E99: Cheating scandals, Twitter updates, rapid AI advancements, Biden's pardon, Section 230 & more

we're seven minutes in and we've produced absolutely nothing that will go in the show hey burgers ax I'm actually angry at sax for not publishing my AMA from the other day crashed we had such a crowded room we had some people in the room for like four hours it was crazy it was like the original days of Clubhouse everyone I know that was trying to get in was texting saying they couldn't get in so it definitely capped out right I know well we hit we hit some scalability you may want to buy an extra server sax cheap weren't you the same guy who was responsible for scaring PayPal no that was somebody else that was eBay

they sold it before it's killed no no that's not true we had huge scalability challenges at PayPal too it seems like a theme yeah the theme is when you have an app that's breaking out you hit scalability challenges it's called a high class problem 2 000 people is not a high class problem it's a trickle it's 2022. 2 000 people participate in the conversation is a child I haven't written code in 20 years here's what you do when you get to a thousand people coming to the room that's a lot everybody else is in passive for you've never written code ever of course I of course I drive that's a lie come on be honest oh yeah it's actually been 25. the last time I

wrote code was Lotus Notes it's true and let your winners ride [Music] we open source it to the fans and they've just gone crazy [Music] so there have been three cheating scandals across poker chess and even competitive uh fishing I don't know if you guys saw the fishing one but they found weights and fillets during a fish uh way and that everybody wants us to check in on the chess and the poker scandals chess.com just released their report that this Grand Master has been suspended they have evidence he cheated basically in a bunch of uh tournaments that were in fact for money he denied that he had done that

but he had previously cheated as a kid they now have the statistical proof that he was playing essentially perfect chess and uh they've outlined this in like hundreds of pages in a report Saxy what are your thoughts on this uh scandal in chess Magnus Carlson finally came out and explained why he thought Hans Neiman was cheating basically he got the strong perception during the game that Hans wasn't really putting in a lot of effort that he wasn't under a lot of stress and he's he it's his experience that when he's playing you know the top players they're intensely concentrating and the Hans demon didn't seem to be exerting himself at all so his you know hackles were raised and got suspicious and then

you know he has had this meteoric rise the fastest rise in classical chess rating ever and I guess there were he had gotten suspended from chess.com in the past for cheating so on this basis and maybe other things that Magnus isn't telling us Magnus basically said that this guy is cheating I think the maybe the interesting part of this is that there's been a lot of analysis now of Hans Neiman's games and I just think the methodology is kind of interesting so what they do is they run all of his games uh through a computer and they compare his moves to the best computer move and they basically assign a percentage that correlation matches the correlation matches the computer move

and what they found is there were a handful of games where it was literally a hundred percent that's basically impossible without cheating I mean you look at the top players who through an entire career have never had 100 game that you know chess is so subtle that the computer can now see so many moves into the future that nailing the best move every single time for 40 50 100 moves is just and and and in chess which a human really can't do that well is that there are positional sacrifices that you will make in short lines that pay off much much later in the future which is impossible for a human to calculate and so you know and you saw this by the way when uh I think it was

the it it was the Google AI the deepmind AI that also play chess so the idea that this guy could pay could play absolutely perfectly according to those lines is only possible if you're cheating right exactly so so there were a handful of games at 100 and then there were tournaments where his percentages were in the 70s something plus and so just to give you some basic comparison Bobby Fischer during his legendary 20-game winning streak uh was at 72 percent so he only matched the computer so for best move 72 of the time Magnus Carlson playing at his best is 70 percent uh Gary Kasparov in his career was 69 and then the you know the the super GM's

category are typically in the 64 to 68 range so I think it's really interesting actually how you can now quantify by comparing the human move to the best computer move and it's multiple computers training the best they actually have it provides a way to assess who the greatest player ever is um I actually thought that it was Magnus but now maybe there's a basis for believing it was Bobby Fischer because he was at 72 and Max is only at 70. however look the idea that Hans Neiman is in the 70s 80s or 90s during tournaments would be you know just an off the charts level of play and if if he's not cheating then we should expect over the next couple of years that he

should rapidly become the world's number one player over the board uh you know now that they have all this anti-cheating stuff right so it'll be interesting to see what happens in his career now that they've really cracked down on you know on with with anti-anti Gene technology I have a general observation which is these people are complete losers the people that cheat in any of these games don't understand this basic simple idea which is that trying is a huge part of The Human Experience the whole point is to be out there in the field of play trying and it's basically taking the wins and the losses and getting better that is the path that's what's fun once you actually

win it's actually not that much fun because then you have this pressure of maintaining Excellence that's a lot less enjoyable than the path to getting there and so the fact that these people don't understand that makes them slightly broken in my opinion and then the other thing is like why is it that we have this strain of people now that are just so devoid of any personal responsibility that they'll just so brazenly take advantage of this stuff it's really ridiculous to be they don't it's really sad these people are pathetic it's really pathetic this but it is really interesting how they caught him and

running this against the computer here's a chart of um his scores in these tournaments oh well here is this first chart is how quickly he Advanced which was off the charts and then the second chart that's really interesting is um his chest.com strength so if you don't know chess.com it has become like a juggernaut in the Chess World especially after that HBO series came out a lot of people subscribe to it I subscribed to it I like to play chess there and man you look at the chest strength score there he was just like perfect and then the number of games he likely cheated in you can see the last two columns he's basically cheating in every game

you know Queen's Gambit yeah great show on Netflix and he he said he didn't cheat in any uh of the uh games where they were live streaming but they've proven that wrong sax how does he cheat in person then well that's the thing no one really knows and I don't want to overly judge it until they have hard proof that he was cheating I mean look here's the thing he was never caught in the act it's just that the computer evidence you know seems pretty damning and I mean here's the thing is I don't know how they prove I don't know how they prove that he was cheating over the board without actually catching him

doing it and I don't I still don't think anyone really has a good theory in terms of how he was able to do that well it's not just him though like look the the fishing thing Jason which was crazy I think Friedberg shared the video this guy was in a fishing competition and they basically caught these fish and then they put these big weighted pellets inside the fish's body they even put like a you know chicken breast and chicken fillets inside of the things yeah you know uh then there's no crossover now in poker everybody's afraid that there are ways in which you can read the RFID and some of the cards and some of these you know televised situations and

and front run what the what the playing situation is so that you know whether you're winning or losing and again I just asked the question like is it is it is this are things that bad that this is what it gets to like we all play poker the idea that we would play against somebody that would take that edge yeah it's gross yeah it's really makes me really it's sad so disappointing yeah it's horrible one one observation might be that across all three because I'm trying to find some common thread across these but it could be that there was a lot of cheating going on for a long time and maybe the fact that we do have so much digital imagery that's live on

these things now and so much coverage and everyone's got a cell phone that suddenly our perception of the cheating in competitive events is becoming more tuned whereas maybe there's been a lot of cheating for a long time and it's just kind of coming to light I mean we didn't have a lot of live streaming in poker who knows I mean we could probably ask Phil this we're kidding but like for how many years well there was Visions yeah well there were tons of cheating and online poker yeah remember like people are using these like software programs that would uh track the hand history yeah of your opposition yeah

