00:00:00
J what just happened did you just have a moment an emotional moment I don't know
00:00:03
you know I've been trying to get over Sachs and um it's hard to get over your ex even when they didn't treat you well
00:00:09
we were in a codependent relationship and we were working on it you have no one to fight with anymore who are you
00:00:15
gonna fight with jcal that's the emptiness you feel inside because you're a fighter you're a street brawler and
00:00:20
you have no one to brawl with anymore so you feel well you're the first guy to jump under the table in a bar fight I
00:00:26
mean here you go there you go as I was saying always want I feel like if if goes down I feel like sax and I
00:00:33
would have like we would have thrown down we Bulldogs we would have fought like tooth and
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now I have this I have this I have this image it's like we're in a bar okay and all of a sudden you talking to me a
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fight is about to break out four thought bubbles appear okay J's like J's like let's go get him saak is like this guy
00:00:55
this guy's a dip let's roll I'm like look at that chick she's so goodlooking and then freeberg like what will happen
00:01:02
to my invite duck free BG's like how do I get out of this UNSC let your winners ride Rainman
00:01:20
David and in said we open source it to the fans and they've just gone crazy with Love
00:01:28
Queen all right everybody Welcome to the number one podcast in the world with me
00:01:34
again today for better or worse your Sultan of science David freedberg is back how you doing
00:01:41
freeberg I see you're a pawn only a pawn in their game what's going on with the pawn
00:01:47
background The Imposter syndrome Pawn or queen what is that is that from a movie
00:01:54
what movie is that from it's called The Imposter syndrome uh by just like some French wave I'm not
00:02:00
aware of how I I've learned that freeberg backgrounds is some like weird secret communication language there's
00:02:07
this small but fervent group of people that are really into these backgrounds they're always trying to figure
00:02:12
something out absolutely of course with us again sham paa your chairman dictator
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how you doing Shaman nice winner thank you sir good to see you you ready excited to see you I know look at this
00:02:24
three of four besties will be hitting the slopes three of four besties will be skiing together might be there eron
00:02:29
where are you going for holidays oh actually I'm I'm uh we'll be in next week what well there we go new bestie
00:02:35
and Aon are you staying in the town in just at the hotel okay this is perfect we're all gonna be there bro just $2,000
00:02:44
a night how many rooms you got with the kids in the fam you have three boxes at alltime highs take it easy what did you
00:02:50
do did you start buying Bitcoin with your treasury how what do you mean boxes at an alltime high are you uh doing a
00:02:55
Michael salor or something you know it turns out if uh if you were uh if you didn't get crushed During the postco
00:03:02
period you can just keep keep cranking so that's what we've been doing oh you've been building a real business of
00:03:07
course with us now our new fifth bestie Aaron Levy he is the CEO of the publicly
00:03:13
traded company box which means he's got the most to lose by coming here so welcome back to the
00:03:19
program centrax based on what you guys were just talking about before this uh recording started I have no idea what
00:03:25
what uh what we're in for yes listen we're living in an of meme stocks and people selling convertible notes to buy
00:03:33
Bitcoin for their Treasury and and and then becoming a NASDAQ 100 it's that simple Aaron when you see a company buy
00:03:41
billions of dollars worth of bitcoin and get added to the NASDAQ 100 what method
00:03:45
of suicide do you think of taking your own life with um there was a there was a brief week in uh in 2021 where uh where
00:03:53
the thought kind of crossed my mind so yes um suu you're just gonna use the sword the short blade we have a very uh
00:04:00
sophisticated audit committee that that prevented the action so I uh will you do
00:04:06
this for me yeah just do this for me take how much cash does box have on the books ballpark well we just did a
00:04:13
convert so we're probably 6 700 six or 700 million okay here's what I want to do a little experiment for next week
00:04:19
just buy put 5% of the treasury 30 million in Bitcoin and then you we'll invite you back in two weeks we'll see
00:04:25
what happens okay just put 5% of the treasury in Bitcoin hey everybody here's another announcement a little
00:04:31
housekeeping as you know we successfully got the allin.com domain that was a big
00:04:36
victory for us and uh we now have an email list so four years into this muga uh we now have the ability to take
00:04:45
your email address and spam you with all kinds of great information like a notification when the Pod drops wow so
00:04:54
compelling insights from the besties who you've had enough of and uh first dibs on overpriced event tickets to come hang
00:05:03
out with us wow you this is the compelling pitch we have for giving us your emails so if you'd like to give us
00:05:08
your email and get spammed go to allin.com and let the spam begin all right that's out of the way sax is out
00:05:15
again this week I don't know what's going on we've been trying to figure out where he is he's Mia if anybody knows
00:05:22
he's in DC this week yeah oh is that what's going on did you see all the meetings I know being fous he's he's uh
00:05:31
he's in meetings Mr saxs went to Washington he creating waves but Mr saxs is in Washington and have you guys seen
00:05:39
the photos Erin what do you think of what do you think of saaks in this role I think it's uh I think it's a
00:05:47
strong pick um so so let the genu flecting begin go say more Aon so crypto I'm a little bit indifferent on you know
00:05:57
I I I I haven't you know know so we haven't SP spent much time there leaned in much about there but but on
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AI I think is a very very strong pick and um I think you want somebody that is you know has a general sort of
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deregulation anti-regulation bent at this stage in the evolution of the technology I think there's risk of of
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sort of slowing down too much progress right now and I think that I think he'll provide you know some good
00:06:30
kind of parameters and principles around uh around how to avoid that so I think very strong and then you know crypto
00:06:35
again don't know don't know too much about and then we'll we'll see the rest of the topics as a software CEO yeah of
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a public company when the Biden Administration was putting forward their proposals on how to regulate Ai and have
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definitions on the size of a model and what the models could or shouldn't do and the regulatory Authority they would
00:06:53
have over the software that's written what was your reaction and you were supporting Harris at the time I believe
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or Biden at the time right but like how did you react to that when you saw those
00:07:03
proposals and just to be clear are you talking about the EO that that went out yeah there was the EO but then they were
00:07:10
also drafting they they published a lot of detailed Drafting and then obviously California had its bill which you
00:07:15
probably saw as well which specified like the number of parameters in a model and the size of a model and yeah all
00:07:21
these kind of constraints in reverse order was was uh against s1047 it felt like you know you had two
00:07:28
big issues one you probably don't want state-by-state legislation on this topic that that's going to be you're in a
00:07:33
world for of hurt if if every state has a different approach to this and then second secondarily if you just look at
00:07:39
how it evolved from the very first proposal to the final proposal and unfortunately the kind of underlying
00:07:45
philosophy that was in the the bill it was it was very clearly a sort of like like viewing you know basically AI
00:07:52
progress as inherently risky right now and so it just ratcheted up the the different you know levels of consequence
00:08:00
for the AI model developers and and the risk is is is sort of the second or third order effects of that which is
00:08:06
like does Zuck then want to release the next version of llama if you're taking on you know that much risk and and you
00:08:12
know even the incremental updates um the liability you have yeah in terms of any
00:08:17
of the model advancements and so right now we're benefiting from just an incredibly competitive market between
00:08:23
five or six players and you want them running as fast as possible not having to have sort of this you know a Council
00:08:30
before every model gets released because they're they're you know in fear of getting sued by you know the government
00:08:35
for hundreds of millions of dollars if one person does something wrong with the model so that was the problem with sb147
00:08:40
that's been the problem with some of the the proposals on National legislation I
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felt like the first CEO it didn't have a lot of teeth in it so so it kind of was
00:08:47
more like let's watch you know this space and continue to study it the actual current head of s ostp uh Arty
00:08:54
probar a lot of folks in Silicon Valley know her she's actually very strong very
00:08:58
technical you know understands the valley well is not a sort of does not lean into overregulation so I actually
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think ostp has had a a pretty good Steward uh even under Biden but but I think you know the
00:09:12
efforts that that saaks would you know clearly be leading I think would would lean even more toward AI progress and
00:09:17
and and sort of not accidentally over-regulating too early in uh in this journey so let me ask you a question
00:09:25
then about crypto you're not into crypto crypto a little bit harder to regulate so with saxs being there what do we
00:09:33
think the one two or three things he could do to actually make crypto not a scam not have consumers get
00:09:42
left holding the bag obviously sandboxing projects maybe having people know your customer you know some basic
00:09:51
regulation there uh the sophisticated investor test comes to mind shth what do you think Sac should do in terms of
00:09:58
crypto regul in the short term in the near term that's a really good question I think that today there are a lot of
00:10:07
really valuable use cases that can sit on top of crypto rails I think the most obvious
00:10:15
one is how you can have real-time payments using stable coins I think the United States government is already
00:10:22
using some of these stable coins for a bunch of purposes the number of companies that are beginning to adopt
00:10:29
ADT and use stable coins is actually growing very take a second to to find stable coins for the audience just to
00:10:35
cat people up let me Define what a stable coin is which is that you put a dollar into a wallet somewhere and
00:10:44
in return you get a digital token of that dollar there are two big purveyors of stable coins there's tether and then
00:10:53
there's usdc which is this company called Circle I think the easiest way to to disambiguate them is tether is abroad I
00:11:02
think it's run out of somewhere in the Caribbean and usdc is American it's run by this company called Circle the other
00:11:10
difference is that there is some ambiguity around how these assets are secured so what a stable coin is
00:11:20
supposed to do is when you give them a dollar they're supposed to go and buy some short-term treasury security so
00:11:26
that that dollar is always guaranteed right because if if they if you had a billion dollars of stable coins but only
00:11:33
$900 million of assets to back them up there's an insolvency risk there there's a run on the bank risk right so
00:11:41
theoretically a billion dollars of stable coins should have a billion dollars of cash in some short-term
00:11:46
fungible security what's incredible is at the scale in which these stable coins operate that has turned out to be an
00:11:53
enormous business why when you give them a billion dollars and get a billion dollars of stable coins return they just
00:12:00
go and put it into the bank and you know when interest rates are 2 3 4 5% they're
00:12:05
making billions and billions of dollars they get the float they get the float so
00:12:10
these businesses have turned out to be incredible but that's beyond the point the point is that a lot of companies
00:12:16
that you would never think so for example SpaceX uses these stable coins how how do you think they collect
