00:00:00
we're seven minutes in and we've produced absolutely nothing that will go in the show
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hey burgers ax I'm actually angry at sax for not publishing my AMA from the other day
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crashed we had such a crowded room we had some people in the room for like four hours it was crazy it was like the
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original days of Clubhouse everyone I know that was trying to get in was texting saying they couldn't get in so
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it definitely capped out right I know well we hit we hit some scalability you may want to buy an extra server sax
00:00:35
cheap weren't you the same guy who was responsible for scaring PayPal no that was somebody else that was eBay
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they sold it before it's killed no no that's not true we had huge scalability challenges at PayPal too it seems like a
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theme yeah the theme is when you have an app that's breaking out you hit scalability challenges it's called a
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high class problem 2 000 people is not a high class problem it's a trickle it's 2022. 2 000 people participate in the
00:01:00
conversation is a child I haven't written code in 20 years here's what you do when you get to
00:01:06
a thousand people coming to the room that's a lot everybody else is in passive for you've never written code
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ever of course I of course I drive that's a lie come on be honest oh yeah it's actually been 25. the last time I
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wrote code was Lotus Notes it's true and let your winners ride [Music] we open source it to the fans and
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they've just gone crazy [Music] so there have been three cheating scandals across poker chess and even
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competitive uh fishing I don't know if you guys saw the fishing one but they found weights and fillets during a fish
00:01:44
uh way and that everybody wants us to check in on the chess and the poker scandals
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chess.com just released their report that this Grand Master has been suspended they have evidence he cheated
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basically in a bunch of uh tournaments that were in fact for money he denied that he had done that
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but he had previously cheated as a kid they now have the statistical proof that he was playing essentially perfect chess
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and uh they've outlined this in like hundreds of pages in a report Saxy what are your thoughts on this uh scandal in
00:02:20
chess Magnus Carlson finally came out and explained why he thought Hans Neiman was cheating basically he got the strong
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perception during the game that Hans wasn't really putting in a lot of effort that he wasn't under a lot of stress and
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he's he it's his experience that when he's playing you know the top players they're intensely concentrating and the
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Hans demon didn't seem to be exerting himself at all so his you know hackles were raised and got suspicious and then
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you know he has had this meteoric rise the fastest rise in classical chess rating ever and I guess there were he
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had gotten suspended from chess.com in the past for cheating so on this basis and maybe other things that Magnus isn't
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telling us Magnus basically said that this guy is cheating I think the maybe the interesting part of this is that
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there's been a lot of analysis now of Hans Neiman's games and I just think the methodology is kind of interesting so
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what they do is they run all of his games uh through a computer and they compare his moves to the best computer
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move and they basically assign a percentage that correlation matches the correlation matches the computer move
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and what they found is there were a handful of games where it was literally a hundred percent that's basically
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impossible without cheating I mean you look at the top players who through an entire career have never had 100 game
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that you know chess is so subtle that the computer can now see so many moves into the future that nailing the best
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move every single time for 40 50 100 moves is just and and and in chess which a human really can't do that well is
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that there are positional sacrifices that you will make in short lines that pay off much much later in the future
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which is impossible for a human to calculate and so you know and you saw this by the way when uh I think it was
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the it it was the Google AI the deepmind AI that also play chess so the idea that
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this guy could pay could play absolutely perfectly according to those lines is only possible if you're cheating right
00:04:14
exactly so so there were a handful of games at 100 and then there were tournaments where his percentages were
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in the 70s something plus and so just to give you some basic comparison Bobby Fischer during his legendary 20-game
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winning streak uh was at 72 percent so he only matched the computer so for best move 72 of the time Magnus Carlson
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playing at his best is 70 percent uh Gary Kasparov in his career was 69 and then the you know the the super GM's
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category are typically in the 64 to 68 range so I think it's really interesting actually how you can now quantify by
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comparing the human move to the best computer move and it's multiple computers training the best they
00:04:57
actually have it provides a way to assess who the greatest player ever is um I actually thought that it was Magnus
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but now maybe there's a basis for believing it was Bobby Fischer because he was at 72 and Max is only at 70.
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however look the idea that Hans Neiman is in the 70s 80s or 90s during tournaments would be you know just an
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off the charts level of play and if if he's not cheating then we should expect over the next couple of years that he
00:05:24
should rapidly become the world's number one player over the board uh you know now that they have all this
00:05:30
anti-cheating stuff right so it'll be interesting to see what happens in his career now that they've really cracked
00:05:35
down on you know on with with anti-anti Gene technology I have a general observation which is these people are
00:05:42
complete losers the people that cheat in any of these games don't understand this basic simple idea which is that
00:05:51
trying is a huge part of The Human Experience the whole point is to be out there in the field of play trying and
00:05:59
it's basically taking the wins and the losses and getting better that is the path that's what's fun once you actually
00:06:05
win it's actually not that much fun because then you have this pressure of maintaining Excellence that's a lot less
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enjoyable than the path to getting there and so the fact that these people don't
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understand that makes them slightly broken in my opinion and then the other thing is like why is it that we have
00:06:23
this strain of people now that are just so devoid of any personal responsibility
00:06:28
that they'll just so brazenly take advantage of this stuff it's really ridiculous to be they don't it's really
00:06:34
sad these people are pathetic it's really pathetic this but it is really interesting how they caught him and
00:06:40
running this against the computer here's a chart of um his scores in these tournaments oh well here is this first
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chart is how quickly he Advanced which was off the charts and then the second chart that's really interesting is
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um his chest.com strength so if you don't know chess.com it has become like a juggernaut in the Chess World
00:06:57
especially after that HBO series came out a lot of people subscribe to it I subscribed to it I like to play chess
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there and man you look at the chest strength score there he was just like perfect and then the
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number of games he likely cheated in you can see the last two columns he's basically cheating in every game
00:07:14
you know Queen's Gambit yeah great show on Netflix and he he said he didn't cheat in any uh
00:07:21
of the uh games where they were live streaming but they've proven that wrong sax how does
00:07:27
he cheat in person then well that's the thing no one really knows and I don't want to overly judge it until they have
00:07:33
hard proof that he was cheating I mean look here's the thing he was never caught in the act it's just that the
00:07:39
computer evidence you know seems pretty damning and I mean here's the thing is I don't
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know how they prove I don't know how they prove that he was cheating over the board without actually catching him
00:07:49
doing it and I don't I still don't think anyone really has a good theory in terms
00:07:53
of how he was able to do that well it's not just him though like look the the fishing thing Jason which was crazy I
00:07:58
think Friedberg shared the video this guy was in a fishing competition and they basically caught these fish and
00:08:03
then they put these big weighted pellets inside the fish's body they even put like a you know chicken breast and
00:08:09
chicken fillets inside of the things yeah you know uh then there's no crossover now in poker everybody's afraid that
00:08:19
there are ways in which you can read the RFID and some of the cards and some of these you know televised situations and
00:08:26
and front run what the what the playing situation is so that you know whether you're winning or losing and again I
00:08:31
just asked the question like is it is it is this are things that bad that this is what it gets to like we all
00:08:38
play poker the idea that we would play against somebody that would take that edge
00:08:42
yeah it's gross yeah it's really makes me really it's sad so disappointing yeah it's horrible one one observation might
00:08:50
be that across all three because I'm trying to find some common thread across these but it could be that there was a
00:08:56
lot of cheating going on for a long time and maybe the fact that we do have so much digital imagery that's live on
00:09:06
these things now and so much coverage and everyone's got a cell phone that suddenly
00:09:11
