Oh, J Cal’s here. Hello, J Cal.
Hey, how are you?
Thanks for showing up.
I’ve been here the whole time. I was just, I was just having some of these beautiful
salted roasted pistachios. The only problem is when I went to the store, I kid you not,
there was a shelf of these. All flavors available except one flavor.
Salt and vinegar.
Sea salt and vinegar.
We moved the market. We moved the market.
I am not kidding. I go to the fancy, you know, bespoke-
You went to the Raley’s in Truckee?
I went to the Raley’s in Truckee, the artisanal, and they have, you know, all these overpriced-
First of all, it’s called artisanal?
That’s what I said. The art stuff. The artistic food. The artisanal row where they had this,
I kid you not, spicy, salty, no salt, every shelf packed. Then there’s one shelf I can
see straight through to the ice cream.
But not sea salt and vinegar.
When I look at the tiny little sign, salt and vinegar. Shelled nuts.
Sea salt and vinegar.
Sea salt and vinegar. Chamat’s shelled nuts. Sold out across the country.
You know, I cannot recommend these more highly. They’re incredible.
You can’t recommend your salty nuts, Marc?
They are delicious. My salty nuts are delicious.
Did you see Joe Manchin’s high-heater op-ed in the Wall Street Journal?
Oh my God.
Yep. Joe Manchin went for it.
Joe Manchin’s running for president.
He is. I think. Okay, so let me ask Sax right there. Sax, Joe Manchin,
Nikki Haley, and who’s the guy from Florida?
What’s your question?
By the way, there was a big defection that was leaked this week. Ron Lauder
flipped from Trump to DeSantis. That’s a big one because Lauder’s good for
a lot of money. Five to 10 million at least.
Joe Manchin, what impact would he have coming into the race? I’m not trolling you.
Looking for your honest opinion.
Well, it depends how he comes in. What did he say in the op-ed?
He was talking about the insincerity of the Biden administration to control costs and how
everybody was incompetent. And it certainly, there’s some waste and we can control some
spending and everybody needs to grow up and get in a room and just manage the budget for
the American people and stop playing politics.
Yeah, I think the headline of the article, actually, to your point, Jacob,
was much worse than the substance of the article, Saxe. But if you see the headline,
I don’t know, Nick, if you can just throw it up there, it was brutal. The headline and the
byline of the article, I think was more damaging than the substance of the article.
Biden’s Inflation Reduction Act betrayal. Instead of implementing the law as intended,
his administration subverts it for ideological, ideological ends.
I have to think that Joe was responsible for that, for the titling of that article.
He would get permission to approve it.
And by the way, I think if you guys remember, we talked about this when that act was first
published. And if you guys remember, I think I pulled up the CBO data, the CBO model, and it
showed for the first five years, this thing burns a couple hundred billion dollars. And then there’s
some expectation that there’ll be some sudden boom in revenue in the out years. And then you
make the money back in the out years. So it’s total like accounting shenanigans for him to
have made the claim in the first place that the IRA was actually going to be like a net deficit
reduction, or debt reduction. In fact, it’s all just accounting shenanigans. And it’s just a
massive spend package, particularly in the near term when it matters most.
I think I told you guys this, but I think this was like, when was the last time I was in
Washington? Probably? What is it March now? So maybe it was January, I was there.
And I saw Schumer and Mark Warner, and I spent about two hours with Manchin. He is really
impressive. He’s cool. He’s interesting. He’s thoughtful. He’s moderate.
Manchin’s like a formidable guy. So this will be really interesting if he steps in there and
tries to take it.
Between Nikki Haley and Manchin, where do you write your check?
I’d probably write a check to both, to be honest.
Feels like a good ticket to me. I’ve always wanted to see the cross.
Could you imagine a Democrat and Republican merging somehow and like running together?
It would be the greatest.
Oh, my God.
I’ve been pitching that for years. I think that’s like a
David Freeberg may have just come up with one of the most disruptive ideas in American
politics that’s ever been floated. Oh, my God.
Manchin Haley, yeah.
Just my comment on this. So first of all, I remember when, you know, Manchin did a good
job stopping Biden’s three and a half trillion dollar build back better. Remember, it was him
and Sinema that were the holdouts. But then Manchin compromised and gave Biden a $750
billion version of it. And I guess now he’s complaining that Biden didn’t live up to his
end of the bargain in doing the deficit reduction. But quite frankly, many commentators said at the
time that the bill’s claims to deficit reduction were preposterous and that would never happen.
So quite frankly, you know, Manchin shouldn’t have been euchared or hoodwinked by Biden.
Everyone was basically saying there’ll never be any deficit reduction out of this bill.
It’s just more spending. So I don’t really feel bad for Manchin here saying that somehow
he was betrayed by Biden. He should have known better. Now, in terms of him running, yeah,
I think as a Democrat who’s figured out how to get himself elected in West Virginia, which is a
plus 20 red state, he obviously knows how to appeal to the center. The problem for him is
just how do you get the Democratic Party nomination? Because he’s far to the right
of your average Democratic Party voter. If he wants to run as an independent,
that’s a different story. And that would really throw a curveball into the race.
But I don’t see him doing that. I think it’s kind of a stretch. And
this is the problem with a lot of these fantasy candidates is that, you know,
centrist or moderate voters might like them, but they can’t get the nomination of their party.
You mean like Trump and Obama, those who are fantasy candidates?
I don’t think so. I mean…
Trump was not a fantasy candidate. He’s the ultimate fantasy candidate.
Well, he was an outsider, but he appealed to the base of the party. He appealed to the base of
the party. What I’m saying is in order to get the nomination of a major party, you have to
appeal to its base. And I don’t think Manchin appeals to the base of the Democratic Party.
He’s out of step with it. He’s out of step with it in ways that I like, don’t get me wrong.
But I just, I don’t see how he’s going to get a nomination.
Chris Christie, what do you think of him? It seems like he’s about to come in the race too, David.
He’s just clutter.
Pointless. All right. Listen, everybody, welcome to the all-in podcast. It’s like episode 100
something. With me again today, the rain man himself. Yeah. David Sachs is here. Friedberg
is in his garden at his home in Paris. Spring has sprung, the queen of quinoa. And of course,
the dictator himself, Chamath Palihapitiya, the silver fox. Look at that little tuft of
silver hair. So distinguished.
I got a haircut from somebody recently who said that people go to her and ask her to put the
silver thing in their hair. Really?
I don’t have to worry about that.
Friedberg looks like he’s in Smurf Village there. What is, what is that background?
That is a scene from…
I like most of my backgrounds.
Oh my God.
It’s the mood and the moment of the week.
You guys just totally, totally denied half the beta males in the YouTube comments from being
able to guess what the background was. Thanks a lot, Sachs.
He ruined it for them.
Well, actually, I did a reverse image search, and then I used a chat GPT plugin to automatically
figure out Friedberg’s background each week.
Oh, okay. All right. Well, let’s get started. Come on.
Let’s get started. Okay, listen.
Look at Sachs. I gotta get out of here.
The alpha’s spoken. The alpha’s spoken.
Sachs feels like he’s in a good mood. I like this.
Welcome to the World’s Greatest Podcast.
OpenAI launched a bunch of chat GPT plugins, and I don’t know if you saw it,
but David Sachs wrote a blog post with chat GPT. It’s an amazing back and forth.
I read this back and forth. Explain what you did, Sachs.
This was really one of the best conversations I’ve seen with chat GPT.
It’ll pop it up here on the screen, but explain what you did.
Well, I had an idea for a blog post about the use of a, I guess, tactic you could call give to get.
I thought it would be an interesting tactic for AI startups to use if they’re trying to get a hold
of proprietary training data. For example, if you wanted to create an architect AI,
you need a lot of plans. If you’re going to create a doctor AI, you need a lot of lab results or
medical reports to train the AI on, and those are hard to get. OpenAI doesn’t necessarily have them
yet. There is an opportunity, I think, for startups to create these AIs in different,
you’d call them professional verticals. The give to get technique would be, you give points to
your users for uploading that data, and then they can spend those points by using the AI.
Anyway, the company that came up with this give to get tactic was a company called Jigsaw
almost 20 years ago. No one remembers this company. I’m dating myself because I remembered it,
but I just had this idea, gee, I wonder if the Jigsaw approach could be used for AI startups.
I started by going into ChatGPT, and I said, hey, have you heard of Jigsaw? Then it had.
Then I said, tell me about its give to get approach. Then I said, would this approach work
for AI startups that want proprietary training data sets? It said, yes, this is a good idea.