00:12:22
payments from all the starlink customers when they aggregate them in all of these
00:12:26
longtail countries they don't want to necessarily take the FX risk the foreign exchange risk they don't want to deal
00:12:32
with sending wires so what they do is they'll swap into stable coin send it back to the United States and then swap
00:12:37
back to US dollars so it's a very useful utility so number one is I think we need
00:12:44
to make those rails the standard rails in the United States and what that does is it allows us to chip away all of this
00:12:53
decrepit infrastructure that the banks use to sort of slow down and tax a process that should never have been
00:13:00
taxed in so this is good competition in a way Cham now the banks have somebody to challenge them for money transfer and
00:13:09
money storage and it could be regulated and stable but I guess question yeah but
00:13:14
that's that's the first thing but then the second thing it allows you to do is you you start you can see a world where
00:13:18
now you can have real competition against the traditional rails specifically Visa Mastercard American
00:13:24
Express because when you look at Great companies like stripe I use stripe I pay them
00:13:30
3% if I use stable coins from stripe I I don't pay zero but I don't pay 3% it's kind of somewhere in the middle if I was
00:13:39
technically Adept at implementing stable coins through the entire stack of of my
00:13:44
product so I I use it for this learn with me thing where we publish research I would save a lot of money so yes the
00:13:52
idea that you can take that 300 basis points you pay to these companies and crush it to zero would be a boon to
00:14:01
Global GDP because that's 3% on many tens of trillions of dollars aarin you're shaking your head this is a
00:14:08
something you're experimenting with at box or you're aware of or a problem that you uh recognize no no just the I mean
00:14:14
the credit card rails is I mean the tax on on transactions is obviously insane so so the the stable coin being the
00:14:22
intermediary for that in the future makes total sense if you could get everybody to kind of coordinate against
00:14:26
that so yeah well and ating it would get people off of tether hopefully which has
00:14:31
a checkered colorful sorted pass you can go look it up but they've had many many
00:14:36
legal but I think again I think it looks leave it at that yeah but In fairness to
00:14:41
them I think again both of these two companies look as of today again you have a jurisdictional issue difference
00:14:48
but as of today it looks like they're both pegged one for one but anyways the point is if if saaks can really push the
00:14:55
adoption of stable coins number one and then number two is to incentivize much much cheaper
00:15:03
transactional rails then I think he can go to bitcoin and these other more longtail crypto
00:15:10
projects off of a back of momentum because these first two things I think everybody will Embrace and he won't get
00:15:17
caught in a political Quagmire these other things you have these opponents always coming into the system and they
00:15:24
have even Bitcoin like when I said this thing about encryption and and even though I I thought I was very clear the
00:15:34
crypto community on the internet went absolutely crazy all last week up in arms yeah but the thing is like some of
00:15:41
the Maxis piled on then when they actually took time to understand the technicalities of what I was saying
00:15:45
other people realized I was right then they were tweeting it my point is that world is so religious animated
00:15:53
and energized that I think it's hard to use them as the first where you find prog so I would tell go to stable coins
00:16:02
then disrupt the Visa rails and then go to the other stuff I would go stable coins and I would go even before that
00:16:08
the accreditation test that I've been talking about because the SEC has that mandate people were educated Aaron they
00:16:14
could buy crypto and know they're going to lose their money or know that something's a fugazi a fugazi whatever
00:16:20
it is yeah I mean I uh I I'm sure we want to move on but I I guess the so there there's a there's a a parallel universe
00:16:28
where where so no matter what like obviously gendler did not get his arms around this whole thing so so that that
00:16:34
was a big big mistake but there's sort of like like defi Financial crypto where where almost everything is is
00:16:44
deflationary it improves the rails it you know if you believe in Bitcoin as this you know store of value and digital
00:16:52
gold like all of those things can actually kind of make sense and and be a bit rational and like improve things and
00:16:57
then you know you know fortunately or not depending on your views there was this other sort of you know uh fra
00:17:03
fractal event that happened which was oh let's also use these things as a a means
00:17:07
of of kind of creating uh a virtual you know currency and and and Tok and equities and and tokens for anything
00:17:16
where that then runs into basically the SEC remit of like are these things Securities or not and is there insider
00:17:23
trading or not and can anybody issue them at any time and promote them on Twitter or not and so so you know I
00:17:29
think to some extent if you could get back to like crypto 1.0 which was like this is a this is a financial
00:17:34
infrastructure I I think you would have avoided a lot of the the sort of noise and challenges with with crypto now I
00:17:40
don't know you can't put the you you can't put it back in the bag but but there's like I don't think you could get
00:17:45
10 crypto people to agree on how you regulate that second category because some people some people believe I should
00:17:51
be able to issue an nft on anything and I should be able to to trade that and and and at the same time they would
00:17:57
obviously they would sort of claim well that's just the same as a as an aftermarket you know uh seat to a
00:18:02
concert and yet another group would would be treating this as as effectively you know a security and so you you I
00:18:09
don't know how you're ever going to reel that in without some people being upset
00:18:13
you know within the crypto Community all right well more to come and saaks will be back saaks will be back and we will
00:18:19
be rotating the fifth seat amongst uh you know Friends of the Pod and newsmakers sorry did I already did I
00:18:26
already get rotated out uh based on yeah basically the energy was a little low but uh you know I mean it's just I think
00:18:34
well what's your you already had to warn rate what's your resting heart rate versus we're boys and then we'll just
00:18:40
make a decision got it all right listen doge is fully operational Elon and V have helped kill
00:18:48
the last minute Omnibus spending Bill Wednesday night the bill had been killed and we were looking at the government
00:18:56
shutting down starting Friday December 20th today when you're listening to this for some quick background in September
00:19:03
Congress approved a bill that would keep the government funded through December 20th the day this episode published keep
00:19:09
that December date in mind for a second this Tuesday December 17th three days before the deadline leaders in Congress
00:19:17
unveiled what was presented as a bipartisan stop Gat bill that would keep the government funded through March 14
00:19:24
that kind of Bill is called a continuing resolution basically give you more time
00:19:28
for the incoming GOP majority to reach an agreement on the funding for the government but there are two major
00:19:34
problems with the bill it's a rush job it had to pass the house and the Senate by Friday night after being presented on
00:19:40
Tuesday it's absurdly long 1500 pages with $340 billion in spending including pay raises and better health care
00:19:50
benefits for the members of Congress my Lord read the room gentlemen and ladies funding for a global engagement Center
00:19:56
for another year that's the disinformation strug group that was wrapped up in the Twitter files 130
00:20:01
billion to renew the farm bill for another year $110 billion do in hurricane disaster Aid just money being
00:20:09
thrown everywhere a billion three to replace the Francis Scott Key bridge in Baltimore V had some spicy comments on
00:20:15
it Congress has known about the deadline since they created it in late September
00:20:19
he said the urgency is 100% manufacture designed to avoid serious public debate but serious public debate is exactly
00:20:27
what's happening on Twitter people are screenshotting and using chat GPT and Claude and and Gemini to work their way
00:20:35
through these documents and it looks like this is not going to happen freeberg your thoughts so the proposed
00:20:43
bill made no real change to the current spending level of the federal government
00:20:47
at roughly $6.2 trillion on an annualized basis which by the way is roughly call it
00:20:55
23% of GDP just to give you some context in 1860 nearly 100 years after the founding of the United States government
00:21:04
federal spending to GDP was less than 1% and it took off during the Civil War uh for a couple of years but you know
00:21:14
we're at these kind of like unprecedented levels year after year now really speaking to how the federal
00:21:20
government has grown as we talked about many times so much in our life and you know at our roads were really bad back
00:21:26
then though yeah our were were really bad back then but but remember the objective of the Republic was to have
00:21:34
the states make local decisions about how to take care of their infrastructure the national highway effort obviously
00:21:41
changed that in the uh the mid 20th century but this was kind of the original intention of the Republic it
00:21:47
wasn't to have the federal government come in and employ people provide uh Insurance to people provide energy
00:21:55
markets to people own football stadiums etc etc etc if you go through the list of things in this bill I think the
00:22:02
hundred billion dollars of natural death disaster relief everyone says that seems
00:22:06
very reasonable that's something the federal government should do when we have a natural disaster we need help we
00:22:11
need support that's a great thing for the federal government to do but think about the incentive it creates it
00:22:16
distorts markets so we've talked about this in the past in areas where you have a higher probability of natural
00:22:22
disasters and people have paid a lot of money for their homes pay a lot of money
00:22:25
for infrastructure should the federal government come in in and rebuild those homes and Provide Capital to those
00:22:31
individuals and those businesses to help them rebuild those homes if there's a high probability of natural disaster
00:22:36
events happening again in the future it means that the cost of insurance doesn't
00:22:40
matter and the cost of real estate doesn't matter because the federal government effectively can come in and
00:22:45
support those prices in the same way the federal comes in government comes in and
00:22:48
supports the prices in agricultural products through the work in the farm bill and through the biofuels mandates
00:22:54
which were also proposed to be extended in this thing so the federal government's playing both a Market role
00:23:00
and you know also kind of this role that I think fills the Gap where people want
00:23:04
to have a customer where there isn't a customer and an employer where there isn't one so like how did we get to this
00:23:10
point so from first principal perspective we've kind of I think lost the narrative on what the federal
00:23:14
government was meant to do if you think about the simple rubric in a bill like just go back some period of time and
00:23:20
someone says hey I I want something I want to have this in this bill and you're the representative that's
00:23:25
supposed to vote on that bill and say yes or no it's very hard to just say no we are not going to spend that money
00:23:32
what's the incentive to say no the alternative is you say yes but give me X as well there is an incentive in that
00:23:41
response and the incentive there is to get something for your electorate the people that voted you in as a
00:23:47
representative of the house which is how we ended up at this point where everyone
00:23:51
says I want something if you're going to get something and eventually the government the federal government swells
00:23:56
to spending roughly 24% of our GDP now the biggest mistake I think the founding fathers made was that
00:24:03
they didn't create constitutional limits on spending and enrichment and this was
00:24:06
because they had these deeply held philosophical beliefs that relied on the House of Representatives to provide a
00:24:12
check by the people if you read The Federalist Papers and I went through a couple of these recently and I use chat
00:24:18
GPT to help me kind of you know bring out some of I think the key points but in the Federalist Papers 10 and 51 James
00:24:26
