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A master's and computer science from Stanford nineteen eighty eight.
An artificial intelligence.
I was a new partner at a law firm called lower Color and Pickering in Washington during National trade? What did you see in artificial intelligence?
As on It's honored to be with you all, I wish I had been a behavioral economist. That was my only real big regret in life. And so what did I see in AI? Which is sort of related, what's the nature of intelligence? I think I saw a dream of understanding ourselves and our society a little better, and that was sort of the primary motivator. I will say that the AI that I studied was the equivalent of
the sun goes around the earth field. So we had a fundamental theory in the nineteen eighties that was completely false and didn't work, but we didn't know it at the time. So me and many other people then fled to all kinds of other fields. And it's exciting now to see a new set of techniques really be transformative. And to Mike's reference on the news this week, you know, you know that I'm enamored with subscription models and now I've become more aware about tender offers and I like
TV channels. So we're announcing today my tender offer for Bloomberg. We hope you will consider it appropriately. Your board members are willing to debate the transaction. But unfortunately, as you would suspect as a board member, that's all I can say on the news of the week.
So you're not going to answer my bosses question, who's going.
To I think it is all answered.
So looking back on AI as you saw it then and whatever you saw then, and comparing it to now, I hear a range of things being said. As extreme as this is, as big an invention as the industrial evolution sometimes say is the discovery of fire. Are we overestimating or underestimating the effect generative A.
I will have us, Well, let's think back thirty forty thousand years ago, and we're a bunch of Neanderthals and we're in the entrance to our cave, and you know, we've been the dominant human humanoid species for a couple hundred thousand years. And the two of us look down and we see Homo sapiens. We're like, look at those guys, they're so skinny. Hairless, but they're pitiful. But those guys were really intelligent, and ultimately those homelostapiens dominated the earth
and killed off us neandervals. So I would say intelligence per species has been highly selected for, and that Homo sapiens intelligence has allowed us to become the dominant species on Earth because we use our intelligence to make tools and do other things. So I think it's a lot different than say, mechanizing muscle power. So if you think of bulldozers and how did that transform you know, society, it did a lot, but it did it over one
hundred years. And although muscles are important, they're not the core human attribute. Thus the dislocation of the end with the Neanderthals, which were much stronger than humans. So if AI develops to actually be super intelligence, then it will be a lot more profound, I think, than anything else, and that we will have actually real species threats because the AI will keep getting smarter and smarter and smarter
without limit. A natural selection works quite slowly in terms of making humans more intelligent, so then we have to sort of say, okay, how fast and how you know? Will the computer is really thank Obviously when we all use AI as consumers we can find. You know, it's pretty miraculous in some cases, but in other cases it's not very effective. But you know, we're understanding more and more of the techniques. And again, one theory is it'll be like Moore's law and just AI will get better
and better and better. But the other theory is it's sort of like the War on cancer, where cancer developed over a very long time. It has lots of different etiologies, and we keep coming up with a solution for one cancer but not another, and our overall progress and society against cancer has been you know, pretty steady but flat. It definitely not exponential, and so you know, it may be that as AI gets better, it hits various walls and that we've got some time to deal with it.
Or it may be that it stays on this exponential So we're just going to have to watch. But I think we need to be prepared for it to be on the exponential, in which case we're going to have a lot of societal stress over the next twenty years.
So your analogy is very helpful, but a little disturbing because I don't see many Neanderthals around anymore.
Right, we have a lot of.
Homo saviens in your analogy, What can we do to make sure that we survive, that that this thing we're creating doesn't become so smart and perhaps I can have our best interests so are well.
