This Week in Tech (Audio)

TWiT 1062: The Architects of AI - Can Small Models Outrun the Data Center Boom?

December 15, 2025

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  • Time Magazine's decision to name 'The Architects of AI' as Person of the Year is viewed by some panelists as an editorial cop-out, similar to naming the 'Personal Computer' in 1982 instead of Steve Jobs. 
  • The prevailing AI boom thesis that requires massive data center build-outs is being challenged by the increasing efficiency and cost-effectiveness of smaller, purpose-built AI models for inference workloads. 
  • The rapid growth and investment in AI are creating economic distortions, such as GPU/RAM shortages and a concentration of venture capital, while the federal government is attempting to preempt state-level AI regulation. 
  • The proliferation of AI advertising sponsorships suggests a potential bubble, though the underlying technology is currently driving the economy. 
  • US AI leaders are leveraging the perceived threat from China to secure greater investment and government support, despite China prioritizing other domains like Electric Vehicles. 
  • Trust in technology companies for AI tools is heavily skewed, with consumers preferring Google over Meta for sensitive applications despite both being large ad-based companies. 
  • David Ellison's potential acquisition of Warner Bros. Discovery reportedly involved a promise to President Trump regarding sweeping changes at CNN, contingent on regulatory approval. 
  • The discussion highlighted a general sentiment that increased media consolidation is detrimental, favoring independent voices and competition against large entities like Netflix and Disney. 
  • The Right to Repair movement suffered a setback as Congress removed a provision from the National Defense Authorization Act that would have allowed military personnel to fix their own equipment. 
  • The hosts concluded the recording of this episode of This Week in Tech (Audio), TWiT 1062, and announced the upcoming holiday special. 
  • The episode was sponsored by Coda, promoting Superhuman as an AI productivity suite that integrates intelligence from Grammarly, Mail, and Coda. 
  • Wix was promoted as a website builder, and Newberry Comics was advertised as a source for pop culture gifts for the holiday season. 

Segments

Panelist Introductions and Updates
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(00:00:00)
  • Key Takeaway: Iain Thomson is launching a new freelance venture called SiliconLimey.com and starting a monthly column for PC Pro in the UK.
  • Summary: Iain Thomson is launching SiliconLimey.com and will write a monthly ‘Letter from America’ for UK readers of PC Pro. Jason Hiner announced his departure from ZDNet after 24 years to become Editor-in-Chief at The Deep View, a publication focused on the AI space with over 600,000 subscribers. Owen Thomas remains the managing editor at the San Francisco Business Times.
Time’s AI Person of the Year
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(00:09:15)
  • Key Takeaway: Time Magazine named ‘The Architects of AI’ as Person of the Year, featuring figures like Jensen Huang, Sam Altman, Elon Musk, and Feifei Li.
  • Summary: The selection of ‘Architects of AI’ is criticized as a cop-out, similar to when Time named the Personal Computer ‘Machine of the Year’ in 1982. The cover features eight individuals, including leaders from OpenAI, Anthropic, and AMD. Feifei Li, who advocates for world models over LLMs, was included among the architects.
AI Bubble and Infrastructure Concerns
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(00:21:36)
  • Key Takeaway: The AI boom is predicted to ‘burn’ rather than crash, clearing brush and leaving behind necessary infrastructure, though significant financial disruption is expected.
  • Summary: Concerns exist regarding the massive water and energy consumption of AI data centers, leading to rising power costs and RAM price volatility, exemplified by Central Computer listing RAM at daily market prices. The current stock market growth is almost entirely driven by AI stocks, raising concerns about underfunded non-AI ideas. However, technological efficiency improvements are expected to lower long-term costs, similar to how automation replaced switchboard operators.
Small Models vs. Frontier Models
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(00:31:16)
  • Key Takeaway: Smaller, more efficient AI models are proving capable of handling specific workloads cheaper and faster than large frontier models, challenging the data center build-out thesis.
  • Summary: Workloads like CRM application assistance can run on older hardware using smaller models, contrasting with frontier models that require the latest chips for training. This shift suggests that the massive hardware demand fueling the current boom may slow down as inference shifts to optimized small models. The success of Chinese models like DeepSeek demonstrated high capability without the newest NVIDIA hardware.
AI in Healthcare and Media
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(00:35:25)
  • Key Takeaway: Specialized AI tools, like the $12 billion valued Open Evidence for doctors, offer genuine value by synthesizing peer-reviewed medical data, augmenting physician diagnostics.
  • Summary: Open Evidence synthesizes medical journals to provide doctors with accurate information, which can be more comprehensive than a doctor’s memory alone. Amazon faced backlash for its AI-generated video recaps on Prime Video and Kindle, which contained factual errors (hallucinations) and were implemented without author control. The panel noted the irony of tech companies shifting from anti-piracy stances to using ingested content for training.