Then I gave the architect example, and I said, can you give me more examples like this? It gave me
like 20 more examples. Then I asked it just to flesh out various kinds of details. I went down
some cul-de-sacs that I didn’t use. Then at the end, I said, can you summarize everything we’ve
just talked about in a blog post? It gave me the first draft of a blog post. I then did a
substantial amount of editing on most of the blog posts, although some of it I just used verbatim.
Then I had a couple of people in my firm look at it. They made some good suggestions, so it’s not
like the human’s completely out of the loop. Then I copy and pasted my edited version back into
ChatGPT, said, here’s my edit. Then I asked for some suggestions. It made a few small edits.
I said, okay, great, just incorporate the edits yourself, gave me that final output.
Then I posted on Substack, a blog that probably would have taken me a week to research and write.
If I had done it at all, I was able to do in a day. I can’t see myself going back now. I think
this is just how I’m going to write all my blog posts, is use ChatGPT as my researcher,
as a writing partner, some cases an editor, but I’m definitely going to run it through.
The thing that I was struck by was just how kind and generous and thoughtful this conversation was.
I just thought, I’ve never seen Sax have a conversation where he was so kind to the
other person and thoughtful. Right about now, all your friends and family are like,
how do we get Sax to have this conversation with us? You were super kind to the AI.
Because it’s not a person, it was a robot.
Well, just in case it takes over the world, J-Cal, you can’t be too careful. No, I think,
listen, it’s important to give the AI-
Look at him, he’s so kind. He’s like, oh, perfect, thanks.
Perfect, thanks, exclamation mark.
I’ve never once gotten a thanks from Sax.
Well, show that example, actually.
Scroll up and show that example. The AI actually gave me some information about Jigsaw’s point
system. Again, the rewards that they used. And it was just in text. So I said down below, hey,
can you spit that out as a table? And it did, instantly, perfectly.
It’s like a day’s work, right? You would have to have an analyst or researcher do a day’s work.
And then I just screenshot of that and I made it an exhibit in my blog post.
But you also said thank you. And then it was delightful back to you. I mean, this is a-
Yes, it was delightful back to me.
This is a literal road to you being a kind human being. All the money that you’ve spent on therapy
and just trying coaching to be nice to people, you’re just nice, naturally.
No, J. Cal, J. Cal, Sax is in a good mood today. I don’t know why you’re instigating him.
He’s laughing. Come on, it’s fun. You have to admit it’s funny,
Sax saying thank you to the AI. Perfect.
This is confirmatory of what we know. David wants to live in a set of highly
transactional relationships, ideally with a machine,
who can then eventually help him make him money.
Can I ask you a question? Sincerely, Sax. What did you enjoy more,
working with your team of humans on this or working with Chet JPT? Which one was
more enjoyable for you, just personally? Well, I think they both were. I would say
that the human contributions were essential. So basically-
Okay. But what did you enjoy more?
It’s not about enjoyment. This is just a job to get done, but it definitely sped things up
enormously. I personally find the hardest part of writing a blog is when you’re staring at that
blank sheet of paper and just having to spit out the first thousand words. It’s just so time
consuming to do that. But again, if you start with the first draft, even if it’s not very good,
then you can just edit it and it speeds things up a lot.
Ideation. It’s great for ideation.
But the contributions of people on my firm were important. I actually trusted it. I know that you
probably should fact check it in a way because it can hallucinate. But the things that we’re saying
made so much sense to me that I didn’t think it was hallucinating.
Well, this is a great moment to pivot into what OpenAI did with plugins. These came fast and
furious this week. And a bunch of folks who had started verticalized Chet JPT-based projects,
MVPs were like, oh, maybe my project MVP is now dead because Instacart, OpenTable, Shopify, Slack,
Zapier, and Zapier, obviously, like if then this, then that is a very wide ranging tool that allows
you to connect APIs from a multitude of sources. And what this all lets you do at the end of the
day is have Chet GPT ping one of these sources, just like an app might do or some custom software
might do ping the API and return data. So hey, what tables are open on OpenTable?
Maybe Shopify, find me things to buy in this category, etc. And so people have started building
little scripts, we used to call these when magic leap was out, internet agents, and the concept of
a software agent that’s existed for a long time, actually, in computer science, I’m sure Freebird
will give us some examples of that. But also Chet GPT can now use a browser. So that means you can
get around the dated nature of the content in the corpus. Somebody did things like, hey, build me a
meal plan, book me a reservation for Friday night in OpenTable, source other ingredients and buy it
for Saturday night on Instacart and then use something like Wolfram Alpha to, you know,
calculate the calories, etc. So when you saw this drop, Sax, what did you think in terms of
the opportunity for startups and to build these intelligent agents, things that will do if that
if this then that, or just background tasks over time, and you could actually leave them running?
Yeah, I mean, I think this is the most important developer platform,
since the iPhone and the launch of iOS and the App Store, and I would argue maybe ever
in our industry, certainly since the beginning of the internet, I think there was a question
when Chet GPT launched on November 30. And people start playing within December,
what exactly OpenAI’s product strategy was going to be was this just like a proof of concept or a
demo. And they even kind of called it like a demo. And initially, it looked like what their business
model was going to be was providing an intelligence API that other websites, other applications could
incorporate. And we saw some really cool demos like that notion demo of other applications
incorporating AI capabilities. And so initially, it looked like what OpenAI was going to be was
more like Stripe, where, in the same way that Stripe made payments functionality available
very easily through a developer platform, they were going to make AI capabilities available
through their developer platform. And then I think a funny thing happened on the way to this
announcement, which is they became the fastest growing application of all time talking about
Chet GPT, over 100 million users in two months, nobody else has ever done that before. I think
it took the iPhone, you know, two years plus, Gmail, Google, those products all took, I think,
well over a year. So this became the fastest growing site of all time. And I think with plugins,
what they’re indicating is that they will become a destination site. This is not just a developer
platform, this is a destination site. And through plugins, they are now incorporating the ability
to basically, you know, anything you could do through an application, you will now be able to
do through a plugin, you’ll just tell Chet GPT what you want done. If you say, hey, book me a
plane ticket on this date, it will go into Kayaks plugin and do that. You say, book me a plane
ticket and then an Airbnb. So the promise of Siri and Alexa realized because those were very rigid,
they had no intelligence, right, Friedberg, you, if you, if you wanted Siri to do something
specific, like use ways, or to go get you an open table, it needed to be pretty specific. And it
didn’t have any kind of natural language model behind it. So this is taking existing API’s and
putting a natural language layer in front of it, which makes it, you know, perform a little more
naturally. Is that what we’re seeing here? I think it provides access to a corpus of data
and a suite of services that are not well integrated into a search or chat interface
anywhere today. So, you know, knowing what restaurants have what seats available is in
a closed service, it’s in a it’s in a data warehouse, operated by open table. And now
what open table can do is provide an API into that data via an interface, and they can allow
chat GPT to make a request to figure that data out to give a response to a user
where they can ultimately benefit from transacting and allowing a service.
This closes the loop between search and commerce in a way that Google cannot and does not do today.
And I think that’s what makes it very powerful. We’ve seen this attempted in a number of important
ways in the last couple of years with Alexa, and Apple Home and Google Home kind of integration
via the chat services that they offer, you know, where you speak to the device,
but the deep integration that’s possible now. And the natural language way that you can go
from the request all the way through to the transaction is what makes this so extremely
powerful. And I think, you know, the points I made a few weeks ago, when we first talked about,
you know, search, having so many searches that are done, where the human computer interface
presents a table or presents a chart, or presents a shopping list in a matrix. That’s what makes
search such a defensible product, I think, could theoretically be completely obviated or destroyed
with an interface like this, where you can write the ability for chat GPT, or whatever the
core centralized services to actually present results in a table in a matrix in an interface
in a shopping list, and actually close the transaction loop. It’s really disruptive to
things like commerce providers, it’s really disruptive. You know, some of these commerce
platforms, it’s really disruptive to a lot of different industries, but also introduces a lot
of real opportunity to build on top of that capability and that functionality to rewrite,
and ultimately make things easier and better for consumers on the internet.
What do you think, Chamath, you’re looking at this, and it seems to be moving at a very fast
pace, over 100 million users, they put a business model on it already 20 bucks a month, they have
a secondary business model of, hey, use the API, and we’ll charge you for usage. And then you layer
on what Zapier and if this than that had already sort of established in the world, which is APIs,
but nobody ever really wanted to write scripts. So that seemed to be the blocker, you go into
Zapier, if this than that, it’s where 5% of the audience people want to customize stuff,
people who want to tinker. But this seems to now with the chat GPT chat interface,
open it up to a lot of people. So is this super significant? Or is this a commodity product that,
you know, 10 people will have for sitting here next year on all in Episode 220?