It's a big challenge. It's hard to slow down because unlike chemical weapons, like we're kind of in a war with a West in Russia and yet no one using chemical weapons and no one's using nuclear weapons. So even in this incredible state of war, we're able to put some limits on what happens. The problem with AI is it's very continuous. You know, your thermostat is an AI thermostat. So there's no good way or even the major powers to agree not to use AI because it's so integrated
through everything else that we do. So there's no real practical scenario to take a break as human society, even if we could get the politics to work on that. So instead we're in the situation where we in America better well damn win the race, and so everyone acknowledges that, and so all the companies are going full out, both for their own you know, competitive reasons, and so you know, it is a race, hopefully to the top of what can AI do for us? And there will be amazing
positive scenarios. You know, all kinds of medical yours, all kinds of productivity. I certainly six years ago, AI was very good at image of analysis. That was one of the kind of workloads that it first got good at, and in particular in radiology, it got significantly better than the typical radiologists pretty quickly and has been better than
the typical radiologist for at least five years. And so I would say, you know, weddings and with friends who are radiologists, what's good that your kids are not going in the business, because radiology is going to be the first profession that's wrecked by AI. Good for humanity, but not good for radiologists. Well, what happened is as radiology got better because of AI analysis that helped radiologists, the price of scans went down, and the number of scans
turned out to be hugely elastic. Now you walk in, you've got a cough, boom, you get a scan, okay. And so what's happened now is there's about thirty four thousand radiologists in the US, which is a shortage. We now have a labor shortage of radiologists okay, by about
five thousand. So it's an incredible story. Of of course, elasticity of demand to improve lives, i e. More scans, and so we may well see with AI that it makes Wall Street analysts more productive and makes software engineers more productive, and that in fact the elasticity and that we grows and that we grow the economy. And when people ask, you know, we're spending collectively as an industry at half a trillion dollars on AI data center, how
is that ever going to get paid back? Well, you know, add one or two points to GDP growth and it gets paid back fast. So you know, I don't want to like guarantee that it's always going to be like radiology. I do think software engineering is particularly fascinating because all the major AI companies are working on it, and so it is the white collar canary in the coal mine. If software engineering engineering jobs go down a lot over the next five years, then that's probably going to happen
to law on architecture and many other things. If in fact, because of the increased productivity, people are building a lot more software, sort of the radiology example, then I think in many professions we will see a big expansion and we can be more confident of the high productivity. None of that really answers the long term question that you asked, which is how are we not the Neanderthals? So I
think reasonable chance high productivity rather than mass unemployment. Okay, but then ultimately, what if they're smarter and smarter and smarter than us. We're going to have to find ways, and I don't know what they are, to both continue to insist on alignment, and that's where you train the AIS to care about human beings so they are aligned
with our values. Okay, but if somebody doesn't train, somebody programs their AI to try to take over the world, we're going to have to enlist the other AIS on our defense to protect us. Okay. So you know there's a number of scenarios out there, and probably for ten twenty years, we're not going to know how serious the threat is, but we will have tools. It's not just that the AI biological species we have been selected for
dominance to try to grow our species. So AI is not naturally trying to expand, not naturally it could be programmed for that, but it can be also programmed to keep humans on top. So it's not as scary as a super powerful human, which we all kind of into it. A super powerful human would be hard to hold back from taking over the world. It's not as dire as that.
Insofar as we do make progress on trying to reshape general of AI in a more positive direction. Does that come from outside the industry or inside the industry? Does that come from government regulation and agreement or does it have to come from inside? Because as I talk to many people in the business, they're much more focused on the race you talk about than they are on the safety part.
They don't want to get slowed down in that.
I mean, you're on the border anthropic, which I know is trying to make a move in the other direction. But can we do it from the outside or does the industry itself somehow have to internalize the risk.
Well, I think lots of the industry is working on it. So there's different sides of safety. So there's when you're treating AI like a counselor and you know it, you know helps you tie a news that's not a good thing. And so those cases across the industry are getting you know, more and more watched for it eliminated, So there's inevitable safety bumps as any technology grows, so then there's more macro safety, like none of the major AIS can be
used to design chemical weapons or biological weapons. But those defenses in the AIS you know, aren't perfect, and we have to constantly and best in them to prevent people from using this super powerful technology plus some crisper to do some really bad things. So there's active work across the whole industry on those scenarios. Because from a commercial standpoint, nobody wants their AI brand to be the brand that develops some bad virus, so there is an incentive there
to protect against the negative cases. But the sort of big long term case is that the AIS get so smart that then we have to do things to make sure that they are aligned with human values, that they are programmed so that success is humans flourishing.