exactly so so it helped you assess whether the person might be bluffing in that particular situation yeah like he has superhuman memory so I don't know if you guys I don't know if you guys watch Twitch like video games like fortnite or whatever but there are like players that have been accused of using the screen overlay systems that basically more accurately show you and drive the mouse to where an individual is on the screen so you can more accurately shoot them and so there's software overlays that make you a better you know competitive video I'll tell you what the through line is and then this the stuff basically became like so now what's interesting is now there's eye

tracking software that people are using on Twitch streams to see if the individual is actually spotting the target when they shoot or if the software is spotting the target yeah they're called reverse team Bots they're aimbots yeah yeah and like reverse cheap the whole thing and I think what's interesting is just that there's so much you know Insight now so much more video streams so much more I mean think about all those guys yeah and there's cell phones and they all videoed this thing happening yeah I think 10 years ago that wouldn't have been the case and there wouldn't have been a big story about it and so you said there was a theme you wanted to uh

there was a threat I I think the theme is is pretty obvious which is that there's been an absolute decay of personal responsibility people don't feel like there's any downside to cheating anymore and they're not willing to take it upon themselves to take a journey of wins and losses to get better at something they want the easy solution the easy solve the quick answer you know that gets them to some sort of finish line that they've imagined for themselves will solve all their problems the problem is it doesn't solve any problems and it just makes them a wholly corrupt individual yeah okay so let's talk about this Hustler Casino Live uh

cash game play there's this woman Robbie who is a new player apparently she's being staked in a very high stakes game she's playing as a guy Garrett who is a very very um known winning cash game player and it was a very strange hand on the turn all the money gets in she says she has a bluff catcher then she claims that she had a thought she misread her hand now people are saying that the poker world seems to be 70 30 that she cheated but people keep vacillating back and forth there was a lot of weird word salad that she said that she had a bluff catcher which would normally be an ace then she said she thought she had a pair of

Threes And then she immediately said afterwards that he was giving her too much credit they confronted her in the hallway she gave the money back because she supposedly loves production so all this stuff sounds very weird one side says okay while this is happening because she's a new player the other side is saying somebody was signaling her that she was good and giving her just a binary you're good because if you were gonna cheat cheating with Jack high in a situation where you just put all in for a 200 quarter million dollar pot seems very suspect uh I don't know if you guys watched the

hand breakdown where does everybody stand on a percentage basis I guess if they think she was cheating or not because we this is not definitive obviously it's not like they cut it open and found the ball bearings it's not it's not so obvious in that situation but I think the way that that line played made no sense and I guess in her previous hand she had a jack three and there was a three on the board so if she misread her hand was ten ten nine three no but you would have but you would have you would have had to call the Flop so I'm thinking what yeah no I get it the hand makes no sense but I'm just trying to find a logical

explanation and that Jack three explanation somebody kind of fed that to her and then she changed her story to that so this changing of the story is the thing I was sort of keyed on Friedberg is why does she keep changing her story is it because she's embarrassed maybe she's had a couple of beverages or whatever or she's just a new player and she's embarrassed by her play and can't explain it she can't explain the hand history all of the things you're saying are probable I don't think that yeah I don't think there's any data for us to have a strongly held point of view on this I'm just looking forward to us all playing

live yeah HCL Poker Live October 21st minus David Sachs unfortunately to mop J Cal gerthner Stanley Tang Phil Hellmuth so we're going to be playing on the same stream we're gonna be playing on the same screen same table I figured out how to hack into the video stream for the camera I just got my RFID sunglasses as well I'm gonna read all your shitty hands jaycal I'm gonna take your money and I'm gonna buy your kids for my 40th birthday Sky organized poker in Tahoe okay and and we we brought in the team from CBS that was the present and they they taped it as if it was being broadcast with whole cards and commentators and we edited it into a

two-day show it was an incredible birthday present I I it was it's one of the greatest things that that anybody's ever given me I appreciate there was a one hour block where somebody at the table said okay guys how about we do a cheating free-for-all yes where you could look at each other's cards and you know you could sort of help somebody else switch cards whatever in that one hour our beautiful home game of friendship became Lord of the Flies I have never seen so much hatred Angling Behavior oh my God it was incredible all that humans are capable of so I I hope that we never uh we never we never see cheating in our game yeah well we'll

see how it goes on October 21st at HCL Poker Live I'm excited I can't wait it should be a lot of fun it should be a lot of fun oh and uh we're not having any official 100 stuff but the fans uh some of the fans who were at the um all in Summit 2022 are doing uh their own 100 episode 100 meetups on October 15th I think all in meetups.io so there are fan meetups happening in Zurich in a bunch of other places I'm going to FaceTime into some of them and just say hi to the fans you know it might be like 10 people in a bar somewhere um I think the largest one is like Miami

or San Francisco are going to be like 50 people or something we should all FaceTime it that'd actually be kind of fun I I'm basically I told them to send me an invite and I'll FaceTime in any time this is next week when is this the 15th I think is this occurring the October 15th it's a Saturday the Saturday after the 100th episode people are doing these all in meetups.io what's next earlier this week it was reported that Elon contacted Twitter's board and suggested that they move forward with closing the transaction at the original terms and the original purchase price of 54.20 cents a share in the couple of days since then and even as of right now with some news reports coming out here

on Thursday morning um it's it appears that there are still some question marks around whether or not the deal is actually going to move forward at 5420 a share because Elon as of right now the report said is still asking for a financing contingency in order to close and there's a lot of back and forth on what the terms are meanwhile the court case in Delaware is continuing forward on whether or not Elon breached his terms of the original agreement to close and buy Twitter at 54.20 as we know leading up to the signed deal or a post signing the deal Elon put together a financing Syndicate a combination of debt investors as well as Equity co-investors with him to do

the purchase of Twitter at 54.20 a share so the 40 some odd billion dollars of capital that's needed was committed by a set of investors that were going to invest debt and equity and there's a big question mark now on whether or not those investors want to or would still consummate the transaction with Elon given how the markets have turned and given how debt markets are trading and Equity markets are trading so chimath I'd love to hear your point of view on what um hurdles Does Elon still have in front of him does he still want to get this done and is there still a financing Syndicate that's standing behind him at the original purchase price to get it done

that's a great question um maybe the best way to start is Nick do you want to queue up what I said in August 25th the lawsuit really boils down to one very specific clause which is the Pinnacle question at hand which is there is a specific performance Clause that Elon signed up to right which you know his lawyers could have struck out and either chose not to or you know couldn't get the deal done without and that specific performance Clause says that Twitter can't force him to close at 5420 a share and I think the the issue at hand at the Delaware business court is going to be that because Twitter is going to point

to all of these you know gotchas and disclaimers that they have around this bot issue as their cover story and I think that really you know this kind of again builds more and more momentum in my mind that the most likely outcome here is a settlement where you have to pay the economic difference between where the stock is now and 5420 which is more than a billion dollars or you close at some number below 54.20 cents a share and I think that that is like you know if you had to be a betting person that's probably and if you look at the the way the stock is traded and if you

also look at the way the options Market trades that's what people are assuming that there's a seven to ten billion dollar swing and if you impute that into the stock price you kind of get into the fifty one dollars a share kind of a an acquisition price again I'm not saying that that is right or should be right that's just sort of what the market says yeah so so I it turns out that you know sort of like that kind of guessed him it turned out to be pretty accurate because the stock today is at 51 this year so I think that the specific performance thing is exactly what this thing has always hinged on and

