Property AI Report 078 - Rightmove Court Date, Elon v Sam Result & 80's Public Information Campaigns

00:00
Introduction and Overview of Property AI Report

01:04
Rightmove Court Case and Market Implications

06:01
Self-Employed Agents vs Traditional Agents

09:11
Desire for Second Homes and Market Trends

12:37
Google IO Conference Highlights

18:36
Elon Musk vs Sam Altman Court Case

22:23
OpenAI and SpaceX IPO Updates

23:48
Sam Altman's Offer to Y Combinator Startups

Transcript

SPEAKER_00 0:00

Hi everybody and welcome to the Property AI Reports. This is your weekly digest of all things property and AI. Brought to you by me, Mal McAlian, and my good friend and co-host Matt Goddard. Matt, how are you today? I'm brought to you by Elon Musk Starlink today. Mal, I'm great. How are you?

SPEAKER_01 0:14

Or am I really nervous?

SPEAKER_00 0:16

You are. You're in the wilds of the north. I am just literally over the garden fence of the sea. So it's all good. Amazing. Beautiful sunshine. Yes, it's already so we're recording this on the 22nd of May. It's a Friday morning, 7 45. It's already 16 degrees out there. It's going to be an absolute scorcher this weekend over here in the UK and holiday as well. So you really do sound like a drive duck at Radio DJ when you do that. Big shout out out there to uh everybody on their road on the one coming on near ears. So listen, without further ado, mate, uh let's get stuck into our property news. All right, um, so big news this week um is the right move court case uh has got a date, or at least the first date. So people who have been listening for a while will recall that um right move is set for some legal action. 1.5 billion being claimed by an ex-member of the Competition and Markets Authority, um a guy called Jeremy Newman, who um believes that um right move has been unfairly abusing its dominant position in the online property portal market by charging excessive and unfair fees to estate agents. Again, regular viewers will know that that is not something that is argued against too frequently on this podcast. Because yes, I I think a 70% margin um suggests that there is something something has gone wrong in the market for sure. But now this particular um court case um is is actually going to be um heard uh at in November, um on the 2nd and 3rd of November, meaning that um it will have finished. I don't know if the actual result will have come out, but it will finish on the day of EA masters. So I wonder what everybody's gonna be talking about there. But Matt, it's progressing, right? It's it's not being thrown out at this point. So yeah, I think what do you think the the the mood will be like in in right move towers right now?

SPEAKER_01 2:07

I think I'm also aware that there's more to come, isn't there? Not just from this particular one, but there's there's other class action lawsuits being put together. So whether Right Move are conscious of those, but it feels like there's a a a mounting um mounting storm, as you say, it was um yeah, masters would be an interesting day, won't it? If this has all just come together.

SPEAKER_00 2:27

Yeah, absolutely. So yeah, that that we we hear from from a number of sources that uh yeah, not an exclusive uh on here, but uh, it has been talked about in in various uh channels around the UK residential property market for a little while, that there are uh, as you say, Matt, a lot of uh a number of other class actions um coming together, also focusing very much on Right Move's charges over the last decade or two. The the the long and short of it is I think that the average um right now is about £1,650 per branch per month. Um various arguments centre on whether it is unfair that RightMove charges the corporates far less, you know, between £350 and £500 in general is the sort of accepted number for um corporate branches, the self-employed models, because of the way that they are organized, they can get it. And indeed are they are advertised as one of the benefits of joining some of these um self-employed uh brands is that you can get right move and everything else for about £150 quid. So, you know, that as an independent agent or as a regional, strong regional, you are likely to be paying way more than that 1650 quid um average because you've obviously being offset from from the others. Um so that's one kind of strand that is uh that is being argued against. Um others um again just kind of include the fact that it goes up by 10 to 12, uh, 15% every year, regardless of of where inflation is, and you know, it has become detached from the actual value that is being um delivered. It may well be that this you know that that actually the the leads are of value, but are they off £1,650 on average value per month, etc. So yeah, there's there's a lot at stake really. I mean, you know, if you think about um what uh this this publicly listed business um has um has been through over recent times in terms of its uh its share price, um that's taken a serious beating, you know, down by about sort of 50% since last summer, over the last year or so. So yeah, I think it's gonna be um a very uh yeah, it's almost a week. Very good, very good. Thank you. Following on the uh following on from the smashing nicey vibes earlier. Excellent. Uh I think yes, it's gonna be a very interesting I assume that you know they must know that there are various you know blows coming their way. Um, as I say, you know, this this particular court case set for the second and third of November, and then if that is um allowed to then proceed to trial, that will presumably be sort of you know April time next year or something like that, which uh, you know, again, it's just kind of keeps on going. In the meantime, right move is very, very, very specifically carrying on as normal, sailing on. Um it's uh guidance over the last couple of weeks um for the forthcoming year is we're just gonna do exactly the same as we always have, which is put prices up by I think 120 to 150 quid on average uh per branch per month. And yes, sit tight and um keep arguing that this is entirely fair and entirely right. And uh yeah, I know that you speak to a lot of agents um out there, Matt. Are they are they talking about this particular court case? Are they just kind of you know battening down the hatches and trying to trying to survive through what is what has been a relatively challenging few months, right?

