Alright everyone, we just finished recording this pod and we wanted to come back and give a little bit of intro because I feel so many different emotions and here's why the stakes of this are super super super high. Yeah, we're talking about what's going on with robots in the real world. So robots that are being used we have specific examples of really cool businesses that are doing robots for. You know, lawn care restaurants all different types of things, but then we go over the Elon Musk versus Sam Altman lawsuit. What is this lawsuit between two of the power players?
Of Silicon Valley and what's our take on it which might surprise you as well as some of the brilliant the nuance the marketing and PR that's going on here we kind of call it out. This is actually we have fun while doing it but this is actually really really important in my opinion listen to the entire thing and you have to listen to the first half to build up the story the stakes for the second half. Trust me you're going to understand exactly what I'm talking about when you get through the whole thing. So enjoy it.
All right, what up Sam? Hey, what's going on? Sam, I got to tell you something. When it comes to kissing eating ice cream before bed or business timing is everything my friend. I think I think that timing is important in all aspects of business and in technology. There's a moment happening right now. I could feel it. I could feel it. My it's like when you hit your funny bone and your whole arm gets hot. I could feel it right now.
It's about to change robots are going wild. I got to talk to you about robots and they've like been around for a minute but now it actually feels like it's a reality. Exactly. So right now a lot of people are talking about Tesla because Elon Musk came out and he said the future of Tesla is this humanoid robot. And I forgot what they call him like optimists or some shit like that. So it's like he's like, hey, we got this robot that can walk around pick up stuff.
Do tasks is going to change the workforce and your boy, Bradadcock, he's got a company called figure which you're an investor in. They have their robot. I think they just raised like a billion dollars or something right like last week. I think they raised $600 million at a two and a half or $3 billion valuation. I think. Nice little investment there for you.
I know I was in the first I was in on the first round. I double down and did on this round. Is this going to be my my Mona Lisa? Is this going to be my big win? Well, it could have been anybody's because you had him come on the podcast and tell the world what he was doing. So good on you. You multi billion dollars valuation right now. So that's a big deal. And people are really excited about that. I think there's these stats that say if basically labor is 50% of the GDP.
The labor market is a 10 times bigger market than transportation, which makes sense. Why Elon is like, hey, forget cars. It's all about these robots. We're just we're an AA company. We're doing robots. He's very good at repositioning and re reimagining the vision of the company over and over and over again. Right.
It went from affordable electric cars to self driving autonomous vehicles, robotaxies that will just drive people everywhere. Your car will become an appreciating asset instead of a depreciating asset. And then now it's actually it's not even about cars. It's about AI robots and that's that's the future. But I want to tell you about something that's less fancy than that. Because I think it's going to come first.
And that is single purpose robots, a K a Rumba's on steroids and Rumba's on steroids. You know, the Rumba was a it's a single purpose, a little vacuum robot that just goes around your house. But it's in the wild today. It like actually works. It's actually useful for people and even better example, I think is the dishwasher, which is in pretty much every home in the United States right now.
And it saves you a ton of time. Like when you're like my dishwasher pro class week terrible experience when your dishwasher breaks. The dishwasher is a single purpose robot. That's actually out there in the wild. We should be striving to create something as useful as the dishwasher that should be the north star right now for a lot of a lot of companies and there are. So I went on Twitter today. And I saw this great video that was about a company called electric sheep. Have you seen this?
No electric sheep. That's electric sheep. I don't know what it is. That's a great name. I think. And I think it's a lot a lawnmower. It is. Imagine if you took the Rumba and you put it in the lawn. That's what it is. It's a great name. All right. It's time for a little ad break. Everyone or what a unicorn eats for breakfast. Okay. I don't actually know, but I do know that 20% of all unicorn startups are using HubSpot and for good reason.
HubSpots all in one platform loves up your sales, marketing and support. Plus they have a huge collection of resources to help start up scale. And with the HubSpot for startups program, you can say big on your first year to see if you're eligible to save on HubSpot go to HubSpot.com slash startups.
It is a robot that knows your lawn does all kind of landscaping. What's interesting about these guys that I found pretty fascinating is not only are they a company that's like a bunch of guys in a garage building a robot like a lawnmower that's got a camera on it that can go around your lawn. They're actually buying up and rolling up landscaping services. So it's a combination of a sweaty startup and a moonshot startup together.
So these guys are going out and they're buying all these landscaping businesses in the Bay Area. And because they're like, well, we need a testing ground for robots. You have to actually like in their office, it's just like an astroturf. They're like, yeah, well, they can do this square astroturf pretty easily. It's not so bad. But in the real world, your lawn is got all kinds of different lumps and dips and divots and trees and rocks and it has to be able to work.
How are we going to get the best data? Right? The same way that Tesla is putting all like the cars on the road collecting data at all times and they're collecting like whatever. 100 times more data than the next biggest self driving car company. These guys are trying to do that with their lawn care robots. So they're buying these landscaping businesses.
Then they use them for as a sandbox. They take their robots out and they try to use them. They they mow your lawn normally, but they'll try to test their robots as well. They gather the data and then over time, they're like, well, we're buying these landscaping businesses at one valuation. But then what we'll do is we'll slowly start to replace the workers in the landscaping business with the robots and actually have improved margins.
And so we're going to like, it's like a private equity play as well. And so I thought that was a pretty fascinating approach that I hadn't heard before. I can't decide if that's just overkill. Like, maybe that's not actually necessary to do two hard things at once, but I did find it very interesting. What do you think of that strategy? I'm looking at their website. All right. So it's slick. This is cool. I agree with you.
The whole overkill thing that bothers me. That could be true. Well, the problem is like the founders like founder like with the Stanford and like you're smart enough to build a robotics company. That's almost you're smart enough where you can get yourself into trouble. Right. You could be like, oh, we'll vertically integrate. And it's like, if they use the words vertically integrate, be real careful.
You might be mid-witting the shit out of your plan right now. Basically, like for him, there needs to be a Venn diagram of this guy, this founder of sheep robotics. He's like the dumbest smart person. And he needs to hang out with the smartest dumb person. And we need that like we need that like a Venn diagram overlap to make this the perfect business. That's that's kind of like what he's doing.