Give us your view, but we are likely to see the biggest effect. You mentioned biomedicine. You mentioned computer software progners. Let's talk turning the news.
Today with the deal between Disney and Open AI and the entertainment space that you know well, I mean you manage transition from my perspective, least from more traditional TV cable broadcast.
Through to streaming.
What does the transition look like from streaming through the AI.
So just as an example, we can look at video creation storytelling and sort of say, let's look at what AI is going to do and the mechanics of generating video and frankly, whether that's a news channel trying to illustrate a concept or entertainers trying to do amazing special effects, we're going to have higher quality special effects and that will shift to be AI generated instead of manually generated
with sort of overseas visual effects companies. So there is a shift there, But the core thing of storytelling is very hard. How do you do long form character development, creating tension, resolving tension. That's not a case that the AI does well today. Eventually, ten twenty years, the AI may win the Booker Prize, okay, and then if it does,
it's going to be able to do a movie script all. So, but for now, the AI is really helping on sort of industrial aspects of what we do, like an amazing visual effects shot, and so it's you know, important, and we want to stay on the front as Disney does, but it's not doing the core thing, which is which story is going to captivate human attention.
I'm not sure it says much about my job, about whether I keep my job in the AI world, because there's a lot of things that are done on television with news and other things that frankly, are not creating the next Lion King.
Well, I think interpreting the world in your case is a broad general wisdom, and so I think you'll have a relatively longstanding role in your success.
Given my age, I'm good.
Given your age, you're good. But you know, it is a very big change. Again, you know, people want to compare it to the Industrial revolution that happened over two hundred years. This is going to happen over ten or twenty. And it might be that what's caused political polarization in the last decade or two is rate of change. So think about you know, since NAFTA, you know, sort of the rise of globalization, the redefining of marriage equality, immigration,
all kinds of change in society. And one view is enough of our fellow Americans, it's just too much, and it radicalizes them and they're willing to vote for things they wouldn't normally vote for. And if that's fundamentally what's going on in US society as well as you know, Brexit and a couple other places. Then we're in for a pretty big storm because the rate of change is not going to slow down. The rate of change of society, you know, partially or maybe largely driven by AI, is
going to be large. And so that may be that you know, how everyone today is nostalgic for Reagan, you know, there may be a day when we're nostalgic for Trump. That our polarization has really continued to increase because the
rate of change has continued to increase. So that's why I think it's so important that leaders like all of you are thinking about how do we build bonds, how do we have people of Americans care about each other so that we can keep the society coherent and caring despite the rapid amounts of change in generated by technology.
I want to come back to something you referred to just explore a bit more, and that is how are we going to pay for it? There is so much money going into data center's investment right now, and to something said, I think it's been supporting the markets because there's been so much investment.
How do you get a.
Return on that investment without laying off an awful lot of people.
With GDP growth, so you can either automate away the job. That's one theory, and the other is that people will produce more and I'm sure it'll be a mix, but efficiency often generates more growth. I mean, we did the radiology example, so it's sort of that at larger scale. So the way we pay for it is more GDP growth.
You can do GDP growth with fewer people. And so what happens to the people who are out of work or have to take much more menial jobs than they had before because it's the knowledge workers.
Well, I think it's a great question. Compared to globalization. Probably this is a room full of globalists. We believe in the benefits of trade, and yet despite that that really did deliver in terms of the overall economy. There was enough dislocation and enough of the countries that our politics has been shifted. So I think there probably will be things like that because of AI, But at least it's not again, it's not a mass layoff scenario. Most likely,
it's much more likely that there's a growth response. We also see significant GDP growth, you know, increased beyond what we typically see because of the productivity of AI.
What I hear from you is AI has enormous potential, a lot of it for good, some of for decidedly not good. It's very complicated, it's coming very very fast. Where will the leadership in directing AI come from? Are there people who understand this, who get it, who have the right values, who can help us go in the right direction, particularly given how fast it's coming.