Madison emphasized that the structure of govern was meant to ensure that both state and
00:24:30
federal governments would limit each other's excesses including their financial ones and then in the
00:24:35
Federalist Paper number 58 he said the House of Representatives has control over the quote power of the purse which
00:24:42
gives the people's Representatives authority over Taxation and spending but they also warned along with Alexander
00:24:49
Hamilton of the dangers of unchecked government power through burdensome Taxation and excess spending which would
00:24:56
ultimately erode individual freedoms so they recognized that there were going to
00:25:00
be limits but their expectation was that the house and the individuals that were
00:25:04
electing people to the house that were members of this Republic would come in and say we're going to keep that from
00:25:09
happening and clearly something went wrong along the way that we got to this point where again spending is 24% of GDP
00:25:16
and I think that the biggest thing they got wrong was that they didn't create these constitutional limits on federal
00:25:22
spending or taxation through either a balanced budget um structure spending as a percent of GDP no federal debt or term
00:25:29
limits or all of these other mechanisms that could have been introduced at the beginning that could have created some
00:25:35
structural limits instead they assumed that there was this natural limit that would emerge as a function of the
00:25:40
democratic process because of how they formed the government but unfortunately I think they failed to realize that the
00:25:47
electorate would eventually not want the freedoms of the people of the time back
00:25:54
then in 1776 this was a pioneering country where everyone wanted to come here to have freedom to do anything they
00:26:01
wanted everywhere they wanted to build a business to Homestead to be a rugged individuals it was entrepreneurial yeah
00:26:08
it was and over the last 250 years we've gotten used to an increment in lifestyle
00:26:13
every year and discovered that we have a mechanism to force the increment in lifestyle through the actions of
00:26:19
government and so the electorate has stood up and said I want more each year and I want the government to provide it
00:26:25
for me if the free markets are not doing it and that's really where we kind of got to this point where I think we
00:26:30
elected people to the house who ultimately had this incentive that said if I give you this I need to get this
00:26:36
and we ended up swelling this so I I don't know if it cracks with Doge I really don't know if people step up and
00:26:42
recognize the limits of of government and what the limits should be of the federal government on an electorate
00:26:47
basis it's an amazing moment to see that Elon went on Twitter and said hey guys this is nuts and everyone said this is
00:26:53
nuts we're not going to elect you if you do this if that momentum and that transparency can keep up I I hope that
00:26:58
people start to connect the dots that this isn't a free lunch that the federal government spending is not Limitless and
00:27:04
it's not unaccountable Aon I think we have enough people who are notable now speaking up about this excess spending
00:27:15
and the outof control debt that it's now in Vogue to talk about austerity to talk
00:27:21
about inefficiency and that really all comes back to Doge and dare I say you know the conversations we've been having
00:27:28
this podcast for 2 years that this is becoming acute what are your thoughts on this Vibe shift this complete pivot
00:27:34
where we've gone from my Lord everybody saying I gotta get mine you got yours I'm getting mine to name and shame
00:27:42
they're naming and shaming now very specific pieces of pork in these bills you know including stadiums for n the
00:27:50
NFL and people are like why is the NFL getting this if they were 20 3040 billion doll two just quick thoughts one
00:27:57
Patrick Carson had a at a tweet yesterday that basically said this sort of this this big
00:28:02
misinformation kind of created by by people that want to be slow is that you you you have to sort of choose two of
00:28:08
fast good and cheap and and I think basically you know elon's companies have sort of always effectively kind of
00:28:17
proven the opposite which is which is actually if you just like start to ask the question like why does that thing
00:28:22
have to cost as much you know if you're building a rocket or or designing a car or developing batteries like why you
00:28:28
know if you just do ground up why does it have to cost as much and so so what's interesting is is that that probably if
00:28:34
most people looked at what the government was spending on they wouldn't even feel like like you know it's not
00:28:39
even helping them in like the disaster relief sense of of you know I think like that they're probably actually people
00:28:44
that actually do experience the benefits of disaster relief it's actually just all of the all of the overhead that
00:28:51
we've created to getting anything done in the government that could actually make the government better serve the all
00:28:56
all the constituents I was talking to you know sort of a nameless individual in the government the other uh the other
00:29:02
week where by Congress they have to hire contractors to do work and the contractors the Contracting firms charge
00:29:09
them two and a half times the the the sort of cost of of an individual employee that they could otherwise hire
00:29:15
and so and so now now they have to Outsource the work and they don't have U any accountability mechanism for that
00:29:22
contractor and so I think there's not a single American that could look at that and say and say this is like actually
00:29:27
working well like yeah we we are spending more money to do less and the ultimate outcome is actually lower
00:29:35
quality and so so you have to at some point just kind of do a little bit of a reset moment and that's obviously the
00:29:41
the upside of Doge is like it's like it breaks every rule of us thinking about how how you would actually go and attack
00:29:47
this problem we thought you'd attack it through meetings and and we would do it through through Congressional you know
00:29:52
sort of processes and and research and it's actually just it is you know obviously a much more sort of founder
00:29:59
startup oriented way to approach this there's going to be lots of things that are broken glass around the edges there
00:30:05
there's no question but I think what's interesting about this week's event is I think that there's been this underlying
00:30:10
kind of notion of like you know Elon and and and whatnot at all you know don't understand the the government enough to
00:30:17
be able to change it and it might actually be the case that the government doesn't understand Elon in the sense of
00:30:22
of like he will just see this thing through and the tools at his disposal and Doge's disposal is is sort of you
00:30:30
know completely unprecedented in terms of the ability to put any anybody in congress on notice if you know if
00:30:36
basically they are promoting things that that are not making the country better so so the the the you know the thing
00:30:42
that we saw this week was actually that playing out everybody's been wondering well what are the actual you know what
00:30:47
are the formal mechanisms Doge has to accomplish an enact change and it's like you just saw it like they can just they
00:30:53
can just create enough visibility and Spotlight on the problem that it it causes it a level of discomfort in in
00:31:01
supporting moving forward with with whatever that thing is and so I think it's interesting I have no opinion on
00:31:06
the actual elements of the bill other than from a a process standpoint and a and a new kind of case study of of how
00:31:13
this is going to play out is I think we're seeing some early indication of what Doge will will be able to do Aon
00:31:18
how do you feel about this Doge effort as someone who is a public Harris supporter so you you've come out I think
00:31:26
you've you've been public about this I want to understand like why people wouldn't be supportive of this
00:31:32
effort right like like what is like what is the motivation for people saying this
00:31:36
isn't a good thing we shouldn't be doing this like because there's a lot of folks
00:31:40
that have gone on these shows it's like they they blast Elon they blast the V but like aren't these principles like
00:31:46
shouldn't they just be Universal that we should not be wasting money and stuff sure of course the now I mean so to give
00:31:54
some credit you know you have rokana supporting it you have fedman supporting it Bernie Sanders you know everybody
00:32:00
Bernie sand yeah Bernie Sanders had a good call out for El you have everybody has their thing in the government budget
00:32:05
that they don't like so assuming that they see that as something Doge can contribute to you could probably get
00:32:10
actually broad support you know there's a classic you know sort of reflex within
00:32:15
within probably Democrat Party On on at this point just because of elon's support of trump that that if something
00:32:21
is a is an Elon project they're gonna they're are gonna instantly respond no matter what the thing is as a negative
00:32:28
without you know kind of actually saying is this does this actually support actually something I do agree with and
00:32:33
so that it's all partisan none of its first principles right for these people for this group of people which isn't
00:32:40
everybody that's gonna be true of both sides like Michelle Obama Michelle Obama was like let's get kids healthy and all
00:32:45
of a sudden now it's in Vogue to do that so so I I think I think we're just in an
00:32:50
environment where where any anything will become partisan what's interesting is is that because of the you know some
00:32:56
of the the cross party elements of of of trump and now's cabinet is it might pull
00:33:01
in more more of the Democrat Party than than would usually happen and and I think because of Elon and the people
00:33:08
that are s surrounding Trump you probably have a bit more air cover for the ranas of the world to also step up
00:33:14
because if it was like Steve Bannon and Trump doing Doge it would be like ah okay you know maybe this is not the
00:33:19
thing to to you know lend credibility to for for Pure political reasons if you have you know some of the best
00:33:25
entrepreneurs that that are out there actually like literally in the cabinet driving this at some point you know it's
00:33:31
it is an IQ test if you're if you're on board or not shabath this is a c change that we're seeing and to Aaron's point
00:33:39
this Administration gets to pick their priorities but everything can't be a priority or it's not a priority
00:33:44
therefore they've picked the priority of smaller government more controlled spending over say Mass deportation or
00:33:51
removing more rights from women to choose when they have an abortion Etc so this seems like a distinctly different
00:33:58
Focus for Trump 2.0 the second term what are your thoughts on what we saw this past 72 hours relation to this bill it
00:34:06
was the most incredible change in how politics will be done going forward I think that
00:34:14
people are probably underestimating what happened here this was a multi billion grift that was stopped on a dime
00:34:27
over over 12 hours of tweets you would have never thought that that was possible the point is to put a
00:34:35
dagger in something that big that had so much broad support just a few hours earlier I think it's so consequential in
00:34:45
how the United States can run going forward so building on what you said shath also very interesting here is the
00:34:52
fact that Trump hasn't taken office yet and they're having this huge impact this
00:34:57
is a current a month before he's even in office if they can stop this what will they do when they actually are in power
00:35:04
I think right now you're seeing the first order reaction which is about the bill itself and I think that misses the
00:35:11
point the bigger issue is going forward you will have the ability to and part of
00:35:18
it is because we have a set of tools now that allows us to do this to read 1500 pages in a matter of minutes to
00:35:25
summarize it into the key essential elements to really understand what's being asked and what's being
00:35:32
offered and then to put it in a digestible format that normal people can consume yes then all you'll have to do
00:35:39
is just connect the dots and tell your Congressman or congresswoman that you'd like or dislike this thing and what
00:35:45
you're going to see is a much more active form of government and I think that's the really big deal the fact that
00:35:51
it's it really becomes the voice of the people now the alternative can also happen imagine there's a piece of
00:35:59
legislation that is very controversial but it turns out that people actually want it then the opposite will also
00:36:07
