¶ Bill Gurley joins the show!
Okay, we are gathered here today. in holy unity, brothers and sisters, to convene and discuss. On this most holy day, the day the All In Podcast drops, many topics AI data centers, China, justice, human dignity. Dario unwinding these SPVs hasn't been good for the Vatican. We got in at twenty billion. That was a fifty bagger for us. So let's get started.
Jason, I'm pretty sure you believed you were the vicar of God before the encyclical. So this is nothing new for you.
🎵 Music
The smoke has risen from Shamaud's pool house. And from the poker room.
He's staying in my pool house. He's been there for the last three days.
It's been magnificent.
You know what? I understand where OJ was coming from. You know, you put Kid O'Kaylin in your house for long enough, you just lose your shit at something.
At some point. All right, enough with the shenanigans. Uh but it's been great staying at the house because there's actually Chamonth is not aware of this. There's an iPad in the kitchen and that's logged in to Uber Eats, DoorDash, Instacart, Amazon, Laura Piana.
Come on, stop.
There is. It's literally every single service. And I told the house manager, like, listen, any packages that come in the next 72 hours, right to the pool house if it says JCal, right to the pool house. So all these packages have been coming. Then I relabeled them, gave them back, sent them to the ranch, and now the house manager is sending that stuff to the ranch.
Laura Piano wants to know why my inseam went from thirty six to twelve.
Your waist size went from thirty-two to thirty-sec.
Hmm.
All right, welcome to the program everybody. David Sachs is here. How are you doing, David? Shamoff Polyhopatea is back at the eighty ninety office. I was at the eighty ninety office the last couple days and there's a vibe. It's a vibe. If you're a bestie and you show up at that office though, everybody there is a huge fan of the pod. So I was like it was like being royalty. It's stopped by everybody. Hey, I'm a developer here, I'm a big fan of the show.
Thank you for giving it to Chamath. We can't give it to him because he pays our mortgage and everything. But every time you stick it to Chamath, we love it. We're cheering for you in the secret slack room. Um and no.
There's a secret slack room.
There is there is definitely a
cigarettes.
Slack room going on. But it was great. The vibes were awesome. You're building a lot of software, a lot of young talent. I don't wanna say that where your secret source is, but there's a secret source of talent you have. And uh man, those are some Smart kids.
I'm happy to say it. Look, when I was at Facebook, we became the most aggressive recruiter of Waterloo co ops. And so I went back to the well. Yeah, we recruit more interns every quarter than we have full time engineers, which we do on purpose because it puts a ton of pressure on the product actually being good. We had four hundred people apply this quarter for interpretation.
internships. Who's busy with some potatoes seed this week, doing great stuff at Ohalo. The one, the only. Bill Gurley is here. He's been running down a dream. If you haven't bought the book, get the book. It's incredible. And you're off book tour, so now you have time for us, yeah?
Yes.
And I uh you know, I had told you if you ever talk about the Pope, I'd love to hop on. Yeah.
You were like Well, you know, he Bill's an evangelical, I'm a Catholic, so we do have some common ground here. When's the last time you were at church, Bill? Have you have you thought now that you're uh you know out of the
And J Cow get sacrilegious.
Yeah.
I gotta come on there and make sure J Cal doesn't get out of line with the Pope.
Listen, the Pope is God's messenger on earth. We should give him the base level of respect. By the way, that's us imitating Bill Gurley. This is not actually Bill Gurley, just for those of you listening.
You think they were confused?
We're confused. We don't want to put words in your mouth. But just a point of clarification. Hey, everybody knows you were uh you you know you uh handed the baton over at uh benchmark after a very successful couple of decades in venture capital. You wrote the book. You've now got a non profit. You're doing your own spin, I think, on uh maybe what Peter Teal does with his fellowship. You started your own running down a dream fellowship, I understand.
Yeah, it's uh it's targeted at a different demographic. It's called uh rdad dot org, running down a dream dot org. There's a website we can give a link to. We're gonna do five thousand dollar grants to people who wanna chase their dreams but need some help. And so there is an application process like
Teal Fellows and other programs and we've been out talking to those people. Um, but we're we're we're actually live. We went live last week for the application. So if you know people who have read the book and are inspired and need some help, have them apply.
Yeah. All right, folks. And uh Yeah, it's great.
I've got two two other th so I did a TED talk which will come out soon that's related to the book. Um I I uh there's a professor in Miami that's built a course around the book, which I'm excited about. And he's he's he's doing it in a kind of an open source way so that other people can borrow that as well. And so if there anyone out there I'd love to uh help them do that.
What's your take on all of this doomerism? Like if you're a young person and you're in college or you're in high school, is this is this much ado about nothing? Or how do you run down a dream in the face of something like
¶ Making yourself valuable in the age of AI, first class of "AI Natives"
Yeah. Well I you know, I started the book before this happened and I've been asked the question a lot and it it came up in the TED talk. I've I fear that the a lot of people are in jobs they actually don't care about that much. And um there's a Gallup poll that backs this up. They can well put that word quiet quitters. They're like fifty-nine percent of the people they surveyed.
are kind of ambivalent about their job. And when you're ambivalent about your job, you're not high agency and so you don't lean in. You know, if you if you look at how Jason talks about all how they implemented AI and all of his His different w working group. you hear that enthusiasm and that high agency and then you want to go try these things. And I think the best way to protect yourself from AI is to be the most AI enabled version of yourself you can be.
But if you're ambivalent about your job, you're probably not doing that. And you could be, you know, a sitting duck. So I think it's the mindset that's the problem.
I created an associate in training program for my firm because we want to like help people get into venture capital. And we gave them a choice of assignments. One of them was to write coverage of one of our portfolio companies that's breaking out. Micro one is the name of it.
And just give us like, hey, here's a competitive landscape, basically write a DL memo and coverage of that company. And then we gave them another option to vibe code a very specific project I've wanted to have for our venture firm for a long time. you know, on competitive intelligence. And I would say I think like maybe eighty percent of the students applying, and we had four or five hundred people apply for six positions, eighty percent of them did the vibe coding.
And I was shocked. I thought it would be the exact opposite. Anybody can write, anybody can throw sh in chat GPT and get some output. But they they actually built software. And th that's the scary thing. The students who graduated, at least this is my perception. Chemoff. The students who graduated like five, ten years ago before AI.
They're not AI first. They feel lost in a drift. They don't have agency. But the group coming out of college right now that cheated their way through school using Chat GPT, doing their assignments, like using those tools. I'm joking, cheating, but I mean So that they were totally cracked. Yeah. And and they're just like, I know how to use these tools to get through my finals.
Yeah. Girlie, I think you're saying something super important. I said this last week, which is nobody asks the warehouse worker at Amazon whether they actually want that job. And so to your point, job satisfaction isn't some external person judging your job to be valid and saying you must be able to have it. I think it should be
asking the person that does the job, do you like it and do you want to keep it? Those are two very different questions. And I think that the all of this AI doom and gloom was a lot and too much, frankly, of the former and not enough of the latter. And
Now this whole lie is kind of getting undone. I think Sachs posted about it this week as well. The Goldman Sachs CEO said it. And now in this crazy twist of fate, now that we need to have trillion dollar IPOs, the entire Frontier Labs are all like, wow, it's gonna be a bonanza of jobs.
Mark Cuban had had a great quote. He said, There are two types of people in the world, those that use AI to learn faster than they ever could before, and those that use AI to avoid learning altogether. And I I think it's this notion of high agency or not.
That's pretty good.
Are you leaning in and using this stuff to be ever more powerful in what you try and accomplish? Or are you using it, you know, as a cheat code? And if you're in the ladder, yeah, you're probably at risk.
You get asked a lot about how to educate yourself if you're a parent of kids. So that you can put them on a path to launch and do well and chase their dreams? You have a good answer for that question?
I mean the the second chapter of the book's all about lifetime learning and it's kind of a requirement that you're following your fascination because the lifetime learning comes for free if you're fascinated with something. Like you just constantly soak up and devour new information. And I I do think
that a lot of kids get exhausted because we've made high school and college such a grind that they think the learning ends the day they they walk out with their diploma. And as we all know, the best and brightest in all of our fields are on a constant learning journey. And when something new comes out, they dive in and try and figure it out. Right. And so And every every single uh person in the book that we profiled has that kind of attitude about their craft, you know, in every day.
And so I I think the real test is if you're not proactively self learning, then you're probably not tilting against something that you really adore and are fascinated by.
Sax, you wanted to jump in there?
With respect to new college grads, I was gonna say that I think the single most marketable skill in the economy right now has gotta be proficiency and Claude. If you're going into a firm m right now and you're the only one who knows Clawed, but it would be like you're the only one who knows how to work a spreadsheet, you know, or word processor. The advantage
would be enormous. Now, I think that that's probably a short term arbitrage because eventually everyone's gonna have to figure out how to use these tools. But as a young college graduate right now, you've such an advantage if you're an AI native. uh just knowing how to use these tools. And this thought uh partially occurred to me when I saw what our producer Nick has been doing with using Claude for, you know, he's been creating this data. Briefing.
We've been doing it for three months.
I just ran it for the first time.
Yeah.