NetSuite AI ERP Sponsorship
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(01:00:56)
  • Key Takeaway: NetSuite positions its ERP as the number one AI Cloud ERP, emphasizing that connected data powers its smarter AI capabilities.
  • Summary: NetSuite is promoted as the leading AI Cloud ERP, integrating financials, inventory, commerce, HR, and CRM into a single source of truth. This connected data is crucial for making NetSuite AI smarter, enabling it to automate tasks and deliver confident, AI-powered decisions. Listeners can request a free business guide on demystifying AI at netsuite.com/twit.
AI Bubble and Economy
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(01:02:02)
  • Key Takeaway: The prevalence of AI in advertising suggests that nearly every company is mentioning AI, fueling concerns about a potential bubble.
  • Summary: The host notes that almost all current advertisements are for AI companies, raising concerns about the sustainability of the current boom. Participants observe that mentioning AI is now mandatory for company launches or press releases, even in seemingly unrelated fields like accountancy. This widespread adoption highlights AI’s current dominance in driving the economy.
US vs China AI Race
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(01:02:58)
  • Key Takeaway: The narrative of an end-of-times AI battle between the US and China is partly a lobbying tool, as China spends significantly less on AI infrastructure and focuses more on EVs and batteries.
  • Summary: Tim Wu’s analysis suggests the US spending $350 billion on AI infrastructure vastly outpaces China’s spending, which is used by US leaders as a threat narrative. China is strategically focusing more resources on sectors like electric vehicles, batteries, and advanced manufacturing, which offer less speculative returns than AI. The competition between the US and China ultimately drives mutual improvement in AI development.
Small Model Performance Breakthroughs
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(01:06:16)
  • Key Takeaway: Chinese innovation, exemplified by models like DeepSeek, is proving that smaller, task-specific models trained on cheaper hardware can be highly performant, challenging the US focus on massive models.
  • Summary: Despite the US inventing the core generative AI technology, China is achieving efficiency breakthroughs by training models like DeepSeek on less compute and cheaper hardware. This efficiency is causing US companies to reconsider the assumption that only large models on the latest hardware drive innovation. Smaller, specifically trained models are proving to be cheaper, lower power, and more performant.
EU AI Regulation and Innovation
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(01:07:50)
  • Key Takeaway: The EU recently passed legislation to allow AI data centers to spin up with less regulation, signaling a move to foster development despite being currently behind the US and China.
  • Summary: Europe is attempting to become more involved in the AI conversation by easing regulatory hurdles for AI data centers. The region possesses a highly educated populace and many innovators who are expected to contribute significantly to the field. While currently behind, this legislative change suggests Europe aims to secure a piece of the growing AI sector.
AI Bubble Burst and Bailouts
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(01:08:31)
  • Key Takeaway: There is concern that if the AI bubble bursts, the China threat narrative will be used to push for government bailouts, which should be resisted to allow the free market to correct overspending.
  • Summary: The argument is made that powerful US companies like Amazon and Google are more concerned with entrenching their positions against US startups than against China. If the bubble bursts, there is a fear that government intervention will prop up companies with poor returns, undermining the free market’s ability to sort out the sector. Conversely, defending OpenAI and Anthropic is seen as necessary to prevent Google from completely dominating AI.
San Francisco Economy and AI
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(01:10:46)
  • Key Takeaway: The AI boom is credited with helping the San Francisco economy recover from its post-lockdown ghost town status, with Union Square Black Friday sales surpassing 2019 levels.
  • Summary: San Francisco is experiencing a resurgence driven significantly by the AI sector, which has helped revitalize the local economy. While inflation might inflate dollar volume figures, the recovery is noticeable, with Union Square Black Friday sales exceeding pre-pandemic 2019 numbers. This economic activity contrasts with the ‘scary’ and sad atmosphere downtown during 2021 and 2022 lockdowns.
Google’s AI Comeback and XR Glasses
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(01:17:10)
  • Key Takeaway: Google has rapidly shifted from being an AI ‘also ran’ to a dominant player with Gemini, announcing AI-powered glasses with Gemini support scheduled for 2026.
  • Summary: Google’s Gemini AI is receiving high praise, leading to partnerships for XR glasses, including one with Samsung for a Galaxy XR headset. These glasses, expected in 2026, will integrate Gemini, and the rumor suggests the new Siri on Apple iPhones next year will also be powered by Gemini. Several luxury and established eyewear brands, like Warby Parker and Gentle Monster, are involved in the hardware ecosystem.
Smart Glasses Privacy Concerns
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(01:26:37)
  • Key Takeaway: The inevitable privacy backlash against always-on recording devices like Meta Ray-Bans is evidenced by cruise lines banning them and a Border Patrol agent being caught recording a raid.
