2026-08-17 23:38:10
Someone reset the 'Days Without Incident' clock at Anthropic to 0. From, I don't know, maybe 1, at most 2, these days.
Look, when I first saw the news that the company would be "watermarking" text, I didn't think much of it. That's in part because they didn't really explain how they'd be doing it so I assumed, like probably most people, that they'd be embedding some invisible characters in text outputs. But that, of course, would only work for people who directly copy-and-paste text from Claude to elsewhere. If you re-wrote whatever the output was, or used some tool to "wash" the text – AI laundering? – you'd remove such "watermarks". Still, many were up-in-arms about this because it was some level of invasive or sneaky. Others because it was going to gunk up the internet even more with superfluous characters. And some simply because it was going to make using AI to write without being known harder to pull off!
As it turns out, what they're actually doing – or planning to do – to pull this "watermarking" off is instead fairly insane.
Basically, Anthropic has designed a system that will alter the output in a way that allows them to assess the probability that any block of text has been generated by Claude. The key is switching one possible output to another at various points in a way that they suggest would only be perceptible by them, holding the keys to how they're doing this.
While it's true that Google has also been leveraging this same basic idea in the form of their "SynthID" technology for a couple of years, I suspect it hasn't been met with such outrage simply because most people don't use Gemini for such purposes – at least not to the extent they use Claude (or ChatGPT).1
Regardless, Anthropic has now pulled this to the forefront and made it a debate.
Again, at first glance this may not sound so bad. Perhaps even somewhat clever. I'm reminded of how back in my reporting days, I used to insert some subtle tweaks to catch if someone was trying to copy a scoop without properly attributing the information source (me).2 You'd be surprised how often this worked!3
To that end, I honestly don't think I'd be as upset/annoyed if Anthropic was doing this simply as a way to catch (or, if you prefer "identify") people who use AI to, say, write entire thought pieces. Just write the damn thing you lazy sonofabitch. Or don't, but don't put your name on it like you did!
Other tools and services have been popping up to do this, obviously. I'm not really sure we need to police such things, but it is also amusing to know the type of people who do this. Then again, it also opens a can of worms in terms of if such output should be considered as a "valid" form of expression if it's driven by your own input (your prompt), etc.
The key, I think, is that many people just want to know. They want to know if you used AI to generate what they're reading. And in some situations, like legal proceedings, people may need to know. To make sure they can trust that the actual legwork was done to say, prosecute a case, versus just the prompt work. Which is why the EU passed the law that Anthropic is now trying to adhere to with this! (More on this in a minute.) Should anyone be forced to disclose this? Again, I don't know. I think so, and certainly I'd prefer it, but this area seems pretty gray with a lot of slippery slopes. Should Anthropic be the one enforcing it? Well, like it or not, with this, they are.
Anyway, the far bigger problem I have is that this isn't just about text that people are copying and pasting elsewhere. It's about all text. As in, the kind you're being served up inside of Claude as well – even if it's not meant to be put elsewhere.
Anthropic is admitting that they're making that output to you worse in order to implement this system.
Again, that's insane. It may sound small or subtle, but it's just an awful decision and precedent to manipulate your product in this way. Even if you don't notice? Especially if you don't notice. This is full on subversion at scale.
But as mad as I may be about this, it's nothing compared to John Gruber, who devoted almost 5,000 words to the matter this weekend, calling it not "subversion" but "perversion". Here's a taste:
One of my fundamental problem with this is that no two synonyms carry the exact same meaning. “He leaped at the chance” and “He jumped at the opportunity” are very similar sentences expressing the same general sentiment, but they are not the same. The exact words we choose when writing matter. I want any LLM I use to choose the very best, most precise words at every single decision point. An obvious constraint that I accept is time and computation. Within the constraint of executing inference quickly, and at a certain cost per token, I want the best words. This constraint matches human writing. I could surely write a better column by taking longer to write it. I write with a sense of how much care I should put into every word and punctuation choice I make. I take more time with certain paragraphs, sentences, or even individual word choices when my gut feeling says I should.
In other words, these are necessary trade-offs. These factors are all in my interest: speed, cost, quality. Ideally I would like perfect writing, at instantaneous generation speed, at zero cost. None of those things are possible. Computation is not free of charge (and cloud-based LLM inference with leading models is actually expensive). Inference is not instantaneous. And great writing, whether natural or artificial, can only approach perfection.