This is awesome. This is awesome. This is cool. Another thing that I worry about. This is badass. What is it? A badass team and a badass execution on like small opportunity. Yeah. Like lawn. I mean, I got I don't know. He's lawnmowing a big big. I mean, is it as grand of a plan as what these people are actually capable of doing?
I think so because I don't know how big the landscaping industry is, but I know that anytime private equities going and rolling up things, there's a lot of money to be made. They wouldn't private equity doesn't roll up, you know, like small lemonade stands, for example, like they go into things that are that are cash flowing, you know, industries.
And so I do think if you added up all the landscape businesses and you're like, well, you know, either what they're going to do is they're going to use them in their own business to get it right. And then they're going to go lease or sell these robots to every landscaper in the country and be like, hey, would you like to improve your your operating margins by, you know, 10% 20% use these robots.
And so that either that's what they're going to do or they're going to go try to outcompete them somehow on price. I don't really love that idea. So I think it has to be there just using this to prove their own tech to then go lease these out to every other landscaper. So on their about page, they list their team. And I guess their advisors include this guy named Dan Foley. It says Dan Foley was a CEO of a company that sold to Brightview.
I Google Brightview Brightview is a commercial landscaping company that did roughly $3 billion last year in revenue. And publicly it's publicly traded. It has a shit market. So what you're saying is the newsletter guy is calling the land guy small. No, what I'm saying is I, yeah, I did cause I did cause small and then I looked at Brightview. It just shows I'm an idiot. I don't know anything like every great man. You're willing to change your mind. I congratulate.
I'm only one Google away from saying sorry. So check this out. Okay. So that's the first one. Now I have a similar, you know, where else are robots being used again, these single-purpose robots, not the general robots, but single-purpose robots. And the same way that we got specific AI before we're getting artificial general intelligence, we got specific AI where it's like, you know, I don't know, it's been like 20 years since deep mind could just be Gary Caspar of that chess, right?
Like we we solve chess, then we solve go, then we solve math, then we solve route planning. You could do these single-purpose AI's that way before you can get to general AI. So similarly, I think the timing of the opportunity is not in the Tesla robot or even sorry, the figure robot, which is like just a human robot that could do everything.
You know, that is the biggest win obviously. But I think before then, almost by definition, we have to see these specific single-jump one-job robots because it's going to be easier to build a one-job robot than it is going to be to build a general robot that could do all jobs.
And so here's some other ones. So I don't know if you know the same, but this podcast is not only listen to people who are trying to make their first million, but maybe by people who try to make their hundred million, their next million.
There's more millions to go and one of those people is the CEO of a restaurant called Sweetgreen. And so the CEO of Sweetgreen is a listener of the pod and I was looking up where else are robots being used. And I saw that Sweetgreen actually now has a what they call their infinite kitchen, which is a robot driven version of Sweetgreen.
So Sweetgreen is like a salad bowl type of concept. You normally go in there and there's like, you know, whatever four people work in the line and then there's like four people in the back kitchen doing prep. Just like most fast casual restaurants.
And what they've done is they basically went in and they were like, hey, what if we, they first I think they bought a robotics company for 50 million bucks. And then they use that technology to build a concept where you basically have like one person in the store and the rest of it is all done by robots.
And so click this link that I put in our sheet. We can show this on YouTube. By the way, is this Jonathan Newman? Yeah. I know that he's a listener. You want to know how I know he's a listener? Don't tell me you're getting free sweet green and I'm not. No, even better.
He emailed me and he took a screenshot and he showed that he subscribed to my first million on both YouTube podcast for Apple and Spotify. So if you want to be like John and start a multi billion dollar company, you got to subscribe. That's all you have to do. I don't think there's been anyone who subscribed that isn't rich and famous and successful and desired by many people of the opposite sex with the same sex if that's what they're into. It's just a thing that works. All right.
Okay, so sweet green. So check this this video out. So basically what they did was they made these like this kitchen. It's just like a giant wall where all the ingredients are in these awesome little robotic kind of dispenser arm type things.
And whatever you order the bowl goes across the conveyor belt. And then it's like the bowl is spinning. It's like rotating so that it drops in all the ingredients of the right spots. And again, they have all kinds of ingredients. Right. So like this sounds pretty simple. It's just like dispensing. Like maybe dispensing almonds is really easy, but fetiches, which is really crumbly. You got to be careful with it. Right. Like so they basically fine tune this thing.
And now this concept can do 500 bowls per hour. And I deumbed them and I was like, how much does like the human like a human lot like your normal restaurant line do is like maybe like 170 to 200. Wow. So you get basically like more than 2x the speed. And now you have a robot that does work that can work 24 seven never calls in sick. Never, you know, you always get puts the right proportion into into every bowl. You know, you have perfect food control cost.
And so you end up with a better version of an employee. And the strategy the way to I think about this is you trade opx for Capix. And training opx for Capix is actually a pretty good idea. I think you should further explain what that means. So today all restaurants work with human labor your human labor is your operating expense. It's an op x. And so. And what that means is that for every hour that you're operating every every bowl that you're selling.
You need to pay a certain amount in wages to to employees. And so let's say today, you know, you're paying 20 bucks an hour to people that work in these restaurants. You got. 10 people working in the restaurant at a given time blah blah, you can add it up. And let's just pretend that your labor costs come out to 33% of your revenue. And so the opportunity here, which is I would say normal for for restaurant food costs usually 30% labor costs usually 30%.
And so you you you add these up. You can't change the food cost, but could you change the labor cost. And so what the what he did with these restaurants is every restaurant to put in these robots cost more money. Or cap X, which is like the initial up front investment. And I think in their last earnings call, they said it's about 500 K to put the robot in.
So you put an extra 500 K to build the store. But again, this is 500 K of cap X, which means you can depreciate it, which is good for your you know, tax purposes whatnot. And it's a one time cost versus your up X is a every day of operation. And what they found was for that extra 500 K investment, they get it at least an extra 7% of you know of net margin from from those restaurants that because they have less objects.
And so you would take that that basically creates, you know, some break even point where you say, OK, cool, two years in we're going to have paid off, you know, the cost of this robot or whatever. And also he's like, you know, the 500 K cap X that's today. And this is the most expensive. It's ever going to be like the cost are only going to drop as we scale up as we refine the as we simplify the design.