I think that there was a realization that there were very few outs around how that contractual term was written and agreed to so there is an out in the contract and that out says that I think it's by April if um if the deal doesn't get done by April then the banks can walk away from their commitment to fund the debt and if the banks walk away then Elon does have a financing contingency that allows him to walk away so the actual set of events that have to happen is those two things specifically get to April so the banks can pass and say we've changed our mind market conditions are different and then Elon is able to say well you know the banks just walked away right now the banks if you look at

all of the debt that they've committed to while they committed at a point in time when the debt markets were much better than they are today in the last you know six or seven months since they agreed to do this the debt markets have been clobbered and specifically junk bonds and a bunch of junk bond debt the yields that you have to pay so the price to get that kind of debt has skyrocketed so roughly back of the envelope math would tell me that right now the banks are offside between one and two billion dollars because they're not going to be able to sell this debt to anybody else so I think the banks obviously want to weigh out the problem is their only way

out is to run the shot clock off until April so I think that's the dance that they're in right now elon's trying to find a way to solve you know for the merger I think Twitter is going to say we're not going to give you a financing contingency you have to bring the banks in and close right now and then we will not go to court otherwise we're going to court and so I think it's a very delicate predicament that they're all in but my estimate is that the equity is probably 20 percent offside so it's not a huge thing he can make that up because he can create Equity value like nobody's business

the debt is way offside by a couple billion dollars which is hard to make back but I think in the end you know given enough time they can probably make that back the best off in all of this are the Twitter shareholders they're getting an enormous premium to what that company is worth today in the open market and so I think this deal is going to close it's probably going to close in the next few weeks and had you bought Twitter when we were talking about it in August you would have made 25 in six weeks and you know if the deal closes at 54 you would have made it you know a third of your money in eight weeks which

is you know very hard to do in a market if you're a GP at one of the funds like Andreessen or Sequoia and you had made this commitment to Elon or even Larry Ellison a couple months ago do you fight against closing at 5420 do you stick with the deal and support him I mean what do you do given that the premium is so much higher than where the market would trade it at today some people are saying the stock should be at like 20 bucks a share or something the average premium in an m a transaction in the public markets is about 30 percent so um and I think the fair value of Twitter is around 32 to 35 bucks this year so you know it's not like he is

massively massively overpaying and so you know I would just sort of keep that in the realm of the possible so like if you take 35 as the midpoint fair value is really 45.50 so yeah he paid 20 more than he should have but he didn't pay a hundred percent more so it's not as if you can't make that Equity back as a private company particularly because there's probably ten dollars of fat in the stock if you think about just Opex right in terms of all the buildings they have maybe they don't need as many employees maybe they revisit salaries you know one thing is when I looked at doing an activist play at Twitter I think I mentioned this five

or six years ago one of the things that I found was at that time Twitter was running their own data centers and you know the most obvious thing for me at that time was like we're going to move everything to AWS now I don't know if that happened but I'm sure that if it hasn't just bidding that out to Azure gcp and AWS can raise you know three or four billion dollars because I'm sure those companies would want this kind of an app on their cloud so there's all kinds of things that I think Elon can do as a private company to make back maybe the small bit that he overpaid and then he can get to the core job of rebuilding this company to be usable uh this product to be usable

because look I'll just speak as a user right now it has been decaying at a very very rapid clip and I think that his trepidation in closing the merger in part also even though he hasn't said it has to do with the quality of the experience it's just degraded it's not as fun to use as it was during the pandemic um or even before the pandemic so something is happening inside that app that needs to get fixed and if he does it he'll make a ton of money sort of like what happened with Friendster and Myspace and any social networking app over time the quality degrades if it's not growing it's shrinking and it gets

if it if it's if it's not growing and also if the product hygiene isn't enforced in code and product hygiene in this case are this you know the spam Bots you know the trolling it can really take away from the experience yeah I mean interestingly like if you think back to the original the the starting Days the original days of Twitter I don't know if you guys remember you would send in an SMS to do your Tweet and then it would post up and other people would get the SMS notification and um it would crash all the time and the apps were the app was notoriously crashing it was poorly architected at the beginning and some people have argued that Twitter has had

a cultural technical incompetence from the earliest days I think that's a little harsh so I do think look Twitter was known for what's called a fail whale you know they used to have these fail whales constantly and they did hire people that attempted to try to fix it I remember the the funniest part of when I went in there and said hey here's my plan and here's what I want to do is literally a day or two later the head of engineering quit I can't remember who his name was but he was just out the door uh but it is a I think it is a team that has tried its best that probably at the edges definitely made some technical miscalculations like

I said at that time the idea that any app of that scale would use their own data centers made note technical sense whatsoever it made the app laggy it made it hard to use it made it more prone to downtime to your point but that being said I would be shocked if they haven't made meaningful improvements because the stack of the internet has gotten so much better over the last seven years and so to your point David if they didn't take advantage of all these new abstractions and mechanisms mechanisms to rebuild the app or to rebuild search or to rebuild you know how you know all these infrastructure elements of the app work

I would be really surprised because then what are they doing over there yeah well look I mean to the point earlier besides the product points there was a a really good a tweet I liked that said for what it's worth I think Elon will show us just how lean the Silicon Valley Advertising companies can be run at the very least it'll be an interesting thought experiment for spectators um because if he does go in and actually does significantly reduce Opex and head count and the company does turn profitable and he can grow it well look it'll really by the way it'll really be

a beacon from the financial big companies yeah from a financial perspective there is ten dollars a share in Opex cuts that he should make right away just so that he is economically break even and he looks like every other m a transaction you know you paid a 30 premium and you bought a company there is a lot of margin of safety there if Elon does that so to your point there probably is and there probably needs to be a meaningful riff at Twitter I'm not saying it's right I'm not saying it's you know and I feel for the people that may go through it but from a financial perspective the math makes sense for him to do that because then he is a break even proposition on a go in m a

transaction and I think that there's there's a lot of intelligent Financial sense so that all the debt holders feel like he's doing the right thing and all the equity holders particularly see a chance for them to make a decent return here all right well let's move on conversation a great conversation between Dave Friedberg uh about the Twitter transaction and now we're being rejoined by our besties yeah how was your cappuccino Jayco that was great I have a I have a nice cold brew here a nice iced Cobra and a nice drip coffee I'm working but I'd love to talk about topics that I'm not uh being subpoenaed or depositioned about we will

have a lot to say in the coming weeks I'd love to talk about topics that my lawyers have advised me not to talk about how Eerie was our prediction 51 bucks a sharing it is exactly where the stock is right now that's Yuri yeah uh all right lots of advances let's keep going yeah speaking of Elon uh Tesla AI day was last week I actually went it was great uh this is a recruiting event where what did you do after Fel helmuth and I went and uh I drove Phil home youth home uh the end uh no it's a great event and it uh is essentially a giant recruiting event hundreds of AI sorry sorry I'm sorry I'm sorry can we just talk about