The idea that anything other than my needs should factor into the generation of text for me is patently offensive.
Incidentally, I happened to write about AI and writing just yesterday, before I started to dive into this situation, noting the import I place on word selection. This Anthropic nonsense throws that notion right out the window. You may as well just buy a Mad Libs and run a random synonym generator.
For all the talk about AI slop, this is AI slop!
And for a company that likes to portray and convey moral superiority at every turn, and to hold themselves as the stewards of AI, it's a bad look. Yes, it's being somewhat forced upon them by the EU, but they don't have to do this everywhere, and yet they are.
They'll say that's just easier, and I'm sure that's true. But it doesn't make it better. That makes it worse. This is a nearly $1T company. They're about to be one of the largest companies in the world. Hell, they already are. Put in the effort to not make your service shittier for every single user.
Again, it may seem like a small thing. But small things matter. And they tend to snowball...
Honestly, what Anthropic should do here is tell the EU, just as their soon-to-be Big Tech peers, Apple, Google, and Meta do, that their rules are stupid. As with other such EU rules, they appear at first glance to perhaps be coming from the right place, but they're usually just political grandstanding. Worse, they seemingly don't think through the very obvious second-order effects of such rules.
If the EU mandates that the big AI tools have to implement these "safeguards", the people most likely to take advantage of such things are just going to turn to other tools. And what happens when running models locally on machines becomes far more commonplace? There's just no way this actually works. Again, all it will do is make what were the most-used AI tools worse. And that, in turn, may make the most-used AI tools less used.
Of course, that often does seem like the EU's basic mandate. So...
I digress. This is all just so nutty. Not that it's happening – again, Google already has been doing this and the EU is mandating it – but that it needs to be explained to these companies why it's such a batshit idea. Again, they're making their products worse – on purpose. Writing with AI was already contentious. Now it's nuclear.
Why does this need to be spelled out? It's almost as if they have a reading-the-room problem here. And perhaps that is impacting the overall perception of AI. You think?
I'll let Gruber take us home:
This isn’t just about text one might generate with the intention of passing it off as their own natural work. This isn’t even about LLM proofreading of work written by hand. Anthropic is saying that all new Claude models are going to adulterate every single bit of text longer than 200 tokens (~150 words) they generate, including everything it presents to its users to read. So even in a private conversation between a user and Claude, which will never be read by anyone other than the user, Claude will begin making word choices in the name of marking its output in statistically predictable ways rather than maximizing clarity and precision.
Even today’s so-called frontier models are already decidedly lacking in lucidity. Claude, ChatGPT, Grok, et al. are “better writers” than most humans and produce better prose than the median human. But: no shit. Most people are terrible writers. The “average person” is pretty stupid and half of all people are stupider than that. And there are many smart, interesting people who are miserable writers. So as impressive as LLMs are, the bar is low. The best writing I see come out of these models is worse than anything I would choose to read for pleasure. And now Anthropic is saying they’re going to make it worse, on purpose, for purposes that do not benefit me in any way? Even if only slightly worse?
Get fucked.
1 It was also framed more around images, video, and audio "watermarking" and less around the text element. ↩
2 And what outrage this caused back then in the blogosphere. Which feels so quaint now. ↩
3 Some companies employ similar tactics for internal memos too. Best not leak! ↩
2026-08-17 18:33:00
Presentation aside, clearly this was a bit of a muted year for Pixel hardware. Some small upgrades, some actual downgrades, and – undoubtedly related to both – price increases. The one new stand-out feature, hardware-wise at least, for the devices was clearly the 'HiLight' indicator in the camera bump. Much like BlackBerrys of old – which everyone keeps trying to get back to, it seems – this gives you a visual alert to a notification. Unfortunately, it sounds like it's comically under-implemented, to the point of being pointless:
That’s where this year’s “HiLight” feature comes into play. The rear-facing LED is available on all three Pixel 11 Pro models, and somehow it feels more half-baked than the temperature sensor.
This feature currently exists for exactly two functions – to tell you when a favorite contact is calling you, and to indicate that Gemini is active.
That’s it.