Like every version we come out with is just going to be lower cost than this one. And I asked him I go, in 10 years, what are the odds that your restaurants are basically robot robot driven not human labor. Is this guy, sweet green is publicly traded right. Yes, it's he are you allowed to say what he's going to say right now. I told him I said, is there anything in that I can't share in this and he goes, no, I've shared all this but he was basically like it's very high, right.
Like it and just just thinking about that a little bit out loud. It's like, man, that means of the next 10 years in a very is you know, hopefully for in our lifetime. Restaurants are just going to go for a lot of restaurants are going to go from you walk in and there's just a bunch of people who are sort of disgruntled people who would rather just be checking their phone right now and then you know sitting there with this like stupid uniform on.
And it's just going to go where you go and you push a button and then your bowl gets made by a robotic arm and then you walk out like that's going to be going to be one human in the loop one one human whose job is now called you know robot maintenance robot operations and they're basically the guys like up.
The carats machine got a jam let me go and take a little fork and unjam that thing or hey I got to refill the container of apples and so what the what these guys do with the sweet green restaurant is the humans are all in the back doing the fresh prep of ingredients and then the robots are serving the customers and that's how they split it today.
So you and I are fairly optimistic you know we try to see the the bright side of most things you in particular do that but let's try to be pessimistic right now a little bit so the argument that you're going to see from a lot of actually most people I would think particularly pessimist but most people I think are going to be pessimistic on this they're going to say.
But this is going to ruin the economy this is going to ruin jobs and let me ask you a question before you actually give your opinion you have. Sean you own a business that employees warehouse workers roughly what's your annual turnover for your warehouse workers like how often do they go we use a three-pl now but before we when we had it in house it was. I would say every year we're going to replace 90% of the team so I was reading I think it was Amazon I forget someone who employees.
10 or hundreds of thousands of warehouse workers for them it was it was 100% so it was 100% turnover rate and I remember talking to Brett from figure and I go Brett are you going to like are you preparing to like be the most hated man in America right now and he was like well why and I said well because like you're going to be you're
you're you're taking jobs and he was like well Matt actually taking jobs in fact there's all these warehouses that no one will no one's going to work there they just literally cannot the cannot convince people to work there whether they can't afford it or if it's just a people are interested in that type of work and then and then he goes plus the average turnover on a lot of warehouses it is 100% so like they just can't keep people like in these jobs for a long time.
And so my question to you is are you pessimistic at all of what's going to happen in 15 years 20 years you know my first job I was a laborer and then a dishwasher I bet I think you've probably have done similar things like that what's going to happen my first business was a restaurant business I was the guy chop and tune and doing all that stuff in the back doing dishes you know every every night.
I think there's two versions of pessimism the first version is it's not going to work the second version is it's going to work and that's a bad thing you're talking about the second version I think this I think I think it's going to work it 100% is going to work I think I asked the guy I was like how I was like what's the non obvious like only when you're in the weeds doing it is it really obvious about this but to the outside person they maybe gloss over it was like what's what's that inside that's a great question he goes well it's like it's like most things that I'm going to do is I'm going to do it.
It's like it's like most things in technology because the first 90% is easy which makes it really easy to have like a sweet demo and everybody just immediately is like oh man this is going to change everything and it will eventually and probably a lot longer than we we want because it goes the so the 90% is easy the next 9% is 10 times harder so it's like you know the simple stupid example of this would be like you know dispensing almonds easy
dispensing the right amount of crumbly fetish ease it is literally 10 times harder than the almonds problem right or like on a Tesla like my Tesla self drives and it's the auto is mostly good unless it's a flashing yellow light then it like freaks out and I almost die right or it's like if it's a
doing morning or it's a foggy this whatever or it's rainy here or there's construction there there's like all these edge cases and then that's what he said is like the last 1% is it's even 10 times harder than that first one and it's like so with self driving cars the problem is nobody wants a 99% good self driving car even if that's actually
5 times better than a human yeah it's like if I'm going to die on a die on my own hands not at the hands of this really you know this piece of software and so that makes it really hard to roll out these things and gets and deal with the PR backlash anytime there is a crash or a or a bad
result even if it's less even if it's a better probability than humans driving but I don't think you have the same problem with restaurants right size of the prizes smaller but also the barrier gentries the barrier to deployment is much smaller where it's like oh man I asked for light sauce this is medium sauce really you know it's like whatever it's okay it's not self driving car crash and so I do think that that's the case here where a lot of people can get 90% of the way there
next 9% 10 times harder getting the final 1% 10 times harder than even that in software development we used to say this where I would always be because I'm the non-engineer I worked at a company of all programmers and I just be like walking around you know eating cashews and just walking around just like hey guys how's it coming with when do you think it's going to be done and they're like well we're about 90% of the way there
or we got like 90% of the things done so we're about halfway done you're like great 10 minutes will be done I was like wait 90% done so you're halfway done so yeah the last 10% always takes out at least double the time that you've already spent all right cool that's how math works I do remember coffee I'll go get some
alright everyone a quick break because I want to fill you in on a little experiment that I'm doing I've got a new project it's called money wise it's a personal finance podcast for high network people or young people who are on their way to becoming a high network when I made a little bit of money
I didn't even know how much money I should be spending each month should be 10,000 30,000 50,000 and I didn't really have a lot of people to ask so I created a podcast called money wise because I wanted to figure out what are some of the things that people who have a lot of cash and who have a high net worth what do they do with it the first
episode is with a friend of mine he sold his company for $200 million when he was 31 years old he gets super transparent about his monthly expenses his portfolio how it impacts his happiness everything and so I want you guys to check it out it's called money wise that's one word you can find it on my Twitter bio I'm the sam par or you can just type in money wise on apple Spotify and YouTube
alright back to the pod hey let's take a quick break to tell you about the hub spot podcast network if you like podcast like this you should check out some other cool podcast one is called business made simple so it's by Donald Miller and it's brought to you by the hub spot podcast network and what he does is he makes it easy to take the mystery out of growing your business there's an episode that you should check out called what you should put in a job description to get the perfect hire
and then this episode Donald Miller looks at the whole hiring process and how important it is to emphasize both the positive attributes and the drawbacks to future candidates and you'll learn why being self-aware as leader will help you avoid hiring disasters
so check it out you'll listen to business made simple wherever you get your podcast like 10 years ago universal income or you know universal wages was like a thing you be I you be I we're going to you're going to give everyone in America a bunch of money and like I'm a capitalist
a guy and I was like what if that that's the worst and then I learned two things one you know and last in Alaska I've had a friend I've had friends moved to Alaska you know they do that they've been doing that for decades they give you five grand
and it's like you get a share of the money that they were making from having so much natural resources I think I don't I maybe I don't know where it's from and I believe if I'm not mistaken I think sometimes it's a tax credit where like you just pay less in taxes or if you