SPEAKER_01 5:18

Not the ones I speak to, but then the things I'm obviously talking to them is much more in terms of the stories we get onto next with the likes of the digital negotiator and and sort of embedding um technology and uh processes and efficiencies, whereas your obviously conversations are much more focused on that marketing side of things, aren't they?

SPEAKER_00 5:35

Yeah, sure. Yes, uh so yeah, it is a big, big, big um problem um for for many agents. So yeah, look, we're um we will obviously um keep an eye on that and uh as that comes um comes through. Uh Romeo's been very tight-lipped about um its reaction to all of this sort of stuff. There is an ongoing court case, etc. So no comment in general. Um but yes, it's gonna be interesting to see um yeah, what else happens between now and uh November, and as you say, Matt, if uh if any of these other um sort of um floated uh court cases um come into view as well. All right, um next up on our property news, we've got some um some data from 20EA basically saying that uh that really interesting findings, self-employed agents outperform traditional ones. Okay, now this is a very, very specific and and you know really quite um I guess controversial in terms of um what it says about traditional and you know kind of corporate high street estate agents versus self-employed. Uh could the the actual stats are that um uh that uh from 20 EA, so again, you know, really reputable source, um, found that um agents had a 65.2% higher likelihood of s of a sale as a self-employed agent compared to 53.1 for traditionally employed agents. So that is quite a significant, you know, down from 65.2 down to 53.1. And the argument that is being made is that you know it's much more, it's it's glorious self-interest uh by these self-employed agents, which is if they don't sell it, they don't get paid and then they don't eat. Whereas in traditional agencies um there is you know more kind of lettings and and various other uh revenue streams that might be able to um to offset some of those uh those failures. Um but Matt, this is really quite a quite a punchy finding, right?

SPEAKER_01 7:14

It is, and it's a few metrics as well, isn't it, that they're sort of highlighting in there that's the the faster sale being 142 days versus 152 days for the rest of the industry. Um and you have to just as you say, it's almost put it down in a way to that hand to mouth is probably a little crude, but the the more focused that maybe self-employed agents are on the full transaction, you know. If I can chase through my pipeline, then I'm gonna get some cash in the pocket, right? And and it certainly identifies that IV, some of these uh businesses are much more focused on their individual transactions that when when you're in the big corporates, maybe handing off to a different department and uh forgetting about it. And that that's extra scrutiny, you know. If it's better for the consumer and the customer, then great.