It's completely inexplicable that this notification is only for phone calls and not messages. I mean, even BlackBerry did that! Google seems to be messaging that this could come down the road, but how do you not launch with this? Who gives a shit about phone call notifications? The phone functionality is arguably the least interesting element of modern smartphones.
But even better would be:
Also, elephant in the room, why in the world does this not work as a notification LED?!
Our Andrew Romero pointed out just how good this would be. Having the LED customized to the app you got a notification from – reds and purple for Instagram, as one example – would be so good.
I see no reason why, with the right software, you couldn't have a few options. Say, light up "red" if my wife is messaging me somewhere (not just a phone call, but in any app). But also, say, light up "blue" if I get a Signal message. I mean obviously.
The Gemini notification is fine/cute – perhaps mirroring the 'Pixel Glow' strip that Google is trying to make happen on (the still poorly named) Googlebooks? It's probably a good thing to have if you're going to be talking to Gemini a lot and need to know it's active/listening.
Of course, the only time I would ever put my phone face down on a table is if I'm using a case (I worry less about scratches and more just the cleanliness of the surface for a device I'm going to touch so often throughout a day). And my "case" of choice is usually a MagSafe wallet which allows me to put the phone face-up (while making the phone actually stable with the ever-massive camera bump). And this obviously negates anything on the back of the phone.
Also, all of this with regard to notifications is what my Apple Watch is far better for anyway. So really this is just a feature for if you don't wear a smartwatch and often leave your phone face-down on a table. That's probably nice/useful but only if Google adds the obvious other notification integrations and why they're not launching with those is just dumbfounding.
But, to Schoon's point, Google often launches with features for Pixel devices which are half-baked at best. And as such, they usually vanish rather quickly.
2026-08-16 21:57:26
A number of interesting parts in this interview of Tim O’Reilly — including kicking off with the distinction between actual open source and all the current buzz (again) around open weights — but the ending bit about AI and writing stands out:
Steven Levy: When I edit this interview I will boil down our long conversation to a shorter one, but I won’t use AI to do it. And of course, the writing in the introduction will be all mine. It’s actually our policy.
Tim O'Reilly: I think that's a legacy thing that's going to go. My ability to have a thought partner in AI when I'm writing is very powerful.
SL: AI does your writing for you?
TO: No, no. I use it for brainstorming, and sort of just functional writing. When I interview somebody for an hour, I go to AI and say, “Turn it into something I can use.” I don't have the time to write up all those interviews.
I’ve already said (and written) my piece about using AI to write. To quickly summarize: quality aside, I personally don’t see the point because most of what I get out of writing is from the process itself. From thinking to choosing what words to use — and just as importantly, what words not to use. It’s a bit like having a robot run a marathon for you. What’s the point?
But I also say that as someone who loves writing. Many people do not, and so I also think using AI is fine for certain types of low-stakes writing, like many types of email. But if you’re actually putting your name to something more substantive, forget the audience, you’re just sort of cheating yourself.
Anyway, what I really want to remark on here is the idea of using AI to brainstorm. In the past, I may have written this off as well. But actually, with the rise of the very good AI voice technology — namely, GPT-Voice — I actually have found going back and forth with AI quite useful in helping to think through some ideas. And actually, it’s less about the content coming from the AI, it’s just the fact that I'm having a conversation and it’s drawing ideas out of my brain.
I’ve long found that some of my best ideas to write about come out of conversations. And while it’s obviously great to have those with people, people aren’t always immediately available to have a conversation with you. And again, if I’m being honest, it’s less about what the other person is saying and more that the chat is fleshing out my own ideas. In a way, I’m sort of “using” the human on the other end. Why not use an AI for that?
Again, I’ve found it quite interesting these past few weeks. These conversations with AI have spurred some ideas in my brain that I’m not sure I would otherwise have had. And to me, it's the actual speaking that's key to that. Saying things out loud forces your mind into places – at least it does for me.
SL: Aren’t you worried that AI will eventually supplant human writing?
TO: AI is literally a medium, in the same way that written words are a medium, or paint or music is a medium. When I talk to an AI or design art with it, I get something different out of it than you do, in the same way that Michelangelo and Van Gogh got completely different things out of paint. The idea that you can't write with AI will seem as curious as the idea that you can't make a good portrait or landscape with a camera. There will be people who are masters at expressing their ideas by summoning words from LLMs. People used to ride horses. Now, few do. We're in the early days.