go and any tax money you literally get a check of like $4800 or $5500 something like that and then the second thing that I learned was I started researching you be I and I was like wait why Sam Altman advocating for you you be I like why are all these like really smart robot makers advocating for it and I'm like shit they know they when my wife comes home and like why is the kitchen clean what did you do yeah why are you cleaning up this mess you did
nothing else that's what he's doing by starting you be I which he has he has you know I think Sam Altman along with a few other guys are doing experiments in San Francisco where I think they're giving $800 I forget I don't even want to say because I'm going to get the numbers wrong but it was like a fairly small stop now they I think they did it for
like some number of years and that was the experiment and then they stop and I we should go look up actually what actually happened but I remember reading something that was like not like entirely positive it wasn't like oh my god this is great we this is the program we need a rolled out nationwide it was like well no that's not that's not what the takeaway was but it's still an
interesting concept to me that I'm open to learning more about because when I learn more about these robots I actually do think I'm like I'm just old enough where I think this isn't going to impact me but for most Americans who are born who are young now it's going to have a massive impact on their future yeah yeah and so that second concern of
like oh wait this is the this is the real version of they took our jobs like hey it wasn't the immigrants it was the dorks building robots that took all your jobs yeah I do think that's true in fact it's kind of a paralyzing thought because it's not just labor jobs actually it seems like the knowledge jobs are going first for sure every two weeks it's like oh video editors out of a job
Photoshop the useless skill now okay well lawyers don't need them right this is like it's like clearly the breadcrumb starts to get laid where you're like okay today they haven't replaced all these but what's going to happen in v12 of this like of this product like this v12 is just going to do the job for doctors for for you know for everybody for all these
designers for video editors for all these things and so it's kind of a paralyzing thought and it reminds me they did this interview with Elon Musk and he was like they're like you're really worried about AI right he's like yeah I'm extremely concerned about AI it stresses me out I lose sleep over AI and they were like so why are you working on AI then why are you developing it is like well basically I think this is going to happen either way
it's it is inevitable my mind told me that he goes and then I just had to decide do I want to see the apocalypse in my lifetime or do I want to die and not not get to witness it he's like I decided I'd like to witness it just a layer of things because I thought he was going to say something else I thought he's going to say like you know I can use this for good and instead he's like I just rather see it in my lifetime then not see it he's like what of
the thing is like then I felt good I just operate is continued on that's kind of how I feel when I see the AI like getting so much better I'm like dude I don't know if any of my businesses will even make sense in 10 years well all right carry on then I know what are you going to do about this like am I really going to go stop the progress of technology no am I going to anticipate this now and like change everything that I'm doing now
also doesn't really make sense let me just make a while the while as possible and see what I think that when it comes to AI in these robots I think what it is it's it's sort of like a squirrel preparing for winter where between now and the next like 10 years the name of the game is just pile away as much as you can to get above this certain threshold to where you can make it through this winter that is never going to end and so it's like between now and whenever this moment happens if it's going to be five years or 20 years the name of the game is just
hurry up and like board up your home for the store to come so just that way you're safe for and that you're just your independent and you're all right but once that once it like once ever that threshold or that time comes a lot of people I think are actually going to be screwed I'm not going to predict what's going to happen because I have no no idea but I just think that between now and then the name of the game is just to make
us much money set up your life in such a way where you can pile away all these nuts and you're just good and you're just good for the winter that's like basically how I'm living I don't know what the right mindset is I think that's for right but right or wrong that's also my mindset is just like get it all time do good all the games good right and it's like well I but I also am not like bliners on about this stuff in fact one of the name the name of my
holding company was inevitable outcomes and I was like well why don't I just figure out what is inevitably going to happen and then go invest in that because that that's just a better thing to work backwards from if you realize that something is inevitable that's way different than speculating of
like well maybe this could be the case it's like once you know something is inevitably going to happen then you just have to figure out which company is going to win which is actually like you've reduced the problem set down into which company is going to win and and
win is the right time for for business like this to exist I started this episode talking about timing because I think that the single purpose robots is going to be the big winners in the next cycle here where like you have the knowledge work like LLM's chat GPT type of stuff but then I think you're going to see the specific robots I think both of those are going to be really really successful what you're not going to see is that I don't I think the human robot I think it has to be
further out than that this message my opinion you know there's also other versions of this so that we talked about the sweet green one you know the founder of Chipotle has a new restaurant concept that's all robotic first what is it and by the way I want to the inside the sweet green guy said he goes the key is not to retrofit the restaurant he goes what everybody tries to do is they have the existing restaurant then they try to install a robotic arm that can try to
use the existing restaurant layout because it's cheaper right to not rebuild a restaurant and his quote was everybody's trying to retrofit I'm different I'm willing to blow the whole thing up quote I'm willing to blow the whole thing up and he was basically saying like we just thought through from first principles if this was a restaurant that was not going to have humans working on the line it was going to have robots how would you design
every part of this restaurant and then let's build those and so they did to this year they're up and running and now they're doing like 10 more in the to scale this up what's it called and what do they serve so is it called
kernel so now what's his name Steve L's Steve L's the guy who created Chipotle he's got anyone called kernel and kernel is basically like some kind of like vegan bowl type of concept and so you can see videos of it where it's basically like dispensing stuff into a bowl and then it's like shake
there's like an arm that's just shaking the bowl just to mix it for you it's for your layers the crossover of vegans and apocalyptic like AI people I don't that been diagram I don't think is going to cross over nicely like you don't have like like hey do you want to go to this restaurant that has no
humans working ever because fuck people yeah do they sell hummus you don't mean like that conversation is not going to be plant based machine operated baby yeah who's got that tattoo nobody that's not a huge crossover but it looks cool so he has two or three of these locations yeah so I
don't think this one's like as figured out doesn't seem like it's as promising but there's a bunch people doing this just soft bank had poured like hundreds of millions into a pizza bot that I've talked about a lot which is pizza is the big prize here pizza is a much
simpler dish like yeah it's a single single item it's the most popular kind of like fast fast casual type of type of food and if you could and it's also owned by chains and so you can get if you can get dominoes as a customer you're going to get to go in whatever like you know 5,000 domino locations and so whoever can build a pizza bot that can make a perfect pizza every time perfectly circular perfect ratio of ingredients never calls in sick can work 24 seven consistent it doesn't
matter if that thing costs like you know $500,000 you'll be able to sell into all the dominoes all of the pizza huts all of the chain chain pizza stop shops in order to to do this so I think that pizza bot is like you know the big opportunity here I I like to think of myself as an independent