I didn't know this thing existed.
You'd be busy.
Well, I just you know, I thought it would just be AI slop and it would just kinda give me a a roundup of news. that I was getting in my X feed anyway. But actually the thing that was really impressive about it was that it predicted topics that I would specifically be interested in based on my previous comments on the pod. And also it went back and looked at previous transcripts and what I had said and then had updates to those topics based on
specific things I had said. So again, it was highly, highly contextual. But then I asked Nick, how did you generate that? And he showed me the the custom prompt that he designed for Claude and then the skills document. And they were very long and detailed documents. They weren't written in code, but they were very technical.
And I just realized looking at that that the average person is not gonna be able to generate this. I mean, this is why this idea that you're just gonna be able to like throw AI into an organization and it's just magically gonna generate value is not true. You have to know how to get value out of it. I mean, maybe we could just show these documents on the screen.
Yeah. I mean the the the interesting thing, uh, Sachs is you can. You just have to ask your AI. You ask Claude or Chat GPT or whatever you're using. Hey, I want you to make me a mega prompt and you like a mega pint. Like give me a mega prompt of you're a producer of a podcast. These are the four characters on the podcast. What would be a great prompt for me? And it will actually suggest a prompt.
and then you can refine the prompt. So you actually have a dialogue about a prompt, as opposed to writing the prompt yourself. And so I've started doing this and it is extraordinary.
Like well, Nick, can you show on the screen to scroll through the training rules? And then also there's the skills document that was written on how to be a producer for this podcast, which I thought was really impressive.
By the way, David, what you said I think is true of almost every single job type. Like it's not just tech or programming. if you're in marketing, if you're in legal, if you're in accounting, like i any role you might have at a firm, sales, if you're the most AI Savvy person of all your peers, you are golden. Like you are golden. Like in your company.
What's more valuable than the next person who's not, basically.
Yes. And and and I think that I don't think it goes away because I think you learn how to get better at it over time. So having an early advantage I think will extend for a while. Because you can learn more more and more things you can accomplish.
Should we let producer Nick describe what we're just looking at there?
Go ahead, produce what w producer Nick, explain the process.
Yeah.
Once we got access to Claude Cowork and it had that like further expanded memory access. I thought it would be interesting to just start feeding every transcript into it and seeing if it could actually contextualize new stories that were coming out based on past things that you guys have said. And I gave it like a general prompt of what I wanted. And I said, How would you write a skills file or some training rules for this? And it wrote all of it for me.
Yeah. Oh, so you were less good than I thought.
Yeah.
I thought you were right.
It's a hack. It's a hack. You use AI to make the skills. Yeah.
But you've been updating that over time, right, as you've been iterating and learning.
Single day and every single day it gets smarter and better.
The recursiveness of this is incredible.
Need someone to manage that process, right? Because the four besties are not going to do that. So you need a producer of the show to do that. This is why people think, oh, it's just going to wipe out all the jobs. No, someone still has to supervise, iterate. Validate, you know, all those kinds of things.
Yeah. And it's It's really interesting. The the the people who are coming into the workforce right now are super aware of this and they're putting the tools to work and it's much easier for them to get a job. I mean, I I literally looked at the top nine candidates for this associated training program I have.
And we're gonna do it every year. Every summer we start it. We do it for a year. We pay you to learn. And um it it it was just extraordinary how you could tell immediately if the person had systems thinking, Sachs, like they understood
uh the the process of venture capital that there was a structure to it. You had to source deals, you had to make decisions on which ones to invest in, you had to do diligence, you you know, you had to double down on investments. They they just understood the process
And then when you if you just talk to one of these LLMs, it will tell you what to do. So you can say, I don't know what I'm doing. What should I do next? And then it actually tells you what to do next. So for people who are intimidated about this and uh maybe think like I it's I'm I'm already too far behind. I encourage you to pop up Claude, go into cowork and say, what can I do to be better at my job and just start talking.
And literally if the more you talk and you can use voice, uh text to voice, I use Whisperflow is a really cool program for this. And I have a foot pedal to do it. You just ramble and ramble and ramble and keep adding stuff. You don't have to be structured. It will build the structure around. The two or three paragraphs that you give it as instructions, that's the thing people are getting caught up on now, is Bill, they they think they have to type.
When in fact, if you just blather on and on, a skill I have a unique uh ability to do, you just blather on, it's a superpower. You blather on and the thing makes sense of it. It is unbelievable what the blather on prompt. can get in terms of output. Thanks for coming uh to uh my TED talk. All right, let's get started. There's a lot to talk about and uh we got a big docket today.
¶ Reacting to Pope Leo's AI encyclical: Who guards the guardians?
We're going to start with the Pope. The Pope is dope. And uh the Pope, Leo, he's the 14th, released his first encyclical, encyclical on AI. And it was long. Two hundred thirty five pages, over forty two thousand words. Just to give you an idea, Bill Gurling.
Write it, do you think? When did he put that together? Well, must have been.
Um in the notes. Uh no, I mean I I'm guessing
How long did it take for him to write this in between all of his other tasks?
I think it's a six month process to do this, but I'm sure he had collaborators. Bill, your book, I'm assuming he did 60.
Did I write it?
I'm sure there was a team that wrote it. But Bill, your book's 60, 70,000 words, I'm guessing. So this is almost a a literal book, right? Mm-hmm in terms of how long it is. And it's called Magnifica Humanitas or Magnificent Humanity. In it he warns business leaders. to safeguard humanity from AI. His core argument is AI is not inherently evil, but technology is never neutral. And that technology takes on the characteristics
wait for it of those who build, finance, and control it. And I don't think he thinks super highly of that group of people. The Pope called for regulation of AI companies. Obviously we're gonna have that debate here. Uh some of the things he uh called for I think are not very debatable and there's a lot of consensus around worker retrainment, safety uh for children and guardrails, a ban on autonomous weapons. That's the uh Skynet rule. Don't build Terminators with your AI.
But he was joined by anthropic co-founder Chris Olah. I don't know how many co-founders there are of this company, uh, but apparently there's dozens. And Olah is not Catholic. According to a Vanity Fair profile. He was raised evangelical and now he's an atheist. The folks at Amazon, Google, and Meta lobbied the Vatican on April 29th to soften the language in his missive, and uh he was not swayed.
His central question, Sachs, is will AI be used to concentrate power in the hands of a few, or will it serve everyone? Something You brought up when you mentioned monopolies, duopolies, et cetera, two weeks ago on this very podcast. What's your take on the Pope and his interest and his uh missives on AI and promoting a bit of AI regulation?
Well, I very much agree with the Pope that the biggest risk of AI is a centralization of power and then its misuse against us. Um in some Orwellian way. I think it's government that's gonna do that, um, not necessarily an individual actor because it's governments that ultimately have the power.
So I do worry about the potential for AI to be used to surveil us, censor us, control us, as Orwell described in nineteen eighty four. So if that's where the Pope is going with this, I very much agree with him. the uh maybe where we end up in different places is he thinks that government regulation is the way to prevent this. And I would just say that we have to be careful not to empower government too much because if you give government the power to regulate or approve AI development.
if you create, say, an FDA for AI, as many people are calling on, that will give government the power to approve models and and therefore give notes to model developers. And very soon this definition of safety will expand because the government always takes an expansive view of its powers. And we saw this during the social media wars where the definition of Trust and safety expanded to issues like psychological safety, microaggressions, disinformation.
Transphobia, and so on, that you know, again, these social media companies were told that they had to stamp out all of those threats to. Safety and it ended up becoming a censorship agenda. So I get very worried about, you know, what if some government agency can give notes. So the model developers and they start telling the model developers that your definition of safety is not expansive enough. You have to again protect the public from disinformation or
you know, psychological harms. So again, I think we just have to be careful not to aggrandize government because that's gonna be the most likely culprit in terms of the centralization of of power. And um I know the um the Vatican likes Latin. This is a problem of political philosophy that goes all the way back to Socrates. It's called quis custodiat ipsos custodes, which is who will guard the guardians. In other words, if we entrust
a set of guardians to protect us from a bunch of threats, what's to stop them from becoming tyrannical and from becoming the new threat against us? And I mean, this is a the central dilemma of political power.
Yeah.
Yeah, who watch the watchers or who guards the guardians, meaning who's gonna protect us against our guardians if they turn against us? The genius of the American founding, by the way, is that it was a second order solution to this question. The founders of America very much understood this. And what they came up with is we have to have the guardians guard against each other. And so they came up with the idea of separation of powers. We'd have separation of federal and state.
We'd have um the the three branches of of the government, even within the legislative branch, it was a bicameral legislature. So they divided up the powers in a way that hopefully the guardians would check against each other as opposed to becoming tyrannical against us. And that that is kind of my view on AI, is that ultimately we have to have a solution.
of checks and balances. If the AI market becomes monopolized and falls into the hands of one or two companies, I would use antitrust law very aggressively to as a check and balance against their power. Right now we have a very competitive market. You know, we have five Frontier labs competing very aggressively. As long as the market is competitive, I would use that because I think competition generates the best outcomes. It helps us win against China.
But it also protects the population because these companies, you know, if they get out of line, there's some competitor that can offer something better.