I’m honestly not sure if I agree or disagree with this. I think I mainly agree but it’s also still a bit hard to see now. Because so much of what I see as the output still seems to mostly follow the same general patterns. I do expect that will change as models continue to improve, but perhaps I’m just not good at prompting when it comes to producing output that could pass as good writing.
On the flip side, I think the people who view any kind of AI-aided creation as an abomination are sort of silly. AI is a tool. The latest in a string of technological tools which will never end. What people inherently actually don’t like is the way this tool came about — by ingesting much of the internet. That is, words written by humans. Yet, in a way, humanity has done something similar throughout history, from cave painting on down, but this new level of “learning” has been done at a scale that no human can match. And, in fact, without other humans on the receiving end. It feels unnatural because it is unnatural, but that also depends on what your definition of “natural” is.
One more thing: when asked if open source can break the Big AI hold:
I don't predict the future. But I will say the world is proceeding the way that I hoped it would. What if the big frontier models end up like mainframes or supercomputers—aimed at really hard problems, which are not actually the thing that gets diffused throughout society?
Lost in all the aforementioned open weight debates is the notion that the frontier models may end up being overkill on a number of fronts — including, importantly, price and performance. Beyond some of the "open" players catching up on the latter, the real takeaway of this particular era may be the realization that we don’t need the absolute frontier for many tasks. And, in fact, more nimble, tailored models may be better suited for certain – maybe even most? – jobs.
The question there is whether the best of those come from — are distilled from — the frontier. And who gets to distill...
2026-08-14 05:23:29
On the plus side, it wasn't as bad as last year. On the minus side, it was still pretty bad.
Look, I'm clearly – clearly – not the intended audience for the 'Made by Google' events. But then again, shouldn't I be? I'm a sort of tech-obsessed user that upgrades my smartphone every year. Yes, that's been an iPhone for the past 19 years,1 but I often tend to buy a Pixel device too because I'm curious! Yes, that's crazy. And yes, I'm not at all a typical user. But with the cards – and devices – played right, I could, theoretically, be someone who moves to a Pixel phone as my primary device one day, right?2
I mean, not if I'm watching this presentation.
Again, Trevor Noah was a far better MC than Jimmy Fallon was last year. But the bar was so comically low – pun actually intended – that almost anyone would have been an upgrade. Sure, my own personal preferences naturally finds Noah funnier than Fallon, but he also just seemed decidedly more chill and at ease than Fallon and, as such, a lot of his jokes landed with less of a cringey thud. Of course those jokes were almost always negated by the Google employees he was playing against as they were clearly far more worried about sticking to the script. And it's hard to blame them, they're not comedians nor actors. But they are asked to be here.
It's a fucking weird strategy for a product unveiling!
Again, clearly I'm not the audience. But who that audience is, I don't know. People who are fans of the various celebrities they showcased, I guess. But even then, is that really a good acquisition strategy? How much are they paying these people to hawk these products and how many purchases will it actually lead to? Clearly Google can measure this. Are they? Or are they just hoping for some kind of halo effect? Are they just hoping for more views on YouTube? What's the ROI?
I would like to give Google credit for trying something different. This is not an Apple keynote. But I gave them credit for that last year. It didn't work, yet they doubled down. Again, Noah is an upgrade over Fallon, but the format just doesn't work. At least for me. And I assume for many. It still just feels like an infomercial.
It's like when Meta has tried to do keynotes with laughably scripted "candid" conversations. But at least those were actual Meta employees who, script aside, were presumably actually excited about what was launching. Here, half of the presenters were actors and/or celebrities. Are they genuinely excited about new Pixel products? Maybe. But also maybe mainly because they're getting paid to be excited about them. Start the countdown to shots of them in the wild using iPhones...
Again, the other half of the presenters were actual Google employees, but they were faced with the impossible task of acting against professionals. For the most part, they were actually pretty good at it, but still failed because it all just looks so scripted. Because it was so scripted! What is the point?!
At least the events are live! (Aside from the many pre-recorded videos Noah would tee-up throughout.) As such, they do feel actually more alive than the last several years of Apple events. But again, sort of in an awkward way here.