our perception of the cheating in competitive events is becoming more tuned whereas maybe there's been a
00:09:19
lot of cheating for a long time and it's just kind of coming to light I mean we didn't have a lot of live streaming in
00:09:25
poker who knows I mean we could probably ask Phil this we're kidding but like for
00:09:30
how many years well there was Visions yeah well there were tons of cheating and online poker yeah remember like
00:09:37
people are using these like software programs that would uh track the hand history yeah of your opposition yeah
00:09:45
exactly so so it helped you assess whether the person might be bluffing in that particular situation yeah like he has
00:09:51
superhuman memory so I don't know if you guys I don't know if you guys watch Twitch like video games like fortnite or
00:09:56
whatever but there are like players that have been accused of using the screen overlay systems that basically more
00:10:03
accurately show you and drive the mouse to where an individual is on the screen so you can more accurately shoot them
00:10:08
and so there's software overlays that make you a better you know competitive video I'll tell you
00:10:14
what the through line is and then this the stuff basically became like so now what's interesting is now there's eye
00:10:21
tracking software that people are using on Twitch streams to see if the individual is actually spotting the
00:10:28
target when they shoot or if the software is spotting the target yeah they're called reverse team Bots they're
00:10:33
aimbots yeah yeah and like reverse cheap the whole thing and I think what's interesting is just that there's so much
00:10:38
you know Insight now so much more video streams so much more I mean think about all those guys
00:10:44
yeah and there's cell phones and they all videoed this thing happening yeah I think 10 years ago that wouldn't have
00:10:49
been the case and there wouldn't have been a big story about it and so you said there was a theme you wanted to uh
00:10:54
there was a threat I I think the theme is is pretty obvious which is that there's been an absolute decay
00:11:00
of personal responsibility people don't feel like there's any downside to cheating anymore and they're
00:11:07
not willing to take it upon themselves to take a journey of wins and losses to get better at something they want the
00:11:13
easy solution the easy solve the quick answer you know that gets them to some sort of finish
00:11:20
line that they've imagined for themselves will solve all their problems the problem is it doesn't solve any
00:11:26
problems and it just makes them a wholly corrupt individual yeah okay so let's talk about this Hustler Casino Live uh
00:11:33
cash game play there's this woman Robbie who is a new player apparently she's being staked in a very high stakes game
00:11:40
she's playing as a guy Garrett who is a very very um known winning cash game player
00:11:48
and it was a very strange hand on the turn all the money gets in she says she has a bluff catcher then she claims that
00:11:54
she had a thought she misread her hand now people are saying that the poker world seems to be 70 30 that
00:12:01
she cheated but people keep vacillating back and forth there was a lot of weird word salad that
00:12:08
she said that she had a bluff catcher which would normally be an ace then she said she thought she had a pair of
00:12:13
Threes And then she immediately said afterwards that he was giving her too much credit
00:12:18
they confronted her in the hallway she gave the money back because she supposedly loves production so all this
00:12:23
stuff sounds very weird one side says okay while this is happening because she's a new player the other side is
00:12:29
saying somebody was signaling her that she was good and giving her just a binary you're good because if you were
00:12:35
gonna cheat cheating with Jack high in a situation where you just put all in for
00:12:39
a 200 quarter million dollar pot seems very suspect uh I don't know if you guys watched the
00:12:45
hand breakdown where does everybody stand on a percentage basis I guess if they think she was cheating or not
00:12:51
because we this is not definitive obviously it's not like they cut it open and found the ball bearings it's not
00:12:55
it's not so obvious in that situation but I think the way that that line played made no sense
00:13:03
and I guess in her previous hand she had a jack three and there was a three on the board so if she misread her hand was
00:13:12
ten ten nine three no but you would have but you would have you would have had to
00:13:15
call the Flop so I'm thinking what yeah no I get it the hand makes no sense but I'm just trying to find a logical
00:13:21
explanation and that Jack three explanation somebody kind of fed that to her and then she changed her story to
00:13:28
that so this changing of the story is the thing I was sort of keyed on Friedberg is why does she keep changing
00:13:33
her story is it because she's embarrassed maybe she's had a couple of beverages or whatever
00:13:38
or she's just a new player and she's embarrassed by her play and can't explain it she can't explain the hand
00:13:43
history all of the things you're saying are probable I don't think that yeah I don't think
00:13:48
there's any data for us to have a strongly held point of view on this I'm just looking forward to us all playing
00:13:54
live yeah HCL Poker Live October 21st minus David Sachs unfortunately to mop J Cal gerthner
00:14:02
Stanley Tang Phil Hellmuth so we're going to be playing on the same stream we're gonna be playing on the same
00:14:07
screen same table I figured out how to hack into the video stream for the camera I just got my RFID sunglasses as
00:14:13
well I'm gonna read all your shitty hands jaycal I'm gonna take your money and I'm gonna buy your kids
00:14:18
for my 40th birthday Sky organized poker in Tahoe okay and and we we brought in the team from CBS that was the present
00:14:27
and they they taped it as if it was being broadcast with whole cards and commentators and we edited it into a
00:14:33
two-day show it was an incredible birthday present I I it was it's one of the greatest things that that anybody's
00:14:39
ever given me I appreciate there was a one hour block where somebody at the table said okay guys how
00:14:46
about we do a cheating free-for-all yes where you could look at each other's cards and you know you could sort of
00:14:52
help somebody else switch cards whatever in that one hour our beautiful home game of friendship
00:14:59
became Lord of the Flies I have never seen so much hatred Angling Behavior oh my God it was incredible
00:15:10
all that humans are capable of so I I hope that we never uh we never we never see cheating in our game yeah well we'll
00:15:16
see how it goes on October 21st at HCL Poker Live I'm excited I can't wait it should be a
00:15:22
lot of fun it should be a lot of fun oh and uh we're not having any official 100
00:15:26
stuff but the fans uh some of the fans who were at the um all in Summit 2022 are doing
00:15:34
uh their own 100 episode 100 meetups on October 15th I think all in meetups.io so there are fan meetups happening in
00:15:43
Zurich in a bunch of other places I'm going to FaceTime into some of them and just say hi to the fans you know it
00:15:47
might be like 10 people in a bar somewhere um I think the largest one is like Miami
00:15:52
or San Francisco are going to be like 50 people or something we should all FaceTime it that'd actually be kind of
00:15:56
fun I I'm basically I told them to send me an invite and I'll FaceTime in any time this is next week when is this the
00:16:03
15th I think is this occurring the October 15th it's a Saturday the Saturday after the 100th episode people
00:16:09
are doing these all in meetups.io what's next earlier this week it was reported that Elon contacted Twitter's board and
00:16:18
suggested that they move forward with closing the transaction at the original terms and the original purchase price of
00:16:24
54.20 cents a share in the couple of days since then and even as of right now with some news reports coming out here
00:16:31
on Thursday morning um it's it appears that there are still some question marks around whether or
00:16:36
not the deal is actually going to move forward at 5420 a share because Elon as of right now the report said is still
00:16:43
asking for a financing contingency in order to close and there's a lot of back and forth on what the terms are
00:16:48
meanwhile the court case in Delaware is continuing forward on whether or not Elon breached his terms of the original
00:16:55
agreement to close and buy Twitter at 54.20 as we know leading up to the signed deal or a post signing the deal
00:17:04
Elon put together a financing Syndicate a combination of debt investors as well as Equity co-investors with him to do
00:17:11
the purchase of Twitter at 54.20 a share so the 40 some odd billion dollars of capital that's needed was committed by a
00:17:20
set of investors that were going to invest debt and equity and there's a big question mark now on whether or not
00:17:25
those investors want to or would still consummate the transaction with Elon given how the markets have turned and
00:17:31
given how debt markets are trading and Equity markets are trading so chimath I'd love to hear your point of view on
00:17:37
what um hurdles Does Elon still have in front of him does he still want to get this done and is there still a financing
00:17:43
Syndicate that's standing behind him at the original purchase price to get it done
00:17:47
that's a great question um maybe the best way to start is Nick do you want to queue up what I said in
00:17:53
August 25th the lawsuit really boils down to one very specific clause which is the Pinnacle
00:18:00
question at hand which is there is a specific performance Clause that Elon signed up to
00:18:08
right which you know his lawyers could have struck out and either chose not to or you know couldn't get the deal done
00:18:15
without and that specific performance Clause says that Twitter can't force him to close at 5420 a share
00:18:24
and I think the the issue at hand at the Delaware business court is going to be that because Twitter is going to point
00:18:30
to all of these you know gotchas and disclaimers that they have around this bot issue
00:18:36
as their cover story and I think that really you know this kind of again builds more and more
00:18:44
momentum in my mind that the most likely outcome here is a settlement where you have to pay
00:18:53
the economic difference between where the stock is now and 5420 which is more than a billion dollars
00:19:00
or you close at some number below 54.20 cents a share and I think that that is like you know
00:19:08
if you had to be a betting person that's probably and if you look at the the way the stock is traded and if you
00:19:14
also look at the way the options Market trades that's what people are assuming that there's a seven to ten billion
00:19:19
dollar swing and if you impute that into the stock price you kind of get into the fifty one
00:19:25
dollars a share kind of a an acquisition price again I'm not saying that that is
00:19:29
right or should be right that's just sort of what the market says yeah so so I it turns out that you know sort of
00:19:35
like that kind of guessed him it turned out to be pretty accurate because the stock today
00:19:39
is at 51 this year so I think that the specific performance thing is exactly what this thing has always hinged on and
00:19:47
I think that there was a realization that there were very few outs around how that contractual term was written and
00:19:53
agreed to so there is an out in the contract and that out says that I think it's by April if um if the deal doesn't
00:20:02
get done by April then the banks can walk away from their commitment to fund the debt and if the banks walk away then
00:20:09
Elon does have a financing contingency that allows him to walk away so the actual set of events that have to happen
00:20:16
