THIS WEEK IN AI: Microsoft Build, NVIDIA at Computex, New Glenn Explosion

**Josh** (0:00)
We had a pretty big and exciting week in the world of AI and frontier technology. Lots of things happening. New AI hardware devices unveiled, rocket ships exploding. I want to start with the Microsoft event. Microsoft held their Build event. Microsoft notoriously has been in the AI race only via companionship to OpenAI. They are the largest investor, largest owner of OpenAI. And that has been the connection. This week, they severed even more ties with OpenAI as they decided to build their own new hardware. Now, they released seven new AI models. They released two new AI devices. And to hear that Microsoft is building an AI hardware device was a little shocking. So I went on this kind of race to try to figure out more information to understand how it worked. And what I found is these two devices that we're seeing on screen, we have a desktop device that looks kind of like an Amazon Echo Home Hub. And apparently it's very smart. You can converse with it. It works with their new AI models. And the second device is this small looking key card. That's something you wear around your neck. It's very smart. It has a display built into it. And it's used for a lot of kind of practical in the job type use cases.
What I found out that disappointed me is that all of this was a concept. They marketed this as this amazing product that everyone was going to be able to use, showcasing all of these cases. But the reality is that they're never actually going to ship these. In fact, this is just a concept for other companies to go off and get inspired to then build their own versions of. So here I was thinking, oh my God, wait, Microsoft's making a comeback. They have seven new models, they're releasing new hardware. And I think the reality is that Microsoft still feels like they're in the same place they were prior to this build event.

**Ejaaz** (1:37)
Yeah, I've watched this video twice now, and I still don't know what these devices do.
I feel like I've been transported back a decade ago, and Amazon's just announced the Echo again. Also, why are we wearing Lanyards as futuristic AI tech? Now, I got hopeful when I saw this announcement, Josh, but I almost immediately killed that hope for one specific reason.
I don't know anyone that is conceivably using Microsoft's AI products to a larger extent, right? So Copilot is like their flagship AI assistant, and they've admitted that their coproduct product is way behind the likes of ChatGBT and Claude itself. So if I already know that people aren't really using the Microsoft AI ecosystem at the software level, why on earth would they use it at the hardware level? Now, I dug in to a little bit about what this thing is supposedly meant to do. And it's supposedly meant to be like an AI agent, kind of like physical surface area. So what I mean by that is it's meant to listen to the things that you do, it's meant to see the things that you write or speak about, and then it's meant to kind of like ingest this data and improve your own personal agent, your own personal model. There's one issue though. Microsoft doesn't even have a functioning V1 of an AI agent that can do all of this for you. They kind of brand it as coproduct, but it's really ChatGBT and it's an older model of ChatGBT and it's less effective than ChatGBT, so why wouldn't I just use ChatGBT? Now, understandably, Microsoft recently has been trying to move away from their partnership with OpenAI. There was a bit of tension between Sam Altman and Satya Nadella, and they're trying to sever that partnership and start becoming a more multimodal operation. They've started using Cloud for a lot of their products and other types of models. This is a step into the device side of things. This wasn't exciting to me and it maddens me so much that this is a concept that apparently they don't plan to build at all. What did excite me was something that we covered earlier on in a earlier episode this week which was their new Microsoft Surface, AI engineered laptop which is meant to run like one of Nvidia's latest chips which allows you to run models locally. But this doesn't really inspire me.

**Josh** (3:43)
Well, something that might inspire some people if the hardware isn't doing it, is the software because Microsoft isn't just sitting there being dormant. They're working on their own AI models. They're working on large language models that I have to assume are somewhat derived from chat-qbt models because they have that proprietary license. They must be leaning on it to some extent. What we have here is seven new models that they're working on in parallel. Initially, I was a little frustrated by this too. I'm like, why the hell are they working on seven models at once? But in the context of this image that we're seeing on screen, it makes a lot of sense. The models are supposed to be working on specific modalities altogether. We have an image model, we have a large one and a flash one for smaller. We have a transcription model, we have a reasoning model, we have two voice models and a coding model. They're building all of these in parallel. I have to imagine they're going to be building the orchestrator or at least using Copilot as the orchestration harness engine for these models knowing what to serve them.