Phil hamley's non-sequitur in the group chat about Ken Griffin I mean oh yeah where he's just like I made a joke about his net worth and what he's going on what is going on we were talking about the most serious of topics and he just comes seven seconds to fill it's what's going on seven seconds to fill by the way I uh I I was uh texting with uh Daniel negranu he did an incredible podcast if you guys with Lex Friedman if you haven't listened to it the Daniel negronu uh pod with Lex is incredible but I I was joking with Daniel that there's a section where he's talking about the greatest poker players of all time and if you look in the bar of YouTube it shows where the most

viewership was and it was exactly the 30 seconds he talks about helmuth and I said to Daniel this must have been Phil re-watching it over so anyway the event was um uh super impressive Elon only spoke when he showed The Optimist the new robot he's building a a general purpose robot that will work in the factories it's very early days but they showed two versions of it and um he said he thinks they could get it down to twenty thousand dollars it's going to work in the factory so it's actually got a purpose and obviously the factors already have a ton of robots but this is more of a robot that uh will benefit from the

general or the the computer vision and the AI the narrow AI being pursued by the self-driving team this is like two and a half hours of really intense presentations um the most interesting part for me was uh they're building their own super computer and their chips and the dojo supercomputer was really impressive um at how much they can get through uh scenarios so they're building every scenario of every self-driving I actually have the full self-driving beta on my car I've been using it it's pretty impressive I have to say if you haven't used it yet I feel like AI is moving at a pretty Advanced clip

the past year if you haven't also seen meta announced a text to video generator so this is even more impressive than dolly dolly you put in a couple of words Friedberg and you get a painting or whatever this is put in a couple of words and you get a short video so they had one of a teddy bear painting a teddy bear so it looks like you're going to be able to essentially create a whole movie by just talking to a computer really impressive where do you think we are Freeburg in terms of the compounding nature of these narrow AI efforts you know obviously we saw poker chess go Dolly gpt3 self-driving

it feels like this is all compounding at a faster rate or am I just you imagining that yeah look I mean it's interesting when when people saw the first computer playing chess they said the same thing I think any time that you see progress with a computer that starts to mimic the predictive capabilities of a human it it it's uh it's impressive but I will argue and I just I'll say a few words on this it's I think this is part of a 60-year cycle that we've been going through um fundamentally what humans and human brains do is we can sense our external environment then we generate Knowledge from that sensing and then our brains

build a model that predicts an outcome and then that that predicted outcome is what drives our actions and our Behavior we observe the sunrise every morning then we observe that it sets and you see that enough times and you build a predictive model from that data that's been generated in your brain that I predict that the sun has risen it will therefore set it has said it will therefore rise and I think that the Computing approach is very similar it's all about sensing or generating data and then creating a predictive model and then you can drive action and initially the first approach was just basic algorithms and these are deterministic models that are

built it's a piece of code that says here's an input here's an output and that that model is really built by a human and a human designed to design that algorithmic model and said this is what the uh the predictive potential of the software is then there was this term called data science so as data generation began to proliferate meaning there was far more sensors in the world it was really cheap to to create Digital Data from the physical world really cheap to transmit it really cheap to store it and really cheap to compute with it data science became the hot term in Silicon Valley for a while and these

models were not just a basic algorithm written by a human but it became an algorithm that was a similar deterministic model that had parameters and the parameters were ultimately resolved by the data that was being generated and so these models became much more complex and much more predictive finer granularities uh finer range then we used this term machine learning and in the data science era it was still like hey there's a model and you would solve it statically you would get a bunch of data you would statically solve for the parameters and that would be your model and it would run machine learning then allowed those parameters to become Dynamic so the

model was static but generally speaking the parameters that drove the model became dynamic as more data came into the system and they were dynamically updated and then this era of AI became and that's the new catch word and what AI is realizing is that there's so much data that rather than just resolve the parameters of the model you can actually resolve a model itself the algorithm can be written by the data the algorithm can be written by the software and so with a with AI example so poker plug an Adaptive model so people uh so you're playing poker and the software begins to recognize behavior and it builds a predictive model that says here's how you're

playing and then over time it actually changes not just the parameters of the model but the model itself the algorithm itself and so Ai and then it eventually gets to a point where the algorithm is so much more complex that a human would have never written it and suddenly the AI has built its own intelligence its own ability to be predictive in a way that a human algorithmic programmer would have never done and and this is all driven by statistics so none of this is new science person say there's new techniques that all on their underlying use statistics as their basis and then there's these techniques that allow us to build these new systems of model development like neural Nets and so on

and those statistics build those neural Nets they they solve those parameters and so on but fundamentally there is an um geometric increase in data and a geometric decline in the cost to generate data from sensors because the cost of sensors is coming down with Moore's Law transmit that data because the cost of moving data has come down with Broadband Communications the cost of storing data because the cost of dram and and solid-state hard drives has come down with Moore's Law and now the ability to actually have enough data to do this AI driven where people are calling AI but it really is the same it's part of the spectrum of things that have been going on for 60 years to

actually drive predictions in the in the world is really being realized in a bunch of areas that we would have historically been really challenged and surprised to see and so my argument is at this point Big Data played a big role yeah yeah we've over the last decade we've reached this Tipping Point in terms of data generation storage and computation that's allowed these statistical models to resolve dynamically and as a result they are far more predictive and as a result we see far more human-like behavior in the predictive systems both physics both those that are you know like a like a robot is the same as one that existed 20 years ago but the way that it's run is

using the software that is driven by this Dynamic model and that data is for a better answer okay I have two things to say but one the first one is a total non-sequitur so use the term data scientist do you know where the term data scientist came from as classically used in Silicon Valley it came from Facebook and it came from my team in a critical moment this was in 2007 I was trying to 2008 I was trying to build the growth team this is the team that became very famous for getting 2 billion users and you know building a lot of these algorithmic insights and I was trying to recruit a person from Google and he was like a PhD

in some crazy thing like astrophysics or particle physics or something and we gave him an offer has a data analyst because this is what I needed at the time this is what I thought I needed an analyst you know to analyze data and he said absolutely not I'm offended by the job title and I remember talking to my my HR you know business process partner and I asked her like I don't understand what is this where is this coming from and she said he Fashions himself a scientist and I said well then call him a data scientist so we wrote in the offer for the first time data scientist and at the time people internally were like this is a dumb title what does this mean anyways

we hired the guy he was a star and uh and that title just took off internally so Rob it's funny because parallel we started climate Corp in 2006 and the original the first guy I hired was a buddy of mine who was a 4.0 for in applied math from Cal and then everyone we hired on with him we called them the math team and they were all applied math and statistics phds and we called them the math team and it was really cool to be part of the math team but then we switched the team name to data scientist and then it obviously created this much more kind of impressive role impressive title Central function to the organization that was more than just a

math person or data analyst as I think it may have been classically treated because they really were building the algorithms that drove the models that made the product work right Peter Thiel is a very funny observation not funny but you know observation which is you should always be wary of any science that actually has science in the name political science social science I guess maybe data scientists you know because the real Sciences don't need to qualify themselves physics chemistry biology anyways that's so here's what I wanted to talk about with respect to AI two very important observations that I think is useful for people to know the first one Nick if you throw it up here is just