is those two things specifically get to April so the banks can pass and say we've changed our mind market conditions
00:20:22
are different and then Elon is able to say well you know the banks just walked away right now the banks if you look at
00:20:29
all of the debt that they've committed to while they committed at a point in time
00:20:34
when the debt markets were much better than they are today in the last you know six or seven months since they agreed to
00:20:41
do this the debt markets have been clobbered and specifically junk bonds and a bunch of junk bond debt the yields
00:20:48
that you have to pay so the price to get that kind of debt has skyrocketed so roughly back of the envelope math would
00:20:55
tell me that right now the banks are offside between one and two billion dollars because they're not going to be
00:21:00
able to sell this debt to anybody else so I think the banks obviously want to weigh out the problem is their only way
00:21:06
out is to run the shot clock off until April so I think that's the dance that they're in right now elon's trying to
00:21:13
find a way to solve you know for the merger I think Twitter is going to say we're
00:21:17
not going to give you a financing contingency you have to bring the banks in and close right now and then we will
00:21:22
not go to court otherwise we're going to court and so I think it's a very delicate
00:21:28
predicament that they're all in but my estimate is that the equity is probably 20 percent offside so it's not a huge
00:21:35
thing he can make that up because he can create Equity value like nobody's business
00:21:39
the debt is way offside by a couple billion dollars which is hard to make back but I think
00:21:44
in the end you know given enough time they can probably make that back the best off in all of this are the
00:21:50
Twitter shareholders they're getting an enormous premium to what that company is
00:21:55
worth today in the open market and so I think this deal is going to close it's probably going to close in
00:22:00
the next few weeks and had you bought Twitter when we were talking about it in August you would have made 25 in six
00:22:07
weeks and you know if the deal closes at 54 you would have made it you know a third of your money in eight weeks which
00:22:12
is you know very hard to do in a market if you're a GP at one of the funds like Andreessen or Sequoia
00:22:19
and you had made this commitment to Elon or even Larry Ellison a couple months ago
00:22:25
do you fight against closing at 5420 do you stick with the deal and support him I mean what do you do given that the
00:22:32
premium is so much higher than where the market would trade it at today some people are saying the stock should be at
00:22:37
like 20 bucks a share or something the average premium in an m a transaction in the public markets is about 30 percent
00:22:43
so um and I think the fair value of Twitter is around 32 to 35 bucks this year so you know it's not like he is
00:22:52
massively massively overpaying and so you know I would just sort of keep that in the realm of the possible
00:22:59
so like if you take 35 as the midpoint fair value is really 45.50 so yeah he paid 20 more than he should have but he
00:23:07
didn't pay a hundred percent more so it's not as if you can't make that Equity back as a private company
00:23:13
particularly because there's probably ten dollars of fat in the stock if you think about just Opex right in terms of
00:23:19
all the buildings they have maybe they don't need as many employees maybe they revisit salaries you know one thing is
00:23:25
when I looked at doing an activist play at Twitter I think I mentioned this five
00:23:30
or six years ago one of the things that I found was at that time Twitter was running their own data centers and you
00:23:36
know the most obvious thing for me at that time was like we're going to move everything to AWS now I don't know if
00:23:40
that happened but I'm sure that if it hasn't just bidding that out to Azure gcp and AWS can raise you know three or
00:23:48
four billion dollars because I'm sure those companies would want this kind of an app on their cloud
00:23:53
so there's all kinds of things that I think Elon can do as a private company to make back maybe the small bit that he
00:23:59
overpaid and then he can get to the core job of rebuilding this company to be usable uh this product to be usable
00:24:05
because look I'll just speak as a user right now it has been decaying at a very very
00:24:11
rapid clip and I think that his trepidation in closing the merger in part also even though he hasn't said
00:24:18
it has to do with the quality of the experience it's just degraded it's not as fun to use as it was during the
00:24:25
pandemic um or even before the pandemic so something is happening inside that app
00:24:30
that needs to get fixed and if he does it he'll make a ton of money sort of like what happened with Friendster and
00:24:35
Myspace and any social networking app over time the quality degrades if it's not growing it's shrinking and it gets
00:24:41
if it if it's if it's not growing and also if the product hygiene isn't enforced in code and product hygiene in
00:24:48
this case are this you know the spam Bots you know the trolling it can really take away from the experience yeah I
00:24:57
mean interestingly like if you think back to the original the the starting Days the original days of Twitter I
00:25:02
don't know if you guys remember you would send in an SMS to do your Tweet and then it would post up and other
00:25:08
people would get the SMS notification and um it would crash all the time and the apps were the app was notoriously
00:25:15
crashing it was poorly architected at the beginning and some people have argued that Twitter has had
00:25:22
a cultural technical incompetence from the earliest days I think that's a little harsh so I do think look Twitter
00:25:28
was known for what's called a fail whale you know they used to have these fail whales constantly
00:25:33
and they did hire people that attempted to try to fix it I remember the the funniest part of when I went in there
00:25:40
and said hey here's my plan and here's what I want to do is literally a day or two later the head of engineering quit I
00:25:46
can't remember who his name was but he was just out the door uh but it is a I think it is a team that has tried its
00:25:56
best that probably at the edges definitely made some technical miscalculations like
00:26:02
I said at that time the idea that any app of that scale would use their own data centers made note technical sense
00:26:09
whatsoever it made the app laggy it made it hard to use it made it more prone to
00:26:13
downtime to your point but that being said I would be shocked if they haven't made meaningful
00:26:18
improvements because the stack of the internet has gotten so much better over the last seven years and so to your
00:26:24
point David if they didn't take advantage of all these new abstractions and mechanisms mechanisms to rebuild the
00:26:30
app or to rebuild search or to rebuild you know how you know all these infrastructure elements of the app work
00:26:36
I would be really surprised because then what are they doing over there yeah well
00:26:40
look I mean to the point earlier besides the product points there was a a really good
00:26:46
a tweet I liked that said for what it's worth I think Elon will show us just how lean the
00:26:53
Silicon Valley Advertising companies can be run at the very least it'll be an interesting thought experiment for
00:26:58
spectators um because if he does go in and actually does significantly reduce Opex and head
00:27:03
count and the company does turn profitable and he can grow it well look it'll really by the way it'll really be
00:27:09
a beacon from the financial big companies yeah from a financial perspective there is ten dollars a share
00:27:15
in Opex cuts that he should make right away just so that he is economically break even and he looks like every other
00:27:21
m a transaction you know you paid a 30 premium and you bought a company there is a lot of margin of safety there if
00:27:27
Elon does that so to your point there probably is and there probably needs to be a meaningful riff at Twitter I'm not
00:27:33
saying it's right I'm not saying it's you know and I feel for the people that may go through it but from a financial
00:27:37
perspective the math makes sense for him to do that because then he is a break even proposition on a go in m a
00:27:45
transaction and I think that there's there's a lot of intelligent Financial sense so that all the debt holders feel
00:27:51
like he's doing the right thing and all the equity holders particularly see a chance for them to make a decent return
00:27:57
here all right well let's move on conversation a great conversation between Dave Friedberg uh about
00:28:07
the Twitter transaction and now we're being rejoined by our besties yeah how was your cappuccino Jayco that
00:28:16
was great I have a I have a nice cold brew here a nice iced Cobra and a nice drip coffee I'm working but I'd love to
00:28:23
talk about topics that I'm not uh being subpoenaed or depositioned about we will
00:28:27
have a lot to say in the coming weeks I'd love to talk about topics that my lawyers have advised me not to talk
00:28:31
about how Eerie was our prediction 51 bucks a sharing it is exactly where the stock is right now that's Yuri
00:28:38
yeah uh all right lots of advances let's keep going yeah speaking of Elon uh Tesla AI day
00:28:45
was last week I actually went it was great uh this is a recruiting event where what did you do after Fel helmuth
00:28:52
and I went and uh I drove Phil home youth home uh the end uh no it's a great event and
00:28:59
it uh is essentially a giant recruiting event hundreds of AI sorry sorry I'm sorry I'm sorry can we just talk about
00:29:06
Phil hamley's non-sequitur in the group chat about Ken Griffin I mean oh yeah where he's just like I
00:29:14
made a joke about his net worth and what he's going on what is going on we were talking about the most serious of topics
00:29:20
and he just comes seven seconds to fill it's what's going on seven seconds to fill by the way I uh I I was uh texting
00:29:27
with uh Daniel negranu he did an incredible podcast if you guys with Lex Friedman if you haven't listened to it
00:29:34
the Daniel negronu uh pod with Lex is incredible but I I was joking with Daniel that there's a section where he's
00:29:41
talking about the greatest poker players of all time and if you look in the bar of YouTube it shows where the most
00:29:47
viewership was and it was exactly the 30 seconds he talks about helmuth and I said to Daniel this must have been Phil
00:29:54
re-watching it over so anyway the event was um uh super impressive Elon only spoke when he showed The
00:30:12
Optimist the new robot he's building a a general purpose robot that will work in
00:30:17
the factories it's very early days but they showed two versions of it and um he said he thinks they could get it down to
00:30:24
twenty thousand dollars it's going to work in the factory so it's actually got a purpose
00:30:27
and obviously the factors already have a ton of robots but this is more of a robot that uh will benefit from the
00:30:34
general or the the computer vision and the AI the narrow AI being pursued by the self-driving team this is like
00:30:42
two and a half hours of really intense presentations um the most interesting part for me was
00:30:46
uh they're building their own super computer and their chips and the dojo supercomputer was really impressive
00:30:55
um at how much they can get through uh scenarios so they're building every scenario of every self-driving I
00:31:01
actually have the full self-driving beta on my car I've been using it it's pretty
00:31:06
impressive I have to say if you haven't used it yet I feel like AI is moving at a pretty Advanced clip
00:31:15
the past year if you haven't also seen meta announced a text to video generator so this is even more impressive than
00:31:22
