SPEAKER_02: Oh, Jake house here. Hello, Jake. How are you? Thanks for
SPEAKER_03: 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 vinegar tire,
SPEAKER_02: we move the market, we move the market. I am not kidding. I go
SPEAKER_03: to the fancy, you know, bespoke rallies went to the rallies and truckie. I went to the rallies and truckie the artisanal and they have you know, all these overpriced wall it's called
SPEAKER_01: artisanal. That's what I said. The art stuff, the artistic
SPEAKER_03: 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 see something and I look at the tiny little sign. salt and vinegar shelled nuts, sea salt and sea salt and vinegar. Chumash shelled nuts sold out across the country. You know, I cannot
SPEAKER_01: recommend these more highly. They're incredible. You can't recommend your salty nuts. They are delicious. My salty nuts are delicious. Did you see
SPEAKER_01: Joe Manchin's high heater op ed in the Wall Street Journal? Oh, oh my god.
SPEAKER_03: Yep, Joe Manchin went for it.
SPEAKER_01: Joe Manchin is running for president. He is, I think. Okay,
SPEAKER_03: so let me ask sacks right there. sacks Joe Manchin, Nikki Haley. And who's the guy from Florida? That's your question. By the
SPEAKER_01: way, there's a section that was leaked this week. Ron louder flip from Trump to to Santas. That's a big one because louder is good for a lot of money, five to 10 million at least Joe
SPEAKER_03: Manchin. What impact would he have coming into the race? I'm not rolling in looking for your honest opinion. Well, it
SPEAKER_00: depends how he comes in. What did he say in the op ed? He was
SPEAKER_03: 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
SPEAKER_01: to your point, Jake out was much worse than the substance of the article sacks. 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
SPEAKER_03: 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
SPEAKER_01: for that for the titling of that article, you know, he would get
SPEAKER_03: permission to approve it. Right. And by the way, I think, if you
SPEAKER_02: 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
SPEAKER_01: 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 a look at the budget. Between Nikki Haley and Manchin, where do you write your check?
SPEAKER_01: I'd probably write a check to both to be honest. It feels like a good ticket to me. I've always wanted to see
SPEAKER_03: the cross. Could you imagine a Democrat and Republican merging somehow and
SPEAKER_01: like running together? Oh my God.
SPEAKER_03: I've been pitching that for years. I think that's like a clear path.
SPEAKER_01: David Freeburg may have just come up with one of the most disruptive ideas in American politics that's ever been floated. Oh my God.
SPEAKER_03: Manchin Haley? Keep dreaming. Just my comment on this. So first of all, I
SPEAKER_00: 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 and doing the deficit reduction. But quite frankly, many commentators said at the time that the bills claims deficit reduction were preposterous, and that would never happen. So quite frankly, you know, Manchin shouldn't have been euchered 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 their party. And listen, you might Trump and Obama those who are fantasy
SPEAKER_03: candidates. I don't think so. I mean, Trump was not a fantasy
SPEAKER_03: candidate is the ultimate. Well, he was an outsider, but he
SPEAKER_00: 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 mansion appeals to the base of the Democratic Party is 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 gonna get a nomination. Chris Christie. What do you think of him? He seems like he's
SPEAKER_03: about to come in the race to David. Pointless, viable, pointless, pointless. He's just he's just clutter. Okay,
SPEAKER_03: 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 poly hop atia, the silver Fox, look at that little tough of silver hair. So distinguished. I got a haircut from somebody
SPEAKER_01: recently who said that people go to her and ask her to put the silver thing in their hair. Really?
SPEAKER_00: I don't have to worry about that. Yeah. Looks like he's in Smurf village there. What is what is that background background? That is a scene from? Okay. I like most of my
SPEAKER_02: backgrounds. I Oh my god, like way mood in the moment of the week. You guys just totally totally denied half the beta
SPEAKER_01: males in the YouTube comments from being able to guess what the background Thanks a lot. Really different for them. Well, he'll actually reverse image
SPEAKER_03: search and then I use the chat. Thanks a lot. automatically figure out I don't know that was the game around each week.
SPEAKER_00: Okay. All right. Well, let's get started. Come on. Let's get
SPEAKER_03: started. Okay.
