AI Race Shifts: OpenAI Faces "Code Red" Amidst Google, Anthropic Advances

Deep Dive

The podcast begins by announcing the upcoming IPO tour dates for Austin, Texas; Arlington, Virginia; New York, New York; and Los Angeles, California, with tickets going on sale the following day.

The discussion then shifts to OpenAI, where Sam Altman issued a company-wide "Code Red" emergency. This action was prompted by the perception that Google and Anthropic are now leading the artificial intelligence race, which the hosts liken to a Mario Kart competition. Jim Cramer is quoted discussing how Google (Alphabet) possesses many of the capabilities OpenAI desires, suggesting OpenAI's ambition to rival Alphabet is misguided. The hosts note a personal decrease in their own use of OpenAI's ChatGPT, attributing it to frustrating issues, and highlight that Google's stock has risen 92% in the last six months while its competitors like Microsoft, Nvidia, and Oracle (shareholders in OpenAI) have seen decreases. The source details that OpenAI is directing all employees to cease non-core projects and focus on improving ChatGPT. Furthermore, Anthropic, described as the "Pepsi to OpenAI's Coke," is reportedly achieving $10 billion in annualized revenue, comparable to OpenAI, and has secured a $15 billion private investment from Microsoft and Nvidia. The Financial Times reports that Anthropic is preparing for an IPO as early as next year, potentially with a $300 billion valuation, which could position it as a favorite among retail traders if it precedes OpenAI to the stock market. The hosts conclude that in the AI race, there may be a "first mover disadvantage," citing that Google was once the leader before OpenAI, and now Google and Anthropic are not only replicating but improving upon OpenAI's features. Mark Benioff is quoted expressing a preference for Google's Gemini 3 over ChatGPT after a two-hour trial. The analogy of Mario Kart is used again, suggesting that being in second place allows one to use a "red shell" to unseat the leader, implying that OpenAI's current lead status makes it vulnerable.

Moving to the second story, American Eagle's stock surged 15% due to its "Anti-AI" pledge. The hosts list celebrities like Travis Kelce, Coco Golf, Sydney Sweeney, Martha Stewart, and Timothy Chalamet as brand ambassadors contributing to American Eagle's record revenues and best Thanksgiving weekend sales. However, the primary driver for the stock's performance is identified as the company's commitment to using only "real," non-AI-generated bodies and people in its marketing, particularly from its Aerie brand. This stance is contrasted with J. Crew's previous misstep of using AI-generated images with flawed details, which resulted in public criticism. The hosts introduce the concept of "digitally organic" as a growing trend, likening the market's embrace of natural and organic products in the food industry to a potential future acceptance of "digitally organic" approaches in contrast to AI-generated content.

The third story focuses on Waymo, Google's self-driving car operation. Waymo reported that its vehicles have completed 100 million driverless miles and are involved in 91% fewer crashes that seriously injure people compared to human drivers, and 96% fewer collisions with pedestrians at intersections. Despite two prior fatalities involving Waymos, the source clarifies these were caused by human drivers in other vehicles, and a recent incident involved an unleashed dog. The hosts suggest that delaying self-driving technology represents a missed opportunity to save lives and improve pedestrian safety. However, this safety data is juxtaposed with Waymo's recent software update that makes its cars drive more aggressively, akin to "crazy New York City cab mode." Waymo confirmed to The Wall Street Journal that the update aims to make vehicles "confidently assertive," as their previous passiveness was hindering progress, such as waiting excessively for construction vehicles. Waymo asserts that this increased assertiveness will not compromise safety, as computers can still predict and avoid collisions more effectively than humans.

The podcast then briefly mentions other news items. Nike advertisements in the UK were banned for misleading sustainability claims, a situation that Allbirds reportedly appreciates, labeling it as "greenwashing." Delta reported a $200 million loss in potential profit due to flight cancellations during a 43-day government shutdown. "Rage bait" was declared Oxford's word of the year, with other notable terms including "aura farming" and "biohacking." The hosts explain "rage baiting" as posting content intentionally to provoke strong emotional reactions.

Finally, the podcast shares a "best fact yet" about wine sommeliers developing larger smell-processing areas in their brains due to extensive aroma training. The episode concludes with birthday shoutouts and a mention of Rodrigo Tomas having both podcast shows as his top two Spotify listening experiences.