Staging aside, there was also this weird undercurrent throughout the event, highlighted by Noah again and again, which boiled down to: we know we promised the last wave of AI was cool, but didn't really do much for you, but this time, it's really cool. Okay, but why would anyone buy that, quite literally, this time?3
Noah veered between seemingly improvising well – as you'd hope! – to awkwardly being forced to come back to the script. And again, that just serves to undermine the entire "performance".4 Is he actually excited about any of this? Even if he is, when we're asked to believe that he knows these random Google product managers well, casually sitting on the couch with them, just to catch up, it just all feels so fake.5
It's like Google doesn't quite understand what actually made Apple keynotes work. It's not the current, slick variety. It's the history behind them dating to when Steve Jobs would be on stage, clearly excited and enthusiastic about what he was showcasing. That's what translates and what people want to see. In that regard, hiring actors to do this is the opposite of the point.
Update August 17, 2026: As for one of the key features of the Pixel devices being shown off/touted...
1 Yes, even for the 11 of those years that I worked at Google. Sorry, Google! ↩
2 I can't decide if it was weird or smart to set up Alex Cooper as the Switcher-in-Residence. If it's legit, probably smart. But again, better not capture any shots of her with an iPhone! ↩
3 Also, it all honestly felt decidedly AI-lite versus what you'd expect?! Then again, maybe that shouldn't be a huge surprise at this particular moment in time? ↩
4 The parts with his fellow South African, Noel, while obviously staged, were also by far the best of the bunch. Fun/funny banter. ↩
5 Which is honestly a bit annoying when say, the ASL demo is so awesome. In ways, this felt like a distraction from the technology. ↩
2026-08-13 17:43:35
Apple's App Store fees are hanging on for dear life:
Apple Inc. won a one-day reprieve from the Supreme Court Wednesday as Justice Elena Kagan paused proceedings before a California trial court in the iPhone maker’s long-running antitrust feud with Fortnite-maker Epic Games Inc.
The administrative stay issued by Kagan is designed to give the high court more time to consider Apple’s request for a longer-term stop to additional lower court action in the case. Absent the Supreme Court’s order, Apple would have needed to make a filing with the US District Court for the Northern District of California by Wednesday afternoon. Kagan paused proceedings until 5:00 p.m. Washington time Thursday.
In other words, Apple was going to have to submit a proposal to the California court for what they think a "fair" App Store cut should be – something between 0% and 27% – with evidence to back up that proposal. While they wouldn't have been forced to implement that fee yesterday, it is a massive component of the on-going legal challenge because it will essentially put the wheels in motion to bring about a lower fee. Potentially a much lower fee.
Apple, of course, doesn't want to lower the fee. They didn't want to lower it from their standard 30% cut, but their sole loss in "winning" the Epic court case ensured the end of that. It meant developers could link out to the web to handle payments outside of the App Store rails, which Apple reluctantly allowed alongside a 27% fee.
This fee, famously, pissed off US District Judge Yvonne Gonzalez Rogers. Because it was pretty clear that 27% was backed into by Apple to not only keep the fee structure intact, but also to keep the entire model intact. Because a 27% fee was likely a worse deal for many developers who chose to use it (because they'd have to pay the processing fees for anyone they choose to handle the payments on the web, which are usually just above 3% – making the total cut paid above 30%).
Anyway, yeah Judge Gonzalez Rogers found Apple's "remedy" so insulting that she asked for Apple to be held in criminal contempt of court. And she ordered Apple to stop charging fees for web-based payments. Apple has kept trying – and failing – to reverse all of this. The Ninth Circuit upheld the contempt finding but also said Apple should be allowed to charge something for their App Store fees (even when processed through the web), just not 27%.
Apple tried to freeze the entire thing while they appealed to the Supreme Court – and the Supreme Court denied the freeze. But they didn't deny hearing the case – yet. That's why they're pausing the proceedings for now (after Judge Gonzalez Rogers denied the same request), while they weigh Apple's appeal. But before they do that, they're basically likely to decide today – again, it was just a 24-hour delay – whether they should grant a longer stay. Presumably if the court thinks they're unlikely to hear Apple's appeal, they may not grant that longer stay. Or if they think Apple filing their number won't harm their business, they'll let it proceed. But Apple will argue that if the longer stay isn't granted, it will cause major harm to their business because again, it will effectively end the App Store cut as we know it.