a baselining of you know when we have thought about intelligence and compute capability we've always talked about Moore's Law and Moore's Law essentially this idea that there is a fixed amount of time where the density of transistors inside of a chip would double and roughly that period for many many years was around two years and it was largely led by Intel and we used to equate this to intelligence meaning the more density there was in a chip the more things could be learned and understood and we used to think about that as the progression of how Computing intelligence would grow and eventually Ai and artificial intelligence would

would get to mass Market well what we are now at is a place where many people have said Moore's law has broken why it's because we cannot cram any more transistors into a fixed amount of area we are at the boundaries of physics and so people think well does that mean that our ability to compute will essentially come to an end and stop and the answer is no and that's what's demonstrated on this next chart just to make it simple which is that what you really see is that if you think about you know super computing power so the ability to get to an answer that has actually continued unabated and if you look at this chart the reason why this is

possible is entirely because we've shifted from CPUs to these things called gpus so you may have heard companies like Nvidia why is companies like Nvidia done so well it's because they said they raised their hand and said we can take on the work and by taking on the work away from a traditional CPU you were able to do a lot of what Freeburg said is get into these very complicated models so this is just an observation that I think that we are continuing to compound knowledge and intelligence effectively at the same rate as Moore's Law and we will continue to be able to do that because this makes

it a problem of power and a problem of money so as long as you can buy enough gpus from Nvidia or build your own and as long as you can get access to enough power to run those computers there really isn't many problems you can't solve and that's what's so fascinating and interesting and this is what companies like open AI are really proving you know when they raise the billion dollars what they did was they attacked this problem because they realize that by Shifting the problem to gpus it left all these amazing opportunities for them to uncover and that's effectively what they have the second thing that I'll say very

quickly is that it's been really hard for us as a society to build intelligence in a multi-modal way like our brain works so think about how our brain works our brain works in a multimodal way we can process imagery we can process words and sounds we can process all of these different modes text into one system and then Intuit some intelligence from it and make a decision right so you know we could be watching this YouTube video there's going to be transcription there's video voice audio everything all at once and we are moving to a place very quickly where computers will have that same ability as well today we go to very specific models and kind of balkanized

silos correct to solve different kinds of problems but those are now quickly merging again because of what I just said about gpus so I think what's really important about AI for everybody to understand is the marginal cost of intelligence is going to go to zero and this is where I'm just going to put out another prediction of my own when that happens it's going to be incredibly important for humans to differentiate themselves from computers and I think the best way for humans to differentiate ourselves is to be more human it's to be less compute intensive it's to be more empathetic it's to be more emotional a lot less

emotional because those differentiators are very difficult for Brute Force compute to solve be careful the replicants on this call are getting a little nervous here they're not processing that that was an emotional statement do not want to process that one well I to your point uh during this AI day um they were showing in self-driving as you're talking about this balkanization and trying to um make decisions across many different uh decision trees you know they're looking at Lane changes they're looking at other cars and pedestrians they're looking at road conditions like fog and rain and then they're using all this big

data to your point Freeburg to run uh tons of different simulations so they're building like this virtual uh World on Market Street and then they will throw people dogs cars people about that into the simulation it's such a wonderful example imagine that system hears a horn yeah well you hear a horn so clearly there's some auditory expression of risk right there's something risky and now you have to scan your visual field you have to probabilistically decide what it could be what the evasive maneuver if anything should be so that's a multimodal set of intelligence that today isn't really available yeah but we have to get there if we're going to have

real full self-driving so that's a perfect example Jason a real world example of how hard the problem is but it'll get solved because we can brute force it now with with chips and with compute I think that's going to be the very interesting thing with the robots as well is all of these decisions they're making moving cars through roads all of a sudden we're going to see that with vetoles vertical takeoff and Landing you know aircraft and we're going to see it with this General robot and everybody wanted to ask Elon about General AI you know the Terminator kind of stuff and his position is I think if we solve

enough of these problems Friedberg it'll be an emergent Behavior or an emergent phenomenon I guess would be a better word based on each of these cities crumbling you know each of these tasks getting solved by groups of people you have any thoughts as we wrap up here on the discussion about a general Ai and the timeline for that because obviously we're going to solve every vertical AI problem in short order I spoke about this a little bit on um the ask AMA on call in on Tuesday night um once sax gets it out you can listen to it but I really have this strong belief that the servers crashes this episode drops okay yeah you guys can try to download the app but it might

crash so just be careful so so here's here's my my course that you were 10 times more popular than jaycal so it's unexpected levels of traffic well you had you did have an account with 11 000 followers I mean it might look like you're right we'll put you on that account next time yeah please yeah I'm starting from zero yeah that's fair that's fair yeah look my core thesis is I think humans transition from being um let's call it you know passive in this system on Earth to being laborers and then we transition from being laborers to being creators and I think our next transition with AI is to transition from being creators to being narrators and what I mean by that is as

as we started to do work on Earth and engineer the world around us we did labor to do that we literally plowed the fields we walked distances we built things and over time we built machines that automated a lot of that labor you know everything from a plow to a tractor to a caterpillar equipment to a microwave that cooks for US Labor became less we became less dependent on our labor abilities and then we got to switch our time and spend our time as creators as knowledge workers and a vast majority of the developed world now primarily spends their time as knowledge workers creating and we create stuff on computers we do stuff on computers but we're not doing physical labor anymore

as a lot of the knowledge work gets supplanted by AI as it's being termed now but really gets supplanted by software the role of the human I think transitions to being one of a narrator where instead of having to create the the blueprint for a house you narrate the house you want and the software creates the blueprint for you dictate and instead of yeah and instead of creating the movie and not spending 100 million dollars producing a movie you dictate or you narrate the movie you want to see and you iterate with the computer and the computer renders the entire film for you because those films are shown digitally anyway so you can have a computer render it instead of

creating a new piece of content you narrate the content you want to experience you create your own video game you create your own Movie experience and I think that there's a whole Evolution that happens and if you look Steve pinker's book Enlightenment now has a great statistic a set of statistics on this but the amount of time that humans are spending on leisure activities per week has climbed extraordinarily over the past couple of decades we spend more time enjoying ourselves and exploring our creative interests than we ever did in the in the past in human history because we were burdened by all the labor and all the creative and knowledge work we had to do

and now things are much more accessible to us and I think that AI allows us to transition into an era that we never really thought possible or realized where the limits are really our imagination of what we can do with the world around us and the software resolves to the um and automation resolves to make those things possible and that's making a really exciting kind of vision for the future that I think AI enables Star Trek had this right people didn't have to work and they could pursue things in the Holodeck or whatever that they felt was rewarding to them but speaking of jobs uh the job reports for August came in we we talked

about this we were trimming 300 000 jobs a month and we're wondering if the other shoe would drop but boy did it drop 100 over a million jobs burned off in August so without getting into the macro talk it does feel like what the FED is doing and companies doing hiring freezes and cuts is finally finally having an impact if we start losing a million as we predicted could happen here on the show people might actually go back to work and lift and Uber are reporting that the driver shortages are over they no longer have to pay people spiffs and stuff like

that to get people to come back to work so at least here in America feels like we're turning a corner do we want to go can we let's talk about the marijuana yeah yeah I was about to say we got a couple of things we really want to get to here uh Ukraine section 230 and then this breaking news uh we'll pull it up here on the screen while we're recording the show President Biden says and I'm just going to quote here first I'm pardoning all prior Federal offenses of simple marijuana possession there are thousands of people who are were previously convicted of simple possession who may be denied employment