happen and can also happen now so I think that it's a very nuanced and interesting way that governance can
00:36:12
happen the other thing that I'll say though which is funny is we should have a segment called today in hypocrisy and
00:36:19
if I was running the segment what I would say is today in hypocrisy you have a group of people I.E
00:36:25
the Democrats who are very upset and who now point to Elon as sort of like some Shadow cabinet minister or some Shadow
00:36:35
President elect or some Shadow first buddy right first buddy I love that except then I thought to myself well
00:36:42
hold on a second like there was like some something UNT happening in the shadows and I thought well actually this
00:36:48
is the exact opposite the guy is tweeting in real time his stream of Consciousness you absolutely know
00:36:55
everything that he wants because he just lays it all bare and at the same time I
00:37:00
thought it was really interesting the same people who were saying that were the ones that finally admitted that they
00:37:05
were hiding Biden for the last two years and I thought did we just miss this like
00:37:10
the same people that are like hold on Elon I don't like the fact you're telling us what you actually want on
00:37:15
Twitter transparently while we hide our president of the United States in a box well yeah so you're referring to a Wall
00:37:23
Street uh Journal story that broke uh think this week in hypocrisy Jason take it away yeah I mean it was just as we
00:37:31
said on this pod we knew that they were hiding him now the cover up is worse than the crime and the coverup is a
00:37:37
cover up they were not letting him take meetings they were limiting access to him Dean B Phillips came on this program
00:37:45
shout out to him congratulations the great run you know he he just told the truth here he's not up for it he's Su
00:37:52
Downing you know terrible situation people get old and people have cognitive decline the end question
00:38:00
hold on a second so just to contrast and compare Trump is not even in office you
00:38:05
know Elon is not a member of the cabinet per se these are effectively today still private
00:38:12
citizens when there's all of this noise about what happened over the last two days to stop an absolutely ridiculous
00:38:18
pork barrel bill but when are we going to double click into what decisions have been made in the last two years that
00:38:23
were actually bidens versus surrogates that just decided and who gave them the authority to make those decisions if
00:38:30
they're going to do Aaron and you and I are left leaning moderates I think that would be the most accurate way to
00:38:36
describe us I mean if they want to do an investigation there should be an investigation to did they know that he
00:38:42
was in massive cognitive client and let him stay in charge of the nuclear codes do you agree or
00:38:49
disagree this is uh this is sort of not not the part of politics I I think about
00:38:54
as much so I'll I'll leave that up to you as the other left leing moderate so yeah no I just wonder if like this is a
00:39:00
crime that they like what if it turns out he actually has Parkinson's or Alzheimer's like a diagnosis it's not
00:39:07
out of the realm of possibility that they covered up an Alzheimer diagnosis chth and if they did is that
00:39:15
criminal I mean it's unethical it's deeply unethical yeah it's very dangerous Yes again it just goes back
00:39:24
to the people elected Joe Biden he won fair and square he ran on a specific mandate that the people
00:39:32
endorsed I just think it's devious though that certain figures in that white house took a level of power and
00:39:40
decision-making Authority that they were never entitled to if if they wanted that
00:39:45
they should have run and they should have been elected that's what we all sign up for and so I think that that
00:39:51
idea that we let that happen or that that happened to the American voting public is I think very unfair
00:39:59
that's why I think you have to realize that and you've said this before we need these checks and balances going forward
00:40:06
and I think the way that you have these checks and balances again is Veer towards transparency the more
00:40:11
transparency there is and again this is where I'll say you may or you may or may
00:40:16
not like Donald Trump but the one thing you will never have to be worried about is whether you will not be able to hear
00:40:23
from him in first person you're GNA hear from him that is absolutely true I mean simple
00:40:30
suggestion here chth if you're ever in doubt you will be able to know very quickly where he stands on whatever
00:40:37
topic is important to you and I think that that idea is very important because then if it's filtered through somebody
00:40:43
else because of some health issue that's then covered up we're making decisions that impact the entire world we're
00:40:50
making decisions that impacts the economy we're making decisions that touch hundreds of millions of American
00:40:56
Lives who are making those decisions yeah it's kind of crazy I I have a simple suggestion here with these bills
00:41:01
by the way when they're 1500 pages how about for every hundred Pages you release you have one day of review so if
00:41:07
you want to release 1500 pages 15 business days review does that sound reasonable maybe
00:41:13
three weeks and then just stop doing 1500 at a time break these things up into two or 300 Pages at a time I just
00:41:20
love the fact that people are motivated and they have the will and the desire to
00:41:25
focus on these focus and desire because you people have to have the will and people did not have the will to get in
00:41:32
the weeds and examine the spending and now it's becoming like invogue it's becoming a Pastime to question the
00:41:39
spending this is a really great moment in time for America the other thing Jason that we haven't done is I think
00:41:45
that killing the bill was step one the thing that America has not yet seen and I think Aon brought this up with the
00:41:52
Patrick Collison tweet which is just excellent Nick if you just want to put it up there it's it it really is true
00:41:58
America still believes that the more you spend the more you get we do at the core
00:42:05
that's why there are 1500 pages of spending in here because people want things because they want things to be
00:42:11
better what we need to train people to understand is actually that it's the lies that are told that make you think
00:42:19
that with more money comes a better outcome and we see every day in Silicon Valley we all start with next to nothing
00:42:26
as a startup and we outmaneuver and we out execute companies all day long with way more resources so it has nothing to
00:42:34
do with the resources contraint leads to great art Aaron your thoughts no I mean
00:42:38
I I can't add that much more to this I think it's there there's probably a little bit of a a disconnected times
00:42:43
from the let's say the the voting public and and you know broad constituents from
00:42:49
then those that have sort of seen this in real life being in inside of a company having to you know do a startup
00:42:54
and scaling up and and just this um the the perverse incentives to build bigger teams spend more your project
00:43:02
then is more important the more dollars it gets we have all of these systems in place which is the stuff that gets
00:43:08
attention are the things that you spent more on so you have all these weird incentives to actually have your thing
00:43:14
literally cost more to have you know more overhead because you've brought in more contractors into the project that
00:43:21
then you know you're going to get some you know kind of future benefit from in some way so you you have a lot that that
00:43:27
is sort of fully broken in this and um and there's no there's there's you know it's hard to imagine any other way to
00:43:34
Veer off from that path other than something that does shake things up you know as much as doge is doing all right
00:43:39
listen we can't do any worse than being massively in debt so just let's have a culture of yes we can no yes we can you
00:43:46
could have you could have Runway de yeah I think we already have that I mean we this is for for people who maybe are
00:43:53
rooting against Trump in the audience or rooting against this because they're super part
00:43:57
all I'll say is I know these individuals around Trump root for them and root for
00:44:02
this process please because this is a path to fixing the most acute existential problem we have which is our
00:44:08
debt you don't have to like Trump to like Elon to like V and to like these other individuals sacks included there
00:44:16
are great people who are being called to serve let's judge them based on their performance that's all I ask for the
00:44:23
people who hate Trump who hate these indiv ual judge them on their performance they've come out with a bold
00:44:29
plan let them cook once they've cooked then judge their results that is what I'm telling everybody who hates Trump
00:44:38
and who hates this Administration and who's partisan on the other side let him cook judge the results oh I'll just
00:44:43
throw out one more one more thing in this because I think doge is The Branding of Doge is is often the
00:44:49
efficiency side which people always go to the the spend side but the corollary to that is the regulations that that
00:44:56
obviously are expens expensive to maintain and and that's what creates layers and layers of overhead on
00:45:01
reviewing everything that's coming in then to the government and um and you know unfortunately we have great
00:45:07
examples in California where where literally we spend more to do less and and it's because we've ratcheted up
00:45:14
these layers and layers of Regulation and I have friends literally doing climate Tech in in like climate Tech you
00:45:22
couldn't imagine something more probably left leaning Democrat that they can't actually get things done in California
00:45:27
the state that that you would imagine to be the most kind of climate first you know friendly State because of the
00:45:32
amount of Regulation that prevents them from getting things done so so you know there's there's actually this like you
00:45:39
know total combination of actually a fewer regulations you'll spend less money in government you'll actually grow
00:45:45
the economy faster which will create more jobs like all of the things get solved the more efficient you get you
00:45:52
know kind of large on all of the topics so this is spending great Point Aaron regulations next let's see what they do
00:45:59
there I was in the room when Antonio graes was doing zero based budgeting at Twitter now X and sax and I were looking
00:46:08
at roles for people what the what this team can do in terms of making things more efficient it's amazing what can
00:46:16
happen when you do zerob based budgeting and when you just think from first principles well do we even need to do
00:46:22
this does this need to exist take all these regulations put a 20e clock on half of them a 10year clock on the other
00:46:29
half can can I just give one one more random example feel free to edit it out chath you like this because it came out
00:46:33
of meta um uh do you have you followed the Z standard compression library from meta so this open source Library kind of
00:46:41
a you NextGen compression on on data and we finally it took us you know probably
00:46:45
too long but but the team worked insanely hard implemented this compression algorithm we literally our
00:46:50
uploads and downloads got faster we spend less money on on networking and compute and it you know took some
00:46:57
re-engineering of the system but like it like that's just like not a concept that
00:47:01
that people go into problem solving with which is like what if the thing actually
00:47:04
was cheaper to run and it was better and so think about all the systems of government that could be that could just
00:47:09
be upgraded and then you would spend less money actually maintaining them I mean we spend you know hundreds of
00:47:15
billions of dollars way way too much on Legacy infrastructure technology we could automate more you could spend way
00:47:20
less money and then get better outcomes so this is just happening everywhere and
00:47:24
and I don't think people realize the the scale of the so and I'll just give an example when we
00:47:29
went into Twitter nobody was coming to the office there were people who hadn't committed who hadn't come to the office
00:47:35
who hadn't committed code in six months so what were they doing right so you start looking at the data then they were
00:47:41
spending an enormous amount of money on SAS software that nobody had logged into
00:47:46
and then they had desk software to Route people around that was costing $10 per day per desk per you know location
00:47:54
whatever nobody was coming to the office but they were paying for software to Route people to the right desk in office
00:48:00
suting it the waste when I tell you the waste and the Griff and I'll just call it what my interpretation is stealing