I think you are asking the exact right question. And you use the great term, like in poker,
if there are three hearts on the board, and you have the ace of hearts, you have what’s called
the nut blocker, right, which means that nobody else, even if anybody else has a flush, they never
have the best flush. And if flush is the best hand, there’s a lot of ways that you can manipulate the
pot and eventually win the pot because you have that ace of hearts and nobody else has it.
The concept of blocker, I think is very important to understand here, which is what are the real
blockers for this capability to not be broadly available. So I think you have to segregate,
you have the end user destination, you have the language model, and then you have the third party
services. And so if you ask the question, what is the incentive of the third party service? Well,
the shareholders of a travel site, right? They’re not interested in doing an exclusive deal with any
distribution endpoint, they want their services integrated as broadly as possible.
Right? So I think the answer for the service providers is just like they build an app for
iOS and for Google, and if they could have justified it, they would have built an app for
a gaming console, they can, they should, they would, they do. Right? So that’s going to get
commoditized and broadly available. I think on the LLM side, I think we’ve talked about this,
everybody’s converging on each other. In fact, there was an interesting
article that was released that said that there was a handful of Google engineers that quit,
because apparently Bard was actually learning on top of
chat GPT, which they felt was either illegal or unethical or something, right? So, so the point is,
I think we’ve talked about this for a while, but all of these models will converge in the absence
of highly unique data, right? What I’ve been calling these white truffles. So if you can
hoard white truffles, your model will be better. Otherwise, your model will be the same as
everybody else’s model. And then you have the distribution endpoints of which there are many
whose economic incentives are very high, right? So Facebook doesn’t want to just sit around and
have all this traffic go to chat GPT, they want to be able to enable Instagram users and WhatsApp
users and Facebook users to interact through messenger or what have you. Obviously, Google
has a, you know, many hundreds of billions of reasons to defend their territory. So I think
all of this to me just means that these are really important use cases. As an investor,
I think it’s important to just stay a little patient. Because it’s not clear to me that
there are any natural blockers. But I do think that David’s right that it’s demonstrating a
use case that’s important. But it’s still so early, we are six weeks in.
Yeah, I tell you, I think there’s a couple of great blockers here, or there’s going to be an
M&A bonanza for Silicon Valley. If you look at certain data sets, Reddit, stack overflow for
programming. And Cora, these things are going to be worth a fortune. And to be able to buy those
or get exclusive licenses to those if you’re maybe Google barred, or if you’re a chat GPT,
that could be a major difference maker, Twitter’s data set, obviously. And then you look at
certain tools like Zapier. And if this and that they’ve spent a decade building the sort of,
you know, meta API, that would be an incredible blocker. I think this is going to be like a
balkanization. I’ll be honest with you.
So many oral sources.
Zapier ran into it for free, they did a plugin for free.
Exactly. I was just gonna say, I don’t think these are not blockers. I don’t think this is
the ace of hearts on a flush board. I don’t think so. I think that these things are really
interesting assets. They are definitely truffly in nature. But they may not be the, you know,
10 pound white truffle from Alba that we’re looking for.
Yeah, no, but on the M&A side, don’t you think this would be like incredible?
No, but the only reason I say that, again, is it is just so early, like I in the text,
I mentioned this to you guys, I remember, and Saks and I were in the middle of this.
We were both right at the beginning of social networking. Saks started genie,
I was in the middle of aim. And all of a sudden, we saw read start social net,
then we saw Friendster get started, then we saw MySpace get started. And you have to remember,
when you look back now, 20 years later, the winner was the seventh company, which was Facebook,
not the first, not the second, it was the seventh, which started two and a half years
properly after the entire web point to a phenomenon started.
Yeah, same with search, by the way, where Google was probably 20.
Yeah, excite like us.
If you want to be a real student of business history, I’ll just say something that’s more
meta, which is, if there’s something that I’ve learned on the heels of this SVB fiasco,
is that there is an enormous amount of negative perception of Silicon Valley,
and frankly, a lot of disdain for VCs and prognosticating technologists, right? And I
think that we have to be podcast. I think we have to be very careful.
Yeah. And I do think that we are an example of that because we are the bright, shiny object of
the people that were successful. And the broad makeup of America thinks that we’re not nearly
as smart as we all think we are. And after all of this money that’s been burned in crypto land,
and NFTs, and all of this web three nonsense, to yet again, whip up the next hype cycle,
I think doesn’t serve us well. So I do think there’s something very important here. But I think
if we want to maintain reputational capital through this cycle, because government will
get involved much faster in this cycle, I think it’s important to just be methodical and thoughtful,
iterate experiment, but it’s too early to call it, I guess, is what I would say.
Yeah, it’s definitely too early to call it. But,
Sax, you’re saying explicitly, you think this is bigger than the internet itself,
bigger than mobile as a platform shift.
It’s definitely top three. And I think it might be the biggest ever.
I think, look, I think things could certainly play out the way that Jamath is saying. However,
I actually think that open AI has demonstrated now with these platform features, that it has a
lead, a substantial lead. And I actually think that lead is likely to grow in the next year.
And let me tell you why. I think it’s got a couple of assets here that are hard to replicate.
So number one, user attention. I think they’ve now got, I would guess, hundreds of millions of
users and this thing is caught on like wildfire. It must have been beyond their wildest dream. I
think it even surprised them how much this has taken off. It’s really captured the public’s
imagination and people are discovering new use cases for it every day. If you are sort of the
number two or number three or the seventh large language model to basically get deployed behind a
chatbot, I just don’t think you’re going to get that kind of distribution because the novelty
factor will have worn off and people will have already kind of learned to use chat GPT.
So number one is the hundreds of millions of eyeballs. Number two is with this developer
platform, I think we should describe a couple of other features of it. One of the problems
with chat GPT, if you’ve used it, is that the training data ends in 2021. And so you very
rapidly for many questions, get to a stopping point where it says, like, I don’t know the
answer to that because I don’t have any information about the last two years. Well,
one of the plugins that OpenAI has introduced itself is called the browsing plugin. And it
allows chat GPT to go search the internet and not just run internet searches, but to run an internet
search as if it were a human. So you ask chat GPT a question and it goes to find, it runs a search
and then it scours through the list of 20 links and it doesn’t stop until it finds a good answer.
And then it comes back to you with just the answer. So it actually saves you the time
of clicking through all those loops and it’ll give you the browsing history to show you what
it did. That’s mind blowing. They also have a thing called a retrieval API, which allows developers
to share proprietary knowledge bases with chat GPT. So if you have a company knowledge base or
some other kind of content, you can share with chat GPT so that chat GPT can be aware of that.
And there are some privacy concerns, but the company has said they’re going to
sandbox that data and protect it. As an example, I’m planning on writing a book on SAS using chat
GPT and I’m going to put together all the previous articles and talks I’ve done as a database so I
can then work with that in chat GPT. So you’re going to have more and more developers sharing
information with chat GPT. You’re going to have chat GPT able to update its training based on
sort of the last two years, being able to search the internet. And I think that as those hundreds
of millions of users use the product, and as developers keep sharing more and more of these
data sets, the AI is going to get smarter and smarter. And then what’s going to happen is
both consumers and developers are going to want to use or build on the smartest API.
Yeah, see, this is where it feeds on itself. I mean, yeah, I think there might be a
I agree with much of what you’re saying. But I do think somebody like Facebook, when they release
their language model, which they’re about to, is not going to allow chat GPT to have any access to
the Facebook corpus of data. And then LinkedIn will do the same, they’ll block any access to
chat GPT to their data. And so then you might say, you know what, I’m doing something related
to business and business contacts, I need to use the LinkedIn one. And they’re just going to block
other people’s usage of and tell you, hey, you have to come to our interface and have a pro account
on LinkedIn. And this all becomes little islands of data. And so I’m not sure that
you may be right. It’s too early to have a definitive opinion. But I would say
you have to believe plugins are going to be promiscuous.
Yes, exactly. Plugins are the refutation of your
Facebook does not have an API, Twitter turned off their API, people who are
Cora doesn’t let people use its data. So I just picked three. Those are three incredible data
sets that don’t allow people and Craigslist doesn’t. So people who are smart, do not allow
API’s into their data. They keep it for themselves.
I think there were a lot of people when the app store rolled out that swore up and down,
they would never build a mobile app, because they didn’t want to give Apple that kind of power that
the internet was open, whereas the app store is closed and curated by Apple. And sure enough,
they all at the end of the day had to roll out apps, even though in the case of Facebook,
it definitely has made them vulnerable, because they’re downstream of Apple. I mean, Apple
now has enormous influence over Facebook’s advertising revenue, because users have to
go through Apple. They never had to do that before the internet. Nonetheless, Facebook felt compelled
to release a mobile app because they knew was existential for them if they did it.