housing or educational opportunities there's not my pardon will remove this burden that's big news second I'm calling on Governors to part in simple State marijuana possession offenses just as no one should be in a federal prison solely for possessing marijuana nobody should be in a local jail or state prison for that reason either finally this is happening third and this is an important one we classify the marijuana at the same level as heroin and even and more serious than fentanyl makes no sense I'm asking secretary bakara and the Attorney General to initiate the process of

reviewing how marijuana is scheduled under federal law I'd also like to note that as federal and state Regulators change we still need important limitations on trafficking marketing and under eight hours of marijuana thoughts on this breaking news is this giving the the timing on this is kind of midterm related it just seems is this is this I guess is this a politically popular decision to do I think so I mean look I support it so buying finally did something I like great I mean I thought that we should decriminalize marijuana for a long time or specifically you know I agree with

this idea of descheduling it it does not make sense to treat marijuana the same as heroin as a schedule one narcotic just doesn't make any sense it should be regulated separately and differently obviously you want to keep it out of the hands of minors but no one should be going to jail I think for simple possession so I do agree with this and I think the thing they need to do I don't see it mentioned here is they should pass a federal law that would allow for the normalization of let's call it legal legal um you know cannabis companies so so companies that are allowed to operate under state laws like in California should have access to the banking system

should have access to payment rails because right now the reason why the legal cannabis industry isn't working at all in California is because they can't bank they can't take payments so so it's this weird all-cash business that makes no sense so so listen if we're not going to criminalize it as a drug like heroin if we're going to allow states to make it legal then allow it to be a more normal business where the state can tax it and it can operate in a more above board way is what you're saying the federal medic I think it could still be regulated on a

state-by-state basis but I think you need the feds to bless the idea that Banks and payment companies can take on those clients which states have already said are legally operating companies and right now they can't and it's a huge gap in the laws so maybe that's the one thing I would add to this but I don't have any complaints about this right now based on what we know from this tweet storm and I would say this by the way was an about face this was an about faced by Biden yeah do you know what the polling data says I mean is is there I'm assuming there's big support in kind of the independence and the middle uh for this it was 70 at one point yeah

yeah so so look this to me this is the kind of thing that Biden should be doing with the 50 50 Senate finding these sorts of bipartisan compromises right so yeah I look this is good news for us why hasn't this happened in the past like what's been the political reason that other presidents Obama even didn't that that have there was a similar ideology like why why but why does anyone know why this hasn't been done in the past there was rumors he was going to do in the second term they just didn't have the political Capital why to do it why I don't I don't well it's hard ones doesn't require yeah

the pardon doesn't require political capital I think it's probably the perception that this is soft on crime in some way or there wasn't enough broad-based support as David said I mean I think the the United States population has moved pretty meaningfully in the last 20 years look at the chart here um you know we were talking about 2000 it was only 31 percent uh and then you look at 2018 it's up at 60 plus percent so when people saw the states doing it and they saw absolutely no problem you know in every state and I think what people will see next I think that's a Gallup poll that's a Gallup pollution yeah yeah so I mean it's increased dramatically MDMA psilocybum and some of

these other plant-based medicines Ayahuasca are next and they're doing studies on them now I don't want to take away from how important this is for uh all the people for whom this will positively impact I just want to talk about the schedule change for marijuana as a parent one of the things that I'm really really concerned about is that through this process of legalization getting access to marijuana has frankly become too easy particularly for kids at the same time I saw a lot of really alarming evidence that the the intensity of these marijuana-based products have gone you know I think it's like five or six times more intense than I don't know

50 or 100 tomorrow much higher right so so it's no longer you know this kind of like you know Do no harm drug that it was 20 years ago this is this could be actually David the way that it's productized today as bad as some of these other you know uh narcotics so in June of this year the Biden Administration basically made this press release that said the FDA is going to come out with regulations that would cap the amount of nicotine in cigarettes and I think that was a really smart move because it basically set the stage to taper nicotine out of uh out of cigarettes which would essentially you know decapitate it as a an addictive

product and I think by thinking about how it's how it's dealt with what I really hope the administration does is it empowers the FDA if you're going to legalize it you need to have expectations around what the intensity of these drugs are because if you're delivering drugs OTC and now any kid can go in at 18 years old and buy them which means that 18 year olds are going to buy them for 16 year olds 16 year olds are going to get fake IDs to buy them for themselves you need to do a better job so the parents you're helping parents do our job here's what you need one like alcohol if alcohol is 21 then of course yeah fine but even alcohol David you know

that there are there are we know what the intensity of these are their labels and there's warnings and you know the difference between they're they're getting wine versus hard alcohol but let me just give you some statistics here chamoth if you think about the the Cannabis in the 90s uh and prior to that uh they've been very you've been a ton of studies on this in Colorado it was uh the THC content was less than two percent and then in 2017 we were talking about you know things going up to uh 17 to 28 for a specific strain so they have been building strains like Girl Scout cookies Etc that have just increased and increased and

then there are things like shards and obviously Edibles you can create whatever intensity you want so you have this incredible there you know variation you could have an edible that's you know got one milligram of THC one that has a hundred or you could have a pack of Edibles and you see this happen in the news all the time some kid gets their parents pack or somebody gives one and the kids don't know um and this dabbing phenomenon combined with dabbing is like the shards like this really intense uh stuff combined with the Edibles is really the issue and the labeling of them so you got to be incredibly careful with this it's not good for kids it screws up

their brains and so yeah be very careful I have a I have a zero tolerance policy on this stuff I don't care if it's legal illegal like I don't want my kids touching any of this stuff until it's not for kids obviously yeah but we also should not be over there until they're 35 or 40 and even then I hope they never do it but but I need some help and I'm not sure I'm the only parent that's asking you can't have this stuff be available effectively sold like in a convenience store no no that's not going to happen where there isn't even labeling at least like cigarettes are labeled it's very clear how bad this

stuff is for you oh do you guys have any feedback on the job report or anything they're all going away when when the when the AI wins well that's why I brought it up it's like we're now going to see a potential you know a situation where Jobs go away and a lot of the stuff like even developers right don't you think Freiburg developers are going to start development tasks everyone assumes a static lump of work I think what happens particularly in things like developer tools is the developer can do so much more and then we generate so much more output and so the overall productivity goes up not down

um so it's pretty exciting as these and remember like like we were talking on the AMA the other night Adobe Photoshop was a tool for photographers so you didn't have to take the perfect photograph and then print it you could you know you could use the software to improve the quality of your photograph and I think that that's what we see happening with all software um in the creative process is it helps people do more than they realized they could do before and that's pretty powerful and it opens up all these new avenues of interest and things we're not even imagining today all right so scotus is going to hear two uh cases for Section 230

the family of nohima Gonzalez a 23 year old American college student who was killed in an Isis terrorist attack in Paris back in 2015. you remember those horrible attacks is claiming that YouTube helped and aided and abetted Isis uh the family's argument is YouTube's algorithm was recommending videos that make it that makes it a publisher of content as you know it's section 230 common carrier now if you make editorial decisions if you promote certain content you lose your 230 protections uh in court papers filed in 2016 they said the company quote knowingly permitted Isis to post on YouTube hundreds of radicalizing videos inciting violence which helped the group

