perennial FINR (Fixed In Next Revision) stories.

A more convincing reply combines the inventive, discursive ChatGPT output with the less voluble but more reliable answers of a search engine. As one (coffee) drinking companion suggested, this could be what Microsoft has in mind for future evolutions of its Bing search engine and other applications, or what Google search might do with Generative Machine Language (GenML) extensions.

Another “fixing ChatGPT” suggestion can be found in Stephen Wolfram’s recent paper titled Wolfram|Alpha as the Way to Bring Computational Knowledge Superpowers to ChatGPT. Over the years (I recall conversations with him about 35 years ago) Wolfram has developed powerful computing technology made available at wolphramalpha.com.

No doubt, ChatGPT’s popularity, its “virality” will give rise to more such additions to its powers, especially if the OpenAI/Microsoft association actively markets ChatGPT licenses.

We shouldn’t neglect what established AI companies have to say.

Google, for example, calmly publishes a blog post titled Google Research, 2022 & beyond: Language, vision and generative models. Detailed and informative, the blog posts remind us of the depth and breadth of Google’s AI work and gingerly refers to ChatGPT without mentioning it by name [as always edits and emphasis mine]:

“2022 has brought exciting advances in media generation. Computers can now interact with natural language and better understand your creative process and what you might want to create. This unlocks exciting new ways for computers to help users create images, video, and audio — in ways that surpass the limits of traditional tools!

[…]

2023 and beyond will surely be marked by advances in the quality and speed of media generation itself. Alongside these advances, we will also see new user experiences, allowing for more creative expression.

It is also worth noting that although these creative tools have tremendous possibilities for helping humans with creative tasks, they introduce a number of concerns — they could potentially generate harmful content of various kinds, or generate fake imagery or audio content that is difficult to distinguish from reality. These are all issues we consider carefully when deciding when and how to deploy these models responsibly.”

This contrasts with wild rumors of turmoil in the Alphabet executive suite with “code red” alerts and founders emerging from their warrens (while laying off about 12,000 people). Let’s hope Impressive Research will soon translate into Product Innovation for the rest of us.

From Alphabet’s reserved stance we now move to Meta’s Chief AI Scientist Yann LeCun, an individual with internationally acclaimed credentials and (you be the judge) an attitude to fit. A ZD Net story titled ChatGPT is ‘not particularly innovative,’ and ‘nothing revolutionary’ recounts LeCun’s reaction [again, edits and emphasis mine]:

“The public perceives OpenAI’s ChatGPT as revolutionary, but the same techniques are being used and the same kind of work is going on at many research labs, says the deep learning pioneer.”

He then adds faint praise…

“It’s nothing revolutionary, although that’s the way it’s perceived in the public, it’s just that, you know, it’s well put together, it’s nicely done.”

…reminds us that ChatGPT is using AI research and technologies developed by others…

“You have to realize, ChatGPT uses Transformer architectures that are pre-trained in this self-supervised manner. Self-supervised-learning is something I’ve been advocating for a long time, even before OpenAI existed…

Transformers is a Google invention, unveiled by Google in 2017, which has become the basis for a vast array of language programs, including GPT-3.

The work on such language programs goes back decades.”

…and explains that everything will be forgotten when Meta offers a surpassing alternative to ChatGPT:

“Are we going to see this from Meta? Yeah, we’re going to see this. And not just text generation, but also creation aids, including “generative art. I think is going to be a big thing.”

Unmentioned in LeCun’s commentary is Blenderbot, an August 2022 Meta chatbot that promptly got roasted for various racist and imbecilic responses.

We might very well be at a Netscape Moment, whether from OpenAI and its partner Microsoft, or perhaps from countermoves by Alphabet or Meta. OpenAI may have gotten there first, but let’s recall that Netscape didn’t come to dominate the browser market it ignited.

One last imprecise, lingering thought after my third reading of Jeremy Kahn’s Fortune article and (unsuccessfully) trying to parse the unusually complicated terms of the Microsoft investment deal. Admiring how deeply smart Sam Altman is, I couldn’t help but wonder how much advantage he might be taking of Satya Nadella’s thirst for a perceived AI coup.

— jlg@gassee.com

ChatGPT: Netscape Moment or Nothing Really Original was originally published in Monday Note on Medium, where people are continuing the conversation by highlighting and responding to this story.