And I believe that I don’t think it’s right analogy, the right analogy would be Google search,
does Facebook does Craigslist allow their data to be indexed inside of Google search answers? No,
right? They block that for a reason they and they will write a cease and desist letter.
Fine. So So you know what, those guys will stay out of it. But look how much content Google search
already has. And I think that chat GPT will start by eating a substantial portion of search because
again, you don’t have to go through the 20 links, it just gives you the answer. It’s going to eat a
substantial portion of browser usage and app usage, because you’re just going to tell chat GPT
what you want to do, it will go book your plane ticket, it will go book your hotel room. Yeah,
see, this is a play in this hold on the apps that want to play in this will benefit. So there’ll be
a powerful incentive for applications to get an advantage by participating. Let me finish my point.
Yeah. And then eventually, they will be forced to do it not because they get an advantage,
but because they’re so competitively disadvantaged. If they don’t participate
in that ecosystem, I agree that they’ll participate in it. But here’s the thing,
what’s going to happen is Google is going to turn on Bard and I’ve been playing with Bard.
It is 80% of chat GPT already. And then when they make Bard a default, you know, little snippet on
your Google search return page, or Bard is built into YouTube, or Chrome, or Android, all the play
store, they’re going to roll right over chat GPT because they have billions of users already. So
this advantage that you see today, I see that getting rolled real quick, because you’ll be on
YouTube. And on the top right hand side will be barred. And when you do a search, it’s going to
say, here are other sentences you could do, oh, you want to search Mr. Beast, when he’s helped
people or Mr. Beast when he’s given away more money, or people have copied and been inspired
by Mr. Beast, all that’s going to occur inside of YouTube, and chat GPT is not going to have
access to the YouTube corpus of data. And then when you do a search, it’s going to be the same
thing, it’s going to be on the right hand side. And it’s going to be playing just like it is in
Bing. If you turn on your Android phone, they’re going to make Google Assistant go right into
Bard. And Google Assistant is already used by hundreds of millions of people. So I think that
Google will roll. I think they’re going to roll chat GPT.
I don’t know who’s going to win. But I’m looking at this sexy poo more reductively as a capitalist,
which is what are people’s incentives, because that’s what they’ll do. Google’s incentive is to
usurp chat GPT usage by inserting something inside of their existing distribution channels
to suppress the ability for you to want to go to the app known as bundling. I think Facebook has
that same incentive. Oddly, even though Microsoft is such a deep partner, I think certain assets of
Microsoft have that incentive, you’re talking collectively about five or $6 trillion of market
cap, then when you add in Alexa and Amazon and Siri and Apple, what is their incentive,
I don’t think their incentive is to let this happen. And I think if you look at the Slack,
Microsoft Teams example of even a better engineer product who’s excellent and widely deployed,
even at hundreds of millions of users doesn’t much matter when it’s
more cleverly distributed and priced. And so those things again, you may still be right,
all I’m saying is, it’s just so early to know. And as slow and lumbering as some of these big
companies are, they are not so stupid as to kill their own golden goose and or defend it when
threatened. So I think you just have to let let it see what happens.
I want to finish the point on Google. And then we can move on to the bundling thing. Let me just
make the counter argument, which is that I think Google is caught completely flat footed here,
even though they shouldn’t have been because they published the original paper on Transformers in
- They should have seen where all this was going, but they didn’t open AI, use that paper
and commercialized it. And the proof of that is there was just a lawsuit a couple of days ago,
or at least a claim by a former employee of Google who quit, because he said that they
were using chat GPT to train their AI. So their AI is so far behind. They were violating the
on chat GPT. That’s not a good sign. That’s not a good sign. I also think hold on, hold on,
I’m just making the counter argument here. I mean, don’t dismiss it out of hand, give me a chance to
explain it. Moreover, chat GPT for which was just released a few weeks ago, we know that open AI had
that they were using it internally for seven months. So the state of the art is not what we’re
using. It’s what open AI has internally. They’re obviously working now on chat GPT five. And so if
you’re saying that Bard is 80% of chat GPT four, well, I got news for you. It’s probably 50% or 20%
of chat GPT five. And who knows what the product roadmap is inside of open AI. I am sure that
they’ve got 200 ideas for things they could do to make it better and lowering fruit. But look,
regardless, I think the pace of innovation here in development is going to speed up massively.
I mean, there is going to be a flurry of activity. I agree. It’s hard to know exactly how it’s going
to play out. But I think this idea that oh, it’s a foregone conclusion, these big companies
are just going to catch up with open AI. I think that there’s a strong counter argument.
That’s not I’m making a very specific argument. It’s not a foregone conclusion where all the value
will get captured. Just like in any of these major tidal waves. If you make the bets too early,
you typically don’t make all the money. And it tends to be the case and it has been in the past,
at least with these transformative moves. It’s sort of in the early third of the cycle
is where the real opportunities to make the tons of money emerge. And there’s a lot of folks that
show you a path and then just don’t necessarily capture the value. I’m not saying that that’s
going to be the case here. All I’m saying is, if history is a guide, all of these other big waves
have shown that fact pattern. And so I’m very excited and I’m paying attention. But I’m just
being circumspect with this idea that, you know, having been in the middle of these couple of waves
before it, I made all the money by waiting a couple years. I don’t know if that’s going to
be true this time around. But right, that’s sort of my posture right now.
You obviously have a point because we’re only four months in. So how can we know where this
is going to be in five years? So you could be right to your point, sex. I think it’s clear.
And this is, you know, big ups to the open AI team, that they will be one of the top two or
three players. Absolutely. We all agree on that, which is extraordinary in itself. And the top
four players freeberg are obviously going to be Microsoft opening, I will call that like,
whatever that little, you know, pairing, and then Google, Facebook. And then we haven’t talked about
Apple, but obviously, Apple is not going to take this sitting down. And hopefully,
they’ll get in gear and have Siri, you know, make it to the next level, or they’ll just put her out
to pasture. If you were to look at those four, and we’re sitting here a year from now, who has the
best product offering? Who has the biggest user base, just take a minute to think about that,
because you were at Google. And we all know, the word on the street is, it’s the return of the
kings. Larry and Sergey are super engaged by all reports, every back channel, everybody I talked to
is saying that they’re every day, they’re obsessed with Google’s legacy now and making this happen.
So what can you tell us in terms of who you think a year or two from now will have the biggest user
base and be the most innovative amongst that quartet? Or maybe you think there’s other players
who will emerge? The advantage that open AI has, which is the advantage that any
call it emerging, you know, advantage competitor has, is, yeah, outsider is that the incumbents
are handicapped by their current scale. Much of the consideration set that Google has had
in deciding what features and tools to launch with respect to AI over the last couple of years
has been driven fundamentally by a concern about public policy and public reaction.
And I know this from speaking to folks there that are close enough to kind of indicate like,
Google has been so targeted has been such the point of attack by governments around the world
with respect to their scale and monopoly and monopolistic kind of behavior. Some people have
framed it privacy concerns, you know, etc, etc. The fines in the EU are extraordinary,
that so much of what goes on at Google today is can I get approval to do this? And so many people
have felt so frustrated that they can’t actually unleash the toolkit that Google has built. And so
they’ve been harnessed and focused on these internal capabilities. I think I mentioned this
in the past, but things like, what’s the right video to show on YouTube to keep people engaged?
What’s the right ad to show to increase click through rates, etc, etc. versus building great
consumer products for fear of the backlash that would arise, and governments coming down on that
mission release, and ultimately attacking the revenue and the core revenue stream. And this
is no different than any other kind of innovative dilemma, you know, any other business of scale in
any other industry historically ultimately gets disrupted, because their job at that point is to
protect their cash flow and their revenue stream and their balance and their assets, not to disrupt
themselves, especially as a public company, especially under the scrutiny and the watchful
eye of governments and regulators. So I think Google has, in aggregate, probably good competitive
talent, if not better talent than open AI and others. Google has arguably the best corpus of
data upon which to train the best capabilities, the best toolkit, the best hardware issues are
the lowest cost for running these sorts of models, the lowest cost for serving them, etc, etc. So
frankly, they’re way behind the battle is theirs to lose, if they are willing to disrupt themselves.
And this is the moment that Larry and Sergey should wield those founders shares that they have.
And they should wield the comments that they wrote in that founders letter, that they will always
make the right decision for the long term for this company, even if it means taking a cost in the
short term and disrupting themselves. This is the moment to prove that those founders shares were
worth, you know, the negotiation to get there. And, and I think that it is going to require
a real degree of scrutiny, a real degree of regulatory uncertainty, a real degree of
challenge by governments and public policy people, and perhaps even a revenue hit in the near term
to realize the opportunity, but I do think that they’re better equipped to win if they chose to.