SPEAKER_02: Look, it sounds like I get out of here. The alpha spoken the alpha. Sounds like he's in a good mood. I like this. Welcome to the
SPEAKER_03: world's greatest podcast. Open AI 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 like one of the best conversations I've seen with chat GPT. Pop it up here on the screen. But it's
SPEAKER_00: 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 a interesting tactic for AI startups to use if they're trying to get a hold of proprietary training data. So for example, if you want to create an architect AI, you need a lot of plans. Or if you're going to create like a doctor AI, you need a lot of lab results or medical reports to train the AI on and those are hard to get open AI doesn't necessarily have them yet. So there is an opportunity I think for startups to create these AI's and different, you call them professional verticals. So the gift 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. And anyway, the the company that came up with this gift to get tactic was a company called jigsaw. Almost 20 years ago, no one remembers this company. I'm kind of 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. So I started by going into chat GPT. And I said, Hey, have you heard of jigsaw and then it had and then I said, Tell me about its gift to get, you know, approach. And then I said, would this approach work for AI startups that want proprietary training data sets? And I said, Yes, this is a good idea. And then I gave the architect example. And I said, Can you give me more examples like this? And it gave me like 20 more examples. And then I asked it just to flesh out various kinds of details. I went down some cul de sacs that didn't use. And then at the end, I said, Can you summarize everything we've just talked about in a blog post. And 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 use verbatim. And then I had a couple of people in my firm look at it, they made some good suggestions. So it's not like the humans completely out of the loop. And then I copy and pasted my edited version back into chat GPT said, Here's my edit. And then I asked for some suggestions and made a few small edits. And I said, Okay, great, just incorporate the edits yourself gave me that final output. And then I posted on substack a blog that probably would have taken me a week to research and write if I'd done it at all I was able to do in a day. And I can't see myself going back now I think this is just how I'm going to write all my blog posts is, is use chat
SPEAKER_00: GPT as my researcher, as a writing partner, some cases an editor, but I'm definitely gonna run it through. The thing that I
SPEAKER_03: was struck by was just how kind and generous and thoughtful this conversation was. And I just thought I've never seen sacks 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 sacks to have this conversation with us? You were super kind to the AI. Because it's not a person. It was a
SPEAKER_01: robot. Oh, well, just in case it takes over the world, Jake, how
SPEAKER_00: you can't be too too careful. But no, I think Listen, it's important to give the AI
SPEAKER_02: never once gotten a thanks from staff.
SPEAKER_00: Scroll up and show that example. The AI actually gave me some information about jigsaw's point system. Again, the rewards that they used. Yeah. And it was just in text. So I said down below, hey, can you spit that out as a table? And it did instantly. It's like a day's work, right? Like you would have to have an
SPEAKER_03: analyst or research and do a day's work. It's incredible. And then I just screenshot of that. And I made it an exhibit. Thank
SPEAKER_00: you. Well, it was like delightful back to you. I mean,
SPEAKER_03: this is this is a literal road to you. Like, all the money that you've spent on therapy and just trying coaching to be nice to people. You're just nice naturally. I think it's in a
SPEAKER_02: good mood today. I don't know why you're instigating him. He's laughing. Come on. It's like, you have to say thank you to the
SPEAKER_03: AI. Perfect. This is confirmatory. What we know is
SPEAKER_01: 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, did you what did you enjoy more working with your team of
SPEAKER_03: humans on this or working with chat gpt? Which one was more enjoyable for you? Just personally?
SPEAKER_00: Well, I think they're both were I would say that the human contributions were essential. So basically, it's not about enjoyment. It's just, you know, it's about this is just a job to get done. But but it definitely spent 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 like spit out the first 1000 words. Yes, 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 speaks. Yeah, it's great for ideation. But the people were important.
SPEAKER_00: Yeah, 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
SPEAKER_03: pivot into what open AI did with plugins. These came fast and furious this week. And a bunch of folks who had, you know, started verticalized chat, she PT based projects MVPs were like, Oh, maybe my project MVP is now dead. Because instacart open table Shopify slack zapier and zapier obviously, like if then this then that is a very wide ranging tool that allows you to connect API APIs from a multitude of sources. And what this all lets you do at the end of the day is have chat GPT paying 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 open table, 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 free market will give us some examples of that. But also chat 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 open table 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 sacks, what did you think in terms of the opportunity for startups and to build these intelligent agents things that will do if then if this then that, or just background tasks over time, and you could actually leave them running?