KPT they can use anthropic or if they don't trust anthropic they can go to Grok. Bill, you had the number one rated s talk at the all in summit in history, two thousand eight hundred and fifty one miles. You have been famously against regulatory capture. In light of the Pope's comments of hey, regulating, what do you think is common sense? Because AI is everything. AI can help people make
Bioweapons. It can also help people get their term paper in or do, you know, uh be a better salesperson at you know, Oracle. Like We're talking about paper. Like we're talking about oxygen here. This is like a fundamental horizontal technology. So where do you think? There is a case to regulating AI, if at all. And where do you think, hey, yeah, free market, we'll figure it out?
Well I have I have two takes, one on the Pope and one on anthropic. So your questions your question's more about anthropic.
The least powerful of the two.
So so this Pope said and I have to learn how to pronounce all these Latin words like you, that this encyclical was uh was mirrored after one done by Leo the thirteenth in eighteen ninety one and he invoked that He even said he chose the name because he's so enamored with Leo the Thirteenth. Leo the thirteenth encyclical warned that the Industrial Revolution was gonna be bad for people. So let me tell you what happened.
From eighteen ninety one till today. The work week went from over sixty hours to thirty four hours globally. Real wages went up eight to ten X adjusted for inflation. The medium worker now earns more than a doctor did in 19 in 1891. Global GDP per capita went from 1,500 to 20 K. Child labor in the U.S. went from 18% to zero. Workplace deaths fell by 40 accidents. Life expectancy went up sixty percent, and global poverty went from seventy-five percent of humanity to under ten percent.
All those things happened because of technology, innovation, and capitalism, which is exactly what Leo the Thirteenth was warning against. So he got it dead wrong. He got the whole thing precisely wrong. So it's an interesting thing to say you're borrowing from.
Yeah. So now on to
And
Yeah, anthropic and just common sense around do you think they're Uh how would you regulate and or protect against maybe we'll we'll broaden the term here, protect against nefarious uses of the technology. Obviously we won't want children to be protected. We want to have truth. Uh and honesty in terms of facts uh and all of us sharing some some basic truths.
Yeah.
Uh and we obviously don't want people using this technology for bioweapons in the Terminator scenario.
¶ Anthropic's Digital God: Do they believe they are creating a superior species?
I have to tell you that that anthropic is a mystery to me. I've never ever seen a company that is both leading their field and the most negatively outspoken. commenter on what they do. I I've just never seen it. And my initial theory was the regulatory capture theory that they just want to ensure there's regulation. And quite frankly,
I think they're, you know, very close to achieving that. Like they have stirred up, you know, a frantic uh position, especially in America. American consumers are definitely afraid of AI. Um yeah, I think I've talked to you guys in the past about, you know the book that Jonathan Heights written about social media. And there's a whole bunch of state legislators that think we should have regulated social media. And so now they're destined to turn wanna get in front of it.
And we know that Anthropic's one of the most aggressive lobbying company startups of all time. you know, the the the amount of effort that they're putting in, the amount of money a state by state basis. So that was always my first theory. But then they just they got so loud that I I've literally in the past thirty days read everything I can about anthropic and I've come up with a new theory. This is this
Okay, new breaking theory.
This m I call it the Dr. Frankenstein theory. Um you remember when Elon had that conversation with Larry Page where Larry called him a Explain the story real quick.
Uh a birthday party and and You know, Elon was like, Listen, humanity needs to be protected from the stuff at Deep Mind, because at Deep Mind they had an example of the AI having tried to break out, to jailbreak out of its computer. and not be turned off and, you know, had some sentience or some, you know, inkling of sentience. And he said, Well, you know, we have to protect the human species. And he said, Well Larry said, Well what do you think
That's specious because you care about the human species over AI. This is at least fifteen years ago.
No, this is right before Elon co founded uh Open AI, right? It's back in two thousand seven fifteen or something.
The actual story here is Elon ha Elon and Google had back. Demis and the team at uh DeepMind when they were an independent company. Then Elon was like, Oh my God, Google's gonna buy this. And I remember having the conversation with Elon about this. We have to figure out a way for DeepMind not to go to Google.
We have to block this somehow. And he begged those folks to not sell to Google because Google was running the table on everything and he wanted this technology to be independent and he was on the board of the company.
And he also said this was his motivation to launch open AI as a non-
Google got it. He's just said, We we this is this technology's too powerful for any one person. So like once again you gotta give Elon a lot of credit. He saw the writing on the wall. If one person can and he saw it fifteen, twenty years ago and him and Sam Harris
used to debate this over dinner, you know, what happens if somebody controls this and they run away with it? It would be extremely dangerous. It has to be available to all the people. Essentially the Pope's position. It has to be in the service of humanity. Not ruled by one person. It's far too powerful.
So the reason I call this the Dr. Frankenstein theory is the more I dig, I've met people who I who I dare say think it's their responsibility and they're excited about building a species that's that's superior to humans. And I would just encourage people to read, you know, as much as they can about anthropic. Chris Ola worked on this thing called the Constitution. It's about eighty pages. It's hard to get through.
But I would encourage you to read it. Amanda Askill, who is the chief philosopher, has started doing podcasts. I would encourage you to listen to'em and listen to her language. And then Dario wrote this blog post called Machines of loving grace. And it it was based on a poem and the poem is kinda weird. I w we should put a link to the poem. It's quite short.
But the last the last stanza of the poem says, I like to think of a cybernetic ecology where we are free of our labors and joined back to nature, returned to our mammal brothers and sisters. I don't know what that means. Like we're gonna go live in the fields where the mammals live. I I d and then the the kicker and all watched over by machines of loving grace. Sounds like overlord to me. And then in Dario's post he says he near the end, and it's very long, you read it.
Jamal, I mean the machines of love and grace is very long, but he's he's talking about in the future, what are humans gonna do because he believes in the massive abundance and UBI and that we won't have to work. I don't believe in any of those things, but he does. And then he says It could be a capitalist economy of AI systems, which then give out resources to humans based on some secondary economy of what the AI systems think makes sense to reward in humans.
So so that's envisioning a a deity of sorts that's gonna break ties and deser decide what
It's a computer it's a computational reward function for humans. It decides how much you're worth.
Yeah, so I don't think they think they're writing software, I think they're midwifing a deity here. And and I don't know which one I'm more afraid of, the regulatory capture or or or or the second theory I call the Dr. Frankenstein theory.
These are delusions of grandeur. Let's call it what it is. They believe that they are so intelligent. I know some of these folks, the Burning Man sort of offshoot of it, transhumanism. They believe that they're so powerful. these individuals, that they can create God, and that by creating God they are like this Prometheus kind of species. It literally is the ultimate level of narcissism and delusion of grandeur to think you can create God.
And that then the God you create, like you're saying, Bill, is gonna be so benevolent and perfect that you create constructed the perfect God that will give you your pellet, will give you your little skinarian, you know
I didn't say it. Dario said it.
Right. But no to but to your point of like just taking them at their word, they actually believe that they can create God and that they'll create a God so good that it's better than humanity. Sachs, your thoughts.
Well, I guess the question then is why are they pushing for the let's call it red capture agenda where
I know what. That is very reductive game theory. So if you want to be unexploitable, I think the best thing that you could do if you're trying to build a super god is have three or four entities in a room, close the door behind you, and then dominate those other three or four entities, and then you set the rule. And because your counterparty is unable to track at the level of technical capability that you would have.
you create this massive asymmetry that allows you to exploit them. That's just simple game theory optimization. And you know what Bill said is so powerful. I've read these things and it's laborious and it takes time, but every time they put these things out, just take the time to read it. And what I have said before, Bill, I don't know your point of view on this, but I initially thought that this was mostly game fear.
that a lot of their reactions I thought were less rooted in their dogmatic beliefs and more rooted in a GTO approach to either raising capital or putting pressure on competitors. Either way, both could be true, what your framing is and my framing, although mine's more tactical than yours, to be fair.
'Cause I've always thought that e these moves make sense through that lens. How do you absorb most of the capital? How then do you make sure that you are in a position to disproportionately affect the rules and how do you create an oversight body capable and intellectually aware as you are about the actual details.
The referees don't understand the game, right Shema?
If the refs don't understand the game, you'll run over the game.
By the way, by the way, one thing they have achieved by doing this is I think that if you pulled the let's just call it the intellectual elite, so everyone in the media and whatnot and the professors and all those. and they were to rank the different AI players by who they think is most caring, I think they'd probably put anthropic first because they've been out with the Dumerism talk. And so it's given'em a halo with the people that may matter for what they want to accomplish.
It's absolutely brilliant.
Creating a lot of trouble, like with the data centers and whatnot. Like there's there's negative ramifications.
What you're saying is so important because on the one hand they create empathy. And then they write these documents that expose what they think and nobody actually connects the dots.
To steel man their position for a second, I mean I think probably the way they think about it is that they are creating something very powerful, something godlike. And therefore it needs to be saved. And that they care the most about that out of everybody. Nobody else takes this seriously. Remember that Anthropic was basically a spin out of open AI, and they felt that Sam and the company leadership weren't Taking their point of view seriously enough.