Well, really well said. I think the founders share insight is particularly interesting sacks.
The fact that by the way, sorry for those I did nothing with them.
Yeah, no, no, I was just gonna say the exact same thing. It’s like if they don’t use it now,
what would it take? And when? Yeah, and yet another, yet another case of the emperor has
no clothes, just a power grab by Silicon Valley execs, which was meaningless. Because if in this
moment, you don’t wield that power, and break that company into bits as you need to, what was
the point of having it?
They need to come in and say, we’re going to give barred results to 10% of users and ask them to
get feedback on it. Because who has worse queries than just one point I want to make there for
who has more reinforcement learning than Google, that search box is now everywhere and people
write after question and Gmail and Google Docs, etc, etc. I mean, they have so many people asking
questions and YouTube might be the the transcripts of YouTube, every video and the image of every
video bananas and the comments under it, you know, the comments under the video, you have the
transcript of what happened in this video. And then what was the question and answer underneath
it? Let me make the counterpoint, please, to my own point, like, look at how Gerstner came after
Zuck. So Zuck had his point of view, his strongly held belief that AR VR was the future of the
platform. That’s what he wanted to bet into. That’s what he wanted to lean into. It’s what he
wanted to build the company against. He did it. And then the financial analysts and the investors
came at him and said, This is a waste of money, focus on making money, you have a responsibility
to shareholders, F those founders shares, you don’t deserve that 10x voting right, or whatever
the framing might have been to get him to say, you know what I acquiesce, I’m giving it up. And
I think that we should also think about what’s going to happen on the other side, Google is a
trillion plus dollar market cap company. Their shares are owned by every public endowment,
public pension fund, institutional investor owns Google in their portfolio. So the backlash
against Google making a hard bet like this, and potentially destroying billions of dollars of
cash flow in the process every year will not be easy to do that the same sorts of letters that
Gerstner at all. And obviously, we love Gerstner. And, you know, we can all defend him all day long
at Zuck is what might may end up happening with with alphabet if they did choose to go this path.
Saks, what do you think here about the founder share specifically in Google’s chances
of disrupting themselves and, you know, just putting this into every product
and shoving it down users throats and catching up?
Well, I mean, with all due respect to Larry and Sergey, I mean, they’ve been on the beach a long
time. This reminds me of Apollo Creed coming out of retirement in rocket for a lot of a lot of
fanfare. But they could be a little out of shape. Sam Altman may not look like Ivan Drago. But
but this this is one shrewd character. This is one shrewd character. I mean,
Altman is fit. He’s fit. He’s been in the arena.
Yeah, he’s, you know, he’s a multi time founder who sat at the top of YC and got to see everything
that worked. Yep. And got to see all the research and he’s been plugging away at this for what,
like eight years. So there’s a there’s a big I just think there’s a big gap to catch up on. Now,
Google has all the resources in the world. And they’ve got a lot of proprietary assets, too.
And they’ve got all the incentive in the world. So do I think that Google will be
one of the top four players in AI? Absolutely. But this idea that is going to come in steamroll
open AI. I have a prediction. I got a prediction. Within next year, Larry and
Sergei take the title of co CEOs. And then they do a demo day where the two of them
get on stage. They actually do the demos of these products. If that happens, that fictional
quantification. That’s it. That’s listen, and Bezos is gonna run for president. Those are my
two predictions. Stop. I’m taking love riddance. Can you imagine if Larry Freeburg where the
chances of Larry and Sergei taking co CEO slots, that’s prediction one and then prediction two,
where the chance of them running the next Google IO, where they get on stage, and they walk people
through all the products that they shepherded, and that they have a vested interest in that there,
they want to demo, there is an institutional problem at Google, at the top level, which
does need to be solved. Which is this position of constantly being in defense against the scrutiny,
again, of regulators and public policy folks, and you know, all these different groups that
are against Google. And so as a result, the kind of cultural seasoning, particularly the executive
and the board level has been one of like, you know, protect the nest, don’t overreach, don’t
overstep. And it’s a real, you know, I think one for the for the business school books or whatever,
ultimately is what they end up doing about it. Because now is, you know, the time when
that defensive posture is really kind of putting the entire business at risk.
The same thing happened to Microsoft, remember, in the late 90s, that’s right,
when they got crushed by that antitrust lawsuit, it made them very defensive.
Well, that can know but that consent degree, they put up they had a wartime CEO come in
bomber came in. And, you know, followed by kind of an innovative guy who could kind of continue to
build. And I think that there may be a moment here. I look I love Sundar. He’s a he’s a great
guy, great CEO, sooner and I don’t forget, if I ever told you this, he and I started at Google
on the same day, we’re both in the same nuclear class, we were the freaking hat on the TGIF
day and on stage, he was a product manager, and now he runs the company.
But I think the question is, like, whether it’s the CEO or the broader hold kind of executive
org or the board, a degree of disruption necessary to shift that cultural seasoning is so necessary
right now, for them to have a shot at this. And similar to what you just said, sex, like you’re
going to need a bomber type moment to kind of, you know, reinvigorate that business.
And by the way, I’ll tell you such a moment, I think that
it’s an important port point when bomber took over during that period after gates,
when they were on their heels, he basically just focused on revenue and paying dividends and stock
buybacks, and the stock went sideways. And he missed mobile. And now, yeah, it’s missing,
you know, when you’re forgetting one big thing, which is that that was also because he had to
operate under a consent decree to the DOJ. Exactly. So the product managers of Microsoft
were replaced with lawyers from the Department of Justice, and you had to get their sign off
before you could ship anything. So we have to remember that those things probably slowed
Microsoft down as well. And the great thing that Satya had was a blank slate and the removal of
that consent decree. So he was able to do everything that just made a lot of sense.
And he’s executed flawlessly. I think the problem at Google is not Sundar or Larry or Sergey.
I think it’s more in the deep bowels of middle management of that company, which is that there’s
just far too many people that probably have an opinion. And their opinion is not shrouded in
survival. Their opinion is shrouded in elite language around what is the moral and ethical
implications of this and where has this been properly tested on the diaspora of 19 different
ethnic tribes of the Amazon. That’s the kind of decision making that is a nice to have when you
are the second or third most valuable technology company in the world. But you have to be able to
pause that kind of thinking and instead get into wartime survival mode. And it’s very hard. So it
doesn’t almost matter. At this point, what Sundar wants, the real question is, what is the capability
of middle management to either do it or get out of the way. And I think that in all of these big
companies that struggle, what you really see is an inability for middle management to get out of
the way, or, frankly, just you need somebody to then fire them. And if you look at folks who get
their groove back, let’s see what Facebook does. What are they targeting? They’re targeting middle
management. If you look at what Elon does in the companies that he owns, there is virtually no
middle management. It’s like get out of the way, build product, build product and ship it. Yeah.
And what is the core truth? And so if failure is there in front of you, and if David is right,
that you have 200 million users come out of nowhere, who are voting every day with their
time and attention to use an app. And that doesn’t create a five alarm fire where you get middle
management out of the way and you are the senior most people talking to the people doing the work
and shipping things every day. You’re you are toast. You are toast,
a lot of people are starting to think we’re moving a little bit too fast. When it comes to
open AI is incredible performance, which had GPT for the plugins and all this. And so the future
of life Institute, which was formed in 2015. It’s a nonprofit that’s focused on de risking
major technology like AI. They did a petition titled pause giant AI experiments and open letter
bunch of computer scientists assign this letter. And the letter quote says we must ask ourselves
should we let machines flood our information channels with propaganda and untruth? Should
we automate away all the jobs including the fulfilling ones? Should we develop non human
minds that might eventually outnumber outsmart obsolete and replace us? Should we risk loss of
control of our civilization, a number of notable tech leaders like Elon, Steve Wozniak, and a
handful of deep mind researchers have signed it. What do you guys think of the latter? Are we going
to slow down or not? And then we can ask the question generally, how close are we getting to
AGI, which is what everybody’s scared of, is that these agents start working with each other in the
background to do things that are against human interest. I know it sounds like science fiction.