  • Summary: The public remains highly sensitive to recording devices worn on the face, leading some cruise lines to ban smart glasses in public areas. A recent report confirmed a Border Patrol agent used Meta Ray-Bans to record a raid while the indicator light was on. While the basic Meta Ray-Bans are tolerable, models with integrated displays are significantly chunkier and heavier, potentially hindering mainstream adoption.
CES 2024 Preview and Tech Trends
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(01:30:05)
  • Key Takeaway: CES 2024 is expected to be dominated by AI, but the event remains fundamentally a sales conference where the best insights often come from observing impractical or ‘bad idea’ technology.
  • Summary: Despite the host’s aversion to Las Vegas and CES, the upcoming event is anticipated to be the ‘AI conference’ of the year, featuring interesting XR hardware developments. Past CES events have showcased fleeting trends like 3D TV, which ultimately failed to revolutionize the industry. LG is integrating Microsoft Copilot into its TVs, a feature listeners note cannot be easily disabled.
Vention Engineering Partnership Ad
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(01:34:39)
  • Key Takeaway: Vention offers AI-enabled engineering teams and interactive AI workshops to help companies achieve efficiency boosts and navigate the complexity of adopting AI architectures and models.
  • Summary: Vention addresses the challenge of AI adoption making development harder by providing engineering expertise to build cleaner, calmer software development processes, promising at least a 15% efficiency boost. They offer interactive AI workshops to assess readiness and clarify goals, helping clients move beyond initial prototypes to full-scale products without internal disruption. Their 20-plus years of global engineering expertise positions them as experienced partners, not AI newcomers.
Club TWiT Support and Events
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(01:37:59)
  • Key Takeaway: Club TWiT membership covers 25% of operating costs, enabling the continuation of independent tech journalism and providing members access to exclusive content and community events.
  • Summary: Club TWiT support is crucial, covering a quarter of the organization’s operating costs, preventing cuts to shows and personnel. Benefits include ad-free feeds, access to a lively Discord server, and specialized user groups for AI and 3D printing. Upcoming exclusive events include a Home Theater Geek recording and an interview with British Grandmaster David Howell regarding AI in chess.
Australian Beach Tragedy and Social Media Ban
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(01:42:34)
  • Key Takeaway: The recent mass shooting at a Hanukkah celebration in Australia, despite the country’s strict gun control post-Port Arthur, highlights that no nation is immune to tragedy.
  • Summary: The attack in Australia is particularly tragic given the nation’s successful implementation of strict gun control measures following a previous mass shooting. The subsequent Australian law banning social media for children under 16 is viewed as largely unenforceable, likely leading to increased VPN use and mandatory biometric verification for all users. This erosion of online anonymity is seen as a significant loss for internet freedom.
US Tourist Social Media Checks
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(01:51:46)
  • Key Takeaway: The US is considering making the optional five-year social media history check mandatory for tourists from visa-waiver countries, potentially including Australia and Europe, raising serious privacy concerns.
  • Summary: The US State Department may mandate that applicants for the visa waiver program disclose all social media handles used in the last five years, with privacy settings made public. This policy, which could also involve DNA swabs, is framed as a counter-terrorism measure but risks severely damaging US tourism. The requirement to list defunct platforms like MySpace highlights the outdated nature of the proposed data collection.
Warner Bros. Discovery Sale Complications
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(01:58:59)
  • Key Takeaway: Skydance’s $108 billion cash offer for Warner Bros. Discovery is complicated by its structure through Larry Ellison’s Revocable Trust, which allows Ellison an easy exit from the deal.
  • Summary: Skydance’s bid significantly surpasses Netflix’s offer, but the use of a revocable trust structure means the funding is not personally guaranteed by Ellison, unlike Elon Musk’s Twitter bid. David Ellison reportedly promised President Trump sweeping changes at CNN if the deal went through, leveraging political influence in the approval process. The complexity of media mergers often requires significant government sign-off, especially when involving foreign sovereign wealth funds.
Ellison Trust Revocability
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(02:00:20)
  • Key Takeaway: David Ellison’s funding structure for a potential deal utilizes a revocable trust, granting him the ability to dissolve it and withdraw funds.
  • Summary: The revocable trust structure allows Ellison to dissolve it at any point, meaning the committed funds are not a personal backstop. This contrasts with Elon Musk’s bid for Twitter, which involved a personal guarantee forcing him to complete the deal. The structure essentially gives Ellison an out from his financial commitment.
Warner/CNN Acquisition Politics
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(02:00:59)
  • Key Takeaway: David Ellison reportedly promised President Trump sweeping changes at CNN in exchange for approval to acquire Warner Discovery.