It was the most woke portion of open AI.
Let's not say we're we're steel manning, so the most
So they they see the power of it. They're the ones who are concerned about safety and they care the most and therefore they're in the best position to do that. Now, I think the issue is just you can see how this can lead to red capture, right? Which is If you brand yourself as the safe AI company and then try to characterize everybody else as a reckless player. And reckless AI needs to be stopped. You can see how this would basically further your monopolistic control over this industry.
And if you see AI through the lens that, you know, the really frankly, the Pope and I see it, which is centralization versus decentralization, I do think that is, you know, one of the key lenses we should have on the technology is whether you want this to be a centralized or decentralized technology, this way of viewing the world leads to more centralization. And I think that's dangerous. I mean, if AI is this very powerful technology, I think it needs to be decentralized so that
All of us can protect ourselves to some degree, right? We need to be able to run we need to be able to run the AI ourselves on our own hardware if we so choose. So we're not beholden to a single company that might be in bed with a deep state.
Let's say it very pointedly. If benefits and compensation and economic support We're all of a sudden tied to some algorithmic decision. This is a dystopian episode of Black Mirror that we're dealing with. And to your point, Saks, you want 100 or 1000 or 100,000 versions of what that answer is. So that there's actually a way to refute A singular answer, a singular answer to these kinds of questions, which is effectively what some folks would want, is incredibly dangerous.
And this is something that is in control, I think, of
¶ AI sovereignty, the next era of privacy, open-source crackdown coming?
humanity. I've been talking about AI sovereignty here for a bit. just in terms of how much more cost effective it is.
And how you're not training other people's AIs with your knowledge and your insights. This is why it's super important that open source, open source agents and local hardware be able to run these models and that Consumers and companies learn how to roll their own language models, how to make a small language model, an SML, a VSML, a verticalized one, and run it on your Apple hardware, because Apple actually has taken a principled approach.
historically to your sovereignty for your data. Data sovereignty
About privacy.
Yes. And now it's intelligence sovereignty. The the intelligence sovereignty is different than privacy. Privacy is oh if you can't see my photos, you can't you know, peek into my notes app and what I wrote there in my journal. Now, intelligent sovereignty is you can't tell me what to think. You can't use your AI to analyze my photos, to analyze my emails, to analyze my messages, and tell me how to interpret the world.
That's actually going to be the next key piece there. This is why I think Apple is just the dark horse in this entire race. If there is an open source product, that can run on this hardware, the M fives, the, you know, forty eight gigs, 128 gigs, the stud new Mac Studio coming out with supposedly a terabyte, that changes the whole game. And this is so paradoxical, Bill. That our adversary, the Chinese, of all people, the Communist Party, is leading the open source movement. Centralizing.
the open weight movement. It's not open source. Just The distinction is important.
Yeah, yeah.
Uh look, I Jacob, I agree with you about the importance of open source because open source means software freedom. You can run the program yourself on your own hardware. You don't have to share you don't have to give up your data sovereignty, you don't have to give up your privacy to again to some monopolist who's gonna be, you know, in bed with the government or the deep state, right? So that's the thing we're all afraid of.
And if that's the only AI that's available is from the, you know, Monopoly or Duopoly. then your choices are to live off the grid and not participate in the modern economy. Or give up control, right? To some social credit system. So I think the open source is really important. And by the way, that was Elon's instinct in creating open AI. He was afraid that Google was gonna monopolize AI. So he's like, let's create. open AI so that
It's not dominated by a single company. But that that is, I think, the right answer here is I know i i people wanna I think their instinct to the idea of powerful AI is to clamp down and just control it, but actually You have to have multiple players. That's the only way you're gonna be protected is is to have multiple players.
This next wave of the market evolution, I think, is going to be extremely high stakes and messy. Nick, just throw this up because I just want these guys to react to it. So this is a company that I just ran into on X called Rogo. And what they did was they created a test bench and a set of evals. to be a financial analyst essentially and tested all of the frontier models.
And it was so interesting because they summarized I read their paper that they published and I quoted the most interesting part because I see it everywhere now across all evaluations. which is this one phrase, there is no single best model anymore. At the top of the leaderboard, Opus four seven, GPT five five, sonnet four six appear almost indistinguishable.
Separated by less than, in this case, you know, three tenths of a percentage point overall. Read superficially, the results suggest convergence, three frontier systems reaching roughly the same level of capability. Okay, why is that interesting? Well, you got trillions of dollars going into each of these guys to trying to create these next super brain, but increasingly our existing set of evalves and our existing capabilities when applied on these models, roughly produce the same thing.
Which theoretically says that these things are getting commoditized way too quickly. And then you'd say, well, what's the ROI on all this incremental spend? Which is a very interesting economic and investment question. So I don't know, like Gurley, what do you think happens If these evalves continue to asymptote and we need more and more and more money for training.
Some of the smarter people in the open source community have suggested to me that we need more open source connectors of types. So MCP uh is actually run by the Linux Foundation. And if you think about any surface area where a model might interact with other software, the more of those connectors that can be open sourced and commoditized, it would lower this is what Google did with Kubernetes, uh to to try and
commoditize where workflows live off of AWS and to make it easy to migrate. And so the more you can create systems that make that type of exchange you just described super easy so that you can plug and play the model. And you have to worry about things like context and how does context come in and and data and you know, stuff that like glean and and data bricks do, but how
Anyway, if you can do that, if you can create more of those connectors like that, then the models become swappable. And certainly with the with the model companies trying to move up the stack, you have massive desire from the app layer players.
to try and figure this out. And we already, you know, have watched what Cursor's doing and playing with their own model and being forced to kind of reckon with the fact that they're coming up the stack fast. So I think that's a really good insight that this gentleman shared with me. And I think We the founders and developers that are out there should work on more of these interfaces and throw'em into the open source world just to make it more exchangeable, swappable.
Well, is there an issue right now with we don't have a good harness for open source? I mean, the way that like Claude is a harness for open four point seven.
Yeah. There's people making open source versions of this or building companies around harnessing and building the integrations into it. But open source is always like the last to build the fit and finish around the product. They focus on the core.
of the product, right? So like Linux for your desktop never really took off because the interface was never polished, the UI was never like perfect. But there are companies building that. And I'll just I'll show you one company that we invested in. This is a company called Abacus.
And they had a very simple idea. They came up with their own hardware stack. They came up with their own uh platform. And now they are sold out of these boxes that they're building for insurance, healthcare, and everybody wants to run AI. inside their organization and then start building their own Models. We actually incubated this in our incubator. And you can check it out. Goabacus.co. They're just basically saying it and organizations cannot get enough of this product. It is crazy how
Savvy, these organizations are getting. And Shamath, you're doing it with 8090 as well, I think, where they're just like, we have to build headless products so that we don't get locked into. Any one provider.
Whenever we go into the Fortune 1000, we never compete with OpenAI or Anthropic. They'll have a preference sometimes of what they want to see under the hood. So our control plane can basically hot swap, as Bill said, between one or the other. We've also started to lay the seeds for open source and open weights.
But the reason is because they don't wanna be tied into one of these critical frontier labs. They wanna be able to ride the wave of innovation, but they're afraid of two things. They're afraid that one technology leapfrogs the other too quickly for them to participate and they pick the wrong one. And the second thing that they're increasingly afraid of is terms of service and being at the sake of
a frontier lab in the political philosophy that they may be in the crosshairs of accidentally. Right. So you're a hospital system in Canada, you support the euthanasia laws in Canada, but this frontier model in America says, nope, can't do it. So now we shut you off, right? That's a an an example. I'm not saying one is right or wrong. It's just to illustrate the case. So a lot of the folks that we see now in the Fortune 1000 and increasingly the global one thousand.
They want, as Gurley said, abstraction above it. They want to sit, as Sachs said, in a control plane. They want to see be at this level and they want to have the flexibility. Because they don't know how it's going to shake out. They see all the money being invested at the model layers, but they see the model quality asymptote. So they're like, wait a minute, what are we supposed to do just from a risk perspective?
And and regulated industries are particularly sensitive to these kind of issues you bring up.
Hugely sensitive and regular.
So if you just follow what finance, healthcare, you know, and and those kind of folks are doing, they're just like, This has to be on prem and they're very concerned about a data leak and they're very concerned about HIPAA compliance. They're very concerned about training a model. Like what if
You know, all of a sudden somebody does, you know, a a query or or writes a prompt and it pulls some information from that Canadian healthcare system and all of a sudden somebody gets a result. And it that sounds farcical. Remember stable diffusion? On getty images, and the all of a sudden the getty image watermark was in the output. Like look to be these systems.
See anthropic and open AI in all of these Fortune one thousands. at the developer layer. Cause most of the developers have their own credit cards. They're allowed to sign up for them. You eventually wrap them in an enterprise license. So it's a typical PLG led market motion, like we saw at Slack. We've seen it everywhere. The interesting thing is not that, but it's the unwind that happens then when you have these huge licenses, you have these huge buckets of spend.