SPEAKER_00 7:58

Yeah, absolutely. So Nick Huntley, who's um who's the director of 20A, who's brought these um forwards, we were actually with him yesterday, weren't we? He was some of these stats as well, didn't he? Yeah, yeah, exactly. And yeah, and also things like fall-through rates um are another area where they perform strongly. Um their fall through rates were 21.29% compared to the standard 23.6. So, you know, again, it does point to this um uh yes, again, the sort of glorious self-interest of like, right, well, if I if I don't make this happen, if I don't get all of these chains to kind of link up and so on and so forth, you know, going back just slightly extra um in order to to make these things, these these deals kind of come through. So, yeah, really interesting um findings, I think, and and and certainly um point to this sector, which again is it it always surprises me, is only only makes up about three to four percent of of the actual the market itself, although it does feel like it's is significantly bigger because as self-employed uh individuals they do uh you know kind of uh put themselves out there on social media and others um a lot more than perhaps the more traditional ones. But uh yeah, very, very interesting. Uh and certainly um things that we will continue to keep an eye on uh as we go forward. All right, our third story on our property news this week uh some uh stats from Barclays um about um the desire for second homes versus the actual whether people are buying them or not. So um 11% of homeowners um would consider buying an additional property within the next two years, but the vast majority consider it too expensive and too risky. And this you know kind of plays into what, again, speaking to a lot of agents out there right now, sorry, the landlords are very much um moving out of the market, there's a lot of sales going on, um, and you know, it's um it's it's really sort of that the Renters Rights Act and other uh regulatory situations are kind of putting a lot of people off particular sort of accidental landlords who might just have one property, and then there's other stats as well from from the same uh uh from the same report saying that things like um 40% of tenants don't know that the Renters' Rights Act exists. So again, you know, it's um it's all very well passing all this legislation and doing all the changes to the to the actual industry, but actually has it had an impact on the ground and is it going to make any difference to to how many tenants feel about it? Matt, I know this is one you've been keeping an eye on as well. What's your take?

SPEAKER_01 10:07

It is, and it's uh it was at the Lettings Industry Council early this week, and obviously it's the f it was the first one after renters' rights kicked in, so it's a case of sort of seeing how the how everyone else was finding uh um it. And I think your point there about uh it was fairly quiet, is the the answer to how it was, and um sort of I don't know if it's everyone just bracing a hand for impact still. Um but your your point or the stat there about how many people are just simply unaware of it. Um and it made made me think of the government sort of advertising that they did, and you may not have seen it because it was that subtle, but it certainly popped up between Netflix episodes or you know prime video and and those sort of things for me, and whether that's because I'm central London and a particular style of house and therefore I've got them. But even then it was only because I'm in the industry. I was like, oh that's what they're they're advertising, the the awareness of these changes. But obviously, it was a a flood of section 13s in the uh and sorry, section 21, section 13's the new one. Section 21's in the build-ups to this, and a lot of people trying to get out. But what I also found interesting, which isn't necessarily the theme of this um particular article, but in terms of second homes, um, is the the sort of mood music that I hear through the the companies in the relocation agent network is around people where they've got those second homes down in sort of the the Cornwall areas or the the sort of the these sort of the properties where it's more holiday lets and and people sort of not not going there because of the the challenges. Um you sort of see markets shrinking because of these extra pressures that the government bring in without I guess and those occasions they are intended because they're trying to reserve properties for the for the locals. But um it's um I think the renters' rights act, you know, there's still a a lot to play out on that front.

SPEAKER_00 11:46

Absolutely right. And yeah, no, I haven't actually that's really interesting because I haven't seen any of those adverts at all. Um so it doesn't surprise me that you know it's demographic based, isn't it, Mal? Guess it must be mate, guess it must be. Um but yeah, you know, I remember back in the day, you know, again, talking back in about the the 80s uh DJs, you know, Charlie says, you know, don't play with matches and all that sort of stuff. Government um awareness campaign.

SPEAKER_01 12:06

Evan Keegan on crossing roads, right?

SPEAKER_00 12:08

Exactly right, yeah. The Green Cross going about all that sort of stuff. Yeah, they used to they used to really yeah, you used to do it properly. You used to know stuff, they used to tell you stuff. Uh but yeah, I I I know that it is much more difficult nowadays with with the fragmentation of all you know, media and stuff like that. But yeah, yeah, it it is no surprise to me that that 40% of uh of tenants still don't have a clue that uh that renters right actually come in, and it's probably going to continue that way for a little while. They need to bring back Charlie. That's all I'm saying. All right, that is the end of our property news for this week. Um let us move on to our AI and tech news. Um, all right, we are going to start with Google, aren't we? Because this week was the big Google IO conference and they revealed a bunch of new stuff, um, bits of which we we kind of touched on last week. So Google Omni video and um and and uh model, which is which is going to be amazing. Um I have not had time to to play around with it as yet, but I cannot wait to get my hands on it. We've also got things like Gemini Spark, which is a 24-7 Agenic Assistant, um, trying to be this sort of Jarvis from Iron Man. Um basically it's got access to all of your kind of um data anyway, if you if you use Gmail and things like that. Um obviously Chrome and all the search that you've done as well. But yeah, Matt, there was plenty, plenty, plenty to get our teeth into on this Google stuff. And what caught your eye from it?