recruit including some who were actually involved in the terrorist attack so they have made that connection well look let's let's be honest we can we can we can put a pin in this thing because I think it would be shocking to me if this current scotus uh all of a sudden founded in the cockles of their heart to protect big Tech I mean they've dismantled um a lot of other stuff that I think is a lot more controversial than this um and so you know we've we've basically looked at gun laws we've looked at affirmative action we've looked at abortion rights sorry well I mean I think as as we've said I think we all

know where that dye is unfortunately going to get cast um so to me it just seems like this could be an interesting case where it's actually nine zero in favor for complete for completely different sets of reasons I mean if you think of the liberal left part of the Court they have their own reasons for saying that there aren't 230 protections for big Tech and if you look at the the far right or the right-leaning Parts members of this of scotus they have they have another set of different do you think you're gonna make a political decision not illegal no but even even in their politics they actually end up in

the same place they have protections but for different reasons so there there's a reasonable outcome here where you know uh Roberts is going to have a really interesting time trying to pick who writes the majority opinion there was a related case in the fifth circuit in Texas where do you guys see this fist circuit decision where Texas passed a law imposing common carrier restrictions on social media companies the idea being that social media companies need to operate like phone companies and they can't just arbitrarily deny you service or deny you access to the platform and the argument

why previously that had been viewed actually is unconstitutional was this idea of compelled speech that you can't compel a corporation to support speech that they don't want to because that was a violation of their own First Amendment rights and with the first the fifth circuit said is no that doesn't make any sense Facebook or Twitter can still advocate for whatever speech they want as a corporation but as a platform they if Texas requires them to not discriminate against people on the base of their Viewpoint then Texas has the right to to impose that because that doesn't it their quote was that does not chill speech if anything it chills censorship so what's the right legal

decision here in your mind putting aside politics if you can for a moment but on your legal hat what is the right thing for society what is the right legal issue around section 230 specifically in the YouTube case and just generally should we look at YouTube should we look at a blogging platform like medium or blogger Twitter should we look at those as common carrier and they're not responsible for what you publish on them obviously they have to take stuff down if it breaks their terms of service Etc or if it's illegal I've made the case before that I I do think that common carrier requirements should apply on some level of the stack to

protect the rights of ordinary Americans to have their speech in the face of these giant monopolies which could otherwise de-platform them for arbitrary reasons just to you know just explain this a little bit so historically there was always a debate between so-called positive rights and negative rights so where the United States start off as a country was with this idea of negative rights that what a right meant is that you'd be protected from the government taking some action against you and if you look at the Bill of Rights you know the original rights are all about protecting the citizen against intrusion on their Liberty by by a state or by the federal government in

other words Congress shall make no law it was always a restriction so the right was negative it wasn't sort of positively a force and then with the Progressive Era you started seeing you know more uh Progressive rights like for example uh American citizens should have the right to health care right that's not protecting you from the government that's saying that the government can be used to give you a right that you didn't otherwise have and so that was sort of the big Progressive Revolution my take on it is I actually think that the problem we have in our society right now is that free speech is only a negative right it's not a positive right I think

it actually needs to be a positive right I'm embracing a more Progressive version of Rights but on behalf of sort of this original negative right so and the reason is because the Town Square got privatized right I mean you used to be able to go anywhere in this country there'd be a multiplicity of town squares anyone could pull out their soapbox draw a crowd they could listen that's not how speech occurs anymore it's not on public land or public spaces the way that speech political speech especially occurs today is in these giant social networks that are that have giant Network effects and are basically

monopolies so if you don't protect the right to free speech in a positive way it no longer exists so you not only believe wow that YouTube should keep it section 230 you believe they YouTube shouldn't be able to de-platform as a private company you know uh Alex Jones as but one example they should have their free speech rights and we should lean on that side of forcing YouTube to put Alex Jones or Twitter to put Trump back on the platform besides your position I'm not saying that the constitution requires YouTube to do anything uh what I'm saying is that if a state like Texas or if the federal government wants to pass a law saying that YouTube If you

are say of a certain size you're a social network of a certain size you have Monopoly Network effects I wouldn't necessarily apply this to all the little guys but for those big monopolies we know who they are if the if the federal government or state wanted to say that they are required to be a common carrier and they cannot discriminate against certain viewpoints I think the government should be allowed to do that because it furthers a positive right historically they have not been able to do that because of this idea because this idea of compelled speech meaning that it would infringe on YouTube's speech rights I don't think it would I mean Google and YouTube can advocate for

whatever positions they want they can produce whatever content they want yeah but but the point that and I think section 230 kind of makes this point as well is that they are platforms they're distribution platforms they're not Publishers so if they don't once so especially if they want section 230 protection they should not be engaging in Viewpoint discrimination okay so now there is a rub here wait can I just say can I just say go ahead your explanation David your explanation that you just gave before was so excellent thank you that it allows me to understand it even more clearly that was really so tremoff do you think the algorithm is an act of editorialization yes yes yes and so then

should YouTube look at the end of the day let me let me break down an algorithm for you okay effectively it is a mathematical equation of variables and weights an editor 50 years ago was somebody who had that equation of variables and weights in his or her mind okay and so all we did was we translated again this multimodal model that was in somebody's brain into a model that's mathematical that sits in code you're talking about the front page and the New York Times yeah and I think it's a fig Leaf to say that because there is not an individual person who writes 0.2 in front of this one variable and 0.8 in front of the

other that all of a sudden that this isn't editorial decision making is wrong we need to understand the current moment in which we live which is that these computers are thinking actively for us they're providing this you know computationally intensive decision making and reasoning and I think it's it's pretty ridiculous to assume that that isn't true that's why when you go to Google and you search for you know Michael Jordan we know what the right Michael Jordan is because it's reasoned there is an algorithm that is doing that it's making an editorial decision around

what the right answer is they have deemed it to be right and that is just true and so I think we need to acknowledge that because I think it allows us at least to be in a position to rewrite these laws through the lens of the 21st century we need to update our understanding for how the world works today and you know jamaat there's such an easy way to do this if you're Tick Tock if you're YouTube if you want section 230 if you want to have common carrier and not be responsible if it's there when a user signs up it should give them the option would you like to turn on an algorithm here are a series of algorithms which you could turn on you could bring your

own algorithm you could write your own algorithm with a bunch of Sliders or here are ones that other users and services provide like like an App Store so YouTube moth could pick one for your family your kids that would be I want one that's leaning towards education and takes out conspiracy theories takes out cannabis use takes out this one it's a wonderful what you're saying is so wonderful because for example like you know this organization Common Sense Media yes I love that website every time I put in a movie I put Common Sense Media decide if we should watch it or like an I use it a lot for apps because they're pretty good at just telling you

which which apps are reasonable and unreasonable but you know if Common Sense Media could raise a little bit more money and and create an algorithm that would help filter stories in Tick Tock for my kids I'd be more likely to give my kids tick tock when they turn 14. right now I know that they're going to sneak it by going to YouTube and looking at YouTube shorts and all these other things because I cannot control that algorithm and it does worry me what kind of content that they're getting access to and you could do this by the way chamath on the operating system level or on the router level in your house you could say I want