SPEAKER_00: Yeah, I mean, I think this is the most important developer platform since the iPhone and the launch of iOS in 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 chat GPT launch on November 30. And people start playing with in December, what exactly open AI'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 open AI 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 chat 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 chat 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
SPEAKER_03: those were very rigid, they had no intelligence, right? Friedberg, do if you if you wanted Siri to do something specific, like use Waze, 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
SPEAKER_02: 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 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, Chumath, you're looking at this, and it
SPEAKER_03: 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 then that had already sort of established in the world, which is API's, but nobody ever really wanted to write scripts. So that seemed to be the blocker, you go into Zapier, if this and that, it's worth 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
SPEAKER_01: 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 is the best. 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 service 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 the answer for the service providers is just like they build an app for iOS, and they build an app for Google. And, you know, 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
SPEAKER_01: 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 learning on top of chat GPT, which they felt was either legal 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
SPEAKER_01: 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, 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
SPEAKER_03: blockers here, or there's going to be an M&A bonanza for Silicon Valley. If you look at certain data sets, Reddit, StackOverflow 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 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 on so many oil sources for free. They
SPEAKER_00: didn't plug in for free. Exactly. I was just gonna say I
SPEAKER_01: don't think these are not blockers. I don't think this is the ace of hearts on the flushboard. I don't think so. I think that these things are really interesting assets. They are definitely truffle in nature. But they may not be the you know, 10 pound white travel from alba that we're looking for. You know, on the M&A side, don't you think this would be
SPEAKER_03: like incredible? No, but the only reason I say that again is
SPEAKER_01: it is just so early like I in the text, I mentioned this to you guys I remember, and Sax and I were in the middle of this. We were both right at the beginning of social networking, Sax started genie, I was in the middle of aim. And all of a sudden, we saw Reed 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
SPEAKER_02: probably 20 exactly to the scene. Yeah, excite like us. If
SPEAKER_03: you want to be a real student of business history, I'll just say
SPEAKER_01: something that's more meta, which is, if there's something that I've learned on the heels of this SVP 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 podcast,
SPEAKER_01: 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,
SPEAKER_03: it's definitely too early to call it. But sacks, you're saying explicitly, you think this is bigger than the internet itself bigger than mobile as a platform shift?
SPEAKER_00: 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 Jamaat 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 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, 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, 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 open AI's 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, 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, so this is where it feeds on itself. I mean, yeah, I think there might be a I agree
SPEAKER_03: 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. I'm gonna 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 to chaos too
SPEAKER_00: early to have a definitive opinion. But I would have to
SPEAKER_01: believe plugins are going to be promiscuous. Yes, exactly. plugins are the refutation of your Facebook does not have an
SPEAKER_03: 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
SPEAKER_00: were a lot of people when the App Store rolled out that swore up and down, they'd 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 it was existential for them if they didn't. And I believe that I don't think it's right analogy, the right
SPEAKER_03: 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
SPEAKER_00: 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 one 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
SPEAKER_03: 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 or 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.
SPEAKER_01: 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
SPEAKER_00: 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 was caught completely flat footed here, even though they shouldn't have been because they published the original paper on transformers in 2017. 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 terms of use. Hold on, they were violating the terms of use of open AI to train their own AI 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 reading the counter
SPEAKER_00: 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 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 for 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 lohing 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 the case. I'm making a very specific
SPEAKER_01: 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
SPEAKER_00: 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,
SPEAKER_03: sacks. Yeah, 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 freeburg are obviously going to be Microsoft Open AI we'll 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
SPEAKER_03: super engaged by all reports, every back channel, everybody I talked to was 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, we'll 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
SPEAKER_02: 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 them and ultimately, 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 and any other industry historically ultimately gets disrupted, because their job at that point is to protect their cash flow and the revenue stream and their balance and 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
SPEAKER_02: 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, 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 there is 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 founder's 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 said, well, really well
SPEAKER_03: said. I think the founder share insight is particularly interesting. sacks. The fact that by the way, sorry, for those did nothing with them. Yeah, no, no, I was just gonna
SPEAKER_01: say the exact same thing. It's like if they don't use it now, what would it take and when? Yeah, this is good. 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,
SPEAKER_03: 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 that for bird? Who has more reinforcement learning than
SPEAKER_03: Google? That search box is everywhere. And people write question after question and Gmail and Google Docs, etc, etc.