But there is a theory that when these AI is start operating on their own, like we explained in the
previous sort of segment here with plugins, and they make agents that are operating based on
feedback from each other, could they get out of control and be mischievous and then work against
human interest? So what do you think sex? I think there’s a difference between what could happen in
the short term and then what could happen in the long term. I think in the short term, everything
we’re seeing right now is very positive. And let me just give you an example. There was a really
interesting tweet storm about a guy who wrote about how chat GPT saved his dog. And do you guys
see this? This is one of the really mind blowing ones to me, use cases. So his dog was sick,
took him to a vet, vet prescribed some medication, three days later, dog still sick, in fact, even
worse. So the owner of the pet just literally copied and pasted the lab result for the blood
test for the dog with all the lab values into chat GPT and said, What could this be? Like,
what’s your likely diagnosis? chat GPT gave three possible answers, three illnesses. The first one
was what the vet basically diagnosed with. So that wasn’t it. The second one was excluded by another
test. So he then went to a second vet and said, Listen, I think my dog has the third one,
and vet prescribed something and sure enough, dog is cured, saved. So that’s really mind blowing
that even though chat GPT hasn’t been specifically optimized, as far as we know, for lab results,
it could figure this out. The reason I’m mentioning this is it gives you a sense of the potential here
to cure disease to, you know, like I could see major medical breakthroughs based on the AI in
the next five or 10 years. Now, the question is, like, what happens in the long term, you know,
as the AI gets smarter and smarter, and we are kind of getting into the realm of science fiction,
but here would be the scenario is you’re on chat GPT 10, or 20, or whatever it is, or maybe some
other companies AI. And the developers asked the AI, hey, how could you make yourself better?
Now do it, which is a question we asked chat GPT all the time in different contexts. And so chat
GPT will already have the ability to write perfect code by that point. I think, you know,
code writing is one of the, I think of its superpowers already. So it gives itself the
ability to rewrite its code to auto update it to recursively make itself better. I mean,
at that point, isn’t that like a speciation event doesn’t that very quickly lead to the singularity
if the AI has the capability to rewrite its own code to make itself better? And you know, won’t
it very quickly write billions of versions of itself? And you know, it’s very hard to predict
what that future looks like. Now, I also don’t know how far away we are from that that could
be 10 years, 20 years, 30 years, whatever. But I think it’s a question worth asking for sure.
Is it worth slowing down, though, sex? Should we be pausing because,
based on what you’ve said, you know, I think you’ve framed it properly.
When these things hit a certain point, and they start reinforcing their own learning with each
other, they can go at infinite speed, right? This is not comparable to human speed, they could be
firing off millions, billions of different I think you’re right scenarios.
We’re definitely now on this fuck around, find out curve. Yeah. And so there’s only one way
to really find out which is somebody is going to push the boundaries, the competitive dynamics will
get the better of some startup, they’ll do something that people will look back on and say,
Whoa, that was a little that was a bridge too far. So yeah, we’re just a matter of time.
Yeah, I think we’re not going to slow down. I actually think it’s going the other way. I think
things are going to speed up. And the reason they’re going to speed up is because the one
thing Silicon Valley is really good at is taking advantage of a platform shift. And so when you
think about like all the VCs, and all the founders, you know, everyone accuses us of being lemmings.
And so when there’s like, kind of like a fake platform shift, or people kind of glom onto
something that ends up not being real, everyone’s kind of got egg on their faces. But the flip side
of that is that when the platform shift is real, Silicon Valley is really good at throwing money
at it. The talent knows how to go after it. And they keep making it better and better. And so
that’s the dynamic we’re in right now. You look at 70% of the last YC class was ready all AI
startups for the next one, probably 95%. So I think that we’re on a path here where the pace
of innovation is actually going to speed up. Companies are going to compete with each other,
they’re going to seek to invent new capabilities. And I think the results are going to all be
incredibly positive for some period of time, like, you know, the vet example, we’re going to cure
illnesses, we’re going to solve major problems. Positive, then we invest more, we trust more.
But the paradox of that, as Chamath is pointing out, Friedberg is if we trust it more, we invest
more than some person in a free market is going to say, you know what, I need to beat chat GPT,
therefore, I’m going to take the rails off this thing, I’m going to let it go
faster, and take off some constraints, because I need to win. And I’m so far behind.
How do you feel about that scenario that sort of Chamath and Saks teed up Friedberg,
I think there’s like, GPT three, I think ran on 700 gigs. Is that right?
Does anyone know what GPT four runs on? It’s got to be on some number that’s, you know, not to not
not many multiples of that. But look, someone could make a copy of this thing and fork it and
develop an entirely new model. I think that’s what’s incredible about software and digital
technology and also kind of, you know, means that it’s very hard to contain. Similar to like what
we’ve seen in biology ever since biology got digitized through DNA sequencing, and the ability
to kind of express molecules through gene editing. You know, you can’t control or contain the ability
to do gene editing work at all. Because everyone knows the code. Everyone can make CRISPR Cas
molecules, everyone can make gene editing systems in any lab anywhere. Once it was out, it was out.
And now there’s hundreds of variants for doing gene editing, many of which are much improved
over CRISPR Cas9. I use that as an analogy, because it was this breakthrough technology
that allowed us to precisely, specifically edit genomes. And that allowed us to engineer biology
and do these incredible things where biology effectively became software. And remember,
CRISPR Cas9 gave us effectively a word processing type tool find and replace.
And the tooling that’s evolved from that is much better. So whatever is underlying,
whatever the parameters are for GPT for whatever that model is,
if a close enough replicant of that model exists, or a copy of that model is made,
and then new training data and new evolutions can be done separately, you could see many,
many variants kind of emerged from here. And I think this is a good echoing of Chamath’s point,
we don’t know what’s ultimately going to win. Is there enough of a network effect in the plugin
model, as Saks pointed out, to really give open AI the sustaining competitive advantage? I’m not
sure. The model runs on 700 gigs. That’s less data than you know, fits on my iPhone. So you know,
I could take that model, I could take the parameters of that model. And I could create
an entirely new version, I could fork it, and I could do something entirely new with it.
So I don’t think you can contain it. I don’t think that this idea that we can put in place,
some regulatory constraints and say, it’s illegal to do this. Or, you know, try and,
you know, create IP around it, or protections around it is realistic at the state,
the power of the tool is so extraordinary, the extendability of the tools are so extraordinary.
So the economic and, you know, the various incentives are there for, you know, other
models to emerge. And whether they’re directly copied from someone hacking into open AI servers
and making a copy of that model, or whether they’re, you know, open sourced, or whether
someone generates something that’s 95% is good, and then it forks and a whole new class of models
emerge. I think this is like, it’s as Saks pointed out, highlighting the kind of economic,
market uprooting, social uprooting potential, and many models will start to kind of come to market.
What do we think the impact of white collar jobs getting annihilated by this technology? If that,
in fact, I want to say one thing on this. Yeah, look, I just share one example here. So here’s
a Reddit post that I was made aware of earlier this week. I lost everything that made me love
my job through mid journey overnight. I am employed as a 3d artist in a small games company of 10
people. Our team is two people who basically explains he says since mid journey version five
came out, he’s not an artist anymore, nor a 3d artist. All they do is prompting, photoshopping
and implementing good looking pictures. And he basically says, this happened overnight,
and he had no choices. Boss also had no choice. He says I am now able to create rig and animate
a character that spit out from MJ mid journey in two to three days before it took us several
weeks and 3d. The difference is that he cares about his you know, job and for his boss. It’s
just a huge time money saver. He’s no longer making art and the person who was number two
in the organization who didn’t make as good content as him is now embracing this technology
because it carries favor with his boss. And he ends basically saying, getting a job in the game
industry is already hard, but leaving a company and a nice team because AI took my job feels very
dystopian. I doubt it would be better in a different company. Also, I am between grief
and anger and I’m sorry for using my gosh, your art fellow artists. This is yet another reason
that figma really needs to close this acquisition from Adobe. I mean, it’s like, the value of these
apps are just getting gutted. If you take a workflow management tool for things like design
and imagery, and you reduce it by an order of 90%, it’s like, what is that app experience worth?
And how could you replicate it if you were a big company that already has distribution? That’s one
comment. But what I would tell you, Jason, to answer the white collar question is I think there
are a handful of companies you need to look at exclusively, because they will be the first ones
to really figure out how to displace human labor. And that is TCS. So Tata Consulting Services,
Accenture, Cognizant, these are all the folks that do coding for higher work at scale. I think
Accenture has something like 750,000 employees. So the incentive to sort of squeeze outbacks to
create better utilization rates to increase profitability is quite obvious. It always has
been they will be the first people to figure out how to use these tools at scale. Before the law
firms or the accounting firms or any of those folks, even sort of try to figure out how to
displace white collar labor, I think it’s going to be the coding jobs and it’s going to be the
coding for higher jobs that companies like Accenture and TCS. So those business processing
do for other people, developer kind of folks, they’re going to need half as many people,
25% as many people, we’re going to find out the efficient frontier.