You can't really tick and tie it together. The CEOs then wake up and are told by the CFO, hey, FYI, here's where we are. Uber was one example. A second, I don't know, Nick, if you have this tweet, but from Vivek Garapali, the founder of Clover. Yeah, this was just yesterday. Overheard from a Fortune 20 company. CEO asked for a billion in AI generated OPEX savings at the beginning of the year. So we're six months in. The team has spent$200 million on tokens and with minimal results.
And so now they're in this weird motion now where the CEO is pulling the budget back and now you're having to cut the licenses. You just saw Microsoft announce that they're killing the Claude licenses. It's a super dynamic market right now, and I don't think we know what the terminal solution looks like.
And by the way, I would I would add Claude is really good at product. Like Claude for Excel is better than Copilot, by not by a little, by a lot. By a lot. And so you know, anyone that's gonna run against them, they're they they are a a worthy foe, I should say.
Yeah, but I think I think Claude is exceptional, by the way. I mean I use it every day. Yesterday I hit my token limit on my pro plan. I had to put on my credit card, spent another couple thousand bucks, and I'm like, I was so angry, but I did it because it's so good.
Yeah.
Good, Sax. Wrap us up here.
Yeah. Yeah. So well, just to wrap up, let me just connect a couple of ideas. So one is that in terms of the the red capture agenda. that you're seeing in Washington, I think where it's all leading to is an effort to ban open source models or open weight models. There's a lot of breadcrumbs leading here. I think people who want this are being a little bit circumspect. They don't feel Like they're quite there in terms of being able to justify it.
Yep.
Sure. You look at you look at a lot of the rhetoric around how models need to have guardrails and that with open source Models, the guardrails can be removed and therefore they're dangerous. You see this rhetoric already in anthropics blog posts. So, you know, any threat. that they describe, they kind of go out of their way to take that shot at open source models. You saw with respect to cyber, for example, or with respect to bio threats.
things like that. I mean, I've seen that type of language repeatedly that open models lack guardrails or the guardrails can be taken off and therefore it's a problem. And I think again, they're trying to create ideas or put predicate facts in the public record to justify an action later on. And I think it's just a matter of time before they feel like they're at a position where maybe they can push for that type of ban directly. They're not quite there yet.
But what does that do then to the rest of the market like let's just say America bans open source in open way? Okay, well what about the rest of the world? I mean they're all they're just gonna be.
Sure. Sure, you'll put the US on an island. Well, first of all, as we all know, what does it mean to ban an open weight model? It's a file. It's a bunch of numbers, you know, that you can run on Y laptop.
Yeah.
But what it will do is you think about like all the cloud service providers who run open models, like they will stop doing that because they gotta comply with the law. And so all this infrastructure that's been built up. it will get much harder to use open models in the United States. Now the rest of the world will continue to benefit from them because there's a tremendous benefit in terms of cost and customization and control that you get with an open model.
And we're on a completely different price curve and we haven't talked about this yet. There was an economic and capital moat to training that is going away. That's going away in two ways. One is because we're getting these domain specific architectures at the silicon layer. And then second, we're rebuilding all of the core components. I don't know if you guys saw yesterday, but Elon was like,
We've rewritten the entire training complex in C and it's an order of magnitude increase and we can run it on two hundred and twenty thousand GPUs. At the scale of what they're trying to do, those kinds of innovations are going to make the cost of model training so much cheaper that it's like, why would we stick to the ten billion dollar training runs when we can have the ten million dollar training runs.
Well, if it got one percent better, just as a thought experiment
Nick, can you find Elon Musk?
Okay. If it got one percent better, that's the equivalent of two thousand GPUs, which is the equivalent of hundreds of millions of dollars in compute. So every one percent equals hundreds of millions in compute. If he gets ten percent, twenty percent more efficient every quarter, every Yeah.
Improvement versus jacks for look for training runs is now or an order of magnitude. When you think about then the capex build out, the opex, the power. the cabling, the copper, all of it. And now this is a closed source model, but I'm pretty sure that just that tweet is gonna get read by enough people where there's gonna be five or six open source.
stacks for training that are rebuilt closest to the bare metal as possible. Yeah. Why wouldn't you do that now? And so to your point, Sachs, cutting that off so that we lose that kind of innovation makes no sense to me.
I agree and and like I said, I don't know that the forces who want to ban open source are strong enough or have l made the case or created the predicate facts necessary yet. To ban open source, but I do think it is on the agenda and it's where all the breadcrumb trails are leading. So just watch out for that.
I I agree totally with with what David just said and I wrote a blog post recently on open source and and made the exact same point directly.
That too. That was a good one too.
That's on above the crowd.
No it's not, I actually did it. It's not doing it.
It was not it was on the uh Santa Fe Institute. Oh.
It's it's the P three institution. New my new institute. Anyway, um I s same same exact conclusion, which is rest of the world ends up running on Chinese models if if if they're able to succeed at what you just said.
And and if you want to know the canary and the coal mine sacks, obviously the place they love regulation most is the EU. So EU has already done volley after volley of proposed regulation for AI and open uh an an open source is particularly in the cross says there because nobody's in charge of it.
So are you gonna get a bunch of open source contributors having to vet their model with the EU regulators? Like that's obviously not gonna happen. Nobody's in charge of it. There's just a bunch of contributors. Open source is the solution I think to
I agree.
It is the backside.
It is the backstop. I mean, unless you want to live off the grid. I mean, if you want to participate in the modern economy, it is the backstop. And let me just make one other final point that kinda maybe leads into our next topic is I do think that there is the potential for the monopolization of this market to a greater degree than people maybe pricing in right now. First of all, we've seen that every other major tech category has led to a monopoly or duopoly situation.
seems to be the the way that these things w work out. But also if you look at the growth rates right now, Anthropic does seem to be pulling away. There was a article in the information showing the latest numbers where I think Anthropic's now at They seem to have pulled away from open AI, which is not surprising. It's something I I predicted. Look, if you have one company that's growing at ten X year over year, and another company that's growing at three X year over year, within two years
The first company will have 90% market share. This is the power of compounding, right? Is just do the math on it. Ten times 10 is 100. Three times three is nine. So again, if you just are able to outgrow your competitor at that rate for two years, you will achieve Monopoly market share. Now, there are reasons to believe that Anthropic cannot continue that growth rate for two years. There's going to be a competitive response, it's already happened.
Also, there may not be enough compute to support that kind of growth. There may be physical constraints, but you'd always rather be the company that has that inertia that's on that totally trajectory than the one that has to do something different to then knock that leader off its current trajectory.
Did you guys see what just hit the wire? Nick, can you throw it up from Polymarket? This is insanity. Polymarket puts out there that an AI consultant revealed that one of their clients accidentally spent half a billion dollars in a single month after failing. To set employee limits on clock usage.
Ha ha ha.
What my God. Look at this. Look, the sixteen point six million per day, s almost seven hundred thousand per hour. Oh my god.
There seems to be there seems to be a new like meme taking shape that somehow like all this token spend is is wasteful and basically useless and You know, we're constantly oscillating between narratives like AI is gonna put everyone out of work to like AI is useless and it's a bubble. The Doomers can't seem to make up their minds whether AI is gonna be our new god or whether it's basically a total waste of money and it's gonna lead to a
a bust. But in any event, yeah, I think, you know, the there there's no question that token efficiency is going to be a big theme over the next year because the spend has been ramping up way faster than enterprise customers thought and there's gonna be a drive for efficiency. Does that fundamentally change the dynamics? I don't think so, but it it might, you know, it might temper the growth to some degree.
Well, and th they've done a tremendous job making people believe that tokens are free by giving them these crazy deals like twenty dollars a month, you can do whatever you want, two hundred dollars a month, you can do whatever you want. And it's like everybody's leaving the hose on, everybody's watering, and then
That says you've hit your usage and it's like come back at two thirty. I'm like two thirty? It's ten thirty. I can't do anything between ten thirty and two thirty and then it says, Well, you can put in your credit card and so I did.
Да, но, я имею в виду... The first ten thousand gallons of water are free basically. And then all of a sudden it's like, Okay, it's a penny a gallon and then
Everybody in the organization, and this has literally happened in our organization, one person built like an interface for the founder university program. Another person built one. Then another person was like, well, those two people got credit at the management team meeting. So I'm gonna build an interface. Then the next person builds an interface.
And then everybody shipping like interfaces. And I I literally had three different people on the team make three different versions of like a founder university portal. And I'm like, we don't need three. Can we get coordinated here? And it didn't get to the point of like. Spending thousands of dollars, but it certainly got to the point of spending hundreds of dollars, and it would have gotten to tens of thousands.
Are we still on the first topic?
Well no, we kinda merged like two or three of them together.
Oh we did? Okay.
It's super interesting, trust me.
Super interesting. I think what Gurley said is one of the most interesting things I have heard. In a long time.
Take people by their word.
If you're just read their words.
Yeah.
You can understand what they're saying. You don't have to guess about why they want to have a digital guy.
Well now I'm not the sharpest I'm not the sharpest arrow in the quiver, but I can take down a buck and I can tell you that this don't make a lot of sense to me. Even the dullest arrow can take a buck down. All right, let's get back to It's so great having you here, Bill, we missed you.
I got you. I got you.