dolly dolly you put in a couple of words Friedberg and you get a painting or whatever
00:31:27
this is put in a couple of words and you get a short video so they had one of a teddy bear painting a teddy bear
00:31:33
so it looks like you're going to be able to essentially create a whole movie by just
00:31:39
talking to a computer really impressive where do you think we are Freeburg in terms of
00:31:46
the compounding nature of these narrow AI efforts you know obviously we saw poker chess go Dolly gpt3 self-driving
00:31:55
it feels like this is all compounding at a faster rate or am I just you imagining that yeah
00:32:02
look I mean it's interesting when when people saw the first computer playing chess they said the same thing I think
00:32:07
any time that you see progress with a computer that starts to mimic the predictive capabilities of a human
00:32:14
it it it's uh it's impressive but I will argue and I just I'll say a few words on
00:32:20
this it's I think this is part of a 60-year cycle that we've been going through um fundamentally what humans and human
00:32:28
brains do is we can sense our external environment then we generate Knowledge from that sensing and then our brains
00:32:36
build a model that predicts an outcome and then that that predicted outcome is what drives our actions and our Behavior
00:32:42
we observe the sunrise every morning then we observe that it sets and you see that enough times and you build a
00:32:47
predictive model from that data that's been generated in your brain that I predict that the sun has risen it
00:32:53
will therefore set it has said it will therefore rise and I think that the Computing approach is very similar it's
00:32:59
all about sensing or generating data and then creating a predictive model and then you
00:33:03
can drive action and initially the first approach was just basic algorithms and these are deterministic models that are
00:33:11
built it's a piece of code that says here's an input here's an output and that that model is really built by a
00:33:17
human and a human designed to design that algorithmic model and said this is what the uh the predictive potential of
00:33:24
the software is then there was this term called data science so as data generation began to proliferate meaning
00:33:30
there was far more sensors in the world it was really cheap to to create Digital
00:33:34
Data from the physical world really cheap to transmit it really cheap to store it and really cheap to compute
00:33:39
with it data science became the hot term in Silicon Valley for a while and these
00:33:43
models were not just a basic algorithm written by a human but it became an algorithm that was a similar
00:33:49
deterministic model that had parameters and the parameters were ultimately resolved by the data
00:33:56
that was being generated and so these models became much more complex and much more predictive finer granularities uh
00:34:02
finer range then we used this term machine learning and in the data science era it was still like hey there's a
00:34:09
model and you would solve it statically you would get a bunch of data you would statically solve for the parameters and
00:34:15
that would be your model and it would run machine learning then allowed those parameters to become Dynamic so the
00:34:21
model was static but generally speaking the parameters that drove the model became dynamic as
00:34:27
more data came into the system and they were dynamically updated and then this era of AI became and that's the new
00:34:33
catch word and what AI is realizing is that there's so much data that rather than just resolve the parameters of the
00:34:40
model you can actually resolve a model itself the algorithm can be written by the data the algorithm can be written by
00:34:46
the software and so with a with AI example so poker plug an Adaptive model so people uh so you're playing poker and
00:34:55
the software begins to recognize behavior and it builds a predictive model that says here's how you're
00:34:59
playing and then over time it actually changes not just the parameters of the model but the model itself the algorithm
00:35:05
itself and so Ai and then it eventually gets to a point where the algorithm is so much more complex that a human would
00:35:11
have never written it and suddenly the AI has built its own intelligence its own ability to be predictive in a way
00:35:16
that a human algorithmic programmer would have never done and and this is all driven by statistics so none of this
00:35:23
is new science person say there's new techniques that all on their underlying use statistics as their basis and then
00:35:30
there's these techniques that allow us to build these new systems of model development like neural Nets and so on
00:35:35
and those statistics build those neural Nets they they solve those parameters and so on but fundamentally there is an
00:35:41
um geometric increase in data and a geometric decline in the cost to generate data from sensors because the
00:35:48
cost of sensors is coming down with Moore's Law transmit that data because the cost of moving data has come down
00:35:53
with Broadband Communications the cost of storing data because the cost of dram and and solid-state hard drives has come
00:36:00
down with Moore's Law and now the ability to actually have enough data to do this AI driven where people are
00:36:06
calling AI but it really is the same it's part of the spectrum of things that have been going on for 60 years to
00:36:11
actually drive predictions in the in the world is really being realized in a bunch of areas that we would have
00:36:16
historically been really challenged and surprised to see and so my argument is at this point Big Data played a big role
00:36:23
yeah yeah we've over the last decade we've reached this Tipping Point in terms of data generation storage and
00:36:28
computation that's allowed these statistical models to resolve dynamically and as a result they are far
00:36:35
more predictive and as a result we see far more human-like behavior in the predictive systems both physics both
00:36:41
those that are you know like a like a robot is the same as one that existed 20 years ago but the way that it's run is
00:36:47
using the software that is driven by this Dynamic model and that data is for a better answer
00:36:55
okay I have two things to say but one the first one is a total non-sequitur so use the term data scientist do you know
00:37:01
where the term data scientist came from as classically used in Silicon Valley it
00:37:07
came from Facebook and it came from my team in a critical moment this was in 2007 I was trying to 2008 I was trying
00:37:13
to build the growth team this is the team that became very famous for getting 2 billion users and you know
00:37:20
building a lot of these algorithmic insights and I was trying to recruit a person from Google and he was like a PhD
00:37:28
in some crazy thing like astrophysics or particle physics or something and we gave him an offer
00:37:34
has a data analyst because this is what I needed at the time this is what I thought I needed an analyst you know to
00:37:39
analyze data and he said absolutely not I'm offended by the job title and I remember talking to my my HR you know
00:37:47
business process partner and I asked her like I don't understand what is this where is this coming from and she said
00:37:52
he Fashions himself a scientist and I said well then call him a data scientist so we wrote in the offer for the first
00:37:59
time data scientist and at the time people internally were like this is a dumb title what does this mean anyways
00:38:06
we hired the guy he was a star and uh and that title just took off internally so Rob it's funny because parallel we
00:38:13
started climate Corp in 2006 and the original the first guy I hired was a buddy of mine who was a 4.0 for in
00:38:18
applied math from Cal and then everyone we hired on with him we called them the math team and they were all applied math
00:38:25
and statistics phds and we called them the math team and it was really cool to be part of the math team but then we
00:38:31
switched the team name to data scientist and then it obviously created this much
00:38:35
more kind of impressive role impressive title Central function to the organization that was more than just a
00:38:42
math person or data analyst as I think it may have been classically treated because they really were building the
00:38:47
algorithms that drove the models that made the product work right Peter Thiel is a very funny observation not funny
00:38:53
but you know observation which is you should always be wary of any science that actually has science in the name
00:38:59
political science social science I guess maybe data scientists you know because the real Sciences don't need to qualify
00:39:05
themselves physics chemistry biology anyways that's so here's what I wanted to talk about with respect to AI two
00:39:12
very important observations that I think is useful for people to know the first one Nick if you throw it up here is just
00:39:18
a baselining of you know when we have thought about intelligence and compute capability we've always talked about
00:39:24
Moore's Law and Moore's Law essentially this idea that there is a fixed amount of time where the density of transistors
00:39:32
inside of a chip would double and roughly that period for many many years was around two years and it was largely
00:39:38
led by Intel and we used to equate this to intelligence meaning the more density
00:39:43
there was in a chip the more things could be learned and understood and we used to think about that as the
00:39:50
progression of how Computing intelligence would grow and eventually Ai and artificial intelligence would
00:39:57
would get to mass Market well what we are now at is a place where many people have said Moore's law has
00:40:04
broken why it's because we cannot cram any more transistors into a fixed amount of area we are at the boundaries of
00:40:12
physics and so people think well does that mean that our ability to compute will essentially come to an end and stop
00:40:20
and the answer is no and that's what's demonstrated on this next chart just to make it
00:40:25
simple which is that what you really see is that if you think about you know super computing power so the ability to
00:40:33
get to an answer that has actually continued unabated and if you look at this chart the reason why this is
00:40:41
possible is entirely because we've shifted from CPUs to these things called gpus so you may have heard companies
00:40:48
like Nvidia why is companies like Nvidia done so well it's because they said they
00:40:53
raised their hand and said we can take on the work and by taking on the work away from a
00:40:58
traditional CPU you were able to do a lot of what Freeburg said is get into these very complicated models so this is
00:41:05
just an observation that I think that we are continuing to compound knowledge and
00:41:11
intelligence effectively at the same rate as Moore's Law and we will continue to be able to do that because this makes
00:41:20
it a problem of power and a problem of money so as long as you can buy enough gpus from Nvidia or build your own
00:41:29
and as long as you can get access to enough power to run those computers there really isn't many problems you
00:41:36
can't solve and that's what's so fascinating and interesting and this is what companies like open AI
00:41:42
are really proving you know when they raise the billion dollars what they did was they attacked this problem because
00:41:48
they realize that by Shifting the problem to gpus it left all these amazing opportunities for them to
00:41:55
uncover and that's effectively what they have the second thing that I'll say very
00:41:59
quickly is that it's been really hard for us as a society to build intelligence in a multi-modal way like our brain
00:42:09
works so think about how our brain works our brain works in a multimodal way we can process imagery we can process words
00:42:16