00:48:08
they were stealing from those shareholders the government is stealing from taxpayers it has to be fixed let
00:48:14
our boys cook freeberg you get the final word before we go on to conspiracy corner you got nothing all right let's
00:48:21
go straight to conspiracy Corner everybody put your tin foil hats on there were drones over New Jersey
00:48:27
Thursday morning the FAA ban drones this is breaking news in parts of New Jersey
00:48:32
until January 17th due to quote unquote breaking news special security reasons they also warn that the government May
00:48:40
respond with deadly force Against drones posing a threat this thing is getting Crazier by the day there have been
00:48:47
thousands of reported drone sightings in New Jersey and bordering states over the
00:48:51
last week here's some examples play the clip yada yada until Thursday morning why house officials have been dismissive
00:48:58
saying repeatedly that nothing significant is going on one of the theories was that there was a that the
00:49:04
drones were looking for nuclear material AKA a dirty bomb or lost radioactive material or the the ultimate a lost
00:49:14
nuclear bomb from like an actual nuclear warhead from Ukraine on Tuesday Morning
00:49:20
the mayor of Belleville New Jersey suggested the drones could be looking for that radioactive material that went
00:49:25
missing on December 2nd that was radioactive material uh geranium 68 we'll get details on that from freeberg
00:49:32
in a moment and then of course conspiracy theories are going wild it's Iran it's UFOs and my favorite Project
00:49:40
Blue beam which is that NASA is using Holograms and other technology to create a new world order and religion and
00:49:46
projecting Jesus into the clouds you can look that stuff up or we'll have Alex Jones on uh in Sax's seat one week okay
00:49:53
freeberg you're the genius here tell us what's going on I think there are three likely explanations the first is that
00:50:00
the government's got some activities that can't be disclosed so we don't know and they can't talk about it no one can
00:50:05
neither you know say yes or say no to it so you know that's kind of one that that's pretty possible the second is
00:50:11
these are just individuals with a bunch of drones messing around having fun trying to wreak havoc could be fun bunch
00:50:17
of kids I think we've all been there the third is what I would call kind of a bit
00:50:21
of a more nefarious like this is my conspiracy theory I think it it could be considered a scop okay
00:50:30
so right now the US has a significant regulatory burden on on drone utilization in a commercial setting and
00:50:40
it's very hard to use drones you have to have lineup sight to the operator these
00:50:43
things aren't supposed to go on their own there's all these rules and restrictions and so on and so forth
00:50:47
meanwhile you've got countries like China rocketing ahead so I don't know if you guys know the company mwan in China
00:50:53
you know the food delivery company have you guys did you know that they do a large amount of drone delivery of their
00:50:59
food now was not aware of that yeah we're testing that here in the US the drone delivery business in China is
00:51:04
already $30 billion a year and they're also launching a pretty significant Fleet of what we would call kind of the
00:51:11
eeve talls or flying cars the expectation is that by 2030 there'll be 100,000 flying cars moving
00:51:18
people around in China and these are huge efficiency gains in fact with mwan you can now order food while you're on
00:51:24
the Great Wall at one of the ramp parts and it'll bring the Drone will bring the
00:51:26
food to you while you're walking the Great Wall as a tourist and in the US the reason that
00:51:32
these things haven't taken off and the reason we don't have a large kind of drone industry which is clearly emerging
00:51:37
is going to be a huge economic driver for China and others around the world is simply the regulatory restrictions and
00:51:43
so if you were going to try and mess with the US's ability to move forward with the Drone economy you would
00:51:51
probably try and wreak some Havoc Stoke some fear and get people to say hey this
00:51:57
doesn't seem cool what's going on I don't like that there's all these drones in the sky I'm freaking out and try and
00:52:02
get The Regulators to come in and say hey we're Banning drones and set up everyone including the people in the
00:52:09
government to say we should take a beat we should think a little bit before we deregulate we should who would do this
00:52:14
who's the motivation Uber Eats and Postmates no no no no it could be the the other government uh that's my scop
00:52:22
point this could be you're saying this could be China doing this to try to slow down our economy
00:52:27
think about it if you're going to pass a bill in Congress to make drones more freely rable in the skies you're going
00:52:33
to reference back this crazy story in New Jersey everyone's freaking out about it and you're G to say hey wait what
00:52:38
about all that stuff that happened in New Jersey maybe this doesn't make as much people are kind of scared about it
00:52:42
we shouldn't rush we shouldn't rush we shouldn't rush that would be my scop theory that's my you know kind of
00:52:48
conspiracy theory tinfoil hat I don't often do them but that's what I would kind of think about I think the first be
00:52:54
Alex Jones would be proud Aaron uh why don't you jump fence and tell us your best conspiracy theory of this no I this
00:53:00
is that was all crazy pills what I just heard uh there yeah take some I think there's like there's like 10 higher
00:53:07
scops you would do if you wanted to to get us to you know have a collapsing economy than going after drone
00:53:12
deliveries but um no I what would they be what would they be I mean well first of all I think I think you'd have ai
00:53:19
like like do a robot I think you'd have a robot AI thing that goes you know runs
00:53:24
a muck um robot RoboCop yeah yeah I I think that would be way sooner than you're worry about food delivery oh you
00:53:30
have 10 self-driving cars hop the you know hop the curb and and crash into a storefront self- driving is on ice for
00:53:37
two years that would be uh you know an example shamat your thoughts you got some conspiracies here what do you
00:53:43
think's going on here no but I thought that the most credible thing was that they were they
00:53:50
were looking for radioactive material that somehow some got lost and why would they only look at night actually it's
00:53:59
interesting you say that there was somebody on Twitter X who claims to be an expert in this field and there's a
00:54:05
startup actually that I just talked about which one kakoa the great I think it might have been King KOA the great
00:54:10
shout out to King KOA the great and his mom's basement eating why do you hate Kena he's don't hate Kena I don't
00:54:16
hate Tred to get me bad because he said I was trying to dox him you always can kcoa he's great no I just think it's
00:54:23
hilarious that people are retraining K KOA the great as if he's like this great journalist and he's in his mom's
00:54:29
basement eating hot pockets or he's working for Putin he's a really good I don't know do I want my jcal or kacoa I
00:54:37
don't know I don't know who do you take I mean your is pretty good likea I subscribe to kencoa yeah Aaron Ley you
00:54:45
have a favorite who are you are you autism capital or kcoa what do you oh I like autism Capital too I think he's
00:54:50
absolutely I'm I'm liking Giger these days oh you're into Giger capital g capital
00:54:56
I read all PCS I think the nighttime thing would be it would be at least typical of this government to do a
00:55:02
striesand effect of of just like maybe if we cover it up nobody will see and then obviously it's the biggest thing
00:55:12
so but if they there is a startup that makes I we really looked it up and there is a startup that makes drones to do
00:55:22
this specific task to look for dirty bombs in ports and ports obviously look for these things it's a known threat
00:55:29
this is not rocket science sorry and why and why only at night did free because that they can read the signatures better
00:55:35
was the theory that at night you can read the signature which doesn't make sense to me Science Guy you want to come
00:55:41
in here I don't see I don't see how nighttime You' get a better read on radioactive material that
00:55:48
doesn't make any sense so that made no sense that sound like a crazy thing but anyway we're living in crazy times
00:55:54
speaking of Crazy by the way that was my first consp theory in 208 episodes of the all in pod so very nice I actually
00:56:01
can participate in conspiracy corner now I'm coming back next week with a better
00:56:06
one okay read us read us some more news go to Google news and read us some more news so we can do another to Jesus
00:56:11
Christ man read for us no you do it go no you got the do in front of you okay so today the Dow Jones Industrial liage
00:56:19
is up 23,000 to 44,000 TR to guys make you look kler said he's super happy sking that's enough I'm going skiing I
00:56:29
thought it was cool how he read the entire Congressional bill um earlier yeah all 1500 J loves to filibuster I'm
00:56:36
not filibustering all right listen here let's do another story let's see if you can contribute something open a update
00:56:43
M your contribution was amazing I was actually using chat GPT to go into the to go into the founding father's papers
00:56:51
and uhal I was reading The Federalist Papers with G 13 in number 44 I would like to
00:56:59
quote Hamilton the musical Hamilton the music I was comparing the lyrics from Hamilton the
00:57:09
musical oh my God hey Nick can you send JK another Yahoo news article let's get going come on let's go
00:57:19
Yahoo let's go let's go can't wait can't wait can't wait to see you tomorrow let's go oh my God
00:57:26
we just can we just end it here yeah no do it do it because I want to talk about
00:57:31
open a you want to talk about open you do yeah yeah give him his red meat give chamad his red meat all right here's an
00:57:36
update on closed AI flipping and uh Sam Alman super villan Sam Allin secure in the bag meta wrote a letter to
00:57:45
California's attorney open yet on open for profit conversion two months ago open aai announced a $6.6 billion fund
00:57:56
around $157 billion valuation they're producting 3.7 billion in Revenue this year pretty great Revenue growth but
00:58:05
there's a poison pill in the deal open AI must convert to a for-profit within the next two years or investors can ask
00:58:13
for their money back and right before they announced this round you remember CTO Mira morat and two other top
00:58:21
researchers resigned many people saw this as a protest Elon who put the first 50 million in and co-founded open AI is
00:58:28
currently suing the company and seeking a court order that would stop the for-profit conversion now Zuck is
00:58:35
joining team Alon Elon and Zuck are in some weird pairing up they're not in the ring not in the Octagon no last week
00:58:44
meta sent a letter asking California's attorney general to stop opening eyes for profit conversion what do you think
00:58:51
of this we've got them now not in the Octagon but they're in the political Arena math your thoughts I think that
00:58:57
this is so interesting so I was looking at all of these things if you if you put
00:59:02
them all together it paints a really interesting story so you have Elon filing an injunction which basically
00:59:08
says you should not allow this conversion to happen until we sort out all of these details because if you
00:59:15
allowed it to convert and then I win it'll be very messy to go backwards I think that that's a pretty credible
00:59:21
legal argument then you have Zuck basic Bally say hey elon's right this company should not convert but the more
00:59:31
interesting thing that really got me thinking about this was a chart that Menlo Ventures put out Nick can you just
00:59:37
show this what this shows is just what's happened in the last year and what do you notice what you notice is the market
00:59:46
share of open AI has changed pretty meaningfully from half to about a third and what you see is anthropic doubl meta
00:59:56
roughly staying the same Google picking up steam and it started to make me think
01:00:01
this is very similar to a chart that I would have looked at when you know in6 and seven when we were building
01:00:10
Facebook because we had this huge competitor in Myspace that was the deao winner and we were this upstart and it
01:00:18
made me think is there a replay of this same thing all over again where you have
01:00:25
this incumbent that Pioneers an idea and they start with 100% share and then all of these upstarts come around
01:00:34
from nowhere and then I thought well what is better today if you are a company that's just starting versus if
01:00:42
you were the incumbent and I think that there's a handful that are worth talking
01:00:45