SPEAKER_01 13:23

I think for starters it it felt a little bit maybe muddled in terms of what they were presenting, because the the big noise out of obviously anthropic and and open AI has been very much focused around harnesses, uh cloud codes, cowork, um, and codecs. And uh they sort of launched and said, well, here is anti-gravity and this is our sort of coding assistant, etc. etc. But then they also had their sort of a good AI labs sort of approach, um, which was having the same sort of messaging. So it's like, well, which one do you want to do? And then as you sort of touched on there, they've got their Spark, but it's like, is Spark their approach to to open claw? And but then they were saying absolutely that AI Studios is our approach to open claw. So it's just like get your mind up, and it's like I'm sure internally they're clear, but when they come to this big event, you'd have thought it'd be more consistent messaging. And like, I don't know if they're necessarily targeting the consumer or they're targeting enterprise, um, but they're sort of picking the way through. I think for me, take a step back, Omni, uh, whilst it's the name gives it away, it's trying to be all things to all people across all media. The really interesting part is when it comes to video, which is obviously straight into your wheelhouse, and I'm sure we'll see some very impressive um changes on it and videos coming out over the weekend and next week once once you sort of roll up your sleeves and get a chance to play with it. But um, where Nano Banana launched last summer and became sort of for for those people who haven't invested time learning Photoshop, you could quickly make Photoshop style edits to pictures that already existed. It looks like the OmniVideo can do exactly that with video. And um being able to sort take a I saw one the way they'd taken video of um London and sort of panning across Big Ben and everything else, and they took it from a daytime to making it New Year's Eve and the fireworks going off, and they even changed the time on Big Ben so it's it was midnight. So being able to do those real-time edits to video, and you know, so for example, if we were sat around a table yesterday and people were slating certain companies for having this consistent video backgrounds, you could quickly take those videos and say, give me a different background, make it night. So you know what's the the one we used to use? Will Smith Eating Pasta? Absolutely video of Will Smith eating pasta, let's set it in in the evening, let's make it that he's he's on a beach on a stool eating pasta, you know, being able to make those edits, um, they didn't really say who they're targeting. Is it me on the phone trying to do a cap cut like one of my pals was trying to do last night for his kids footy team, or is it enterprise video businesses that you sort of work with where you can make those changes? But the the power of that omni-video mode, um, I'm looking forward to seeing what you produce next week.

SPEAKER_00 15:50

Yeah, thanks, man. So yeah, it it is, I think like you, it was almost a kind of um wind tunnel of things coming at you. And you know, you're just kind of almost like trying to catch bits of it and go, right, well, actually, what does this mean and how is this going to fit into my daily life? And do I really care? It's really, really fascinating just to see how these um how the different the different organizations, the frontier labs have have kind of you know shuffled over the last you know, even six months, right? So six months ago, regular listers will remember my obsession with Gemini 3.1. Yeah, that's gone. Uh now everything's clawed, and now you know Google is coming back, and I'm sure we will see Gemini 4 at some stage. To be honest, I I anticipated something like um that coming through through this week. But yeah, it it's almost like that they they've kind of got so much going on and there's so much they can do that they're actually doing as much as possible, and it's kind of actually um diluting the real message about actually what it is that that this that this means for me, what problem it solves for me today that is going to actually help me in uh in my business or in my personal life right now. So yeah, it's um there is there is a lot from that's coming through from Google. It may be that in the next sort of month, six weeks, it starts to actually all kind of click into place and make sense. And you know, then come the end of June, I'm gonna be obsessing about uh Google all over again. But uh, but yeah, I I couldn't really get my arms around it. But uh as you say, looking forward to using Omni because um I do think visual uh video media is going to be the way that people communicate. I was um actually playing around with C dance um actually over the last few days um earlier on this week. That is that is phenomenal. So that's one of the Chinese models. And all I did was just upload a photo of me, put a prompt in, and then it actually had me very articulately going in and talking to an estate agent in their office. Uh, one of the funny things is that this is not unique to uh to but if you put like a UK to sp specify you want a UK street, then it will always put a red London bus in there or a red telephone box or a or a uh Union Jack flag.