thinking person I like to live my life somewhat independently and I don't want to rely on other people I that's why I like to start my own companies when I went to Brett Adcock's warehouse or factory whatever you call it and he showed me he was like check this out we're learning
how the Achilles on a human works and we just got our humanoid to move its foot like an adorso flexion way and like we also like here's like this human knee that we're studying now our guy over here is making the knee so we can like move I saw this stuff and I was like dad can I come
and it's like I was like can I should I drop everything it just come and join you like it felt like Adcock yeah it felt like I was in a cult like I was meeting like Charlie Manson and I was like yes sir who would you like me to kill like I was just like so into this I remember it's going
to my wife I was like you should quit your job I was like Sarah I don't I'm not smart up but will you quit your job and go work here I was like I just was so into it when I saw this stuff this is and in the cool thing about this topic is that it's happening this second right now
and this isn't far away enough to say one day in the future it's like it's happening now and over the next couple months and a couple years we're going to see it in play and I think that's why this topic is very very really fascinating by the way this is also the magic of Silicon Valley like one
of the reasons to be in the Bay Area is you will because he's his factories in the Bay Area right yeah it's in it's South San Francisco it's just north of Palo Alto so you will go you will either meet somebody you'll be at a dinner and hear something or you'll drop by somebody's office
and you'll see what they're working on and how they're approaching it and then you will walk out being like my life is meaningless everything I do is absolutely meaningless I am a small small pale dot on a giant rock and I I mean nothing and what I'm doing is nothing
most people that's a pretty disempowering feeling but for me I wanted to be in situations like that I wanted people who could basically like blow the ceiling off of what I thought was possible what I thought was cool what I thought was interesting and be like no no no you thought that was
interesting this is interesting and that happened the other day I don't know if you saw these videos that were going viral some people read a hackathon down in all seven sun available or mountain view somewhere doing like a there's like something called like the AI house or some shit like that
and during the hackathon during the hackathon this guy walks in with this cool look at jacket and like disheveled hair like he's been in like a cryogenic freezing tube for the last 10 years and it's Sergey Brin it's the founder of Google just showing up at the hackathon and he gave an
impromptu talk did you see this no what do you say where he goes up there and he's just gets really in the details about Google's Gemini thing like about like bugs that they're fixing and stuff like that like not like some grand visionary talk he was just like yeah like here's what the here's
what it could do here's how it works here's how we're thinking about this and he's just talking to a bunch of guys and all of them this hilarious and wind viral because there's a guy sitting there the guy who asked the question in the clip in his shirt he's just a shirt that looks like someone's
body flash yeah with boobs and he has a serious question he's like what is it about the because you know like Gemini got in trouble for being like too woke or whatever like the thing wouldn't generate images of white people and he's like how come you're you know the LLM is not generating images and you know what what's views on the policy of that and nobody even calls that nobody like Sergey Brin doesn't point it and be like dude can we get a different question not the guy
with the boob shirt I'm looking at him now it's just like a guy looks like me just like a normal look dude but he's got a flesh cover but it's it's it's a it's got boobs on his shirt and nobody references it nobody acknowledges it it's just like yeah carry on what live and let live baby that's
the set for this go away and so it's a very strange place but it's strange in a way where kind of amazing things happen like the founder of Google just showing up at your hackathon and and answering some questions this is pretty wild I experience so I experienced this all the time in San
Francisco when I lived there there'd be so many times where it was like I've told so many stories about this where I've go to someone's office and there's just like huge screens with porn playing and it's like well they're just working on this this website and it's like they make porn and so just like normal like normalize there's been other times where like I've seen like I've come into the office and there's people sleeping under desk and stuff like that and just like weird shit that we
would make fun of or things on that TV show Silicon Valley where they like have nipple and like I've experienced this in real life and it's fun to make fun of but honestly it's awesome it is so awesome to like be around these freaks remember when hacker houses where like just getting going I would go to these these houses and you would see that they didn't have share kitchens and like half the time it was like just powders it's like well these guys just live off these powders they just live
off powders it's all they eat and it's really started you know that's how it started those guys just living in a house together when they're supposed to be working on other stuff and then one of the guys was just eating only he's like I'm just going to create like baby formula for
adults basically and he's that became so and that same guy when like I forget what type of chip it is when it came out like you know like these credit cards that we use now we touch your credit card on a machine instead of inserting it and and you could read the credit card he inserted all of
that into a small chip and he surgically put it into his hand and so he could just like touch it say so like being around freaks like that it's fun to make fun of them because it is silly it is awesome I loved I loved being around that I would see this stuff all the time and I was just like
I'm so happy you freaks exist this is the coolest thing I've seen I felt like that all the time did you ever experience that when you'd go to these like hacker houses and they'd be disgusting these guys just it's just like triple bunk beds yeah there's no thief but you know like god damn and I can't
even look down on this because one out of the one out of 18 of you guys is about to become a billionaire in the next five years I just don't know which one like you know whose neck beard is the longest is like you know who who's showered at least in this room like I got I guess I guess write you a check I think that's the optimal strategy here like I had a buddy who worked at my company that would just do these things these experiments like his guy Quinn and Quinn had this like crazy like
sideshow bob style haircut and Quinn would be like he's in really into games and so he's playing this like little like wordscrumble game on iPhone and I think like his girlfriend had beat him in the like they were they him and his girlfriend would play or this girl he was like flirting with or
whatever would play and she beat him and so he stayed up all night pro programming a robotic finger and a camera to like solve this like wordscrumble thing so that he would never lose again and I was like it's like these stories you hear about Kobe Bryant or Michael Jordan with like
this like fierce competitiveness but applied in the absolute nerdiest way and it results in kind of amazing things and it's amazing energy to be around I've been around a bunch of those people and I love it and it always makes me feel like the first feeling I originally what I felt is
you're stupid that's stupid and then it's like oh I'm stupid you're better than me and this like this is awesome uh yeah I feel like that on a regular basis when I when I would go around these weirdos and I love them so we got to also talk about this lawsuit so Elon Musk sued Sam Alpin
and there's probably there's a good analysis out there about this lawsuit but I want to point out a couple of things so here's my frame of this Elon is good at PR he's not just good at engineering he's not just good at business he's not just a technologist he's also kind of a master of PR
and I should have known this because Tesla runs basically spends nothing on TV commercials every other car company spends like billions of dollars on you know like all other car companies in total spend like a bit over a billion dollars on marketing whereas Tesla runs no commercials yet Tesla's brand is huge and it's because Elon is kind of a master of marketing is a master of PR and he does this with Twitter he does this with with Tesla and he's doing it with SpaceX and now seeing
him do this with this lawsuit it's the first time that I've ever seen him do this in public but it's basically he's gonna lose the legal battle but he's gonna win the PR war I think. Uh have you ever been through a lawsuit do you know what the discovery phase is?