and sounds we can process all of these different modes text into one system and then Intuit some
00:42:26
intelligence from it and make a decision right so you know we could be watching this YouTube video there's going to be
00:42:31
transcription there's video voice audio everything all at once and we are moving to a place very
00:42:37
quickly where computers will have that same ability as well today we go to very specific models and kind of balkanized
00:42:45
silos correct to solve different kinds of problems but those are now quickly merging again because of what I just
00:42:51
said about gpus so I think what's really important about AI for everybody to understand is the
00:42:58
marginal cost of intelligence is going to go to zero and this is where I'm just going to put
00:43:03
out another prediction of my own when that happens it's going to be incredibly important
00:43:10
for humans to differentiate themselves from computers and I think the best way for humans to differentiate ourselves is
00:43:17
to be more human it's to be less compute intensive it's to be more empathetic it's to be more emotional a lot less
00:43:25
emotional because those differentiators are very difficult for Brute Force compute to solve be careful the
00:43:31
replicants on this call are getting a little nervous here they're not processing that that was an emotional
00:43:36
statement do not want to process that one well I to your point uh during this AI day
00:43:42
um they were showing in self-driving as you're talking about this balkanization and trying to
00:43:48
um make decisions across many different uh decision trees you know they're looking at Lane changes they're looking
00:43:54
at other cars and pedestrians they're looking at road conditions like fog and rain and then they're using all this big
00:44:01
data to your point Freeburg to run uh tons of different simulations so they're building like this virtual uh World on
00:44:09
Market Street and then they will throw people dogs cars people about that into the simulation it's such a wonderful
00:44:16
example imagine that system hears a horn yeah well you hear a horn so clearly there's some auditory expression of risk
00:44:26
right there's something risky and now you have to scan your visual field you have to probabilistically
00:44:32
decide what it could be what the evasive maneuver if anything should be so that's
00:44:38
a multimodal set of intelligence that today isn't really available yeah but we have to get there if we're going to have
00:44:45
real full self-driving so that's a perfect example Jason a real world example of how hard the problem is but
00:44:50
it'll get solved because we can brute force it now with with chips and with compute I think that's going to be the
00:44:55
very interesting thing with the robots as well is all of these decisions they're making moving cars through roads
00:45:03
all of a sudden we're going to see that with vetoles vertical takeoff and Landing
00:45:08
you know aircraft and we're going to see it with this General robot and everybody
00:45:12
wanted to ask Elon about General AI you know the Terminator kind of stuff and his position is I think if we solve
00:45:19
enough of these problems Friedberg it'll be an emergent Behavior or an emergent phenomenon I
00:45:25
guess would be a better word based on each of these cities crumbling you know each of these tasks getting solved by
00:45:31
groups of people you have any thoughts as we wrap up here on the discussion about a general Ai and the timeline for
00:45:37
that because obviously we're going to solve every vertical AI problem in short order I spoke about this a little bit on
00:45:43
um the ask AMA on call in on Tuesday night um once sax gets it out you can listen to it but I really have this
00:45:51
strong belief that the servers crashes this episode drops okay yeah you guys can try to download the app but it might
00:46:00
crash so just be careful so so here's here's my my course that you were 10 times more popular than jaycal so it's
00:46:08
unexpected levels of traffic well you had you did have an account with 11 000 followers I mean it might
00:46:14
look like you're right we'll put you on that account next time yeah please yeah I'm starting from zero yeah that's fair
00:46:21
that's fair yeah look my core thesis is I think humans transition from being um let's call it you know passive in
00:46:29
this system on Earth to being laborers and then we transition from being laborers to being creators and I think
00:46:36
our next transition with AI is to transition from being creators to being narrators and what I mean by that is as
00:46:42
as we started to do work on Earth and engineer the world around us we did labor to do that we literally plowed the
00:46:49
fields we walked distances we built things and over time we built machines that automated a lot of that labor
00:46:57
you know everything from a plow to a tractor to a caterpillar equipment to a microwave that cooks for US Labor became
00:47:05
less we became less dependent on our labor abilities and then we got to switch our time and spend our time as
00:47:10
creators as knowledge workers and a vast majority of the developed world now primarily spends their time as knowledge
00:47:18
workers creating and we create stuff on computers we do stuff on computers but we're not doing physical labor anymore
00:47:24
as a lot of the knowledge work gets supplanted by AI as it's being termed now but really gets supplanted by
00:47:31
software the role of the human I think transitions to being one of a narrator where instead of having to create the
00:47:37
the blueprint for a house you narrate the house you want and the software creates the blueprint for you dictate
00:47:43
and instead of yeah and instead of creating the movie and not spending 100 million dollars producing a movie you
00:47:49
dictate or you narrate the movie you want to see and you iterate with the computer and the computer renders the
00:47:54
entire film for you because those films are shown digitally anyway so you can have a computer render it instead of
00:47:59
creating a new piece of content you narrate the content you want to experience you create your own video
00:48:06
game you create your own Movie experience and I think that there's a whole Evolution that happens and if you
00:48:10
look Steve pinker's book Enlightenment now has a great statistic a set of statistics on this but the amount of
00:48:16
time that humans are spending on leisure activities per week has climbed extraordinarily over the past couple of
00:48:22
decades we spend more time enjoying ourselves and exploring our creative interests than we ever did in the in the
00:48:28
past in human history because we were burdened by all the labor and all the creative and knowledge work we had to do
00:48:32
and now things are much more accessible to us and I think that AI allows us to transition into an era that we never
00:48:39
really thought possible or realized where the limits are really our imagination of what we can do with the
00:48:44
world around us and the software resolves to the um and automation resolves to make those things possible
00:48:50
and that's making a really exciting kind of vision for the future that I think AI
00:48:53
enables Star Trek had this right people didn't have to work and they could pursue things in the Holodeck or
00:48:58
whatever that they felt was rewarding to them but speaking of jobs uh the job reports for August came in we we talked
00:49:06
about this we were trimming 300 000 jobs a month and we're wondering if the other
00:49:11
shoe would drop but boy did it drop 100 over a million jobs burned off in August
00:49:16
so without getting into the macro talk it does feel like what the FED is doing and companies
00:49:22
doing hiring freezes and cuts is finally finally having an impact if we start losing a million as we predicted could
00:49:28
happen here on the show people might actually go back to work and lift and Uber are reporting that the
00:49:36
driver shortages are over they no longer have to pay people spiffs and stuff like
00:49:40
that to get people to come back to work so at least here in America feels like we're turning a corner do we want to go
00:49:45
can we let's talk about the marijuana yeah yeah I was about to say we got a couple of things we really want to get
00:49:52
to here uh Ukraine section 230 and then this breaking news uh we'll pull it up here on the screen
00:49:58
while we're recording the show President Biden says and I'm just going to quote here
00:50:04
first I'm pardoning all prior Federal offenses of simple marijuana possession there are
00:50:10
thousands of people who are were previously convicted of simple possession who may be denied employment
00:50:15
housing or educational opportunities there's not my pardon will remove this burden that's big news second I'm
00:50:20
calling on Governors to part in simple State marijuana possession offenses just as no one
00:50:26
should be in a federal prison solely for possessing marijuana nobody should be in
00:50:29
a local jail or state prison for that reason either finally this is happening third and this is an important one we
00:50:36
classify the marijuana at the same level as heroin and even and more serious than
00:50:40
fentanyl makes no sense I'm asking secretary bakara and the Attorney General to initiate the process of
00:50:48
reviewing how marijuana is scheduled under federal law I'd also like to note that as federal
00:50:53
and state Regulators change we still need important limitations on trafficking marketing and under eight
00:50:58
hours of marijuana thoughts on this breaking news is this giving the the timing on this is kind of
00:51:06
midterm related it just seems is this is this I guess is this a politically popular
00:51:11
decision to do I think so I mean look I support it so buying finally did something I like
00:51:18
great I mean I thought that we should decriminalize marijuana for a long time or specifically you know I agree with
00:51:27
this idea of descheduling it it does not make sense to treat marijuana the same as heroin as a schedule one narcotic
00:51:34
just doesn't make any sense it should be regulated separately and differently obviously you want to keep it out of the
00:51:40
hands of minors but no one should be going to jail I think for simple possession so I do agree with this and I
00:51:45
think the thing they need to do I don't see it mentioned here is they should pass a federal law that would allow for
00:51:53
the normalization of let's call it legal legal um you know cannabis companies so so
00:52:01
companies that are allowed to operate under state laws like in California should have access to the banking system
00:52:08
should have access to payment rails because right now the reason why the legal cannabis industry isn't working at
00:52:14
all in California is because they can't bank they can't take payments so so it's
00:52:19
this weird all-cash business that makes no sense so so listen if we're not going
00:52:23
to criminalize it as a drug like heroin if we're going to allow states to make it legal then allow it to be a more
00:52:31
normal business where the state can tax it and it can operate in a more above board way
00:52:38
is what you're saying the federal medic I think it could still be regulated on a
00:52:42
state-by-state basis but I think you need the feds to bless the idea that Banks and payment companies can take on
00:52:49
those clients which states have already said are legally operating companies and
00:52:54
right now they can't and it's a huge gap in the laws so maybe that's the one thing I would add to this but I don't
00:53:00
have any complaints about this right now based on what we know from this tweet storm and I would say this by the way
00:53:06
was an about face this was an about faced by Biden yeah do you know what the polling data says I mean is is there I'm
00:53:12
assuming there's big support in kind of the independence and the middle uh for this it was 70 at one point yeah