I would say that's an emerging area. I mean, I think this was likely to be a big political issue in the next couple cycles because many Americans will be concerned about world changing too fast and too much, and I think it's up to our politicians to sort of understand that and channel it in some productive way. There's leaders in the industry like Jeffrey Hinton that spends full time now on these how do we keep humans at the center of the system. So there definitely are emerging
leaders in that way. But again it's a new area. Like you know, nuclear energy you know, or other DNA for long time is very controversial.
Timing is everything, and it comes. The develops you talk about come at a time when there's a decided rise in populism in the United States as well as in much of the Western world. Right now, the early things I'm hearing this but on political from the people is it increases our energy costs and it reduces our jobs. We're against it, and some politicians are showing signs now of trading on that and saying we should be against
Actually data centers, we should be against them. How do you put together the rise of populism with the likely effects of general AI.
Well, you know, the heart of democracy is we're going to live in this country together and we're going to have different views, and so you want a system that's not civil war to work out those views. And I think I think a lot of people will have those concerns. They'll be those effects, and we have to take them
thoughtfully and seriously. And arguably during the era of globalization, there was sort of lip service to retraining, but we didn't really understand or take seriously the devastation of a
lot of communities. So I think, you know, the elites in this room as an example of do a better job at that, which is, you know, where is AI really providing benefits to people's healthcare, to their day to day lives, and if we can do that, then there's more toleration of the dislocation, which is as you said, cost of electricity, data centers, those things.
Are we over investing.
It's unlikely, but you know it's definitely possible. But again, you know the Telkom boom in two thousand, I mean, you know it's a slight over investment, you know, so it could. But if you look at the in the in the telecom one, everyone got so excited about the Internet that they forward invested and were disappointed for a while, but ultimately the Internet really did deliver. But if you look at the mobile phone, it never had a bubble. It came out and just grew and grew and grew
in impact. So you can get both things that live up to the hype and things where the hype gets bigger than the actual technology in the short term. And you know, the market's a good way to work that out.
On AI, does it matter who gets their first?
I mean, is this like beta and VHS where the point that gets their first gets to really set this up.
You're in countries, it matters.
A lot, So US versus China take that correct.
If you're talking companies you know, I care a lot because I'm on the board of Entropic. But from a society standpoint, it probably just matters that the technology is developed and deployed in great ways.
But it does matter in the US versus China.
Yeah, absolutely. I mean, if another country doesn't have to be China right gets ahead of us. There are significant scenarios referred to in a class of the singularity where the AI gets so good that it rights the next DAI and that AI is much better, and then that writes the next day I And so you know, being first by even just a year gives you an enormous advantage. So that's the exponential. But again that's a theory that's not yet proven, but even its slight possibility means we
better don't get there first. And I think we're on a good bathroom.
Well that's my question.
If that were your one goal in the United States, what are the policies that get you there? What are the things we need to do or avoid doing to make sure we're as competitive as possible.
I think we're doing a pretty good job on that. I mean, there's you would push the edge on light regulation, make it easy to build data centers. You know, I think the government's done open field running, so I can't think I don't I don't think we need like a government investment program or something like that. So there's a lot of progress, and we are ahead of our competitors
as far as we can tell. And again, we don't want to make it zero some because you'd like, just like we did in globalization, we would like to bring the rest of the world along with us so that we've got a stable we have less likely chance of war. So I mean, but that's happening.
Okay, So let's talk about what you really love.
This has been very entertaining snow powder and mountain resorts.
This is what you really love, you know.
I have a slight addiction to skiing, and then retiring from Netflix, rather than do a sailboat or something like that, I decided to take over a ski resort and try to make another Yellowstone Club, but one that was sort of more artists, Dick, and I'm a visitor else don not a member. But it's a great place. But to do something like that, yeah, So I've been learning the real estate business. It's a real turnaround. It's a very different thing for me. But when you've got overwhelming capital
relative to our project, things are pretty easy. So I can't say it's it's it's gonna work out great for customers. I'm not sure it'll be the best investment I ever made, but I do love it. But you get to snowboard a lot, but I get to snowboard all winter like Powder Mountain. Utah's fantastic place.
Check it out. Thank you, thank you so much.
Really what an honor. Thank you all, thank you all.