¶ The Great AI Jobs Debate: Dario and Sam Altman flip their rhetoric, Goldman CEO says no AI job apocalypse
You rather.
If we're going to transition to the next topic, there is some evidence that Dario is mitigating his doomer rhetoric.
Just a little bit of a little bit of a little bit. Let me get to it. Yeah, yeah. I got to it here. All right. We we're gonna have to talk for the 16th time in the last 18 months about AI's impact on labor because, again, this chaotic, schizophrenic. Interpretation of the data continues. Cloudfair, as we talked about last week, shout out Matt Prince.
Yeah. Letter of the year.
Letter of the year.
Award for the letter of the year.
eleven hundred making friends every week, Jamal here on the programme. So They both blamed AI sp explicitly and specifically. And Zuck then paired his 8,000. Cuts at meta with the fact that he has put uh spyware on everybody's laptop to study every employee to make their training data better. That got leaked. And people thought, hey, that's a Black Mirror episode. We're we're working at Meta in order to, you know, get our two year severance package.
But on the other side of the table, Goldman Sachs' uh CEO, David Solomon, wrote an op-ed in the New York Times. I'm the CEO of Goldman Sachs, period. The AI job apo apocalypse is overblown, period. Obviously, he might be fighting for that anthropic or open AI IPO in the the coming months, or maybe he's doing it right now.
He made three points. AI won't eliminate twenty-five percent of jobs. It's gonna automate twenty-five percent of work hours and workers will fill that time with higher level tasks. Obviously that didn't happen in the case of Zuckerberg's layoff. Just because a job can be replaced doesn't mean it will be. Bank dollars increased after ATMs, live entertainment became more popular after TV, and the US labor market creates and destroys twenty-five to thirty-five million jobs annually.
And the gross churn dwarfs net losses. New categories like agentic AI management are already hiring, yada, yada, yada. Uh a publication called Fortune is apparently still publishing AI Slop and they say both Sam Watman and Dario have walked back their AI job apocalypse. predictions as they gear up for an IPO. Sachs, have at it. You know, you've been saying uh and your prediction was you took the other side, hey, we're gonna create more jobs. There was uh
A recent one of the job boards put out some stats that the number of software jobs is going up, the number of listings of other jobs going down. So I guess you're probably in the camp of creative destruction and churn at this point, Sach.
Well, I mean, I think you should be giving me more credit than that. Cause my most contrarian take back in January on our prediction show is that AI would lead to job gains, not job loss. And over the past week you've now seen the narrative shift, I'd say almost completely towards that position. So you have the CEO of Goldman Sachs right in this in the New York Times.
You know, I don't think he'd be doing that if he felt like he was completely stepping out on a limb. Maybe even more importantly, you had Sam and even Dario now walking back their claims of massive job loss and they explained why. Dario said it's kind of like the twenty-five percent of work hours thing he said that AI might automate away ninety percent of someone's task, but the other ten percent will expand. To do a whole bunch of new new tasks and new things.
Which is very similar to the the types of of arguments that people like me have been saying, and actually uh Jensen's been saying that just because you automate away some task doesn't mean that you automate away the purpose of a job and now the worker is freed up. to do new things, to do the higher complexity tasks that David Solomon, the Goldman CEO, is talking about. So the fact that Dario is now walking this back and coming around to my position.
I think that that's kind of amazing and uh where do I go to get my apology, you know?
Well we're gonna have an apol we're gonna have an official apology form that you can fill out. It's got check boxes. I was wrong. And there's some
Some mornings I woke up thinking, why am I going out defending these guys? You know, these idiots. I mean, they're scaring the public with all these.
dire predictions about an apocalyptic future. There was no data to support that. I mean, we can all debate what's gonna happen in the future and we probably should be humble about what is going to happen in the future because we don't completely know and this industry is very dynamic. But You have to look at what is the data that we have so far in the current situation.
And we do not see data that supports massive job loss. You can cite this layoff or that layoff, J. Cal, those are anecdotes. And the plural of anecdotes is not data. If you look at the actual data like Yale Budget Lab did, they said no discernible disruption. in the labor market in the last three years.
Due to AI, they've done a comprehensive study. You look at job postings for software engineers, it's up fifteen percent year over year. Their job postings for software developers have hit a new three year high. despite the fact that coding is the single breakout use case of AI this year. So if AI has not caused job elimination for software developers, what category has it caused? I mean, code is now the number one use case, I think, of AI in the enterprise.
Okay. Let's be honest. Over the last five or ten years, a lot of companies overhired. They mishired. These CEOs did not have a good handle on it. Their OpEx budgets completely got bloated, inflated. And they need to sort of get back to where they were, get back to a fighting weight.
And
What's this old adage of never
Never waste a crisis.
crisis. Never let a good crisis go to waste. Exactly. And so they point to this thing. It's very simple to say. It's AI, it's two letters, and say, We're gonna fire people. But underneath that isn't that AI, because we know this, it hasn't done anything measurable yet. At the end consumption of these tokens, nobody is standing there and saying, look at my filing.
Here is the lift that I have gotten. Nobody has said that yet. That's very important to observe. And so instead what people are doing is realizing, okay, I have this cover now to go and clean up what was very poor management and mismanagement over the last five and ten years. where I overhired and I mishired. That's what's happening today.
Okay, Bill Gurley, I'm gonna let you chime in here. You've got two besties saying, Hey, this is all hogwash. It's AI washing. These jobs were just, you know, the strategy obviously in Silicon Valley was to
They need a scapegoat. They need a scapegoat.
They're hired two years ahead of time, build for the future, and it was a vanity metric, and you were blocking talent from working on other startups or competitors. That's the strategy. Hold on.
Wait, wait, wait. You just said the critical thing. That is exactly why they did it.
yes that was the explicit that's
The actual strategy. These guys were awash in cash. And so part of it is you were just hoarding talent or what you thought was talent.
Yes, and just keeping them off the market.
You're jettisoning in it because the reality is as companies get bigger, their growth rates monotonically decrease, and you get to like a GDP plus some number. And your valuation frameworks change and there's nothing you can do to fight that law of gravity in the public markets. Okay. And so as each of these CEOs, who at some point thought they were different and the rules didn't apply to them, are now realizing you're just like everybody else.
Okay. We have to stay humble as Sack said. Bill Gurley, would you like to apologize for Sachs andor give him credit for his incredible nonconsensus prediction?
He wasn't the hold on, he wasn't the one promoting the jobs apocalypse.
It was
You're the avatar for the mainstream media.
I'll give mine.
No.
Really awesome.
You always represent the legacy media on our show, J. Cal. You have been in the forefront.
New York blue haired
Yeah. I'm just presenting the numbers.
Very big anecdotes.
Let's go.
Let me give you an important statistic. Let me give you a very important statistic. This is really important that it can be.
Bill Gurley comment, then you can
are a really important system.
Don't use ketamine. That's a terrible drug. Do not use ketamine, folks. Bill Gurley, you have the floor.
I would just touch on two things that I already said earlier. One, you know, historically Innovation has led to more prosperity for humans. And I gave those numbers from eighteen ninety one to today. I see no reason why that won't happen here. In the short run, from a bottom up perspective. Every human that wants to protect themselves needs to be the most AI enabled version of themselves they can be. And the people that might be at threat of job loss are someone who
like stands hard fast and refuses to use AI. And I would just say that's simply like saying I'm not gonna use email, I'm not gonna use a spreadsheet, I'm not gonna use a computer and and, you know, you probably are at risk.
Yeah, the paradigm will shift to to give you actually my position, which is always would you like me to give my position or you just want to jump on?
You but I I never got to finish that point, so but I can do it after you.
Yeah. So I I I I will give my position on this, which is there and it's always been the same, which is there's going to be a massive job displacement that occurs. And that massive job displacement is gonna come because CEOs in many cases believe that this technology is gonna make people more efficient. They can do more with less and they will be rewarded by the public market by just having higher earnings. And we see that for every single company. Now I
fully concur it was because of bloating and again my position there. I know specifically that Sergey and Larry took that strategy of taking talent off the market so there wasn't a Google competitor. That was literally explained to me by those individuals. We hire people and then we figure out what to do with them later. That strategy permitted it just became the standard in Silicon Valley and now it's being reversed. Now, there will be wholesale jobs that will be retired. If you look at
Self-driving, that's obviously happening with Waymo with 3,000 vehicles and and there'll be many more on the roads. That job will be eliminated. We won't be sitting here. five, ten years and the idea of somebody driving a taxi is gonna seem silly and dangerous. We will see the same exact thing happen with Optimus. You may have seen the figure robots sorting packages. All those sorting jobs at Amazon factories are going away. Амазон тем
These are the savviest people in the world said we are going to eliminate 600,000 future positions and we are going to cut positions. And Andy Jassy said, this is going to be a recurring theme. As we deploy AI, we will do more with less. You will see the headcount at all these big companies dramatically decrease or stay the same as earnings massively increase. And you can take the position, Sach.
that oh my god the numbers are in my favor. They're not. The numbers are in my favor. The job loss is tremendous and there are numbers associated with that. 8,000 people at Meta after 20,000 before that. And if you look at the steady state of these companies,
No.