No I haven't but I'm familiar with the idea of discovery. So basically I don't exactly know uh what all the rules are but I've like I remember there was a time I was gonna sue someone uh because I thought it something didn't work out and I and I I thought they violated contract and I lost money because of it and I was gonna sue them some guy and getting rags weights. Yeah yeah it's salty. Procone has been broken.
I can't let this stand. Uh and so I uh I was gonna do it I hired a lawyer and they're like all right but they're like you're probably gonna win this thing you're not gonna win that much money and I'm like but it's the principle of the thing whatever and they're like okay cool but do you know
what discovery is I was like no tell me more and they're like we're gonna get access to your email to your phone records to your text messages and they're gonna be able to see all of it and in many cases and this is where I don't entirely understand how it works but in many cases
that's completely public record so if I file a lawsuit that part is public record and oftentimes the things they discover will be in public record and I was thinking about it it's like did I just text my wife either day to let her know that I farted but a little something came out
because I think I did text that and I don't want that in public and that's like a three out of 10 on the PC meter like what's the nine out of 10 and what I be okay with them seeing that and that's when it finally hit me of all the years of people telling me don't write of like
offensive or crazy stuff on text messages or email that's why is because I just didn't want that embarrassing stuff to be seen so I didn't know I'm going through that just for that reason and so in this lawsuit we're gonna see all types of private conversations that these people have
I think Elon don't give a shit but I think the average Joe would including me well yeah I don't know we should know more about this I don't know how discovery works of like what parts get because not everything goes public but not everything so it's like what's
what's what's the where's line and how does that work because I think Elon has a lot to lose too with that like nobody wants their shit out there in the public and so but he does like when he when he when he texted that guy the the former CEO of Twitter he replied with all the stuff
like can we talk about this and he just reply was what have you done this week like I feel like in his mind he likes it yes he wants to do that but in his mind he's like I'm gonna say stuff that I want the world to see you know what I mean it's like all part of the game
but in this lawsuit there's actually some stuff that's into that I thought I found pretty interesting because it could I just like tell you what I thought was interesting in this so he so it starts off basically the whole lawsuit starts off the document and it says well humans have transitioned from
a labor economy to a knowledge-based economy and now knowledge is basically getting wrecked by AI so first AI got so good it could beat the best human chess players then it could find the best uh routes between two points like to best streets to take fastest route then it could be more
complicated games like poker and go and what it talks about is that Elon Musk saw this happening and he was I think on the board of or an advisor to a company called DeepMind and he's like oh DeepMind's really interesting he meets the founder of DeepMind this guy Dennis uh I don't know
how to pronounce the last name and he said he's basically like what are your views on AI safety because Elon for a long time had been worried about AI safety and he walks away like I don't think this guy is really you know concerned with AI safety I think he's just trying to build really powerful
AI okay whatever but he gets pretty worried because he finds out that Google is gonna try to buy DeepMind and he's like well Google has the most data because they have emails they have search they have YouTube
so he goes Google has the most data DeepMind has a monopoly on AI talent and so they have the best AI talent and what the result will be is that AGI when it eventually gets done artificial general intelligence will be in the hands of you know the biggest monopoly they have a private company out
there and he's like okay that's a little bit worrisome and he goes and he hangs out with Larry Page the founder of Google and he's telling him like Larry I'm worried about AI what are you guys doing about AI safety and he's like basically kind of the way Elon describes it he kind of
say it passed him on the days oh don't worry about that we're not worried about that he's like well you know AI could take over and basically eradicate the human race if it you know goes there's a path where this goes wrong and he's like well that'll just be evolution and he's like don't be
such a species Elon and he's like species he's like yeah you're favoring the human species oh my god yeah I'm prohuman and so he gets really pissed about this and he he says that this is when he stopped talking to the CEO of Google so he after that that's like the trigger according to Elon and
again I think a lot of this is Elon crafting an narrative I'm not sure I'm not saying that these things didn't happen but I think he's very good at creating an origin story and creating a bad guy and then patting himself oh what do you know as the hero and so he here we go so now what he does
is he teams up with Sam Altman so Sam Altman who's the CEO of OpenAI in 2015 wrote the following he goes the development of super machine intelligence at the time that's what he's going to SMI super machine intelligence it's probably the greatest threat to the continued continued existence of
humanity there are other threats but they're unlikely to destroy every human in the universe the way SMI could what a great what a great opening set yeah all right continue Sam so Sam is worried about this Elon's worried about this they get together because oh then there's the trigger Google's
buying deep mine I didn't know this the in the lawsuit it shows that Elon then went to the PayPal co-founder of the sky Luke NoSec and tried to quickly like emergency raise 500 million dollars to buy deep mind instead of Google just to keep it out of the hands of Google and he fails it can't pull
the deal together in the in the in the last minutes deep mine gets bought by Google and now now Elon's really worried and so Sam Altman then goes to Elon and says hey why don't we create a nonprofit AI lab to catch up with Google and actually the origin of this was to do it inside
Y-combinator where Sam was currently the president so I don't did you know that the origin of opening I was actually supposed to be inside of YC and he called it what if we created the Manhattan project for AI and he's like what if YC did a call to arms and was like hey we need to develop this
technology to the basic we need the anti-google like we need to get the best people we can to start working on this as a research project what he said originally was we'll give him equity in YC as their upside and so they can work on this as a nonprofit that was the legal idea I think he said
that like no person will have control over this thing that we're making and and said they're going to get equity in YC that's how they're the nonprofit the how do we pay these top AI researchers who's Google's going to pay them a shit time well we'll give him equity in YC YC's are our huge
you know cash cow and so that'll solve that problem and he's like we'll have a board of directors me you Elon and then we'll pick three others and like if it's he says this is the like initial email he goes if it's not obvious what the right thing to do is on the five of us will decide