SPEAKER_02: I mean, they have so many people asking questions and YouTube might be the the transcripts of YouTube, every video and the
SPEAKER_02: image of every video bananas and the comments under it. You know
SPEAKER_03: 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,
SPEAKER_02: to my own point, like look at how Gerson are 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 Gerson at all and obviously we love Gerson, 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 sacks. What do you think here about the founders share
SPEAKER_03: 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?
SPEAKER_00: Well, I mean, with all due respect, Larry and Sergey, I mean, they've been on the beach a long time. That's this reminds me of Apollo Creed coming out of retirement in rocket four. A lot of a lot of fans. They could be a little out of shape.
SPEAKER_01: Sam may not look like Ivan Drago. But but this this is one
SPEAKER_00: shrewd character. This is one shrewd character. I mean, Altman is fit. He's fit. He's been in the arena. Yeah, he's,
SPEAKER_00: 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 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 and steamroll open AI. I have a prediction. I got a prediction.
SPEAKER_03: Within next year, Larry and Sergey take the title of co CEOs. And then they do a demo day where the two of them get a two of them get on stage. They actually do the demos of these products. Just happens that fictional quantification. That's it. That's Listen, and based on the run for president. Those are my two predictions. Stop. I'm taking love. Can you imagine if Larry freeburg? Where are the chances of Larry and Sergey taking co CEO slots? That's prediction one and then prediction to where are the chances 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
SPEAKER_00:
SPEAKER_03: have a vested interested in that they're they want to demo.
SPEAKER_02: 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, that the kind of cultural seasoning, particularly at 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
SPEAKER_00: Microsoft remember in the late 90s. That's right. When they got crushed by that antitrust lawsuit. Very defensive. Well,
SPEAKER_01: that can know but that consent degree they put they had a
SPEAKER_02: wartime CEO come in, Ballmer 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, because Sundar 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 Noogler class, we were the freaking hat on the TGIF day and on stage, he was a product manager, and now he runs the company. 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, Sacks, like you're going to need a Ballmer type moment to kind of, you know, reinvigorate that business. And by the way, such a moment, I
SPEAKER_00: think that it's an important port point when Ballmer took
SPEAKER_03: 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 a good point. Yeah, well, wait, you're forgetting one big thing, which
SPEAKER_01: 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
SPEAKER_03: starting to think we're moving a little bit too fast when it comes to open a eyes. 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. A bunch of computer scientists assigned 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 at smart, obsolete and replace? 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's 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
SPEAKER_00: 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 tweetstorm about a guy who wrote about how Chad GPT saved his dog. And did you guys see this? This is one of the really mind blowing ones to make 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 Chad GPT and said, what could this be like, what's your likely diagnosis? Chad GPT gave three possible answers, three illnesses. The first one was what the vet basically had 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 Chad GPT has 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, 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
SPEAKER_00: worth asking for sure. Is it worth slowing down, though,
SPEAKER_03: sacks? Should we be pausing? Because based on what you 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 scenarios, we're definitely now
SPEAKER_01: on this fuck around, find out curve. Yeah. And so there's only one way to really find out which is somebody's 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 just a matter of time.
SPEAKER_00: 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 on to 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, sure, 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, they're positive, then we invest more, we trust more. But the
SPEAKER_03: paradox of that, as Chamath is pointing out, freeburg 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 be 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 trim off and sacks teed up freeburg? I think there's like GPT three, I think ran on 700
SPEAKER_02: 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 too 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-4, 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 that kind of emerge from here. And I think this is a good echoing of Chamav's point. We don't know what's ultimately going to win. Is there enough of a network effect in the plug-in model, as Sax pointed out, to really give OpenAI 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 this state. The power of the tool is so extraordinary. The extendability of the tools are so extraordinary. So the economic and the various incentives are there for, you know, other models to emerge and whether they're directly copied from someone hacking into OpenAI 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
SPEAKER_03: getting annihilated by this technology if that in fact comes to pass? I want to say one thing on this. Yeah, look, let me just share. Can I just give 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 and a small games company of 10 people. Our team is two people he 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 choice. His 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 in 3d. The difference is that he cares about his you know, job and for his boss is 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
SPEAKER_01: 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 OpEx 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
SPEAKER_03: processing developer kind of folks, they're going to need half as many people, 25% as many people? We're going to find out
SPEAKER_01: the efficient frontier. Yeah. I see it a different way. I mean,
SPEAKER_00: 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, growth, 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 by speaking to some AI program in a natural language way. So more flowers will bloom, more startups, more projects.