about so the first is when you look at what xai is done with respect to invia gpus the fact that they were able to get
01:00:54
100,000 to work as you know in one contiguous system and are now rapidly scaling up to basically a million over
01:01:02
the next year I think what it does Jason it puts you to the front of the line for
01:01:06
all Hardware so now all of a sudden if you were third or fourth in line xai is now first and it pushes everybody else
01:01:13
down and in doing that you either have to buy it yourself or work with your partner and I think for the folks like
01:01:20
meta that translates and explains why they're spending so much more it's sort of like this arms race if you can't
01:01:26
spend with my competitors I'm just going to prefer my competitor to you so I I think that that creates a capital war in
01:01:33
a capital War I think the big companies like Google Amazon Microsoft meta and Brands like Elon will always be able to
01:01:43
attract effectively infinite capital and their cost of capital goes to zero which
01:01:48
means they'll be able to win this Hardware War okay so put a pin in that then the second thing is what
01:01:55
happens on the ACT data and experience side on the training side if you listen to Ilia suer if you listen to Andre
01:02:01
carpy what they effectively are saying is there's this terminal ASM toote that we're seeing right now in model quality
01:02:08
so what happens a lot of these folks are now experimenting on the things around the model right the user experience how
01:02:15
you use it can I keep things in memory can I cut and paste these things from here and there because what it says is
01:02:21
like the data is kind of static and brittle but it's actually not that's what we said before because you have
01:02:26
this Corpus of data on X that's pretty unique I suppose if Elon fed in all this kinetic data that he controls through
01:02:34
Tesla that's very unique does that all of a sudden create this additive pool of information
01:02:43
possibly and then the third thing is when you look at that chart what that chart says is hold on a second why are
01:02:48
corporates moving around and what I can tell you just through the 8090 lens is we are complet completely promiscuous
01:02:56
in how we use models and the reason is because these models offer different cost quality tradeoffs at different
01:03:05
points in time for different tasks and so what we are seeing is a world where instead of having two or three models
01:03:11
you rely on you're going to rely on 30 or 40 or 50 and you're going to trade them off and you're going to use
01:03:16
effectively like an llm router to dis you know load balance them yeah and to Route them or just or just to manage and
01:03:23
Route them and then there's an intelligence above that that's constantly tasking and figuring out
01:03:27
prompt optimization across these models so it's this thing where we were very reliant on open AI now we're Reliant
01:03:35
across three or four ideally we'll be reliant on 30 or 40 and so I just see this world where
01:03:41
it's all getting commoditized quite quickly and so I'm just like sort of scratching my head like where is the
01:03:48
market value here Aaron your thoughts I know you're very promiscuous when it comes to llms as well uh I I mean I we
01:03:54
have a very similar model is what which M said which is we're agnostic so we work with multiple AI vendors but the um
01:04:00
uh I think the a a friend deep in AI land a couple years ago right before chat BT said there's no secrets in Ai
01:04:08
and I didn't totally understand kind of at the time it hadn't registered what that meant but very quickly it kind of
01:04:13
became obvious which is the research breakthroughs sort of propagate insanely quickly across the
01:04:20
AI community and so back back to Jas framework if you just think about it as as if if the research effectively
01:04:27
becomes open at at some point in time quickly enough because either the researchers move or people publish it or
01:04:32
whatnot then it really is a compute game and then maybe a data access game and that means that there's four or five ad
01:04:38
scale players that can that can fund this and and I think as we've seen in other areas where it's an infrastructure
01:04:45
play you eventually have the underlying service with with enough competition you
01:04:50
have the underlying service eventually Trend toward the cost of the infrastructure so so what we should
01:04:55
expect is that the price of a token in AI land you know basically will be whatever the price of running the
01:05:02
computers are and maybe with like a you know plus 10 20% margin did you see that
01:05:07
same thing happen with storage I remember in the early days box and Dropbox and YouTube you all had this
01:05:13
major Innovation with storage how did that play out let me give you a fun stat we give our customers unlimited storage
01:05:20
we have 82% gross margin so so the the what what happened was the of the underlying storage has gone down by
01:05:28
hundreds of times since we started the company and then our all our value is in the software layer on top of the storage
01:05:34
so we've benefited by this incredible just you know ruthless competition between Western Digital Seagate other
01:05:40
players that are just trying to pack more more more you know basically more storage density into these drives and
01:05:48
every couple years they have a new breakthrough we're now you know upcoming we're we're heading toward maybe a 50
01:05:52
terabyte hard drive when we started the company they were kind of 80 uh 80 gab how much of your time in the early days
01:05:59
was spent on dealing with this infrastructure issue and then how much of your time and your leadership team's
01:06:05
time is spent on this issue now yeah so so back in the day like if we had you know 10 10 people in in engineering you
01:06:11
know 80% of them was doing you know pure infrastructure work now if we have a thousand people uh it you know be
01:06:17
inverted in terms of the ratio so you just get you get more leverage uh both as the the you know as as you get the
01:06:23
advancements in the technology but then also as you scale but all this is to say
01:06:28
you should basically anticipate a world where and and I think Zuck is this interesting counterbalance on all of
01:06:32
this because of Open Source um if at any moment you know that that Zuck will will
01:06:37
basically provide an open source model that is at at kind of best-in-class benchmarks and and at the at the
01:06:43
frontier then there is a limit on how much you can charge for the tokens of your hosted model because anybody will
01:06:49
then be able to go host the open model and and be able to provide infrastructure around it so so if you
01:06:53
always have that counterbalance and the tokens eventually kind of look the same uh the output tokens kind of look the
01:06:59
same isn't it yeah always isn't it also the truth that major Enterprises Fortune
01:07:05
500s 200s you know 20 years ago weren't interested in open source and now that's
01:07:10
kind of their default they want to buy into open source because they don't want to be locked into a vendor it's actually
01:07:15
not even necessarily the case that the that the customer has to pick the open source vendor they might buy it through
01:07:20
an abstraction layer that that is letting them get the benefit of Open Source but but still buy through
01:07:25
proprietary so you believe open source wins I I believe no no no so I I believe open source causes pricing to always be
01:07:33
extremely low right but okay but in this case do you think do you think open source is GNA ultimately win the day in
01:07:40
models no not necessarily because only only meta has the has the the scale to be able to provide I think what eron is
01:07:47
saying here let me let me maybe try to frame it I think what he's saying is there'll be open source models there'll
01:07:53
be close Source models but the price that Aaron or me or anybody else pays these model makers will effectively go
01:08:00
to zero got it and it it'll go to the cost of the compute to be to be clear with a little bit of margin for for
01:08:07
theer the physicality of that compute got it now it's important step back and say I still think you could probably
01:08:12
have the entirety of the model providers make 10 times more Revenue than they do
01:08:16
today because we're just literally in like the first percent of the total Tam so so it'd be a mistake to think that
01:08:23
that has you know some kind of downward pressure in in terms of the long-term economics of these businesses especially
01:08:28
because I think open ai's Revenue stream is increasingly looking like a SAS Revenue business as opposed to just you
01:08:33
know just the API kind of token pricing so so none of this is is to you know provide any any sort of color on like
01:08:40
what would you bet on today I I agree with jamat that you're going to have maybe not 30 providers but let's say you
01:08:45
at least have you know five to 10 good choices all all competing heavily for the next breakthrough like literally
01:08:49
this morning Google had a breakthrough in in sort of this reasoning oriented model from from their flat from their Je
01:08:55
family 2.0 yeah yeah and uh and and so what's what's incredibly you know kind of great is it's it's sort of the best
01:09:02
time ever to be building software assuming uh you know assuming that that you have a play in the market that lets
01:09:09
you remain differentiated and the key there is just do enough on top of the AI model that there's enough value there
01:09:14
you know how much the world spends on software and software related things every year it's about5
01:09:21
trillion so there's like call it like a trillion and a half of software licenses a trillion and a half
01:09:28
of Consulting and a trillion and a half of it folks inside of companies plus or minus a little bit more you get about
01:09:34
five trillion and that's compounding 133% a year I I'm pretty sure that the market here shrinks by an order of
01:09:44
magnitude and instead of fighting over five trillion I think we'll be fighting over 500 billion what do you think Aaron
01:09:51
you you buy that no not at all uh I mean I don't know if you want to make the case more but but the only
01:09:59
reason is that I think that as as we delever the software development process from humans I think the unit cost of
01:10:05
creating code effectively becomes so cheap that it's going to be very hard to differentially price these products the
01:10:12
way that they are so an example would be that let's say you use I don't know pick
01:10:18
your favorite piece of software I I don't want to pick on anyway that's why I'm not I'm not saying
01:10:24
say office Suite let's pick an office suite everybody's got one sure actually let's pick let's pick on Excel because
01:10:30
maybe that's like sure Excel Google Sheets yeah it's not it's not that Excel isn't valuable it's incredibly valuable
01:10:36
it's what is the marginal cost of creating the Excel equivalent that is good enough that people switch the
01:10:41
marginal cost today is very expensive and you can see that because it's what it costs Google to make sheets but
01:10:49
that's humans so the real question is if you have a legion of B that works 247 incrementally and
01:10:58
increasingly more accurately every day the question is what is the marginal cost and I think the marginal cost of
01:11:05
that is going to be very cheap and when you do that it's very difficult to price
01:11:11
it anywhere near the same and the reason is that other companies will then replicate it and say hold on if if Excel
01:11:18
wants to charge $100 I'll charge 50 and I'll take a lower margin that's just Supply demand economics yeah yeah so so
01:11:26
so so I I think I I I think there's I I just don't agree with the Tam compression because I think there's
01:11:32
another kind of counter event that's happening that that AI is is really going after like services and and so
01:11:37
that then then conversely expands the the T of software where it budgets weren't usually applied to those types
01:11:43
of things but we can get in that in a second but I think we've already seen I think we've already seen this though and
01:11:48
it hasn't exactly played out as as you're saying so you already have like a z like so Zoho is this really
01:11:53
interesting business it's probably a couple billion Revenue at this point um and it's basically a suite of of
01:11:58
extremely lowcost affordable software products by category the cycle time of Zoho is poor but it's not that's not
01:12:05
been that's not been the reason people don't switch though they it's all it's all lever to humans I just think it's
01:12:10
not a good product it's it's decent enough why do you think people don't switch Aaron yeah I do agree with you Aaron by
01:12:17
the way that when you bring C that whole offline Services category online and you
01:12:22
automate them with AI I agree with you that that Tam could be ginormous all I'm saying is right the traditional software
01:12:28