We are beyond that. We are beyond that. They are now getting rid of people. When they say they're getting rid of measurers, you can take them at their word. When they say they're getting rid of middle managers, you can take them on their word.
Washing and scapegoat.
I uh that is you've given your position already, I'm giving mine. My position is They are obsessed with this technology. They're obsessed with earnings and they will continue that. Now on the other side of the ledger, I believe we'll have a Cambrian explosion in startups and all this this talent, if they embrace the tools to Bill Gurley's point. Are you going to be able to solve more problems and create small companies of five or ten people who are laid off from Amazon or Meta and make
double their salary or have a better job that they control. I believe that is going to be the ultimate solution, but that transition is going to be extremely painful. And we should have some humility on this fucking podcast for the people impacted. Every cab driver's losing their job. Every truck driver is losing their job in the next 10 years. Anybody sorting packages are losing a job. Then you can say all you want, shama. Why? You can say all you want, Shamoff.
Those people don't want those jobs, but they may need those jobs. And you are an elitist by definition. We are all elitists on this program. We are elite performance.
And these people are going to learn
And they may not get a job very quickly.
By being able to call something what we think it is, is not being elitist. It's actually telling the truth. Meta over hired. Okay. You could have stopped the company at three thousand people when I left and it would not have changed the outcome of that company. There was no need to go to ninety thousand people and burn fifty billion dollars on VR. They did it because they had the freedom to do it. That's allowed. It's capitalism.
Okay, they're coming back to realize that there's a more efficient version of what they are. That has nothing to do with AI. That's the only point I'm trying to make. All you have to do is just say that.
I think you're wrong. And let me explain to you why you're wrong. I believe you're wrong. I believe Zuckerberg is putting that software on people's computers in order to To find more jobs to eliminate, to increase it. And the surface area problems in the world is not decreasing. But what is
uh decreasing is the number of humans to take on the next opportunity. And that's going to continue. And I think the companies that will be rewarded and their stock prices will be rewarded are the ones who do much more with much less. And they're going to keep eliminating these jobs and I take them at their word.
You don't have to explain everything with conspiracy. Maybe they just mismanaged for a period.
I I think that explains the post COVID two or three years. I think what we're seeing this year is actually the tools working. The tools are working, and there are jobs that are no longer needed. The measurers, as Matthew Prince pointed out, or product managers or designers, those have all been consolidated into one job. Somebody who ships a product. And it doesn't require twelve people, it requires two people now.
I don't think that's been consolidated. I see it in Fortune 1000 companies all the time. I don't think what you're saying is true.
You're talking about the slowest adopters. I'm on the front line with startups.
These are where all the jobs are. But I'm sorry, but a startup is not going to go and enter a regulated market and put JP Morgan out of business. Not gonna happen.
They will eventually uh displace those companies. It happens all the time.
Not gonna happen.
We're gonna agree to disagree.
Good luck. I'm gonna take Boeing.
Okay. Well I m some people might take space action.
So good luck making drugs out of an Excel spreadsheet. I'll take the regulated pharma company. Good luck, sure. And you're gonna show up at the F D and like, Okay, where's your team? Oh, it's just me. I do it all.
Somebody just did that in case.
It's not a joke. It's not a joke. And it's not going to happen because that's not the way society wants safety, predictability, governance, auditability to work.
Yeah. I there's a distinct difference between, you know, drugs and software and services in the world. We I think we can agree on that. And listen, a regul with truck driving is one of the most regulated industries out there. So is cab driving and taxis, as Bill and I well know. And those jobs are being eliminated. Bill, I'm gonna give you the final word, then Sachs will give you the second word.
Let's do sex.
Okay, Sax then Bill. Go.
Well, first of all, J. Cow, you remind me of the Trotskyite who, when confronted with the fact that none of Trotsky's predictions had come true, said that that simply proved how far-sighted Trotsky was.
I didn't go to graduate school. Another record.
In other words, none of your predictions about job loss have come true. In fact, the data
Except for what Matt I just did last week. But go ahead.
That's an anecdote. That is not
It's not an a you're calling eight thousand people losing their jobs an anecdote? yourself it's not an anecdote. Eight thousand people lost their f job.
I heard you about the metadata point. First of all, those jobs, that job loss was not directly attributable to AI. It just wasn't. That's something you've invented and put in the
Yeah.
No, they they clarified that. Okay. Okay. He said it was related to they were trying to balance additional spending capex, but it was not directly related to AI. But even if it were, even if it were a hundred percent the case that was due to AI, you're not netting those jobs against all the other jobs that are being created.
Because of AI and all the new companies that are being created right now because of AI. So you're just cherry-picking one statistic, you're attributing 100% of that to AI, and then you're not basically netting it and prov presenting a balanced view.
I I'm not cherry picking it. I am reading the news and I'm Describing what the CEO said. Jack at Block said he's doing this because of AI. Matthew Prince said it's AI. Okay. Zuckerberg said it's AI. I'm just taking them on their word.
Yes, exactly. So Jack Dorsey came out and said that he was going to do a fifty percent elimination because of AI. Okay. And within twenty-four hours, All the financial analysts on X said that Jack was AI washing and that block had horribly overstaffed during COVID and was running much more inefficiently than all of its other peers in this category. And they've needed to do a 50% job cut for a long time.
So pretty much everyone thought that was pure AI washing. In fact, you've just proven my point. And what exactly are the efficiencies that Jack is getting? I mean, this is the most hand wavy thing ever that, oh, we're just magically gonna be able to eliminate half our cost structure right now.
Okay, so Jack, Matthew Prince, Zuckerberg, and Andy Jassy are all lying and doing A washing. I understand.
This was due to AI. He just did it. That's that's your reading of it. But like I said, even if you attribute those specific job losses to AI, which is questionable, you're not netting it against all the job creation that's happening and also the new company creation. Furthermore, let me just give you some
I specifically attributed that the future and the new jobs will come from startups. So don't misrepresent my point.
Thank you. Okay. We currently have a four point three percent unemployment rate in the economy. Economists consider five percent to be full employment. So basically unemployment is at or near record lows right now, despite the of our lifetime, despite the fact that we're over three years into this AI wave.
Second, and again, this is the point I wanted to make earlier with respect to coding. Coding is the single job category most impacted by AI right now. We are at the point where AI is writing most of the code. We have almost complete automation.
of code writing. You would think that if you could look at this in a simple Malthusian way, all the software developers would be getting laid off right now. Is that happening? No. No. Software developers are not being laid off on net. In fact, Job postings, job erects for software developers are at a three year high.
Bye.
growing fifteen percent year over year. Now, why is this? I think the explanation's really, really important. Okay. You look at code commits on GitHub, which is the leading code repository. There were 1 billion code commits last year. In the past month, there's been 1.1 billion. So in other words,
Yeah.
Make something easier, more people do it.
We have basically a 14x year-over-year increase in code generation. That code has to be managed by somebody. You still need humans to look under the hood. And when the amount of code explodes and you get 10x or 100x more code, the complexity also rises as well. So look, we're not hiring ten times more engineers, but you do need more engineers now to manage all of that code. The other thing that's happening is that there's been an explosion.
of the use of code across the economy by different businesses, different applications, and different use cases. I'm hearing from people who are now hiring software engineers who never would have hired them before. I was talking to a fund manager and he said that his next two hires were not going to be
data analysts, they were gonna be software developers because they're now deploying code for the first time in ways that they were not before. This goes back to my point about cloud proficiency being the most marketable skill right now. In the economy. People are using these tools in entirely new ways. I think that we're at the outset of a boom right now, cause.
By bespoke software proliferating throughout the economy and being used by firms that never thought of themselves as as tech firms before. All of which is leading to more productivity, and that leads to a healthier economy, and that leads to more job creation. And you're seeing that again in the
aggregate numbers and that doesn't even include the blue collar boom that's happening right now with the development of all this infrastructure, the data centers and the new energy and power generation. We are seeing hundreds of thousands of new construction jobs being created among blue collars. J. Cal, and I'm sure you don't want them losing their jobs by turning this boom off. So again
No, I I I never advocate. You like to misconstrue my position. I am very clear, there's job displacement going on and the job displacement is related to AI, but net I do think the economy will grow.
Bill Gurley.
Maybe at some point in the future you'll be right, like the Trotsky, communism has never been tried. Maybe it'll work.
Nobody knows your Trotsky references. Okay. You lose you lost ninety-five percent of the office. Just speak like a normal person.
Chamath laughed. Chamath understood it.
Okay, great.
The audience is smarter smarter than you give them credit for.
Okay.
making these
deep pulse to try to sound smarter than you actually are. Uh the reality's the reality. These people are being laid off because of AI. Bill Gurley, of twenty million people in the United States driving cabs and trucks and doing that as a job right now.
How many of those do you think will lose their jobs to self-driving in the next decade or two based on just being in there? And I'm not trying to lead the witness here in any way. Obviously some people prefer a human driver, but what what's your take on on that specific part of the economy?