SPEAKER_01 17:44

That's that's correct from where I live though, right? Well, maybe not the Union Jack flags.

SPEAKER_00 17:47

Yeah, so but anywhere else is like, why have I got a London bus in this rural part of uh of England? Fleethaws. But yeah, it is, yeah, is it? So so yeah, it's it's it's always worth going and we say this every single week, go play. This is fun.

SPEAKER_01 18:00

This is really C dance, was C dance the one where it was Brad Pitt and Keanu Reeves doing Kung Fu or something. Okay, well, there you go, there's an idea for you, me versus you, and obviously I'll win.

SPEAKER_00 18:10

Bring it, bring it on. Uh all right, next up on our AI and tech news. Um, there's been talking about you know big titans such as us fighting, and we've got Elon Musk versus um Sam Altman in court, has now reached a conclusion, and the jury came back very quickly on Monday with a verdict. And the verdict is that Elon Musk lost. Okay, so just to recap, uh Elon Musk was suing OpenAI to try and essentially break it up, stop it from moving from a uh to a for-profit uh from a non-profit. Um Elon Musk was one of the co-founders back in the day. During the court case, it has turned out well, loads of things have come out, much of it pretty uh pretty gnarly. But it it's come to pass that essentially Elon Musk was trying to turn into a for-profit um along the way, and he wanted to merge it into Tesla and be in charge of it. And Altman and Greg Brockman, who's the the president, were basically trying to hold him off, but at the same time had their eyeballs very firmly on some uh how they were going to make a billion dollars from from this venture as well. So um yeah, the kind of dirty laundry that uh that you don't tend to want to be um seen in court. Um but obviously you know Musk was uh Musk now runs his own X AI that's now part of SpaceX, which we'll talk about again in a sec. And it's it's basically you know this corporate kind of you know jostling and can we throw can XAI throw OpenAI off its uh off its um pace a little bit as well. But yes, in the ends, the jury very quickly decided that it was um it was too late that that even if there was any case to answer, then Elon Musk had not filed it within the right time frame. So um yeah, it got kind of thrown out on a technicality, which seems like a lot of effort for very little reward. But Musk wasn't even in the court, he didn't really care. It just seemed like it was very much just a um uh drag Altman and Brockman into into court and uh have them um have to defend what they've been doing. Um but Matt, I know that you know this kind of gossipy stuff isn't really your bag.

SPEAKER_01 20:00

Did you have any any thoughts on it? The only parts of it really is whether that then obviously has the impact on their IPO and and obviously their story is that that that's all gearing up and there's a a step towards that this week. And and also what's the um what's the broader impact on just AI in general is like seeing these mega wealthy people trading blows in court for the general public even aware of it? Everyone's probably aware of Elon after his escapades like in Argentina with the chainsaw and that sort of thing. Yeah, yeah. Like does it just give AI as a general thing as being sort of this is something that the super mega rich are are playing with and and undermine all the good value that it's doing?

SPEAKER_00 20:39

Yeah, and there's another story out doing the rounds this week. Um apparently 10,000 people are open AI, Anthropic NVIDIA, and meta have retirement level wealth, uh, whereas everybody else is kind of watching from from the outside. And I think you know the what's happening over in Silicon Valley um is is is that kind of divide, right? And and I do think it kind of it's it's gonna play out over here as well, you know, where where you're gonna see, you know, if you are uh an agent adopting AI or or you know um somebody um in your business looking to utilize these tools, then you're gonna be far, far ahead. And perhaps and the phrase is disproportionate, capture a disproportionate value in the market because you're able to actually do things that that others can't. And you know, we're just talking about the video side of things. If you're able to produce brand, real high-quality brand videos way ahead of anybody else and capture you know the attention of your local market, then that is going to be a significant um jump for you in in your business and so on. And obviously that's what you know we we we love to talk about, that's what we love to do um in in in our businesses. But yeah, it's um it's something that I think is uh yes, is slightly unedifying when you're kind of looking on and these guys are are just sort of throwing uh throwing bundles of cash at each other or lawyers to throw sticks at each other when uh when yes, you know, this is not necessarily um a um part of the year where loads of people have got loads of money, what with all this the other stuff that's going on. All right, uh next up in are AI and tech news. Yeah, just touching on the the the the the IPO stories. So the word is that um OpenAI, now that they've got this court case out of the way, are filing for um an IPO as as early as today, Friday, 22nd of May. Also this week SpaceX has filed um and I think they're going in in July, is it? June July, something like that. And that's going to make uh Musque trillionaire. So you know he just didn't have didn't really care about going back into court because he's got so many other things there to uh to focus on. So yeah look lots of um lots of kind of big financy stuff um happened as well.