SPEAKER_03: Now, it will create I think, a lot of dislocation. But for
SPEAKER_00: 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. Like, it makes them so much better.
SPEAKER_03: Let me give you a response to that guy. So and using Sax's
SPEAKER_02: point, that guy's 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 in 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 TikTok, 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 could 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 150. And in that case, freeburg, nobody
SPEAKER_03: wants to do backbreaking labor in the fields and everybody wants that. 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 well, I do. I 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 gonna 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 found
SPEAKER_03: 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
SPEAKER_01: 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 is 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 in 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,
SPEAKER_02: let me just let me just make one point on this. So you know, an
SPEAKER_02: 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
SPEAKER_01: judgment of the creator? Well, no, I'm just saying an image in
SPEAKER_02: 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 kies power tools that came out in Adobe Photoshop. And it was a third party plugin said, 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 artist, 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 kies 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 the the
SPEAKER_01: level of judgment that AI offers you is the same as the level of judgment that kypower tools offered? Yeah, look, I mean, I
SPEAKER_02: 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,
SPEAKER_01: I disagree with you. I mean, I think that this is a magnitude
SPEAKER_03: different. It's more of a than a magnitude different. Yeah. It's
SPEAKER_01: all tools. It's still love. It's on you. You know, you and I have
SPEAKER_02: sat in spreadsheets. And we've I'm generally happy with this
SPEAKER_01: 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
SPEAKER_02: 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
SPEAKER_01: pathologist wants to do? Be a trainer or Pilates instructor? No, I think that's gonna look like. All right. Yeah. You have
SPEAKER_03: 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
SPEAKER_00: 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 is just making them way more productive. You still need the developer, it says that there are five times or 10 x 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. And 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 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, you know, get their project prioritize because there's just never enough engineering bandwidth. It's really the lifeblood of the company. So if you make the developers more productive, it maybe just accelerates the product roadmap. I just, 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 10 times 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 going to find out what that long term really looks like. And maybe the long term will 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
SPEAKER_01: 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
SPEAKER_03: 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 do sacks. I'm going to learn Pilates and be an influencer. That's it. But I do agree with
SPEAKER_03: 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. Alright, last week, we talked about tik tok. 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 tik tok 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 it
SPEAKER_01: apply to incognito mode? Because if it doesn't, it is not. Yes.
SPEAKER_03: There's one saying they're saying that you can get you can
SPEAKER_00: get fined or 20 years in jail, whatever it is, for using a VPN to VPN to tick tock. freeburg. What are your thoughts on it?
SPEAKER_02: 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, 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 wasn't 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 TikTok 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 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. This is a super threat to me. And I think this is something we should be super, super concerned about. And that the internet is 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 overreach. Yeah, there are other ways to manage stuff like this,
SPEAKER_03: like complete overreach sex. Yeah. intentional overreach or poorly written or somewhere in between? What do you think both
SPEAKER_00: I think both I think this is the biggest bait and switch that Washington, the central government's ever tried to pull on us. Everybody thinks that they're just trying to ban TikTok from operating 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
SPEAKER_03: bait switch. It's a huge bait and switch. And so just so you
SPEAKER_00: 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 a 10 year sentence. Now, you know, they'll say, you know, Mark Warner, the sponsor of 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 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 some paragraph B has any interest. And then entities described in some paragraph B are quote, a foreign adversary, an entity subject to the jurisdiction of organizing the laws of a foreign adversary, an entity owned director 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 like the plot of
SPEAKER_03: the prequels. Here we go.
SPEAKER_00: 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
SPEAKER_03: 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. It should be one sentence, which is that app stores are prohibited
SPEAKER_00: from allowing tik tok be an app in their store. That's what they do in India. That's it. Case closed game over. I think doing okay, right? They block like 100 Chinese apps, and
SPEAKER_03: I think their society is still functioning. So, you know, all due respect to AOC, you know, like the idea that 150 Americans 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
SPEAKER_00: 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 tik tok, it's one sentence. Yeah, we were done. All right, everybody. It's been a great
SPEAKER_03: episode. It's been an amazing episode for the Sultan of Science David freeburg, the Rain Man himself David Sachs and the dictator. Chamath Palihapitiya I am the world's greatest champion. And we will see you next time. Bye bye.
SPEAKER_00: Oh, man. We should all just get a room and just have one big huge door because they're all just like this like sexual tension that they just need to release. What you're your feet. We need to get