00:53:19
yeah so so look this to me this is the kind of thing that Biden should be doing with
00:53:24
the 50 50 Senate finding these sorts of bipartisan compromises right so yeah I look this is good news for us
00:53:31
why hasn't this happened in the past like what's been the political reason that other presidents Obama even
00:53:40
didn't that that have there was a similar ideology like why why but why does anyone know why this hasn't been
00:53:45
done in the past there was rumors he was going to do in the second term they just didn't have the political
00:53:50
Capital why to do it why I don't I don't well it's hard ones doesn't require yeah
00:53:55
the pardon doesn't require political capital I think it's probably the perception that this is soft on crime in
00:54:01
some way or there wasn't enough broad-based support as David said I mean I think the the United States population
00:54:07
has moved pretty meaningfully in the last 20 years look at the chart here um you know we were talking about 2000
00:54:14
it was only 31 percent uh and then you look at 2018 it's up at 60 plus percent so when people saw the states doing it
00:54:22
and they saw absolutely no problem you know in every state and I think what people will see next I think that's a
00:54:28
Gallup poll that's a Gallup pollution yeah yeah so I mean it's increased dramatically MDMA psilocybum and some of
00:54:34
these other plant-based medicines Ayahuasca are next and they're doing studies on them now I don't want to take
00:54:39
away from how important this is for uh all the people for whom this will positively impact I just want to talk
00:54:45
about the schedule change for marijuana as a parent one of the things that I'm really really concerned about is that
00:54:52
through this process of legalization getting access to marijuana has frankly become too easy particularly for kids
00:55:00
at the same time I saw a lot of really alarming evidence that the the intensity of these marijuana-based products have
00:55:09
gone you know I think it's like five or six times more intense than I don't know
00:55:13
50 or 100 tomorrow much higher right so so it's no longer you know this kind of like you know Do no harm drug that it
00:55:22
was 20 years ago this is this could be actually David the way that it's productized today as bad as some of
00:55:30
these other you know uh narcotics so in June of this year the Biden Administration basically made
00:55:38
this press release that said the FDA is going to come out with regulations that would cap the amount of nicotine in
00:55:45
cigarettes and I think that was a really smart move because it basically set the
00:55:49
stage to taper nicotine out of uh out of cigarettes which would essentially you know decapitate it as a an addictive
00:55:58
product and I think by thinking about how it's how it's dealt with what I really hope the
00:56:05
administration does is it empowers the FDA if you're going to legalize it you need to have expectations around what
00:56:14
the intensity of these drugs are because if you're delivering drugs OTC and now any kid can go in at 18 years old and
00:56:20
buy them which means that 18 year olds are going to buy them for 16 year olds 16 year olds are going to get fake IDs
00:56:26
to buy them for themselves you need to do a better job so the parents you're helping parents do our job here's what
00:56:32
you need one like alcohol if alcohol is 21 then of course yeah fine but even alcohol David you know
00:56:40
that there are there are we know what the intensity of these are their labels and there's warnings and you know the
00:56:45
difference between they're they're getting wine versus hard alcohol but let me just give you some statistics here
00:56:50
chamoth if you think about the the Cannabis in the 90s uh and prior to that uh they've been very you've been a ton
00:56:57
of studies on this in Colorado it was uh the THC content was less than two percent
00:57:02
and then in 2017 we were talking about you know things going up to uh 17 to 28 for a specific
00:57:11
strain so they have been building strains like Girl Scout cookies Etc that have just increased and increased and
00:57:16
then there are things like shards and obviously Edibles you can create whatever intensity you want so you have
00:57:22
this incredible there you know variation you could have an edible that's you know got one milligram of THC
00:57:29
one that has a hundred or you could have a pack of Edibles and you see this happen in the news all the time some kid
00:57:34
gets their parents pack or somebody gives one and the kids don't know um and this dabbing phenomenon combined with
00:57:40
dabbing is like the shards like this really intense uh stuff combined with the Edibles is really the
00:57:46
issue and the labeling of them so you got to be incredibly careful with this it's not good for kids it screws up
00:57:52
their brains and so yeah be very careful I have a I have a zero tolerance policy on this stuff I
00:57:57
don't care if it's legal illegal like I don't want my kids touching any of this stuff until it's not for kids obviously
00:58:02
yeah but we also should not be over there until they're 35 or 40 and even then I hope they never do it but but I
00:58:07
need some help and I'm not sure I'm the only parent that's asking you can't have this stuff
00:58:12
be available effectively sold like in a convenience store no no that's not going
00:58:17
to happen where there isn't even labeling at least like cigarettes are labeled it's very clear how bad this
00:58:22
stuff is for you oh do you guys have any feedback on the job report or anything they're all going away when when the
00:58:26
when the AI wins well that's why I brought it up it's like we're now going to see a potential
00:58:32
you know a situation where Jobs go away and a lot of the stuff like even developers right don't you think
00:58:37
Freiburg developers are going to start development tasks everyone assumes a static lump of work I
00:58:45
think what happens particularly in things like developer tools is the developer can do so much more and then
00:58:52
we generate so much more output and so the overall productivity goes up not down
00:58:56
um so it's pretty exciting as these and remember like like we were talking on the AMA the other night Adobe Photoshop
00:59:03
was a tool for photographers so you didn't have to take the perfect photograph and then print it you could
00:59:08
you know you could use the software to improve the quality of your photograph and I think that that's what we see
00:59:13
happening with all software um in the creative process is it helps people do more than they realized they
00:59:18
could do before and that's pretty powerful and it opens up all these new avenues of interest and things we're not
00:59:23
even imagining today all right so scotus is going to hear two uh cases for Section 230
00:59:28
the family of nohima Gonzalez a 23 year old American college student who was killed in an Isis terrorist attack in
00:59:35
Paris back in 2015. you remember those horrible attacks is claiming that YouTube helped and aided and abetted
00:59:41
Isis uh the family's argument is YouTube's algorithm was recommending videos that make it that makes it a
00:59:48
publisher of content as you know it's section 230 common carrier now if you make editorial decisions if you promote
00:59:53
certain content you lose your 230 protections uh in court papers filed in 2016 they said the company quote
01:00:00
knowingly permitted Isis to post on YouTube hundreds of radicalizing videos inciting violence which helped the group
01:00:06
recruit including some who were actually involved in the terrorist attack so they
01:00:10
have made that connection well look let's let's be honest we can we can we can put a pin in this thing because I
01:00:15
think it would be shocking to me if this current scotus uh all of a sudden founded in the
01:00:22
cockles of their heart to protect big Tech I mean they've dismantled um a lot of other stuff that I think is
01:00:31
a lot more controversial than this um and so you know we've we've basically looked at gun laws we've looked at
01:00:39
affirmative action we've looked at abortion rights sorry well I mean I think as as we've said I think we all
01:00:46
know where that dye is unfortunately going to get cast um so to me it just seems like this
01:00:52
could be an interesting case where it's actually nine zero in favor for complete for completely
01:00:58
different sets of reasons I mean if you think of the liberal left part of the Court they have their own reasons for
01:01:03
saying that there aren't 230 protections for big Tech and if you look at the the
01:01:06
far right or the right-leaning Parts members of this of scotus they have they have another set of different do you
01:01:12
think you're gonna make a political decision not illegal no but even even in their politics they actually end up in
01:01:17
the same place they have protections but for different reasons so there there's a reasonable outcome
01:01:23
here where you know uh Roberts is going to have a really interesting time trying
01:01:27
to pick who writes the majority opinion there was a related case in the fifth circuit in Texas where do you guys see
01:01:33
this fist circuit decision where Texas passed a law imposing common carrier restrictions on social media
01:01:41
companies the idea being that social media companies need to operate like phone companies and they can't just
01:01:47
arbitrarily deny you service or deny you access to the platform and the argument
01:01:53
why previously that had been viewed actually is unconstitutional was this idea of compelled speech that you can't
01:02:00
compel a corporation to support speech that they don't want to because that was a violation of their own First Amendment
01:02:06
rights and with the first the fifth circuit said is no that doesn't make any sense Facebook or Twitter can still
01:02:12
advocate for whatever speech they want as a corporation but as a platform they if Texas requires them to not
01:02:20
discriminate against people on the base of their Viewpoint then Texas has the right to to impose that because that
01:02:26
doesn't it their quote was that does not chill speech if anything it chills censorship so what's the right legal
01:02:32
decision here in your mind putting aside politics if you can for a moment but on
01:02:37
your legal hat what is the right thing for society what is the right legal issue around section 230 specifically in
01:02:43
the YouTube case and just generally should we look at YouTube should we look at a blogging platform like medium or
01:02:49
blogger Twitter should we look at those as common carrier and they're not responsible for what you
01:02:56
publish on them obviously they have to take stuff down if it breaks their terms of service Etc or if it's illegal I've
01:03:01
made the case before that I I do think that common carrier requirements should apply on some level of the stack to
01:03:07
protect the rights of ordinary Americans to have their speech in the face of these giant monopolies which could
01:03:14
otherwise de-platform them for arbitrary reasons just to you know just explain this a little bit so
01:03:20
historically there was always a debate between so-called positive rights and negative rights so where the United
01:03:28
States start off as a country was with this idea of negative rights that what a right meant is that you'd be protected
01:03:34
from the government taking some action against you and if you look at the Bill of Rights you know the original rights
01:03:39
are all about protecting the citizen against intrusion on their Liberty by by a state or by the federal government in
01:03:46
other words Congress shall make no law it was always a restriction so the right was negative it wasn't sort of
01:03:52
positively a force and then with the Progressive Era you started seeing you know more uh Progressive rights like for
01:03:59