So yeah, it's a big deal.
Especially because in their most recent earnings report a couple weeks ago, Apple noted that their Services growth was weaker than expected in part due to the pressure the App Store model is under. Other countries have already taken various actions to change Apple's fee structure – and even force them to allow for third-party app stores. But the US is obviously Apple's most important market.
And beyond all of the above, they're also under growing pressure because Google got more fully owned by Epic in a separate trial around the Play Store. They lost that case so badly that they ended up cutting a deal with Epic to end their own 70/30 split, amongst other things.
All of this is why I've been predicting/waiting for Apple to change their tune on the App Store and "proactively" change some of the rules, including, most notably, the standard 70/30 split. Yes, they've tweaked it over time due to various developer backlash (and political/governmental pressure), but it seems well past the time to rip the Band-Aid off – as it's in the process of being taken off ever-so-slowly by courts around the world. And, as everyone knows, that's far more painful.
And yet, Apple has thus far refused to budge. Presumably they're holding out for the hope that the US Supreme Court hears their case and determines the 27% shenanigans didn't warrant a contempt ruling (as well as that their one loss against Epic shouldn't dictate changes for every developer across the board). But regardless, the whole thing is so clearly hanging on by a thread.
My hope is that they're now simply waiting for John Ternus to formally be put in place and as one of his first acts, he changes the App Store rules. It would send a great signal to the market and to Apple's developer community that Ternus is his own man, ready to make hard calls and make changes as needed. The precedent here would be Satya Nadella coming into place as Microsoft's CEO and immediately announcing the Office suite for iPad.
Am I asking too much? Probably. It's Apple. They're nothing if not stubborn. But again, the writing is so clearly on the wall here... Apple and Ternus can turn this from a major PR headache into a major PR win!
But they also may not have enough time to do that right now as again, there's a new deadline today! If the Supreme Court doesn't issue that longer stay, Apple will have to submit their proposal for a "fair" fee – again, presumably less than 27% lest they risk pissing off the court even more! – and that in turn will lead politicians all around the country and world to wonder why if the fair fee is 'X%' why they've been charging 30%?
The answer is actually and humorously because that's what Nintendo charged third party game makers to help them make video game cartridges for the NES back in the day. But no one wants to admit that, so instead it's 30% because that's the industry norm, even if it was arbitrarily set by Steve Jobs because it was working for iTunes, again, because it had worked for gaming way back when. Jobs also, of course, famously said he didn't expect the App Store to be a big money maker and instead wanted the fees to simply cover the costs of running the service.
And yet here we are, nearly 20 years later, with the App Store raking in billions in profits and powering Apple's second most-important business in Services. That's obviously what this is all about. But it's also obviously about to change...
Update August 14, 2026: The Supreme Court decided against issuing a further delay and as such, Apple had to file their proposal yesterday. There's quite a bit in here...
First and foremost, Apple proposed cutting the 30% cut they take to 15% if transactions are done on the web. You'll note that this is quite a bit less than Apple's previous proposal of 27%, which got them into trouble. It's obviously halfway between the current 0% rate that Judge Gonzalez Rogers put in place and the 30% standard. That 15% also gets cut further depending on the category of app. Here's the proposal:
• 15% for standard apps, which are subject to a 30% in-app purchase (“IAP”) commission;
• 10% for the Video Partner Program (“VPP”), the News Partner Program (“NPP”), the Mini Apps Partner Program (“MPP”), and subscription renewals; and
• 5% for Small Business Program apps.
Unsurprisingly, Epic has already pushed back against the 15%, noting that Apple themselves found that their "necessary costs" to allow app makers to route payments through the web "would be essentially zero". Apple was also forced to issue that finding and yeah, it doesn't look great!
But Apple's stance on why they need to charge 15% turns to the notion that if they accepted less of a cut, it would effectively kill their IAP business, and as such, the App Store business, as it would drive pretty much all developers to use the web instead.