Yeah. I see it a different way. I mean, this argument that productivity leads to job loss
has been made for hundreds of years and it’s always been refuted. When you make human beings
more productive, it leads to more prosperity, more wealth, more growth. And so, yeah, it’s easy
to think about in a narrow way, the jobs are going to be displaced, but why would that be? It’s
because you’re giving leverage to other human beings to get more done. And some of those human
beings, really anybody with a good idea is now going to be able to create a startup much more
easily. So you’re going to see a huge explosion in creativity, in startup creation, new companies,
new jobs. Imagine, think about the case of Zuckerberg founding Facebook at Harvard. He wrote
the first version himself, maybe with a couple of friends. That project happened and turned into a
giant company because he was able to self-execute his idea without needing to raise venture capital
or even recruit employees, even really before forming a company. Anyone with a good idea is
going to be able to do that soon. You’re going to be able to use these AI tools. They truly
will be no code. You’ll be able to create an app or a website just by speaking to some AI program
in a natural language way. So more flowers will bloom, more startups will bloom, more projects.
Now, it will create, I think, a lot of dislocation, but for every testimonial that is like the one
that you showed, which I think is, I’d say a little bit overly dramatic. I have seen 10 or 100
testimonials from coders on Twitter or other blogs talking about the power that these new tools give
them. They are like, this makes me a 10x engineer. Right. And especially these like junior engineers
who are right out of school who don’t have 20 years of coding history. They get superpowers right
away. It makes them so much better. Let me give you a response to that guy. So, and using Sax’s
point, that guy saying what used to take me weeks, I can now do in two to three days. And I feel like
my work is gone. And that’s because he’s thinking in terms of his output being static. And if he
thinks about his output being dynamic, he can now in the matter of three weeks, instead of making
one character, he can now make a character every two days. So he can make 30 characters in three
weeks. That’s an alternative way for him to think about what this tooling does for him and his
business. The number of video games will go up by 10x or 100x or 1000x. The number of movies and
videos that can be rendered in computers can go up by 10x or 100x or 1000x. This is why I really
believe strongly that at some period of time, we will all have our own movie or our own video game
ultimately generated for us on the fly. Based on our particular interests, there will certainly be
shared culture, shared themes, you know, shared morality, shared things that that tie all these
things together. And that will become the shared experience. But in terms of like us all consuming
the same content, it will really like you with YouTube and Tick Tock, we’re all consuming
different stuff all the time. And this will enable an acceleration of that evolution and
personalization. I’ll also highlight, you know, back in the day, one human had to farm a farm by
hand. And we eventually got the tool of a hoe and we can put in the ground and make, you know,
make stuff faster. And then we got a plow. And then we got a tractor. And today, agricultural
farm equipment allows one farmer to farm over 10,000 acres, you go to Western Australia,
it’s incredible. These guys have 24 row planters and harvesters. And it’s completely changed the
game. So the unit of output per farmer is now literally millions of times what it was just
- And in that case, freeberg, nobody wants to do backbreaking labor in the fields. And everybody
wants to ship our food. But in this case, let me just read you one quote that I didn’t read in the
original reading of this. He says, I want to make art that isn’t the result of scraped internet
content from artists that were not asked. And so I think that’s part of this is that it’s bespoke
art. But the one question I had for sacks was, sacks, you we started this conversation, we’re
saying, hey, this is different than anything in terms of efficiency that came before it. This is,
I’m going to put some words in my ear, but this is like a step function,
more efficient. So to the argument of, hey, efficiency has always resulted in, you know,
more ideas. And we’ve found something to do with people’s time is this time different, potentially,
because this is so much more powerful. This isn’t just like a spell checker,
I would say differently, I think, and I agree with what J. Cal is saying, because I think that
the thing that technology has never done is tried to displace human judgment. It’s allowed us to
replace physical exertion of energy, but it has always preserved humans injecting our judgment.
And I think this is the first time where we’re being challenged with autonomous systems
that has some level of judgment. Now we can say, and it’s true, can reform on sin,
that that judgment isn’t so great. But eventually, and because of the pace of innovation,
eventually is probably not that far away. To judgment will become perfect. I’ll give you a
totally different example. You know, how many pilots are there in the world?
Will we, at some point in the next 10 years, want folks to actually manually take off and land? Or
will we want precision guided instrumentation and computers and sensors that can guarantee a pitch
perfect landing every single time and all kinds of weather conditions so that now planes can even
have 50 x the number of sensors with a computer that can then process it and act accordingly.
Just a random example that isn’t even thought of when we talk about sort of where AI is going to
rear its head. I think that this judgment idea is an important one to figure out because this
is the first time I’ve seen something that is bumping up against our ability to have judgment.
And what this person was talking about in this mid journey example is his judgment has been usurped.
Yes. Yeah, I would disagree. So like, yeah, let me just let me just make one point on this.
So, you know, an image is a matrix of, you know, data that’s rendered on a screen and
as pixels, and those pixels are different colors. And, you know, that’s what an image is.
Is it or is it? Is it the judgment of the creator?
Well, no, I’m just saying an image in general. So like when Adobe Photoshop and digital photography
arose, photographers were like, this is, you know, BS, why are you digitizing photography
was analog and beautiful before. And then what digital photography allowed is the photographer
to do editing and to do work that was creative beyond what was possible with just a natural
photograph taken through a camera. And they’re arguably different art forms, but it was a new
kind of art form that emerged through digital photography. And then in the early 90s, there
was a plugin suite called Kai’s power tools that came out in Adobe Photoshop. And it was a third
party plugin set, you would you would buy it and then it would work on Photoshop. And it did things
like motion blur, sharpening, pixelation, all these interesting kind of like features. And
prior to those tools coming out, the judgment of the digital artists, the digital photographer was
to go in and do pixel by pixel changes on the image to make that pixel to make that image look
blurry, or to make it look sharper, or to make it look like it had some really interesting motion
feature. And the Kai’s power tools created this instant toolkit where in a few seconds, you
created a blur on the image. And that was an incredible toolkit. But a lot of digital artists
said, this is automating my work. What is my point now? Why am I here? And the same happened
in animation when three, when you know, CGI came around, and animators were no longer animating
cells by hand. And in every point in this evolution, there was a feeling of loss initially,
but then the evolution of a whole new art form emerged, and an evolution of a whole new area of
human creative expression emerged. And I think we don’t yet know what that’s going to look like.
Do you think you think you think the, the level of judgment that AI offers you is the same as the
level of judgment that Kai power tools offered? Yeah, look, I mean, I think that the person
making the judgment or the decision about which pixel to change into what color felt like, you
know, I have control. And I think it’s ultimately like, I just told her, I disagree with you. I
mean, I think that this is a magnitude different. It’s more than a magnitude. Yeah. It’s still
love. It’s on you. You don’t look nice. You and I have sat in spreadsheets. And we’ve I’m generally
happy with this idea. So I’ll give you a different example. Today, we use radiologists and pathologists
to identify cancers. Yep. There are closed loop systems, we have one right now that’s in front of
the FDA, that is a total closed loop system that will not need any human input. So I don’t know
what those folks do. Except what I can tell you is that we can get cancer detection, basically down
to a 0% error rate. That is not possible with human intervention. That is judgment. Right. So
I just think it’s important to really acknowledge that this is happening at a level that it’s never
happened before. You may be right that there’s some amazing job for that radiologist or pathologist to
do in the future. I don’t know offhand what that is. But these are closed loop systems now, that
think for themselves and self improve. I get it. But I think that there there is an unfathomable
set of things that emerge. We did not have the concept of Instagram influencers. We did not have
the concept of personal trainers, we did not have the concept of like, all these new jobs that have
emerged in the past couple of decades, that people enjoy doing that they can make money doing that is
a greater kind of experience and level of fulfillment for those that choose and have the
freedom to do it than what they were having to do before, when they had to work just to make money.
What do you think that radiologist or pathologist wants to do be a trainer or Pilates instructor?
No, I think we don’t know what that’s gonna look like. All right. Yeah.
You have any thoughts on this? As we wrap this topic? It’s obviously a lot of passion coming out.
Yeah. Elimination of white collar jobs in a massive way.
I think that this is a short term versus long term thing. In the short term,
I see the benefits of AI being very positive, because I don’t think it’s in most cases wiping
out human jobs, this is making them way more productive. You still need the developer,
it’s just that there are five times or 10x more productive. But I don’t think we’re at the point
in the short term, we’re gonna be able to eliminate that role entirely. What I’ve seen in basically
every startup I’ve ever been a part of is that the limiting factor on progress is always engineering
bandwidth. That is always the thing that you wish you had more of. Totally.
It’s the product roadmap is always the most competed on thing inside the organization.
Everyone’s trying to get their project prioritized, because there’s just never
enough engineering bandwidth. It’s really the lifeblood of the company. If you make
the developers more productive, it maybe just accelerates the product roadmap.