T today what people spend $5.1 trillion on I think people will spend $500 billion on and barely if
01:12:36
that there there may be other things that people spend money on that that are that are wrapped in AI yeah I I guess
01:12:42
the the the the counter and maybe you'd look at an Erp system or a CRM system or
01:12:47
something else like like it that that is sort of like those things are totally screwed no but like but but this is my
01:12:54
point the opposite like the last thing you want to touch is the system that is like like powering your supply chain the
01:13:00
companies the companies I talked to they're consistently like rip it out get us to a point where we can rip it out
01:13:05
and the reason is because what they've realized is they'll spend $50 to100 million do a year for five features and
01:13:11
they're like just give me these five features as workflows yes give me a simple crud database and just get me get
01:13:17
out of the way and it's like the tradeoff for that makes a lot of sense because look let's face it like when you
01:13:24
have to build one piece of software that has to sell to 50,000 companies the reality is that that piece of software
01:13:31
is trying to do everything and then some and it's trying to solve two or three use cases plus around you know five or
01:13:37
six common use cases that are generalized yep for 50,000 customers so you end up with 50,000 features you know
01:13:43
it's really interesting because aarin you kind of alluded to there's a tam expansion moment there and I'm seeing
01:13:49
this on the front lines uh we run a program found University I've talked about it here before where we see people
01:13:55
pitching us they're year zero startups two or three person teams and what they're doing is they're not going after
01:14:01
existing Legacy software they're kind of going after jobs they're looking at a position or a job somewhere this is an
01:14:08
accountant we're going to take an accountant we're going to make of the number one accountant in the world
01:14:13
that's an AI agentic an agent we're going to make a podcast producer we're podcast AI we're going to make a virtual
01:14:19
assistant with Athena we're just seeing it over and over again that's a whole another category where you study a
01:14:26
person's Behavior as they work a social media manager and what they do and then you replicate it with AI and that's
01:14:34
something that just hasn't previously been done so there could be two things occurring here chth and Aaron at the
01:14:39
same time which is a deflation in Legacy systems and they'll be replaced and then
01:14:45
additionally human capital and jobs that are easy enough for AI to do as an agent
01:14:51
will also expand the Tam two things at the same time you are completely right about the usage all I'm debating is when
01:15:00
you have to price something you have to look at the total cost of what it took to make it and then you want to try to
01:15:07
build in a reasonable amount of margin and some reasonable expansion and you discount it back and this is what you
01:15:12
think it's worth even though you may not think you're doing that when you implicitly price something that way that
01:15:18
is what's happening underneath the hood to the unemotional buyer of that good and all I'm saying is if what Aaron says
01:15:26
before which I agree with is true which is the cost of using a model to get to an output effectively goes to zero sort
01:15:35
somewhat what I've been saying before the marginal cost of compute goes to zero the marginal cost of energy goes to
01:15:41
zero the real question is what does it take to make a good in the digital world let me ask freeberg a question here
01:15:48
you're back in the CEO slot at ohal you're doing it every day Dave you're making these choices as to what SAS
01:15:54
products and how you're going to solve problems are you looking at it saying I'm going to hire developers who can
01:15:59
work 10x because of all these new tools and I'm going to build my own internal systems or are you looking and saying
01:16:05
I'm going to buy off-the-shelf SAS products what are you doing when you make your own decisions every day David
01:16:12
freeberg well I try and encourage the teams to build stuff um that better meets our
01:16:19
needs and then it can actually be a better solution and it can be built- in house and I think we did a I think I
01:16:26
mentioned this the last episode but we did a hackathon where we brought in people to learn how to use cursor and
01:16:32
chat GPT to build software that had never done it before to try and create this as a capability for people broadly
01:16:39
in the organization and they were great tools that came out of it so I think that that's really the future as and
01:16:44
this is kind of like you know I'd say early generation but as we get to further later generation
01:16:49
capabilities you could see the instruction to a chat GPT or like interface hey I'd love to do the
01:16:56
following things with a piece of software it shows you a couple options you pick one shows you a couple ux you
01:17:01
pick one it does user testing automatically for you it does QA for you and ultimately it puts it into
01:17:06
production for you which is the biggest challenging step right now you still need Engineers that can load stuff into
01:17:10
production and do QA but if all of that gets automated as well now any user in a
01:17:16
company can actually stand up software to do something for them a non developer you're saying for n developer stand up
01:17:21
software maybe so jamat just to clarify you there there's two different ways to approach the lowering the cost of
01:17:28
developing software one is that it just creates more competitors in each of these categories which then lowers my
01:17:33
price because now there's there's some downward pressure Dave is bringing up an different example which is I'm going to
01:17:36
build my own software at effectively the price of zero the the The Challenge on this
01:17:42
especially the second one is is like when you like most organizations don't want to be in the business of having to
01:17:47
think about about building their own software they just like want it done for them like it's like not a core part of
01:17:52
of their like so you know you're your business would be very unique relative to the broad economy which is like I
01:17:58
just want like like just like I want a place to put my CRM records I want a place to like just like have my HR get
01:18:03
managed and I think the downward pricing pressure due to software cost lowering makes total sense I don't think it's
01:18:09
it's a 10x Factor um but uh but but you know I I think that we've always had a long taale of applications that that
01:18:16
enterprises build uh you did it in Microsoft Access now you do it in retool um so the next era of that will be
01:18:22
obviously AI built and there'll be 10 times the amount of that software but it's not obvious to me why that would go
01:18:28
after the kind of core the the core systems of running a business because just most companies are like not looking
01:18:33
to re reinvent the wheel of that we're working with an aerospace partner won't say who it is and we sat there and they
01:18:39
walked us through what they deal with to make the things that they're making it's
01:18:45
convoluted and this is not a software problem it's that there is no piece of software that understands how they want
01:18:52
to run their company and so instead they have to morph their orc chart yeah to the tools that are available so I think
01:18:58
what freeberg is saying some is some version of that as well he's probably there were probably people there using
01:19:03
the tools that were available and as a result at some point some HR person said we need to hire this other person and
01:19:09
this other person and instead what what it allows companies to do is just completely reimagine how do you want
01:19:16
your company to work and what is the business process you actually need to implement and then let's just get that
01:19:23
built and and you know I I I don't know if you guys saw this but Saia Nadella had this clip that's gone pretty viral
01:19:30
in the last couple of days where he effectively said the same thing and what he's effectively saying is all these big
01:19:37
software systems are business rules wrapping a data base plus an incredible goto Market team you know and this is
01:19:46
what Alex karp points to as sharp knives steak dinners and basketball game tickets I don't know if you guys saw
01:19:54
that clip I did see the clip yeah he likes to win based on product not on sales effort Nick you should find this
01:20:00
clip we don't play golf what we do do is we play software we will put if you want
01:20:05
to actually compete compete on your product and what's very special and and yes do I enjoy humiliating people who
01:20:13
have better steak dinners and sharper knives and better golf swings yes I do you know what I really I really like
01:20:18
that we win in that way it makes me very happy and it makes our clients happy but
01:20:23
it really points to the heart of how the software industrial complex that's what
01:20:27
I call it this 5.1 trillion doar this software industrial complex how has it evolved I think it's people that build
01:20:35
good point products but when the market meaning the shareholders and the public investors demand growth you have this
01:20:42
natural expansion and what do they do they inflate the feature set they inflate the cost and then in order to
01:20:50
sell that they inflate the set of incentives that they give to the buyer so the CIO inside of these large
01:20:59
organizations they control budgets they're equivalent to like state level budgets in some cases you know what do
01:21:06
you think the CIO of a top five bank is spending it's probably 15 to 20 billion dollar a year they are getting whed and
01:21:13
DED to a way that you could not even imagine I don't even think the CEO probably understands and that filters
01:21:20
down through the org and so they don't like totally ruin our whole game here well it's not it's not I'm just pointing
01:21:26
it out like it's I mean I I'll say the cter but here but here's another part of the game on the field if these tools
01:21:33
make your team yeah 10 20 6% whatever you can quantify more effective at their jobs then it's a dious amount for most
01:21:43
organizations who have created very profitable businesses I see this where I was mentioning some companies earlier
01:21:49
and their SAS pricing is broken because the number of employees at a company has
01:21:54
been going down because people are getting more efficient so now they're looking at saying well what value did we
01:21:59
provide with this podcast you know producer in a box and whatever it does they say they were starting with like
01:22:05
$99 a month or $49 a seat I said listen just charge a minimum of $500 to get the
01:22:11
software nobody complained and they got rid of the bottom tiers so there's a value being created here that is so
01:22:19
great that I don't think everybody's going to roll their own like Friedberg because they're going to be like you
01:22:24
know what what this is so great it's 6,000 a year fck it yolo I'll just buy it it is today and in five years just
01:22:33
like we're all going to and we're all using chat like interfaces more frequently yeah you go to your chat-like
01:22:39
interface and eventually you realize you can ask it to build some tool for you that does something and it renders the
01:22:46
tool and it makes it possible and it stands it up in production and suddenly you're using it at your company and then
01:22:52
you ask it to do another tool and it does it exactly to spec and you define the ux you want you define what you want
01:22:58
it to do and it works and it interoperates but you and really clearly and really cleanly with the other tool
01:23:05
and there's a big aspect of this where you can start to build all of the software infrastructure that you as an
01:23:10
organization want right but I think you and Aaron you and Aaron mentioned this though the extreme difficulty is not
01:23:17
that front end part that's easy it's like I think it's less than three or 4% of the work the 96% of the work is how
01:23:26
you actually integrate it in the back end and how do you provision it how do you have controls and how do you do
01:23:31
security because those things fail and those are implemented in a bot in a highly regulated market as an example
01:23:38
you may not actually be allowed to operate let's go through that example and let's say that you're a bank and you
01:23:44
tell the AI figure out all the security and permissions and and Authority rules that are necessary for me to operate as
01:23:51
a bank and it can actually render it it sounds farfetched today but there's no reason that in seven years that is not
01:23:56
the standard isure that I don't have the ability to say go look at all the software that's out there in the world
01:24:01
today help build a tool that meets compliance standards that meets all of my security standards and you can