SPEAKER_01 22:37

Tie in with that one as well anthropics generate 10 point nine billion in revenue during the second quarter of this as well so it's um they're all they're all flying along aren't they and we did expect this to be the year of the IPO. So um it's getting momentum I guess really establishing the fact that this isn't just a flight of fancy. This is uh here and coming home to roost I guess and um but make sure you're utilizing it is the key.

SPEAKER_00 22:59

Yeah 100% and then yeah to your point when you were out in San Fran um last week you you said yeah the the Clawed anthropics um director was up on stage saying that instead of 10xing their um their revenues they've ATX'd it and that's just crazy. So yeah the sooner they can um kind of capitalise on that get some more money in be able to build some more data centres then and that's going to be able to to continue that kind of growth which is insane. Alright elsewhere on our AI and tech news back into to more Sam Altman and again just kind of I think trying to move on from the the kind of gruesomeness of the court case and the the the dirty laundry um Sam Altman has made an offer to every Y combinator startup that basically in return for some equity then they can have unlimited access to tokens right that's huge.

SPEAKER_01 23:48

It's it is and it it comes along time. The one I'm always interested in is this how we look at pricing AI and we've touched on this before as everyone's uh I think it was last summer was forced to announce one pricing model and about a week later they flipped it again because they realised it wasn't working even with Salesforce which is a good one with obviously my background where they've moved towards their headless CRM which means you won't have people logging in it'll all be interactive via the likes of Slack how those pricing models change um and sort of Sam Altman dropping I think it's two million or uh dollars worth of tokens to Y Combinator found founders for for a return of equity and it's sort of like laying down that gauntlet of saying you know come on but also in the same way that Google and uh gives all uh college students a free um free account so that they then get invested in the Google ecosystem it's sort of saying to all founders and startups build on open AI and that becomes a platform of choice right but there was another story this week where pricing's moving more towards cloud computing where you can reserve cost up front so rather than trying to work out um your cost margins you can say look I'm gonna take a certain bulk load for the first one to three years guarantee your your your spend during that one to three years rather than again trying to work out these really weird metrics that if I'm this successful as you say um Anthropic budgeted that their stretch goal was going to be 10x and then it went to 80x like how how do you how do you accommodate for that it looks like AI pricing is shifting from sort of a SaaS type model um which I guess is understandable to more of a a cloud computing where um I think it's uh OpenAI have offered to be able to reserve one to three years worth of um reserve one to three years worth of uh tokens so that you've then got a bit of a guaranteed spend and that's at the end yeah I'm gonna max token max everything and then yeah you sort out it does remind me a little bit of like you know back in the again showing age here uh back in the 2000s with mobile phones right you know you started out with this all you can eat package that was like you know amazing deal and then they go actually kind of fair use because you know you're absolutely blowing our bandwidth and then you know slowly you then have these kind of like chunks so you can have like the the basic level or then the intermediate level or the super duper level and and yeah it feels like there's something like that happening where they're trying to kind of just understand right what what's the right kind of way of of packaging all this up if token maxing continues to be a thing and you know everybody kind of beats their chest about how many uh tokens they're using that yeah very quickly will will just destroy any capacity for anybody else to be able to use it right so I'm afraid we lost Matt at this point in the recording at somewhere to the wilds of North Lincolnshire.

SPEAKER_00 26:30

But uh he'll be back next week as I will be um and we'll just wrap it up here. Everybody else out there have amazing bank holiday weekends and it's going to be glorious so yes it is unusual for the bank holidays and the sunshine to coexist as we know in the UK. So enjoy it everybody out there we will be back again next week with plenty more property and AI news. Look forward to seeing you in seven days