I don’t think in the short term that what’s going to happen is these companies are going to look to
cut all their developers because one or two of them can do 10x the work. I think that they’re
going to try and accelerate their product roadmaps. Now, again, you have this long term concern that
maybe you don’t need developers at all at some point. But I think that the benefits of developing
this technology are so great in the short to midterm that we’re going down that path,
no matter what. And we’re just gonna have to find out what that long term really looks like.
And maybe I completely look very different. I mean, once we get past the short term,
we may have a different long term view. I think in this narrow vertical,
I 100% agree with you. Look, I think that AI is going to eliminate unit testing,
it has already done. So it’s going to eliminate most forms of coding, the engineers that you have,
all of them will now become 10x engineers. So with fewer of them, or with the same number,
you’ll be able to do as much or more than you could have before. That’s a wonderful thing.
And all I’m saying on that specific narrow vertical is you’ll see it first rear its head
in companies like Accenture and TCS because and cognizant because they have an immediate incentive
to use this tooling to drive efficiency and profitability that’s rewarded by shareholders,
it’ll be less visible in other companies. So but what I am saying, though, is that you have
to think about the impact on the end markets for a second. And I think that AI does something that
other technology layers have never done before, which is supplant human judgment in a closed loop
manner. And I just think it’s worth appreciating that there are many systems and many jobs that
reply that rely on human judgment, where we deal with error bars, and an error rate
that a computer will just destroy and blow out of the water. And we will have to ask ourselves,
should this class of job exist with its inherent error rate? Or should it get replaced fully by a
computer which has no error rate? And I think that’s an important question that’s worth putting
on the table. Okay, so let’s wrap here. I just have my final thought on it is like, you’re going
to see entire jobs, categories of jobs go away. We’ve seen this before phone operators, travel
agents, copy editors, illustrators, logo designers, accountants, sales development reps,
I’m seeing a lot of these job functions in the modern world, like phone operators previously,
I think these could wholesale just go away. And they would just be done by AI. And I think it’s
going to happen in a very short period of time. And so it’s going to be about who can transition.
And some people might not be able to make the transition. And that’s going to be pain and
suffering. And it’s going to be in the white collar ranks. And those people have more influence.
So I think this is could lead to some societal disturbance. I’m going to learn Pilates and be
an influencer. That’s it. But I do agree with sacks that the software development backlog,
if this is what you’re saying is so great, that I don’t think we’ll see it in software
development for a decade or two. There’s just so much software that still needs to be made.
All right, last week, we talked about Tick Tock. And this first bipartisan hearing we’ve seen in a
long time. And people actually, I think framing correctly exactly how dangerous it is, in my
opinion, to have Tick Tock in the United States. And of course, then we get the great disappointment
of the actual bill, the restrict act was proposed by Senator Mark Warner, Democrat Virginia,
on March 7. The problem with it is, is it seems like it’s poorly worded,
that there will be civil penalties and criminal penalties to Americans for breaking
the law and using software that’s been banned. And many people said, you know,
this probably is just bad language. I have a question. Yeah, does it does this apply to
incognito mode? Because if it doesn’t, I don’t know, it is not. Yes. They’re saying they’re
saying that you can get, you know, you can get fined or 20 years in jail, whatever it is,
for using a VPN to VPN to Tick Tock. Freeberg, what are your thoughts on it?
Look, I think this is a real threat to the open internet. I’m really concerned about the language
that’s been used, that basically speaks to protecting the safety and security of the
American people by actively monitoring network traffic, and making decisions about what network
traffic is and isn’t allowed to be transmitted across the open internet. It’s the first time
that I think in the United States, we are seeing like a real threat and a real set of behaviors
from our government that looks and feels a lot like what goes on in China and elsewhere,
where they operate with a closed internet and internet that’s controlled, monitored, observed,
tracked, and gates are decided by some set of administrators on what is and isn’t appropriate.
And the language is always the same. It’s for safety and security of the people.
The entire purpose of the internet is that it did not have bounds that it did not have governments
that it did not have controls that it did not have systems that are politically and economically
influenced that the architecture of the internet was and always would be open. The protocols are
open, the transmission of data on that network would be open. And as a result, all people around
the world would have access to information of their choosing, and it allowed ultimate freedom
of choice. You know, this, this kind of is the first of what I’m concerned, creates a precedent
that ultimately leads to a very slippery slope, saying that Tick Tock cannot make money in the
US by charging advertisers or managing commerce flows is one thing that’s where the government
can and should and could, if they chose to have a role. But I think going in and observing,
tracking internet traffic and making decisions about what is and isn’t appropriate for people,
I think, is one of the things that we all should be most concerned about what’s going on right now.
There is no end in sight to this. If you allow this to happen in the first time, you know, VPNs,
virtual private networks allow you to anonymously access internet traffic and and
access internet traffic via remote destinations. So, so that the ultimate consumption of content
that you’re using can’t be tracked and monitored by local agencies or ISPs. And I think that saying
that that can now be restricted, takes away all ability to have true privacy and all rights to
privacy on the open internet. So I’d love to talk about this more. Unfortunately, I got to run.
But this is a super threat to me. And I think this is something we should be super,
super concerned about. And that the entire community of technology, internet, and anyone
that wants to have, you know, freedom of choice, steps up and says, this is totally inappropriate
and overage. Yeah, there are other ways to manage stuff like this, like complete overreach sex.
Yeah, this is intentional overreach or poorly written or somewhere in between. What do you think?
Both. I think both. I think this is the biggest bait and switch that Washington,
the central government has ever tried to pull on us. Everybody thinks that they’re just trying
to ban TikTok from operating in the US. And if that’s all they did, then I think the bill would
be supported by most Americans. But that’s not what they’re doing. They’re not restricting TikTok,
they’re restricting us. That’s not the goal here. Yeah. What a bait and switch.
It’s a huge bait and switch. And so just so you know, what the app provides is that a US citizen
using a VPN to access TikTok could theoretically be subjected to a maximum penalty of 1 million
in fines or 20 years in prison or both. Now, you know, they’ll say, you know, Mark Warner,
the sponsor of the legislation will swear up and down. That’s not the intent. But the problem is
the language of the bill is so vague that some clever prosecutor may want to pursue this theory
one day. And that needs to be stopped. Also, there’s another problem with the bill, which is
you think this is just about TikTok. It’s not. What they do is it says here, I guess they don’t
want to mention TikTok by name. So they’re trying to create a category of threatening application.
But because it is a category, it’s very, very broad. So the bill states that it covers any
transaction, transaction, not just an app, in which an entity described in subparagraph B
has any interest. And then entities described in subparagraph B are, quote, a foreign adversary,
an entity subject to the jurisdiction of organizing the laws of a foreign adversary,
an entity owned, directed, or controlled by either of these. And then it gives the executive
branch the power to name a foreign adversary, any foreign government regime that one of the
cabinet secretaries defines, without any vote of Congress. So this is giving sweeping powers
to the executive branch to declare, you know, foreign companies to be enemies.
It feels like the plot of the prequels in Star Wars. Emergency powers, here we go.
You know, we criticize China for having a great firewall. What do you think this is?
Yeah, I mean, this, this should obviously have nothing to do with the American consumer and
everything to do with a foreign adversary collecting data of Americans at scale. This
could be written in a much simpler way.
Yeah, it should be one sentence, which is that app stores are prohibited from
allowing TikTok to be an app in their store. That’s what they do in India. That’s it. Case
closed. Game over.
I think India is doing okay, right? They block like 100 Chinese apps,
and I think their society is still functioning. So, you know, all due respect to AOC,
you know, like the idea that 150 million Americans are going to suffer because they
can’t be tracked by the CCP is kind of nuts.
This is going to give sweeping powers to the security state to surveil us, to prosecute us,
to limit our internet usage. This is basically the biggest power grab and bait and switch
they’ve ever tried to pull on us. And again, if they really were concerned about TikTok,
it’s one sentence.
Yeah, we were done. All right, everybody, it’s been an amazing episode for the Sultan of Science,
David Freeberg, the Rain Man himself, David Sachs, and the dictator, Chamath Palihapitiya.
I am the world’s greatest moderator, and we will see you next time. Bye-bye.
Open source it to the fans, and they’ve just gone crazy with it.
I love you, West. I’m the queen of quinoa.
I’m going all in.
What your winner’s like. What your winner’s like.
Besties are gone.
That is my dog taking a notice in your driveway.
We should all just get a room and just have one big huge orgy because they’re all just useless.
It’s like this sexual tension that they just need to release somehow.
What your beat.
What your beat.
What your beat.
We need to get merch.
Besties are gone.