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Thanks for reading The Briefing, our nightly column where we break down the day's news. If you like what you see, I encourage you to subscribe to our reporting here.
Greetings!
It's not obvious that filing lawsuits against your competitors is the way to succeed in artificial intelligence, if only because a lawsuit can take years to resolve and AI is evolving extremely rapidly. Nonetheless, litigation is the approach Elon Musk is taking to try to protect his startup, xAI, from bigger rivals. You might wonder if this is the same Elon Musk who reinvented the space industry and made electric vehicles hot? Hmmm.
Still, Musk is starting from behind in AI. And so, even as his wide-ranging lawsuit against OpenAI over the role of its charity shareholder winds through the courts, Musk today sued Apple for teaming up with OpenAI through the integration of ChatGPT in AI services on the iPhone. That move has "thwarted [xAI] in their abilities to innovate and improve the quality and competitiveness of their offerings," the lawsuit alleges. But while the lawsuit over OpenAI's charitable origins seems to have something to recommend it, the same can't be said of the Apple lawsuit. It's full of dubious assertions, starting with its opening line: "This is a tale of two monopolists joining forces to ensure their continued dominance."
Whether Apple is technically a monopoly is up for debate—the Justice Department has alleged as much in a case yet to come to trial—but it is hard to believe anyone could accuse OpenAI of being a monopoly. After all, the ChatGPT maker faces a lot of deep-pocketed rivals, most obviously Google and Meta Platforms. Also, Musk doesn't attempt to square his assertions about Apple and OpenAI teaming up with comments from Apple executives last year when introducing the ChatGPT integration that the company will eventually incorporate other AI companies' services in the iPhone. Just last week Bloomberg reported that Apple was talking with Google about using that company's Gemini model to power Siri. Will Musk add Google to the suit?
Then there's the assertion that by integrating ChatGPT into Apple's AI services, Apple has locked everyone else out. Musk's lawsuit insists that consumers "cannot readily switch to less expensive smartphones and use generative AI chatbots…that match or replace the features offered by the iPhone." In fact, it's easier than ever to switch to cheaper smartphones. Apple's adoption of the RCS messaging standard closes the gap between the company's iMessage and the default texting apps on Android phones, making that gap less of an issue for would-be switchers. (I know—I use a Google Pixel.) Moreover, all the AI chatbots have apps that users can install on both iPhones and Android phones.
Perhaps the lawsuit is meant as a negotiating tactic, one that will give Musk more leverage with Apple. But seeing as how the iPhone maker fought a much more substantive antitrust case—filed by Epic Games over the App Store rules—so hard that it got rebuked by the judge hearing the case, it's unlikely CEO Tim Cook will let this lawsuit worry him for a second. Musk might want to concentrate more on the tech at xAI and less on frivolous lawsuits.
Netflix's Misstep
Even the best management team can have an off day. And somehow it seems Netflix's otherwise stellar team is suffering one of those. Otherwise it would be hard to explain the company's announcement that it is opening a chain of bricks-and-mortar locations—Netflix House—offering "activities that immerse you in your favorite titles with a mix of complimentary and paid experiences."
For instance, people can "take selfies with beloved characters like Queen Charlotte," have a meal at an eatery called Netflix Bite or watch a movie. The first opens in Philadelphia on Nov. 12 and the second in Dallas on Dec. 11, while a third is scheduled for Las Vegas next year (more details here).
These locations sound suspiciously like a combination movie-theater-restaurant with a few other activities thrown in—not that dissimilar to what some cinemas already offer. But movie theaters are a famously tough business, thanks in part to competition from…Netflix! We know Netflix makes a lot of money, but is that any reason to throw it out the window on this kind of venture?
Quote of the Day
Former Meta Platforms executive Nick Clegg on Silicon Valley's "cloyingly conformist" culture: "Everyone wears the same clothes, drives the same cars, listens to the same podcasts, follows the same fads. It's a place born of immense sort of herdlike behavior." (As told to the Guardian)
In Other News
• Marketing software firm Klaviyo told employees it would restructure its R&D organization, according to an internal memo reviewed by The Information. As part of the shakeup, Klaviyo is laying off less than 100 staffers, according to a person with direct knowledge of the changes. Klaviyo will eventually replace most of the people who are laid off with new staffers within its engineering team as part of its effort to expand in AI, the person said.
• Humain, the company overseeing Saudi Arabia's artificial-intelligence push, released an Arabic-language chatbot it plans to make available globally.
• Temu's parent company PDD Holdings reported on Monday that its revenue growth slowed again in the second quarter, with executives citing "intense competition" as a reason for the slowdown. The period also coincided with the elimination of an import duty loophole that had allowed Temu to flourish in the U.S. and keep costs low.
• A group of Silicon Valley companies and executives have put more than $100 million into launching a network of political action committees aimed at shaping artificial intelligence policy.
Today in The Information's TITV
Check out today's episode of TITV in which we break down Epic Systems's AI transcription play with Microsoft for doctors.
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