example uh American citizens should have the right to health care right that's not protecting you from the government
01:04:04
that's saying that the government can be used to give you a right that you didn't
01:04:09
otherwise have and so that was sort of the big Progressive Revolution my take on it is I actually think that the
01:04:15
problem we have in our society right now is that free speech is only a negative right it's not a positive right I think
01:04:21
it actually needs to be a positive right I'm embracing a more Progressive version
01:04:26
of Rights but on behalf of sort of this original negative right so and the reason is because the Town Square got
01:04:33
privatized right I mean you used to be able to go anywhere in this country there'd be a multiplicity of town
01:04:38
squares anyone could pull out their soapbox draw a crowd they could listen that's not how speech occurs anymore
01:04:43
it's not on public land or public spaces the way that speech political speech especially occurs today is in these
01:04:50
giant social networks that are that have giant Network effects and are basically
01:04:54
monopolies so if you don't protect the right to free speech in a positive way it no longer exists so you not only
01:05:01
believe wow that YouTube should keep it section 230 you believe they YouTube shouldn't be able to de-platform as a
01:05:09
private company you know uh Alex Jones as but one example they should have their free
01:05:14
speech rights and we should lean on that side of forcing YouTube to put Alex Jones or Twitter to put Trump back on
01:05:21
the platform besides your position I'm not saying that the constitution requires YouTube to do anything uh what
01:05:28
I'm saying is that if a state like Texas or if the federal government wants to pass a law saying that YouTube If you
01:05:37
are say of a certain size you're a social network of a certain size you have Monopoly Network effects I wouldn't
01:05:41
necessarily apply this to all the little guys but for those big monopolies we know who they are if the if the federal
01:05:48
government or state wanted to say that they are required to be a common carrier and they cannot discriminate against
01:05:54
certain viewpoints I think the government should be allowed to do that because it furthers a positive right
01:05:59
historically they have not been able to do that because of this idea because this idea of compelled speech meaning
01:06:06
that it would infringe on YouTube's speech rights I don't think it would I mean Google and YouTube can advocate for
01:06:11
whatever positions they want they can produce whatever content they want yeah but but the point that and I think
01:06:17
section 230 kind of makes this point as well is that they are platforms they're distribution platforms they're not
01:06:22
Publishers so if they don't once so especially if they want section 230 protection they should not be engaging
01:06:27
in Viewpoint discrimination okay so now there is a rub here wait can I just say can I just say go ahead your explanation
01:06:32
David your explanation that you just gave before was so excellent thank you that it allows me to understand it even
01:06:39
more clearly that was really so tremoff do you think the algorithm is an act of editorialization yes yes yes and so then
01:06:48
should YouTube look at the end of the day let me let me break down an algorithm for you okay effectively it is
01:06:54
a mathematical equation of variables and weights an editor 50 years ago was somebody who
01:07:03
had that equation of variables and weights in his or her mind okay and so all we did was we translated
01:07:11
again this multimodal model that was in somebody's brain into a model that's mathematical that
01:07:19
sits in code you're talking about the front page and the New York Times yeah and I think it's a fig Leaf to say that
01:07:25
because there is not an individual person who writes 0.2 in front of this one variable and 0.8 in front of the
01:07:31
other that all of a sudden that this isn't editorial decision making is wrong we
01:07:36
need to understand the current moment in which we live which is that these computers are thinking actively for us
01:07:45
they're providing this you know computationally intensive decision making and reasoning
01:07:53
and I think it's it's pretty ridiculous to assume that that isn't true that's why when you go
01:07:59
to Google and you search for you know Michael Jordan we know what the right Michael Jordan is because it's reasoned
01:08:06
there is an algorithm that is doing that it's making an editorial decision around
01:08:11
what the right answer is they have deemed it to be right and that is just true and so I think we need to
01:08:16
acknowledge that because I think it allows us at least to be in a position to rewrite these laws through the lens
01:08:23
of the 21st century we need to update our understanding for how the world works today and you know
01:08:30
jamaat there's such an easy way to do this if you're Tick Tock if you're YouTube if you want section 230 if you
01:08:36
want to have common carrier and not be responsible if it's there when a user signs up it should give them the option
01:08:42
would you like to turn on an algorithm here are a series of algorithms which you could turn on you could bring your
01:08:48
own algorithm you could write your own algorithm with a bunch of Sliders or here are ones that other users and
01:08:54
services provide like like an App Store so YouTube moth could pick one for your family your kids that would be I want
01:08:59
one that's leaning towards education and takes out conspiracy theories takes out
01:09:03
cannabis use takes out this one it's a wonderful what you're saying is so wonderful because for example like you
01:09:08
know this organization Common Sense Media yes I love that website every time I put in a movie I put Common Sense
01:09:14
Media decide if we should watch it or like an I use it a lot for apps because they're pretty good at just telling you
01:09:19
which which apps are reasonable and unreasonable but you know if Common Sense Media could raise a little bit
01:09:25
more money and and create an algorithm that would help filter stories in Tick Tock for my kids I'd be
01:09:32
more likely to give my kids tick tock when they turn 14. right now I know that they're going to sneak it by going to
01:09:37
YouTube and looking at YouTube shorts and all these other things because I cannot control that algorithm and it
01:09:43
does worry me what kind of content that they're getting access to and you could do this by the way chamath on the
01:09:49
operating system level or on the router level in your house you could say I want
01:09:53
the common sense algorithm I will pay 25 a month a hundred dollars a year and then any IP that goes through it
01:10:01
would be programmed properly I want less violence I want less sex you know whatever I think we are as a society
01:10:07
sophisticated enough now yes um to have these controls and so I think we need them and so I think we do need to have
01:10:15
the right observation of the current state of play Friedberg where do you sit on this do you think
01:10:22
the algorithm should be I don't I don't I don't know right out of 230. yeah I I don't fully agree with Saks on
01:10:30
um the monopolistic assumption I I think that there are I think there are other places to access content and I think
01:10:37
that there is still a free market to compete and it is possible to compete I think
01:10:43
that we saw this happen with Tick Tock we saw it happen with Instagram we saw it happen with YouTube uh competing
01:10:49
against Google video and Microsoft video prior to that there has been a very significant battle for the attention of
01:10:57
kind of being the next gen of media businesses and we have seen Spotify compete and we're seeing Spotify
01:11:01
continue to be challenged by emerging competitors so I don't buy the assumption that these
01:11:09
are built-in monopolies and therefore it allows some regulatory process to come in and
01:11:15
say hey Free Speech needs to be actively enforced because they're monopolies this
01:11:18
isn't like when utilities laid power lines and Sewer lines and and trains across the country and they had a
01:11:26
physical Monopoly on being able to access and move goods and services the internet is still thank God knock on
01:11:32
wood open and the ability for anyone to build a competing service is still possible and there is a lot of money
01:11:38
that would love to disrupt these businesses that is actively doing it and I think every day look at how big Tick
01:11:44
Tock has gotten it is bigger than YouTube almost or will be soon and there is a competition that happens
01:11:50
and because of that competition I think that the the market will ultimately choose where they want to get their
01:11:56
content from and how they want to consume it and I don't think that the government should play a role Zach's
01:12:00
rebuttal to that you buy that well so not all these companies are monopolies but I think they act in a monopolistic
01:12:07
way with respect to restricting Free Speech which is they act as a cartel they all share like best practices with
01:12:13
each other on how to restrict speech and we saw the The Watershed here was remember when Trump was thrown off first
01:12:20
Twitter made the decision you know Jack I don't even know if it was Jack but basically the company Jack said it
01:12:26
wasn't him actually he said it was the woman who was running it specifically that's it for that yeah yeah Jack
01:12:31
actually said it was a mistake but any event Twitter did it first and then all the other companies followed suit I mean
01:12:36
even like Pinterest and OCTA and Snapchat like officially YouTube everybody yeah but Trump was actually on
01:12:44
Facebook he wasn't on all these other companies they still threw him off so they all copy each other and Jack
01:12:49
actually said that in his comments where he said it was a mistake he said he didn't realize the way in which
01:12:55
Twitter's action would actually Cascade he said that he thought originally that the action was okay because it was just
01:13:03
Twitter deciding to take away Trump's right to free speech but he could still go to all these other companies and then
01:13:08
all these other companies basically you know they are all subject to the same political forces the the leadership of
01:13:15
these companies are all sort of they all drink from the same monocultural found they all have the same political biases
01:13:21
the polls show this so the problem of Freeburg is yeah I agree a bunch of these companies aren't quite monopolies
01:13:26
but they all act the same way but I agree with you I'm a pretty Collective effect is of a speech cartel so the
01:13:33
question is how do you protect the rights of Americans to free speech in the face of a speech cartel that wants
01:13:39
to basically block them go ahead Freeburg respond here's my argument my argument is that these are not public
01:13:43
service providers they're private service providers and the market is telling them what to do the market is
01:13:49
saying and I think I don't think so I think that the pressure that was felt by these folks was that so many consumers
01:13:55
were pissed off that they were letting Trump rail on or they were pissed off about Jam 6 or pissed off about whatever
01:14:01
whatever the current fat is the trend is they respond to the market and they say
01:14:06
you know what this has crossed the line and this was the case on public television when nudity came out and
01:14:11
they're like okay you know what we need to take that off the TV we need to because the market is telling us they're
01:14:16
going to boycott us and I think that there's a market pressure here that we're ignoring that is actually pretty
01:14:21
pretty relevant that as a private service provider if they're going to lose half Their audience because people
01:14:26
are pissed about one or two pieces of content showing up that they're acting in the best interest of their
