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Last quarter I rolled out Microsoft Copilot to 4,000 employees.
$30 per seat per month.
$1.4 million annually.
I called it "digital transformation."
The board loved that phrase.
They approved it in eleven minutes.
No one asked what it would actually do.
Including me.
I told everyone it would "10x productivity."
That's not a real number.
But it sounds like one.
HR asked how we'd measure the 10x.
I said we'd "leverage analytics dashboards."
They stopped asking.
Three months later I checked the usage reports.
47 people had opened it.
12 had used it more than once.
One of them was me.
I used it to summarize an email I could have read in 30 seconds.
It took 45 seconds.
Plus the time it took to fix the hallucinations.
But I called it a "pilot success."
Success means the pilot didn't visibly fail.
The CFO asked about ROI.
I showed him a graph.
The graph went up and to the right.
It measured "AI enablement."
I made that metric up.
He nodded approvingly.
We're "AI-enabled" now.
I don't know what that means.
But it's in our investor deck.
A senior developer asked why we didn't use Claude or ChatGPT.
I said we needed "enterprise-grade security."
He asked what that meant.
I said "compliance."
He asked which compliance.
I said "all of them."
He looked skeptical.
I scheduled him for a "career development conversation."
He stopped asking questions.
Microsoft sent a case study team.
They wanted to feature us as a success story.
I told them we "saved 40,000 hours."
I calculated that number by multiplying employees by a number I made up.
They didn't verify it.
They never do.
Now we're on Microsoft's website.
"Global enterprise achieves 40,000 hours of productivity gains with Copilot."
The CEO shared it on LinkedIn.
He got 3,000 likes.
He's never used Copilot.
None of the executives have.
We have an exemption.
"Strategic focus requires minimal digital distraction."
I wrote that policy.
The licenses renew next month.
I'm requesting an expansion.
5,000 more seats.
We haven't used the first 4,000.
But this time we'll "drive adoption."
Adoption means mandatory training.
Training means a 45-minute webinar no one watches.
But completion will be tracked.
Completion is a metric.
Metrics go in dashboards.
Dashboards go in board presentations.
Board presentations get me promoted.
I'll be SVP by Q3.
I still don't know what Copilot does.
But I know what it's for.
It's for showing we're "investing in AI."
Investment means spending.
Spending means commitment.
Commitment means we're serious about the future.
The future is whatever I say it is.
As long as the graph goes up and to the right.
prediction markets will replace buying stuff.
i want someone to bring kiwis to my house.
i make a prediction market about whether someone will deliver 4 kiwis to my doorstep and load $15 into "no". a guy with an ebike sees it and picks up some kiwis.
before dropping them off on my doorstep, he bets yes. he drops them off. the market resolves to "yes" and he gets $15.
rest in peace, amazon, doordash, ubereats, etc.
@johncoogan I think the only missed aspect here is the core underlying cultural theme that social media is bad for people. As a parent, it’s top of mind. How do I raise kids with technology without all the negatives of social. My gut is saying this is part of the reason for high capex spend.
Meta missed earnings and the stock fell 10%. It’s now a $1.7T company. There was a surprise one-time tax charge of $15.9B that crushed net income, spending on AI researchers has been wild, and capex is growing a ton ($72B this year). But the core business rocks and we know this. $51.2B in revenue this quarter, up 26% year-over-year. There are just so many dials that the Meta team can get slightly more dialed every quarter. More users, more time on platform, more ads, more targeted ads, etc… small tweaks compound.
The bigger question in my mind is about what happens to the advertising cash machine once you are two decades in. Google went through a transition on October 2nd, 2015 that, at the time, looked delusional, but now looks genius. They rebranded to Alphabet and began spinning a narrative that they were more than a search company. This was heavily memed at the time. They couldn’t get their Google+ social network to work, they had a dozen failed attempts to create a chat app, even poor pitiful Google Reader got taken out back.
Today, Alphabet deserves the broader name, the company is more than just a Google search box and 10 blue links. Google Cloud is material, DeepMind is material, Waymo is material. These are key to Alphabet’s future value but also key to running the business today. The interplay between these divisions creates a ton of value, but more importantly, I don’t think these businesses would exist if they hadn’t grown up in a cash-rich environment. The Google ads business basically gave them infinite runway to develop new technology with uncertain horizons and then go find their position in the market as it matures.
Now, on October 28, 2021, Facebook rebranded to Meta. I think it’s overly narrow to frame this as purely focused on virtual reality and “the metaverse.” In my mind, it’s more similar to the Google ➞ Alphabet rebrand and representative of zooming out and focusing on different business lines. VR was just the first in the queue, but it’s worth taking a temperature check here.
There’s no question that AI will be a sustaining innovation for Meta’s core family of apps. Machine learning has been generating immense value for the company in ad targeting since ~2013. Well before OpenAI was founded in 2015, or Google’s transformer paper dropped in 2017. The core business is solid, we know this, but where do Meta’s “Other Bets” go? Mark Zuckerberg has an amazing track record when it comes to buying other social networks that integrate directly with Facebook’s core infrastructure. His track record building or buying successfully in non-overlapping markets is less established.
The line from Google as a PhD research project, to a sort of academic campus focused on “organizing the world’s information,” to mapping the physical world, to building a self-driving car is a crazy chain of events, but it does sort of have a natural logic to it as you look back with 20/20 hindsight. Facebook has oriented around a mission of “bringing people together,” which, in many ways, sounds maybe even more noble than just organizing information, but it doesn’t fit neatly into the AI era.
Reality Labs and Meta Superintelligence / TBD Labs might turn into massive new business lines over time, just as Google Cloud and DeepMind did at Alphabet, but aligning these new initiatives with the core Meta mission and then also justifying expenses to shareholders will be an ongoing challenge.
Great @gamecraftpod epi covering the @EA take private. @mitchlasky has epic suggestions for what they could do. Fingers crossed. Especially for the Sims franchise.
The bull case for Apple + AI is they’re going to completely avoid enormous amounts of capex spend, get most of the consumer value from intelligently integrating Gemini, and get paid a boatload of money from Google for doing so.