I think it's impossible to go with a hundred percent automated uh solution. Because the the economics don't work well. And so I think like some of the other examples that were given, ATMs and whatnot, I I think the the use of non ownership
cars is going to go way up. So it's going to keep growing through this and humans are going to be used for like fifty percent of it instead of a hundred. And so yeah, I might not be surprised if the number actually stays the same or grows. And re m let's remember these jobs didn't exist before because regulation had limited
the what the taxi market was capable of and and getting a w around that actually led to job creation. And so I I'm not a big fan of the Doomerism because around jobs, you know, there's a word Luddite that that kind of is used to to talk about it. And I don't have high confidence in any government program for skills retraining. So it's not clear to me what Yeah, okay, yes, it's happened. What do we do now? It's not clear to me. I think the thing you can
do the most. One, we already talked about use the new tools, know what it's capable of in your field. Like get out there. And then two, if your job is going to go away and maybe it's a job you don't care about. Start thinking about where there are opportunities. Everyone's talking about it. The skill trades are like the we're we're we're short of people.
Shortage for plumbing, electricians, HVAC, all that. Yeah.
It's amazing how J. Cow uses facts that haven't happened yet as like support for his argument. Like you just state that, oh, all the truck drivers are losing their jobs. All the drivers are losing their jobs. And then you say that this proves my take. Yeah, I know it's your belief, but that is not proof. Do you understand that?
proof I gave was Amazon and Andy Jassy Shopify
They were doing that before.
Mark Panny off.
No automated Amazon building.
Do you see that?
Amazon car being delivering your
You cherry pick anecdotes and then misattribute them to AI.
They literally have a self driving division, it's called Zooks.
You're the biggest AI washer there ever.
user of robotics in the world. So yes, Shamoff, they are pursuing robotics possibly more than anybody, and they are pursuing self-drive.
No right. At one point it's a warehouse worker, then it's a driver, then it's Amazon, then it's a specific example.
It's just not much fashion. You can you can personally attack me all you want. The the issue here is self driving is going to take away, I believe, the majority of
Great. Let's put it there as a belief. Who knows? You don't know and I don't know.
Okay.
Everybody knows.
I would take people out there working here. I'm curious, Bill, your take on these large enterprises. You've heard two positions here.
I'm taking I have a legit question for you.
Can I just let the guest be involved, please sax your monopoly?
I'm actually engaging with your with your perspective. Let me explain to me. No, no, no. Let me truly ask you. Okay. Explain to me why job postings for software engineers are up 15% year over year, despite the fact that code has now been fully automated.
Oh, I think there's a Cambrian explosion in Uh software. You're absolutely correct. And I believe people who know how to vibe code or to like who are non-developers are making bespoke software. I've said that a hundred times on this podcast over the last two years and I predicted it. So absolutely I believe that will be an area of job growth.
I believe the positions that are being removed, or just I know based on what we're hearing, is product managers, middle managers, what Matthew Prince called measures, what other people call mid management. Everybody believes that the recording and this daily stand ups and the uh Zoom calls, all of that.
is turning into people management is being done better by AI and people are more self directed and then the stack of people to build products is being consolidated, right? It's Like the the the typical designer can now vibe code, the developer can do front end design in UX, and they can project manage themselves. I there there are a series of jobs that will increase and a series of jobs that will be eliminated, just like the mailroom got eliminated and mess bike messengers got eliminated.
On net. Do you think they'll be on well, your position's shifting a little bit. Do you think on net same position. Do you think on net there'll be mass job loss?
Uh I think there is a chance that we're gonna see uh job loss increase in the short to midterm and then eventually. the displaced people are gonna have to learn or leave the workforce, which is what happened during other revolutions like this. Some people went with the paradigm and adapted and some people didn't and just retired.
That w I I saw that firsthand in the PC revolution as but one example. Some lawyers just would never use these tools and they just retired at fifty-five, sixty-five and they moved on, and then other attorneys w were PC first and they just took their
By the way, did you guys see the news that Kirkland Nellis is gonna spend half a billion dollars to roll their own frontier model?
Makes total sense. That that was like to our earlier point today, is that people are doing on prem and gonna make their own models. Bill, I have one specific question for you and thank you for the Good engagement there, Sax. It was it lacked the ad hominem that usually uh starts every conversation we have.
I don't usually call you an idiot.
That's because it's in our minds, okay. We're thinking about it, we're just not saying it.
Good. I like it better. I like it better. Um Bill, specifically when Andy Jassy, you know, uh last spring said, Hey, we're gonna do more with less, we're gonna be AI first, and they said we're not gonna hire these six hundred thousand jobs.
When you see Tubby Lucky say you have to do AI first before you ask for a headcount and prove to me that you tried AI first before hiring somebody. Do you think this is sign that these organizations are AI washing or do you think these recent ones are more, hey, we're gonna do more with less and the and the size of these companies will be smaller Uh because of AI.
One thing that that I think that last question misses and I think a lot of the the AI doomerism stuff misses is that competition exists. And so If you I don't think there's any scenario where you just do more for less and all of a sudden everyone has seventy percent operating margin. That's not gonna happen. I it's someone else is gonna come along and do more for less and lower the price. And so the thing that could happen is we could have a productivity boom.
from lower price goods and services and the basket of goods that humans are able to buy gets cheaper and cheaper and cheaper and that been true in many categories. Unfortunately it's offset by what happens in healthcare and and other regulated industries. Housing education. But but yeah, so I expect products to get cheaper and people to be able to create more with less, but I don't think it leads to obscene Profits because it'll be whittled away in competition.
Okay.
By the way, just just on this AI washing point, there's a a trial lawyer named Donnie King. He's a securities litigation partner at a firm called Ackerman. He and his Colleagues have started to warn that we could start seeing shareholder lawsuits against companies that engage in this type of AI washing, because he thinks it's a type of puffery, right? Because essentially what the company is doing.
is attributing their own non-performance or their operational issues to AI when in fact there are real problems in the business and therefore it could be a form of securities fraud.
Sweet, securities fraud?
Yeah. I want to double click on this. Did you see the CEO of WISC today on his note about layoffs? No.
Who's whisk?
Find me the AI washing in there. Wick.
Oh yeah, those that's the website builder. Yeah. I mean you can build websites with Claude. Yeah. The the whole website business is challenged. Yeah.
Interesting that he just he just talked about operational details.
I d I didn't read the note.
Of course she didn't read the note.
You said it just happened.
Yeah.
Uh I I will read it. Uh this is
지금까지 뉴스 스토리였습니다.
twenty eight this broke at nine twenty five this morning.
Interesting that this lawyer thinks there's so much AI washing going on that he thinks it could constitute securities fraud and he's warning clients not to engage in it. But look, Jake Al, you're like the last person who hasn't gotten the memo on this. There was a huge narrative shift this week. Sam is backing off this. Even Dario's walking at back. You got the Goldman Sachs CEO.
Yeah.
The explosion and job postings, everyone's coming around. to the idea that the job apocalypse is massively overblown.
I mean it could be a verbal on the
I'm happy to accept it.
No need for an apology. Displacement. You're gonna have some displaced in the short to midterm and then eventually there'll be more problems to solve and people will have to reallocate. I do think We're being uh uh, you know, I think the tech industry itself doesn't have enough empathy or enough thoughtfulness when discussing this because these are real people losing real jobs. And you can point at statistics.
Uh and you think they're spinning, but these are real people losing real jobs who may not make the transition.
Do you think it's more empathetic to be scaring the bejesus out of people that they're gonna lose?
And I'm not in the scaring camp. I'm not in the scaring camp. I I I am in the in enabling camp. That's why I keep saying if you've been laid off You should start a company and you should embrace the tools. So I I'm I'm all about empowering people. I think they they if they learn the tools, they'll have 10 job offers uh and they'll start their own company. So I I do think there's a solution to it. I just think we're gonna go through, you know, low millions of jobs.
being lost or being retired and transitioned out. This next couple of years.
I was just gonna be empathetic and offer some solutions. So we talked about the uh skills trade. deficit of high of people working in that. Micro has a foundation called M Micro Works where they fund they funded sixteen million dollars, twenty six hundred People get a free scholarship for to build become a plumber, welder, or electrician. So go check that out if you want to reskill.
Toolbelt, yeah.
I think it's better than, you know, having the government fix things and then, you know, as as we started and talked about, I've got a new uh grant program myself to help people.
Yes.
kind of tilt their career in a different direction. Go do something you love and and apply and maybe I can help fund your You're moving in that direction.
And and as to your vibe shift, I think it's because
Candidly,
People's houses have been Molotov cocktailed because they're doomerism and people specifically are citing that when they shoot at their houses and throw Molotov cocktails at them twice in the same week. And if you're IPOing and you're coming out saying, hey, jobs are going away, jobs are going away, that's just a really bad look.
And or it's because we called it out and they got caught. And so now they were talking about it.
All right, everybody. This has been another amazing episode of the All In Podcast. Thanks for coming, Bill Girling.
No, no, sorry, I need to do one thing. Yeah. She's a friend of ours. I just wanna just give a huge shout out to Tulsi Gabbard and specifically her husband Abraham. Going through some really tough stuff with cancer. He is gonna kick its ass. I just wanted to say we
Yeah, uh Tulsi's great. We'll see you next time. Bye bye.
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What you're about to be.
What?
Where did you get mercy?
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