01:14:32
shareholders and in the best interest of their platform they're not acting as a public service look I love Market forces
01:14:37
as much as the next libertarian but I just think that fundamentally that's just not what's going on here this has
01:14:43
nothing to do with Market forces has everything to do with political forces that's what's driving this look do you
01:14:48
think the average consumer the average user of PayPal is demanding that they engage in all these restrictive policies
01:14:55
throwing off all these accounts who have the wrong viewpoints no that's nothing to do with it it has to do with the
01:15:00
vocal mind who work at these companies and create pressure from below it's also the you
01:15:09
know the the people from outside the actors who create these boycott campaigns and pressure from outside and
01:15:14
then it's basically people on Capitol Hill who have the same ideology who basically create threats from above so
01:15:20
these companies are under enormous pressure from above below and sideways that and it's 100 political hold on it's
01:15:26
not it's not about maximizing profits I think it's about maximizing you know political outcomes yeah I don't know
01:15:33
that is that is what the American people need to be protected from now I will I will add one Nuance to my theory though
01:15:40
which is I'm not sure what level of the stack we should declare to be common carrier so
01:15:46
in other words you may be right actually that at the level of YouTube or Twitter
01:15:52
or Facebook maybe we shouldn't make them commentary and I'll tell you why because
01:15:56
just to take the other side of the argument for a second which is you know if you don't because those companies do
01:16:02
have legitimate reasons to take down some content I don't like the way they do it but I do not want to see bots on
01:16:08
there I do not want to see fake accounts and I actually don't want to see like truly hateful speech or harassment and
01:16:15
the problem is I do worry that if you subject them to common carrier they won't actually be able to engage in
01:16:21
let's say legitimate curation of their social networks yeah right however so so there's a real debate to be had there
01:16:28
and it's going to be messy but I think there's one level of the stack below that which is at the level of pipes like
01:16:34
in AWS like a cloud flare like a PayPal like the the isps like the banks they are not doing any content moderation or
01:16:43
they have no legitimate reason to be doing content moderation none of those companies should be able allow to engage
01:16:47
in Viewpoint discrimination we have a problem right now where American citizens are being denied access to
01:16:52
payment rails into the banking system you're saying because of their view AWS shouldn't be able to deny service to the
01:16:58
Ku Klux Klan or some hate speech group I think that they should be under the same
01:17:02
requirements the phone companies under okay you know the question is like look I
01:17:10
could frame the same question to you should you know something such a horrible group should such and such
01:17:15
horrible group be able to get a phone a phone account right yeah no no and you'd
01:17:19
say no they shouldn't get anything but they have that right that has been litigated and that's been pretty much
01:17:24
protected by the Supreme Court you know even if it's a government-conferred monopoly the Supreme Court has said okay
01:17:30
listen like it's not violating one's constitutional right for example if your water bill gets terminated without you
01:17:36
getting due process and the the inverse is also true so for what whether we like it or not that
01:17:43
Jason that issue has been litigated I think I think I think for me again just like
01:17:49
practically speaking for the functioning of Civil Society I think it's very important for us
01:17:55
to now introduce this idea of algorithmic choice and I don't think that that will happen
01:18:01
in the absence of us rewriting section 230 in a more intelligent way I don't know I don't know whether this specific
01:18:08
case create an upstanding for us to do all of that but I think it's an important thing that
01:18:17
we have to revisit as a society because Jason what you described as having a breadth of algorithmic
01:18:23
choices over time where there are purveyors and sellers could you imagine that's not a job or a company that the
01:18:29
four of us would ever have imagined could be possible five years ago but maybe there should be an economy of
01:18:35
algorithms and there are these really great algorithms that one would want to pay a
01:18:40
subscription for because One Believes In the quality of what it gives you we should have that choice and I think
01:18:46
it's an important set of choices that will allow actually YouTube as an example to operate more safely as a
01:18:52
platform because it can say listen I've created this set of abstractions you can
01:18:56
plug in all sorts of algorithms there's a default algorithm that works but then there's a Marketplace of algorithms just
01:19:02
like there's a Marketplace of ideas I don't discriminate and let people choose this is the key thing with this model
01:19:08
like if if it was on a blockchain if all the videos all the video content was uploaded to a public blockchain and then
01:19:15
distributed on distributed computing system then your ability to search and use that media would be a function of a
01:19:22
service provider you're willing to pay for that provides the best service experience and by the way this is also
01:19:26
why I think over time to sax to to kind of sax and I are both arguing both sides
01:19:31
a little bit but I think that what will happen I don't think that the government should
01:19:35
come in and regulate these guys and tell them that they can't take stuff down and
01:19:39
whatnot I really don't like the precedent it sets period I also think that it's a terrible idea for YouTube
01:19:45
and Twitter to take stuff down um and I think that there's an incredibly difficult uh balance that
01:19:52
they're gonna have to find because if they do this as we're seeing right now the quality of the experience for a set
01:19:57
of users declines and they will find somewhere else any Market will develop for something else to compete
01:20:01
effectively against them and so I that's why I don't like the government intervening because I want to see a
01:20:06
better product emerge when the big company makes some stupid mistake and does a bad job and then the market will
01:20:12
find a better outcome and it just it's messy in the middle and as soon as you do government intervention on these
01:20:18
things and tell them what they can and can't take down I really do think that over time you
01:20:23
will limit the user experience to what is possible if you allow the free market and this is where the the industry needs
01:20:29
to police itself if you look at the movie industry with the MPAA and Indiana Jones and the the Temple of Doom they
01:20:35
came out with the PG-13 rating specifically for things that were a little too edgy for PG this is where our
01:20:41
industry could get ahead of this they could give algorithmic Choice an algorithmic app store and if you look at
01:20:48
the original sin it was these lifetime bands like Trump should not have been given a lifetime van they should have
01:20:52
given them a one-year ban they should have had a process they overreached we wouldn't be in this position
01:20:59
when you talk about like having a industry Consortium like the MPAA what you're doing is formalizing the
01:21:05
communication that's already taking place is already happening between these companies and what is the result of that
01:21:10
communication they all standardize on overly restrictive policies because they all know there is no free the same
01:21:14
political bias no but if they did it correctly it's all in the execution sacks it has to be executed properly
01:21:20
like the movie industry it doesn't matter you'll end up with the same problem as having the government
01:21:24
intervene if you have the government intervene or private body intervene any sort of set standard intervention that
01:21:29
prevents the market from company I just I disagree with you I think you can create more competition if the
01:21:34
government says um okay folks you can have the standard algorithm but you need to make a a
01:21:39
simple abstracted way for somebody else to write some other filtering mechanism and
01:21:45
to basically you so that users can pick the power users yes what the mpia did was I don't know why
01:21:52
isn't that more choice because that's a product that's a product company I don't
01:21:56
want to be told how to make my product right if you're not on YouTube you have you have an algo you're now saying that
01:22:01
there is this distinction of the algo from the ux from the data and my choice might be to create different content
01:22:06
libraries for example YouTube has YouTube kids and it's a different Content Library and it's a different
01:22:11
user interface and it's a different algorithm and you're trying to create an abstraction that may not necessarily be
01:22:15
natural for the evolution of the product set of that company I would much rather
01:22:19
see them figure it out that's not a good argument that again if you were not a monopoly I would be more sympathetic but
01:22:25
because like somebody somebody's feelings would get hurt a product manager's feelings will get hurt inside
01:22:30
of Google feelings reason to not protect free speech I think you're unnaturally disrupting the
01:22:35
product Evolution and I tough luck that's what that's what happens when you're worth two trillion dollars when
01:22:40
you impact a billion people on the planet when you start having massive impact in society you have to take some
01:22:46
responsibility those companies are not taking responsibility if you're not super super successful if this is not
01:22:52
going to affect you so you don't have nothing to worry about you'll see you'll see apps offshore and you'll see Tick
01:22:57
Tock and other things compete because they'll have a better product experience no no nobody's going to create a new
01:23:03
Google because they're downranking one to ten percent of the search results agreed some accountability hold on in
01:23:12
the ideal World Companies like Google and so forth would not take sides in political debates to be politically
01:23:17
neutral but they're not you look at all the data around the political leanings the people running these companies and
01:23:22
then you look at the actual actions of these companies and they have become fully political and they've waded into
01:23:26
all these political debates with the result that the American people's rights to speech into earn have been reduced
01:23:33
you have companies like PayPal which are just engaging in retaliation basically Financial retaliation purely on based on
01:23:41
what political viewpoints they have why it's not like face it's not like PayPal needs to be in the business content
01:23:47
creation let's continue this conversation call in ama uh if they can get some servers over that I don't know maybe so
01:23:55
you got to raise some money stacks for this app and get some more service all right listen for the dictator who needs
01:24:00
to hit the Lou to do a number two yes I am the world's greatest moderator Friedberg is the Sultan of Science and
01:24:08
David Sachs is the prince of peace see you all next week on the episode wait wait is this 98 or 99 no
01:24:19
it's 99 it's 99. only one episode left Wayne Gretzky get it well less enjoy it well less that we're wrapping it up here
01:24:25
all right we'll see you all next time have a great movement bye bye we'll let your winners ride
01:24:34
[Music] we open source it to the fans and they've just gone crazy with it [Music]
01:24:47
somehow [Music] we need to get Mercies foreign [Music]