Given that, it's probably not surprising that Apple is also now seeking settlement talks(!) with Epic over the situation. In fact, Apple tried to talk to them before they were forced to issue these findings and Epic said no! Now you see why Apple's strategy here was perhaps flawed... Epic, of course, did end up settling with Google, undoubtedly because they weren't nearly as hostile as Apple has been.
Epic really, really does not like Apple as a result of all of this and clearly has been angling – for years now – to make them pay, perhaps quite literally.
Apple is now trying to get the court to force Epic into settlement talks. And if that tactic doesn't work, Apple's proposal will go back in front of Judge Gonzalez Rogers, likely before the end of the year, to determine what the actual cut should be. Presumably she would decide on something between 0% and 15% now, but probably closer to 0% given that was her initial amount, but taking into account the 9th Circuit's ruling that Apple should be entitled to something.
Apple is in a very dangerous spot here. Yes, this is only for web payments, but still, to Apple's point, if that cut is low enough, it could destroy IAP and thus, the App Store as we know it. And that, in turn, would destroy Apple's entire Services business as we know it. Apple's second-biggest business! The one with the most steady growth!
So yeah, they need Epic to settle. Can a CEO change at Apple somehow make that happen? Might Tim Sweeney need to see other concessions? Perhaps new leadership for the App Store itself? This isn't game over, but it's close...
2026-08-13 04:32:29
There have been a few times now where Alex Kantrowitz and I have discussed something on his Big Technology Podcast and it has happened; not just later, but sometimes days, sometimes mere hours later. As was the case with Google last week, as we devoted our last segment to talking through why the company was falling behind (again) in AI and what that might mean...
Sure enough, before Alex could even hit publish on the episode, Demis Hassabis was stepping down ("up") as the head of DeepMind and Jeff Dean, Sanjay Ghemawat, Oriol Vinyals, and Quoc Le – 3 of the 4 leads of Gemini, mind you – were also leaving to found a new startup focusing (at first) on what else? RSI.
So yeah, if Google needed a shakeup (again) in AI, they got it!
Anyway, while Alex kicks off the episode with an emergency interlude from his vacation in Indonesia, we then get the actual episode we recorded, starting with Apple's precarious component situation. Sure, they may have looked great to Wall Street in recent weeks for not spending hundreds of billions on AI build-out CapEx, but as their earnings report made clear, there was still a downside to this moment in time. That is: they can't get enough of the components they need for their other devices because of this AI build-out, and those they can get are now insanely expensive (which they're now forced to pass off to consumers).
It's interesting to think that if Apple had spent more time and resources on the AI build out, if they wouldn't be in a better position now simply with regard to the pecking order for parts. And it's sort of wild that Tim Cook, the logistics expert, in his final days as Apple CEO, didn't see this coming...
As for Alex's conspiracy theory on the price increases, watch the margins. But also, watch the messaging around 'Apple Upgrade'.
Speaking of CapEx, how did Microsoft manage to come out of this most recent earnings report looking so rosy? Well, certainly there's some level of AI potentially fueling cloud growth (as was the case with Amazon as well), but there's also some clever accounting at play here. And I don't mean that deceptively, I just mean it's honestly clever the way Microsoft played a hand they could play at a time when such spend matters more than anything else to Wall Street.
How much does it matter? Well, Microsoft had the biggest single day market cap gain in history following the report...
Anyway, how much are these numbers and growth within the Big Cloud players are simply built around Anthropic and OpenAI? I mean, it's certainly worth asking! And is that part of the reason why we're starting to see Microsoft hard pivot their narrative and model (yet again)? Meanwhile, Amazon is closing out their $50B investment in OpenAI ahead of when they apparently needed to...
Finally, Google. What on Earth is going on? The problems seemingly have been mounting. Where is Gemini 3.5 Pro? Will we ever see it? It increasingly feels like "no" – it feels a little Llama-y... And it certainly feels like a lot of bureaucratic in-fighting for resourcing and mindshare internally.
But it also could be as simple as Demis Hassabis not fully being bought into LLMs being the be-all/end-all of AI and wanting to continue to push frontiers while Google overall finds themselves in this current AI dogfight around coding and whatnot which are obviously all tied to the current LLM state of the art. And what if LLMs get us to the aforementioned RSI?
Anyway, the situation corrected itself! Or was corrected. Either way, look for Google to come zooming back in a few months – again.