like that's the governance idea okay so that was the original idea it evolves a little bit by the way Elon's reply to that email was great and so Sam wrote like a fairly casual I mean he used the a verbiage like you said those sentences that are like a big deal but it was like a casual almost
email with like five points and Elon's reply was agree on all like that was it right I have moved straight to the end so yes agree on all so they start and they're like cool we're making this nonprofit and it'll be open source Elon comes up with the name open AI he's like let's just
put it in the name this is an open source AI and in the next five years Elon contributes 44 million dollars to this nonprofit and they develop some pretty interesting tech so chat GPT now GPT4 it's it could do it's like and it's in the 90th percentile at the lawyers like the bar
exam it's in the 99th percentile for the GRE the verbal section it's a even a 77% at the advanced sommelier test which I don't even know how that would work it's like the sommelier like the wine test and so he's trying to in the lawsuit argue that it's already a GI which it's not but but he's
trying to make that argument because his whole his whole legal case rest on this idea that there's been a breach of contract and they breached the founding agreement but there is no actual founding agreement what he's calling the founding agreement it's like what we call the gentleman's
agreement especially like a handful of conversations emails and then just like the initial founding like articles and corporation of the of the company he calls all of that together the founding agreement he says they breached that but it's not actually a agreement I'm a moron I don't know anything
about legal stuff but I think that that actually counts as something I mean there's been I think there's precedent where that matters so but in this case basically yes to establish that there is a founding agreement and that it's been breached but if you go look at the founding agreement
like those emails like one time they're telling about we could give equity and YC that's just like brainstorming that's not like the agreement then later they they do have a little bit more formal like okay it's going to be a non-profits can be whatever but in the articles and corporation
it specifically says like we will open source this you know whenever you know whenever we deem appropriate yes vague right it's like we will really we will develop this for the benefit of humanity we're definitely doing this maybe someday exactly when we want and so they basically left
themselves like complete latitude to do whatever the hell they want and that's what they did now what I think is interesting so Elon says a couple other things so one he says GPT-4 is already so good like those test scores he goes and now they're developing this thing called Q star have you heard
about Q star no what is it so Q star is a reportedly like the new what what what what what not reportedly rumored to be the thing that they open as working on that is like next next level after GPT-4 so it's like instead of GPT-5 they're using some method called Q star which they think is like
a leap in the intelligence which is really exciting because even GPT-3 to GPT-4 GPT-2 to GPT-3 like those were like pretty substantial improvements but not like a huge leap whereas Q star reportedly is like what the huge leap is there's rumors where Sam Altman came out and said you know
like I was in a meeting like a debt we did a demo or we had an internal meeting the other day and I saw you know I saw something that like blew my mind like basically saw something that just like was on inspiring and I was like what what is it and he hasn't shared any details this is also
right when the that big coup happened they fired Sam Altman that's one of the one of the rumored reasons was when this could be total bullshit we don't know that this is one of the rumored reasons was the the board saw that how powerful Q star is and they're worried Sam is way too fast and way too
loose he loose a good way too aggressive and now this weapon is getting too too powerful it's kind of that idea there so anyways he talks about Elon talks about that in the lawsuit that they're developing Q star and whatever so it's kind of like confirmation that this thing exists although the fun the legal language he uses and all this he goes at the start of every sentence every paragraph it says using knowledge and belief and basically it's like saying like we don't have evidence but like
I know some things and I believe this to be true and then it says all of the claims so who knows it's kind of like Elon's claims a couple other big pieces of this so I want to read you some some Elon emails that that did get surfaced in this so one of the key things that happened early on
was they had this dinner and at the dinner at Sam Altman it's Greg Bach Bach Bachman it's Elon and then it's this guy Ilia Ilia was the lead you know one of the leading deep deep learning researchers at Google and he became the chief scientist of open AI the big turning point was he Elon recruited
Ilia away from Google to open AI this is when Larry paid stop talking to him because he was so pissed that you recruited my like top guy and you declared war basically and recruiting him was like a hurricane effort basically getting him to leave Google and Google was offering him like
a blank check you know fucking movie and exactly this will be a movie for sure so then Google starts offering all of their talent like crazy lavish offers they just up the Annie like crazy they're like we're gonna price anyone out of this market how much do you know a million like I
don't know like millions of dollars per per per employee minimum for some people 10 15 million dollars a pay package annual and so it was like okay well Sam and Greg email Elon saying hey it's getting really hard to recruit you know we have to think of a strategy here Google is doing this
Elon replies he goes we need to do what it takes to get top talent let's go higher if at some point we have to revisit what our current people are getting paid that's fine either we get the best people in the world or we will get whipped by deep mind whatever it takes to bring on the ace talent
is fine by me deep mind is causing me extreme mental stress if they win it will be really bad news with their one mind to rule the world philosophy they are obviously making major progress and they should given the talent level of talent over there and so he basically gives them the green light like
I'll keep funding more go get the best talent and so in 2016 he gives them 15 million and 2017 he gives him 20 million in that five year period he gives him 44 million dollars in total now the problem is Elon the biggest backer and the original backer says he doesn't own anything in open AI
the for-profit company and this is the strongest part of his case here's what he says he goes how is it that you can create a nonprofit company that is supposed to be nonprofit and open source raise millions of dollars from people you take 50 million dollars for me you hire the best people
in the world and you you write down that this is your charter and then you end up a close source maximum for-profit company owned by the most valuable company in the world Microsoft mode 49% by them how is that possible and he's like two things he goes if he goes if it is possible to create a
nonprofit hire people and basically fund all of the research on you know basically like in a tax donation way where you for every dollar you're putting in you get 50 cent rebate back from the government he's like if that's possible and then you could just flip to a for-profit when you make
