Latest / What the Flux / ACCC investigates petrol cartel | Meta moves on from the $80 billion metaverse | OpenAI, Microsoft and Amazon in a throuple?!

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ACCC investigates petrol cartel | Meta moves on from the $80 billion metaverse | OpenAI, Microsoft and Amazon in a throuple?! · What the Flux

• 0:05
  Speaker 1: This is what the Flux.
• 0:06
  Speaker 2: I'm Brett and I'm Justin and it's Friday, the twentieth
• 0:09
  Speaker 2: of March. Boy.
• 0:09
  Speaker 1: Hold on to your little coffee mug over there, my friend,
• 0:11
  Speaker 1: because it's becoming a luxury ATAM. One of Australia's mokes
• 0:14
  Speaker 1: for renowned chefs, Neil Perry reckons we could be coughing
• 0:17
  Speaker 1: up twelve bucks for a single coffee within the next
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  Speaker 1: five years. Oh, he said. With indust rays rising and
• 0:22
  Speaker 1: Bristol wages climbing, the humble morning coffee is turning into
• 0:26
  Speaker 1: a premium experience.
• 0:27
  Speaker 2: You got to take out a morgage for the coffee.
• 0:29
  Speaker 2: Flex Am. We are officially back today with quick Sticks.
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  Speaker 2: That is a weekly quiz on three business and finance
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  Speaker 2: questions where you can win fifty bucks if you're the
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• 0:41
  Speaker 2: at a random time today to make sure you've downloaded
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  Speaker 2: the Flux app and have your notifications turned on.
• 0:45
  Speaker 1: Three exciting stories today, Jussie boy, let's do it for
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  Speaker 1: our first. The AHBLEC has launched a public investigation into
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  Speaker 1: weather major fuel suppliers have been committing anti competitive conduct
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  Speaker 1: in regional Australia, but.
• 0:56
  Speaker 2: A funny business happening in the regions, v Man. What
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  Speaker 2: is going on here?
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  Speaker 1: We know that since the war in the Middle East
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  Speaker 1: kicked off, the price of oil per barrel has jumped
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  Speaker 1: more than sixty five percent.
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  Speaker 2: And that often flows into our petrol bowsers in the
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  Speaker 2: short term and the price of products in the medium term.
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  Speaker 1: But now there is another possible reason fuel prices could
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  Speaker 1: be feeling extra cooked. Go on. The ahrible c ie
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  Speaker 1: Australia's competition COP is investigating allegations of anti competitive conduct
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  Speaker 1: in the petrol industry.
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  Speaker 2: More specifically in the supply of diesel across regional and
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  Speaker 2: rural Australia.
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  Speaker 1: And this isn't some small corner of the market either.
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  Speaker 2: Nope, the companies in the firing line include Ampole, BP, Australia,
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  Speaker 2: Mobile Oil and Viva Energy, aka the big dogs at
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  Speaker 2: the bowsers.
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  Speaker 1: Now, the a trible c announced that it has heard
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  Speaker 1: whispers that the big dog petrol suppliers have been limiting
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  Speaker 1: access of diesel to smaller regional petrol stations. The really
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  Speaker 1: unusual bit, though, is that the hriablec has publicly announced
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  Speaker 1: the investigation before reaching any conclusions, and.
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  Speaker 2: The ATRIBLEC says that there are concerns around fuel pricing
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  Speaker 2: and supply that are especially heightened by the Middle East conflicts, and.
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  Speaker 1: Does a boy when there is market concentration by a
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  Speaker 1: few players, the arible c is extra sensitive to anti
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  Speaker 1: competitive conduct.
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  Speaker 2: So what is the key learning here?
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  Speaker 1: Market concentration is a way of describing how much of
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  Speaker 1: a market is controlled by a small number of companies.
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  Speaker 2: The fuel plays in the market, the quicker things can
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  Speaker 2: go from competitive to cartelli.
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  Speaker 1: And that doesn't automatically mean anything improper is happening, but
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  Speaker 1: it does mean regulators pay closer attention.
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  Speaker 2: For example, we man in the twenty twenty four financial year,
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  Speaker 2: four major petrol companies supplied around eighty eight percent of
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  Speaker 2: petrol in Australia.
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  Speaker 1: Ampoles, your vps, your xon mobiles, your viv energies.
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  Speaker 2: And that means if they decide to actively or even
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  Speaker 2: passively work together, they can materially change the supply and
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  Speaker 2: pricing in the petrol market.
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  Speaker 1: That is why concentration can become risky in essential sectors
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  Speaker 1: like fuel.
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  Speaker 2: And that is why the atripleceeds flag this investigation much
• 2:43
  Speaker 2: earlier than normal.
• 2:44
  Speaker 1: For our second story, Meta is pulling horizon Worlds off
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  Speaker 1: its VR headsets as it shifts further and further away
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  Speaker 1: from its expensive metaverse dream metaverse.
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  Speaker 2: So what's that We only care about AI now, So
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  Speaker 2: what's going on here?
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  Speaker 1: So Meta formally known as Facebook, rebranded in twenty two
• 3:00
  Speaker 1: one to go all in on the metaverse.
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  Speaker 2: They were so committed to the vision they changed the
• 3:04
  Speaker 2: entire company name for it.
• 3:06
  Speaker 1: At the time, the part man part robot zuk called
• 3:09
  Speaker 1: it the next frontier.
• 3:10
  Speaker 2: And the man the crown jewel of that frontier was
• 3:13
  Speaker 2: Horizon world It.