  • Summary: Ellison, who already controls Paramount (including CBS), is seeking CNN from Warner Discovery, leveraging political connections for regulatory sign-off. The proposed deal is massive media consolidation, which might face government scrutiny despite arguments that legacy media audiences have significantly shrunk. Ellison’s argument is that Paramount needs more content scale to compete against giants like Netflix and Disney.
Splintering Media Trust
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(02:04:47)
  • Key Takeaway: Audience trust in large media entities is declining, favoring deeper engagement with more specific, known communities.
  • Summary: The fragmentation of audiences makes it harder to trust large entities whose biases and control structures are opaque. The future of media is predicted to trend toward deeper engagement within niche, local, or hyper-local communities where the source of news is known. While this splintering erodes a shared experience, it builds trust through familiarity with the content provider.
Whatnot Live Shopping Success
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(02:07:30)
  • Key Takeaway: Whatnot, an $11.5 billion valuation platform combining eBay and TikTok, thrives by hosting live-streamed auctions for collectibles and resale items.
  • Summary: Whatnot operates as QVC on a phone, featuring live video streams where sellers auction items like trading cards and sneakers. The platform utilizes niche terminology such as ‘sudden death’ for auction time limits and ‘big rips’ for opening sealed card packs. Its success demonstrates that digital live shopping can thrive in the American market.
Right to Repair Military Setback
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(02:14:35)
  • Key Takeaway: Congress removed a provision from the National Defense Authorization Act that would have granted military employees the right to repair their own equipment.
  • Summary: The removal of the repair provision is a blow to the Right to Repair movement, preventing military personnel from fixing machinery like ovens that were found non-operational while awaiting contractors. This situation mirrors issues faced by farmers needing Ukrainian software to run John Deere tractors due to manufacturer restrictions. The military industrial complex benefits from these restrictions as contractors receive the funds for repairs.
Apple’s App Store Injunction Defiance
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(02:20:44)
  • Key Takeaway: The Ninth Circuit Court of Appeals upheld a ruling that Apple acted in bad faith by violating an injunction requiring it to allow alternative payment options in iOS apps.
  • Summary: Apple’s attempt to comply with the injunction by charging a 27% commission instead of 30% for external payments was deemed a prohibitive violation. The court affirmed that Apple’s restrictions on linking outside payment mechanisms were overly broad, confirming the original judge’s finding of bad faith. This ruling aligns with global regulatory pressure, such as new Japanese laws effective December 18th, forcing Apple and Google to allow third-party app stores.
Excel’s Enduring Dominance
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(02:25:29)
  • Key Takeaway: Despite the availability of cloud-based alternatives like Google Sheets, Microsoft Excel remains stubbornly unkillable, even forcing finance departments to rebel against migration.
  • Summary: Excel celebrated its 40th anniversary, maintaining its dominance because users, particularly in finance, prefer its established formulas and functionality. Even companies operating on Google Workspace often find their finance teams reverting to Excel for critical tasks. The platform’s continued relevance is evidenced by the existence of official Excel esports World Championships.
Episode Conclusion and Thanks
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(02:59:55)
  • Key Takeaway: The hosts concluded the recording of This Week in Tech (Audio), TWiT 1062, and announced the next episode will be a holiday special.
  • Summary: The hosts expressed appreciation to the audience for joining the session. They formally concluded the recording, noting that the next broadcast would be a holiday special. The segment ended with the traditional sign-off indicating the episode was complete.
Superhuman AI Productivity Sponsor
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(03:00:16)
  • Key Takeaway: Superhuman is positioned as an AI productivity suite that integrates capabilities similar to Grammarly and Coda, designed to work seamlessly within existing workflows without a learning curve.
  • Summary: Superhuman is presented as an AI tool designed to combat the issue of AI creating more work by offering superpowers across work environments. It features built-in intelligence for writing, meetings, and presentations via specialized agents that collaborate proactively. Users can unlock their potential by visiting superhuman.com/slash podcast.
Wix Website Builder Promotion
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(03:01:16)
  • Key Takeaway: Wix is promoted as a fast and effective website builder capable of enabling users to create sites quickly, leading to positive business outcomes like increased sales.
  • Summary: Wix is highlighted as a website builder that simplifies site creation, with one user claiming to have built a whole site in under an hour. The platform is suggested for those needing help with self-expression or general life simplification through an easy-to-use online presence. Users are encouraged to try the service at wix.com.
Newberry Comics Holiday Gifts
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(03:01:40)
  • Key Takeaway: Newberry Comics is recommended as a destination for diverse pop culture gifts, stocking items ranging from trading cards and vinyl to Funko Pops and K-pop merchandise.
  • Summary: Newberry Comics offers a wide array of gifts suitable for the holiday season, focusing on pop culture collectibles. Inventory includes blind boxes, graphic novels, manga, trading cards, Smisky, Pokemon, and toys. They market themselves as the source for ‘Wicked Good Gifts for the Holidays.’