breakthrough technology why is everybody not doing that why is that not just the default for every single technology company in the world either it's illegal or everybody should be doing it it can only be one of those two things and I love this argument from Elon I think this is a tremendous
argument and there's no answer to that question yet either this is illegal or every single company in the world is going to do this why would you we are we you and I are not I wouldn't I'd say we are fans of Elon Elon's work but we're we're lukewarm on him as a human being and we are only
hearing one side of this story but in the last 10 minutes only knowing what I know just from those 10 minutes he's right so then he gives us analogy again master of PR he goes it's like if I donated to a nonprofit charity that said we're going to save the Amazon rainforest and then that
charity took all our money and then they created a for-profit logging company that was just cutting down trees in the rainforest and selling the lumber that's what's happened that is open AI and so he says it is a de facto subsidiary of Microsoft and he goes he includes this quote and this
quote I think is going to become very problematic I predict it's going to become very problematic for Microsoft in the future so it's the Microsoft CEO saying remember when all the open AI drama was going down and Microsoft stock price started to tank because they were like oh shit you put you've
given $10 billion or whatever to open AI and they're about to like collapse this is bad for Microsoft and they're going to go create like a new company that you don't own that's bad and so then he came out and he said this publicly he goes if open AI disappeared tomorrow we have all the IP rights
all the capabilities we have all the people we have the compute we have the data we have everything we are below them above them around them the CEO Microsoft said that wow yes exactly and so that also weakens the case that open AI is this like nonprofit non-controlled by Microsoft entity
when he came out and said that we are below them above them and around them god damn what a what a phrase dude this is uh riveting this is riveting that's me when I if I go to Chick-fil-A and I order nuggets I'm below them I'm above them I'm
around them I have them they are mine like that's it what a what a phrase the uh by the way the the way they call this the Manhattan project the best that is the best that is so good all of this is just epic can you imagine these nerdy AI engineers who were probably like bullied and were dorks
throughout all the years now they're like oh me you want me no boys come on let's be civil about this they're just getting fought over and we're talking about 15 or 20 million dollar of your packages that's insane everything about the story's insane you're right he needs to be a
movie if you're making the movie or you want to make the movie of this get in touch with me let's let's create the movie of this this is going to be like the social network movie all over again uh an epic photo collage or something like that would also suffice to like just like some
some neat photos with captions that tells a story I'm into that um I want to leave it with this so darmesh shot darmesh is the founder of hub spot and you and I have talked him a bit he's on this podcast all the time whole he he's doing this thing on AI uh that I want him to come talk about
hopefully he will he told me something that I tell myself all the time when thinking about this which was basically darmesh is super into AI he goes a lot of conferences on it like insider conferences see I would think that of he has a a good grasp of it he has said it's not probably
gonna be as good or as bad as you think it's going to be and him saying that and a calm like fatherly voice to me that's like been the one thing that I've been thinking about of like sam ultman I think he's a great guy and I love sam uh I don't know him but it just has like a fan of
his uh I think that the all these guys in this game are also brilliant marketers and brilliant business people and brilliant at the skill of programming and making this stuff but I also think that they're brilliant at PR marketing and I have to remind myself constantly that it could
be good it could be bad it's probably gonna be right in the middle though of uh of what the reality is gonna be in the middle and these guys are just excellent at telling their story do you agree yeah and we should say uh you know Elon is competitive creating a direct competitor to
open AI right like groc uh he has x ai which is uh like his uh his AI company it's his AI competitor to open AI and he has groc which is the competitor to chat gbt that's like the product name so he obviously has you know interests in this and I think you know one thing that's clear out of
this is it's definitely mission driven like in the same way that um I used to think when it was like oh Jeff Bezos is doing a rocket company it's like oh it's just like a giant dick measuring contest between like billionaires like just the last level of the game is you say I I win earth okay
let me go win Mars now right like that's kind of what it seemed like was oh I'm gonna build a bigger rocket than you but then you read that like even 25 years ago Bezos was like really obsessed with the idea of space travel and um he's been a giant fanatic about it and been been trying to donate
to it and trying to advance the cause in that and that now like even with these companies he's in all the engineering meetings the planning meetings every week it's like okay this wasn't what I thought it was in the same way by the way he could still it could be that and that's okay it could
be mission driven and ego driven and profit driven and that is okay to have all those things so that's a better way of putting it yeah like most things uh it's accelerating because of multiple causes multiple there's multiple things multiple tailwinds pushing it but I would say like
the hater and me wanted to discredit it but the realist and me when I go back and read old interviews or watch all the videos before amazon was super successful it uh it becomes clear that actually it was a deep interest so similarly here even though I think it's part of it is he's trying
to bog open AI down with a lawsuit and spend the PR battle in his favor uh and he has a direct competitor it's clear that opening I wouldn't have even it would not have existed it would not have been successful had he not genuinely had this fear and concern and belief about what needs to happen
with AI long time ago so you know that I think that's that comes out very true in this is there's a paper trail of evidence what a fucking pod I feel amped and scared excited nervous I feel all types of emotions great job it's like a great first date it's like right you aren't just
supposed to like trigger like adrenaline or like the fight or flight response and people and that's like what bonds you I feel like that just happened to us yeah except my version of that was like on our first date we went on a motorcycle but uh down we're talking about like the world maybe
ending in 20 years uh good job this is you I've got a court I got a court case to tell you about dinner no we're not doing dinner I okay so you made it this far to the folks listening go to the YouTube and tell us in the comments do you actually think this is going to be horrible do you
think it's going to be great or is it what darmash said where it's somewhere in the middle where it's not going to be as good or bad as we think but Sean bravo you did a good job this was a great good pod uh it will end it there that's the pod