• 3:14
  Speaker 1: Was meant to be metas virtual social playground where people
• 3:17
  Speaker 1: could work, or shop or hang out as cartoon avatars, and.
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  Speaker 2: It didn't have the best of starts. Remember when Meta
• 3:22
  Speaker 2: proudly showed off Horizon avatars that didn't have legs.
• 3:25
  Speaker 1: I do in hindsight, this is a pretty decent metaphor
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  Speaker 1: for the whole strategy.
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  Speaker 2: But now Metas announced it will pull Horizon Worlds off
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  Speaker 2: its VR app store called Quest.
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  Speaker 1: In June this year because apparently at its peak, Horizon
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  Speaker 1: Worlds only attracted a couple of one hundred thousand monthly active users.
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  Speaker 2: Which is microscopic compared to the billions using metas core apps,
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  Speaker 2: and finally it's become even too much for Meta to handle.
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  Speaker 2: So what is the key leading here?
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  Speaker 1: Markets will back a big, bold vision, but not forever.
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  Speaker 2: In twenty twenty one, the Zark had a ten year
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  Speaker 2: plan for one billion people in the Metaverse and hundreds
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  Speaker 2: of billions of dollars in digital commerce.
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  Speaker 1: The five years after this bold vision, there are only
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  Speaker 1: a couple one hundred thousand people on the platform.
• 4:02
  Speaker 2: And the Reality Labs division which houses met As Betaverse Push,
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  Speaker 2: has wracked up nearly eighty billion US dollars in operating
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  Speaker 2: losses and Jaseboy.
• 4:09
  Speaker 1: At some point, companies need to prove that massive investment
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  Speaker 1: is turning into real users and real revenue and will returns.
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  Speaker 2: Otherwise even the boldest next frontier starts to look like
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  Speaker 2: a very costly distraction.
• 4:20
  Speaker 1: For our third and final story, Microsoft is threatening legal
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  Speaker 1: action against its partner open Ai after a fifty billion
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  Speaker 1: US dollar Amazon deal, risks turning an exclusive partnership into
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  Speaker 1: a very awkward cloud.
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  Speaker 2: Thraple, notwhing, says strategic partnership Quite like preparing the legal team,
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  Speaker 2: So tell me what's going on here.
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  Speaker 1: So Microsoft and open Ai have basically been the tech
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  Speaker 1: world's ultimate power couple for the last few years.
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  Speaker 2: Especially when it comes to cloud infrastructure and access to
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  Speaker 2: open as models.
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  Speaker 1: Microsoft first backed open Ai with a one billion dollar
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  Speaker 1: investment in twenty nineteen.
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  Speaker 2: Then it followed up with another ten billion dollar investment
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  Speaker 2: in early twenty twenty three.
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  Speaker 1: And part of that relationship gave Microsoft's Azure platform a
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  Speaker 1: very important seat at the.
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  Speaker 2: They became the exclusive cloud provider for key open AI services.
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  Speaker 1: Which is a pretty nice perk when your partner happens
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  Speaker 1: to be making the hottest AI models on the planet.
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  Speaker 2: But now be man. Amazon has apparently rocked up with flowers,
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  Speaker 2: a bottle of wine, and a fifty billion US dollar check.
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  Speaker 1: As part of this new relationship, open Ai has made
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  Speaker 1: Amazon Web Services their exclusive third party cloud provider for
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  Speaker 1: one of their specific tools named Frontier.
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  Speaker 2: That's their enterprise platform for building and running AI agents.
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  Speaker 1: And as you can imagine, juzzy boy, Microsoft is not
• 5:28
  Speaker 1: exactly thrilled when AWS suddenly squeezing onto this very type cout,
• 5:33
  Speaker 1: and Microsoft.
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  Speaker 2: Believes this new deal could clash with the exclusivity it
• 5:37
  Speaker 2: already has with open Ai.
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  Speaker 1: So now the three companies are apparently trying to work
• 5:41
  Speaker 1: out whether this relationship can survive as a cloud based
• 5:43
  Speaker 1: th upple, but if it fails, Microsoft is pulling out
• 5:46
  Speaker 1: the legal action, So what's okay learning here?
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  Speaker 2: Strategic dependency is when one company becomes so important to
• 5:51
  Speaker 2: another The relationship creates significant upside opportunity, but a lot
• 5:55
  Speaker 2: of downside risk as well, and Microsoft and open Ai
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  Speaker 2: are a classic example. Yeah, Microsoft poured billions into open ai.
• 6:01
  Speaker 1: And without capital It has also used that relationship to
• 6:04
  Speaker 1: strengthen its cloud service Azure and build out its AI
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  Speaker 1: chatbot Copilot.
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  Speaker 2: And open Ai relied on Microsoft for its mula as
• 6:11
  Speaker 2: well as its enterprise reach to scale quickly.
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  Speaker 1: But it also becomes fragile when incentives start to shift.
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  Speaker 2: For example, open Ai now wants more flexibility with more partners.
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  Speaker 1: Like Amazon, who committed to investing fifty billion US dollars
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  Speaker 1: into open Ai in their latest capital rays.
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  Speaker 2: Whereas Microsoft they want to protect the value of the
• 6:27
  Speaker 2: advantage that they've paid for.
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  Speaker 1: So jaziboyit. The closer these two companies become, the more
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  Speaker 1: damage can be done when goals no longer perfectly match.
• 6:34
  Speaker 2: Flex sam If you want to win fifty bucks before
• 6:36
  Speaker 2: this weekend, make sure you download the Flux out and
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• 6:47
  Speaker 1: Thanks for listening and we'll see you on Monday.