Two California Trials Framing the Week

“Happiness is a rare commodity. There’s a lot of fuel for the claim that unhappiness is caused by some software, when in fact the roots of unhappiness are way deeper than that.” — Keith Teare

If it’s not warfare in Iran, then it’s lawfare in California. Out here in Silicon Valley, it’s been a week dominated by two trials of big tech. First, Meta and YouTube were found liable for designing products that addict children. While the young female social media victims hugged outside the Los Angeles courthouse, the Wall Street Journal dismissed it as a Big Tech shakedown. Then, up the road in San Francisco, a federal judge granted Anthropic an emergency reprieve from the Pentagon’s unprecedented designation of the company as a supply chain risk.

For That Was the Week publisher Keith Teare, the social media trial was fighting the last war, while the Anthropic vs US Government trial is about the future of war. Anthropic took the bait, Keith says. Governments, he believes, should get to decide how to use the products they buy from Silicon Valley. Anthropic wanted to sell to the government but dictate how their technology gets used in battle. The Istanbul-based Soli Özel warned us earlier this week that events in the Middle East are going to get much bloodier. But I wonder if warfare in Iran and lawfare in California are separate fronts in the same battle over tomorrow.

Five Takeaways

•       The Social Media Trial Is Fighting the Last War: Meta and YouTube were fined $6 million — financially meaningless, culturally significant. Keith argues that addiction is successful demand management and every product manager seeks it. The root cause isn’t the algorithm — it’s alienation. The law is always one step behind technology.

•       Anthropic Took the Bait: A federal judge granted Anthropic an emergency reprieve from the Pentagon’s supply chain risk designation. Keith thinks Anthropic is right on the product but wrong on the politics. Governments get to decide how to use weapons. End of story. Anthropic wanted to sell to the government but dictate how the buyer used what they bought. That’s juvenile.

•       Would You Buy a Used Car from Sam Altman? OpenAI killed Sora and shelved its adult mode. Keith calls it maturity, not failure — a recommitment to the core business. Altman’s personality doesn’t lend itself to being liked, but measured by outcomes, he’s fantastic. The AI documentary exposed everyone as adolescent — except Demis Hassabis, the stone-cold scientist.

•       Claude Enters the Third Era of AI: Chat was era one. Directed agents were era two. Autonomous agents that act when you’re not present are era three. Claude’s new Dispatch feature, Gmail connectors, and calendar integration are all about that third era. The product is excellent. The politics are a distraction.

•       Intelligence Is Getting Cheaper. Fear Is Wrapped Up as Principle: The stock market is repricing the future: software companies down, AI companies teed up for IPOs. OpenAI, Anthropic, SpaceX, and xAI will probably all go public this year. For kids in school today, AI is already ubiquitous. The life cycle of companies may shrink from decades to single-digit years. Time, Keith says, to grow up.

About the Guest

Keith Teare is a serial entrepreneur, investor, and publisher of That Was The Week, a weekly newsletter on the tech economy. He is co-founder of SignalRank and a regular Saturday guest on Keen On America.

References:

•       That Was The Week — Keith’s editorial: “Growing Up: Winning Wars Involves Losing Battles.”

•       Episode 2847: America’s Suez Moment? — Soli Özel on the Iran war from Istanbul at midnight. Warfare in Iran meets lawfare in California.

•       Episode 2850: Bring the Friction Back — Stephen Balkam on the same social media trial from the child safety side.

•       Episode 2842: Symbolic Capitalism vs. Symbolic Democracy — last TWTW on the $10 trillion AI startup. The Anthropic thread continues.

About Keen On America

Nobody asks more awkward questions than the Anglo-American writer and filmmaker Andrew Keen. In Keen On America, Andrew brings his pointed Transatlantic wit to making sense of the United States — hosting daily interviews about the history and future of this now venerable Republic. With nearly 2,800 episodes since the show launched on TechCrunch in 2010, Keen On America is the most prolific intellectual interview show in the history of podcasting.

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Chapters:

• (00:31) - Introduction: two big trials in California
• (01:47) - The Meta/YouTube verdict: $6 million and a cultural earthquake
• (03:11) - Is every product designed to be addictive?
• (05:24) - The roots of addiction: alienation, not algorithms
• (08:23) - Happiness is a rare commodity
• (09:51) - Anthropic’s emergency reprieve: the most important event of the week
• (11:16) - Free speech or weapons control? Anthropic took the bait
• (13:00) - The AI documentary: How I Became an Apocalyptomist
• (15:04) - The decade-long Altman-Amodei feud
• (16:34) - Why are they all such children? Demis Hassabis as the adult
• (18:50) - OpenAI kills Sora and shelves porn mode: maturity or retreat?
• (23:11) - Claude’s new era: Dispatch, connectors, autonomous agents
• (25:07) - The social media trial is fighting yesterday’s war
• (26:22) - Prediction markets: the casino eating the world
• (28:53) - Intelligence is getting cheaper. Fear wrapped up as principle.