01:24:06
actually instruct the AI to operate like a large number of software Engineers need to operate today the Practical
01:24:13
issue where the rubber meets the road there is when there is a penetration and a regulator who's a human because it
01:24:19
will not have been a bot comes and knocks on your door and you're like well here's this immutable log of the things
01:24:26
that I did and they're like I don't want an immutable log who the hell tested this show me the unit test that you
01:24:31
created in signed off on so there's a there is a critical human in the loop problem on that other 95% which is where
01:24:39
I agree with Aaron that's in in in reach in in like stage one like we're in stage
01:24:43
zero stage one that you need no but you'll I think it's in stage five and six I think you'll need governments to
01:24:48
take an entirely different risk posture for highly regulated markets I don't see
01:24:52
that happening in any in any time in the near future in in life sciences if you want anything in a in a clinical system
01:24:58
I don't need to tell you guys this but you have to you have to do a QA test on every single change that ever happens
01:25:03
and be able to prove that you tested every single thing so so the idea of a probabilistic AI system generating the
01:25:10
the kind of code for you you know in a clinical trial you know workflow like I just think yeah it's going to take a lot
01:25:15
of change from from Regulators we got another decade of evolution here to make these things sustainable and have a high
01:25:23
quality I think it'll happen faster than everyone thinks yeah and I think actually that's that's like there's
01:25:28
actually no reason why that wouldn't be a good thing if that did happen to be clear I I think though back to to you
01:25:32
know Jason's earlier point though like then the the counterbalance on the Tam compression is is just now the the sort
01:25:39
of thing that we think of as software that market is now is is much larger so if you're if you're selling if you're
01:25:45
selling yeah so but like but like that means that if you're selling let's say $50,000 of security software you know
01:25:51
maybe that goes down a little bit to you know $225,000 but but you might yeah but
01:25:55
you might sell ,000 of new agent yeah that I so I agree 100% with that my only comment is the software industrial
01:26:03
complex today has to shrink because the strangle hold that it has on how companies
01:26:08
run is incredibly high for an experience that's incredibly poor nobody nobody raises their hand and
01:26:16
says gosh this piece of enterprise software that I use in my day-to-day life is as good as Instagram or Tik Tok
01:26:21
nobody says that well I mean except about box I was reading the reviews earlier today and I was on G2 or one of
01:26:28
those sites and it just box was just the ratings were tremendous so I love Bock I
01:26:33
love Bo God it's incredible well I mean I mean just what's the ticker symbol it dollar we try to make it very simple for
01:26:39
people so is it dollar box is that what it is I have to put a I'm putting a j trade in here because I may have to J
01:26:47
trade this sounds like a really great opportunity for me all right listen Ain you just got Kramer what with your lator
01:26:53
yeah yeah you got Kramer FR J trade is I'm just I'm I'm loading up on uh MST and Bitcoin I'm doing a I'm shorting
01:27:00
Bitcoin and I'm buying MST I don't know what that I'm not I'm not trading stocks
01:27:03
right now I'm focused on investing in a 100 startups per year 100 new startups per year I'm putting the first check
01:27:10
into to them that's what I do all right listen enough this has been a great episode Aaron you're amazing thank you
01:27:16
for coming on constantly Everybody follow what is your before WRA on AI can I just tell you guys are you at Levy or
01:27:22
at Aaron uh yeah yeahia Leia is that the French pronunciation l e v i eia have you guys seen the vo model from Google
01:27:31
yeah I have you guys talked about how Google has like gotten some incredible they are they
01:27:37
are I literally paid shout out to Sundar oh yeah yeah and serge is going to work
01:27:42
every day by the way he's at work what can Brown do for you jel Sundar back in the group chat by way you guys see
01:27:48
Genesis yesterday well okay let's let me just put this up here and then I'll te it up to freeberg Google has been
01:27:54
putting out new models they have this new Google Gemini and they have one with deep
01:27:59
reasoning and their 2.0 model I did a sidebyside test same prompts with our friend s deep madra on this week in
01:28:06
startups just this week we did multiple tests he was he has the 01 Pro the $200 per month Gemini was beating that hands
01:28:15
down for me and I think he conceded that with their free model and their $20 model if we just gave it decent prompts
01:28:22
I think Google now has reach parody and they have an app out freeberg what are your thoughts because people were
01:28:28
counting them out and here we are I think not only have they caught up I think they've exceeded what are your
01:28:34
thoughts they were late the compounding effects are playing out and it's only going to continue to compound and I will
01:28:38
say the data repository at Google the engine that they have the infrastructure the team all everything down to
01:28:43
components is advantaged and so everyone's been kind of counting them out but it's clear they're in it to win
01:28:48
it they're here 70% of the usage of open AI is consumer 70% consumer what does that mean for them as as Gemini and
01:28:57
Google get get momentum I think you'll end up having a Gemini that has ads eventually and you could pay and have no
01:29:06
ads or you could not pay and have ads no meaning do you provide enough value and
01:29:10
of enough quality where folks don't need to then folks stay on Google on google.com I'm asking you
01:29:17
whether it impacts open AI the quality of Gemini as it increases or do you think that these usage cohorts are
01:29:23
roughly set I jump back and forth personally my experience is I don't feel like I've got embedded data on open AI
01:29:30
or on Gemini that makes me stick with one I'm just like with Google I'm going to go to the best interface the best
01:29:35
engine so I do think that there's fungibility here and people will move over as they realize better results
01:29:41
better performance but I will say that what we're seeing now with the data Advantage at Google so you know the
01:29:46
internet all these llms are are language models trained on text from the internet
01:29:50
right there's call it 50 billion words on the internet and I think think if you estimate the data repository in these
01:29:56
training sets it's like probably a couple terabytes 1 to 5 terabytes or something like that but if you look at
01:30:02
the the the the video data that's out there there's hundreds of billions of hours or 100 billion plus hours of video
01:30:08
data a large amount of that is sitting on YouTube and by some estimates there's a thousand exabytes of video data on the
01:30:15
internet so about a billion times more video data than there is word or text data and I think we just saw that play
01:30:22
out with the vo model that laun yesterday but here's some examples of VO Google has all of this YouTube data you
01:30:28
know whether or not they're using it to train I don't know the answer I don't think they're allowed to is what I heard
01:30:32
from the Insiders they have to redo the terms of service to get explicit permission to use it but you're right
01:30:39
these models are tremendous whatever they're using and and it's basically rendering physics or it looks like it's
01:30:43
rendering physics now Genesis came out yesterday and it's open source so you can actually go play with this Genesis
01:30:49
model which similarly renders the actual 3D objects into a 3D environment so you
01:30:56
so rather than rendering a two-dimensional set of pixels to look at a video video visual with Genesis as you
01:31:02
can see here you can type in a prompt and it renders this extraordinary video that that also has underlying it the
01:31:09
three dimensional objects that make up the video Banas which means you could change the angle right and you could
01:31:16
work with it and also with Google and this you can start to implement three-dimensional models based on some
01:31:23
prom that says something like I want to have the camera angle at this point in the room I want to have the room look
01:31:28
like this I want to have this color this wallpaper and suddenly everything starts
01:31:32
to prompt in a way that you can actually render in real time a video game a movie
01:31:37
a visual experience and it goes to this point that we're unleashing the capacity
01:31:42
for human imagination and creativity with these systems because it's no longer just a lookalike two-dimensional
01:31:48
image it's now an actual three-dimensional object that then renders the visuals to make this happen
01:31:52
so we're starting to see the next era of these models that goes beyond just text
01:31:57
prediction what do you think Aaron yeah there was another release last week of experimental project for browser use by
01:32:04
Gemini which is another Advantage because YouTube has obviously an incredible amount of screen sharing data
01:32:09
and and videos so so you have you know like like we think about visual as just like okay it's it's going to be you know
01:32:15
for for developing you know CG characters or something but it's it's actually just like like just all the use
01:32:22
cases of a computer are also on YouTube Project Mariner is the name of it right where your Chrome extension AI can
01:32:29
control your browser to do things and then if you go to the AI Studio from Gemini they they have a mode where you
01:32:34
can turn on your webcam and and then you you basically it has full visual uh kind
01:32:41
of access to anything and and so they're they're cranking and it's super exciting because
01:32:48
that like just you can tell that Google's woken up and and they are just on Full Assault so the I mean just in 10
01:32:54
days the quantum the AI open source Gemini updates it's like every morning you're waking up to a Sundar tweet that
01:33:02
is that is some new breakthrough so well yeah it's amazing when you fire 20,000 people who weren't doing any work and
01:33:07
were involved in di nonsense and then you yeah that's not the point the point the
01:33:14
point is they've had this compounding you know infrastructure Advantage data Advantage Personnel advantage and now
01:33:21
they were just a little late to the game but when you they distracted is my point
01:33:25
they were distracted with nonsense you know that's true come on the first version of this came out it was making
01:33:30
Abraham afrian American and Asian you know like they were distracted okay a big part of Google's
01:33:38
orientation historically has been Don't Mess the don't mess up the Machine Classic kind of big company dilemma
01:33:44
where if I do something that's either disruptive to my core business or if I do something wrong where I will invite
01:33:50
Regulatory and consumer scrutiny I'm going to get wrecked and so they avoided stuff early and what they've done is
01:33:55
they've changed the posture in the last two years and now the posture is launch early launch aggressively push hard we
01:34:01
have to win this battle or we're going to get eaten alive and it's amazing to see the founders and and Sundar lead
01:34:07
this organization I think there were a lot of question marks a year ago but I think that the questions have been
01:34:13
answered I agree I I I'm saying it right now I think we've hit Peak open AI in the market I think they're going to be
01:34:19
the number three or four player I think Gemini meta and xai are going to lead them if we were sitting here in three
01:34:28
years I think open AI is number three four five not one or two I don't think they get the one or two slot what do you
01:34:35
think Aaron open AI who's in the one and two slot you I don't think you want to bet against Sam and Greg you don't want
01:34:40
to bet bet against Elon you don't want to be bet against Sergey now uh you know in in office with h with Sundar you
01:34:46
don't want to bet bet against zck so I think I think the rankings are kind of less interesting as much as just the
01:34:51
fact that that it's like game is on you do not have you do not have incumbents that are sleeping at this point that's
01:34:57
just going to push everybody forward so just an incredible time for everybody what a time to be alive all right four
01:35:04
the Sultan of science David freeberg the chairman dictator Jamal payaa and I don't have a nickname for you Aaron Levy
01:35:11
but we will have one soon this is the all-in podcast we miss you Saxy poo we miss you say come back soon Saxy poo
01:35:19
come back soon SX we miss you all right everybody have a great Christmas break and we'll see you shortly go sign up for
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