the common sense algorithm I will pay 25 a month a hundred dollars a year and then any IP that goes through it would be programmed properly I want less violence I want less sex you know whatever I think we are as a society sophisticated enough now yes um to have these controls and so I think we need them and so I think we do need to have the right observation of the current state of play Friedberg where do you sit on this do you think the algorithm should be I don't I don't I don't know right out of 230. yeah I I don't fully agree with Saks on um the monopolistic assumption I I think that there are I think there are other places to access content and I think

that there is still a free market to compete and it is possible to compete I think that we saw this happen with Tick Tock we saw it happen with Instagram we saw it happen with YouTube uh competing against Google video and Microsoft video prior to that there has been a very significant battle for the attention of kind of being the next gen of media businesses and we have seen Spotify compete and we're seeing Spotify continue to be challenged by emerging competitors so I don't buy the assumption that these are built-in monopolies and therefore it allows some regulatory process to come in and

say hey Free Speech needs to be actively enforced because they're monopolies this isn't like when utilities laid power lines and Sewer lines and and trains across the country and they had a physical Monopoly on being able to access and move goods and services the internet is still thank God knock on wood open and the ability for anyone to build a competing service is still possible and there is a lot of money that would love to disrupt these businesses that is actively doing it and I think every day look at how big Tick Tock has gotten it is bigger than YouTube almost or will be soon and there is a competition that happens

and because of that competition I think that the the market will ultimately choose where they want to get their content from and how they want to consume it and I don't think that the government should play a role Zach's rebuttal to that you buy that well so not all these companies are monopolies but I think they act in a monopolistic way with respect to restricting Free Speech which is they act as a cartel they all share like best practices with each other on how to restrict speech and we saw the The Watershed here was remember when Trump was thrown off first Twitter made the decision you know Jack I don't even know if it was Jack but basically the company Jack said it

wasn't him actually he said it was the woman who was running it specifically that's it for that yeah yeah Jack actually said it was a mistake but any event Twitter did it first and then all the other companies followed suit I mean even like Pinterest and OCTA and Snapchat like officially YouTube everybody yeah but Trump was actually on Facebook he wasn't on all these other companies they still threw him off so they all copy each other and Jack actually said that in his comments where he said it was a mistake he said he didn't realize the way in which Twitter's action would actually Cascade he said that he thought originally that the action was okay because it was just

Twitter deciding to take away Trump's right to free speech but he could still go to all these other companies and then all these other companies basically you know they are all subject to the same political forces the the leadership of these companies are all sort of they all drink from the same monocultural found they all have the same political biases the polls show this so the problem of Freeburg is yeah I agree a bunch of these companies aren't quite monopolies but they all act the same way but I agree with you I'm a pretty Collective effect is of a speech cartel so the question is how do you protect the rights of Americans to free speech in the face of a speech cartel that wants

to basically block them go ahead Freeburg respond here's my argument my argument is that these are not public service providers they're private service providers and the market is telling them what to do the market is saying and I think I don't think so I think that the pressure that was felt by these folks was that so many consumers were pissed off that they were letting Trump rail on or they were pissed off about Jam 6 or pissed off about whatever whatever the current fat is the trend is they respond to the market and they say you know what this has crossed the line and this was the case on public television when nudity came out and

they're like okay you know what we need to take that off the TV we need to because the market is telling us they're going to boycott us and I think that there's a market pressure here that we're ignoring that is actually pretty pretty relevant that as a private service provider if they're going to lose half Their audience because people are pissed about one or two pieces of content showing up that they're acting in the best interest of their shareholders and in the best interest of their platform they're not acting as a public service look I love Market forces as much as the next libertarian but I just think that fundamentally that's just not what's going on here this has

nothing to do with Market forces has everything to do with political forces that's what's driving this look do you think the average consumer the average user of PayPal is demanding that they engage in all these restrictive policies throwing off all these accounts who have the wrong viewpoints no that's nothing to do with it it has to do with the vocal mind who work at these companies and create pressure from below it's also the you know the the people from outside the actors who create these boycott campaigns and pressure from outside and then it's basically people on Capitol Hill who have the same ideology who basically create threats from above so

these companies are under enormous pressure from above below and sideways that and it's 100 political hold on it's not it's not about maximizing profits I think it's about maximizing you know political outcomes yeah I don't know that is that is what the American people need to be protected from now I will I will add one Nuance to my theory though which is I'm not sure what level of the stack we should declare to be common carrier so in other words you may be right actually that at the level of YouTube or Twitter or Facebook maybe we shouldn't make them commentary and I'll tell you why because

just to take the other side of the argument for a second which is you know if you don't because those companies do have legitimate reasons to take down some content I don't like the way they do it but I do not want to see bots on there I do not want to see fake accounts and I actually don't want to see like truly hateful speech or harassment and the problem is I do worry that if you subject them to common carrier they won't actually be able to engage in let's say legitimate curation of their social networks yeah right however so so there's a real debate to be had there and it's going to be messy but I think there's one level of the stack below that which is at the level of pipes like

in AWS like a cloud flare like a PayPal like the the isps like the banks they are not doing any content moderation or they have no legitimate reason to be doing content moderation none of those companies should be able allow to engage in Viewpoint discrimination we have a problem right now where American citizens are being denied access to payment rails into the banking system you're saying because of their view AWS shouldn't be able to deny service to the Ku Klux Klan or some hate speech group I think that they should be under the same requirements the phone companies under okay you know the question is like look I

could frame the same question to you should you know something such a horrible group should such and such horrible group be able to get a phone a phone account right yeah no no and you'd say no they shouldn't get anything but they have that right that has been litigated and that's been pretty much protected by the Supreme Court you know even if it's a government-conferred monopoly the Supreme Court has said okay listen like it's not violating one's constitutional right for example if your water bill gets terminated without you getting due process and the the inverse is also true so for what whether we like it or not that

Jason that issue has been litigated I think I think I think for me again just like practically speaking for the functioning of Civil Society I think it's very important for us to now introduce this idea of algorithmic choice and I don't think that that will happen in the absence of us rewriting section 230 in a more intelligent way I don't know I don't know whether this specific case create an upstanding for us to do all of that but I think it's an important thing that we have to revisit as a society because Jason what you described as having a breadth of algorithmic

choices over time where there are purveyors and sellers could you imagine that's not a job or a company that the four of us would ever have imagined could be possible five years ago but maybe there should be an economy of algorithms and there are these really great algorithms that one would want to pay a subscription for because One Believes In the quality of what it gives you we should have that choice and I think it's an important set of choices that will allow actually YouTube as an example to operate more safely as a platform because it can say listen I've created this set of abstractions you can

plug in all sorts of algorithms there's a default algorithm that works but then there's a Marketplace of algorithms just like there's a Marketplace of ideas I don't discriminate and let people choose this is the key thing with this model like if if it was on a blockchain if all the videos all the video content was uploaded to a public blockchain and then distributed on distributed computing system then your ability to search and use that media would be a function of a service provider you're willing to pay for that provides the best service experience and by the way this is also why I think over time to sax to to kind of sax and I are both arguing both sides

a little bit but I think that what will happen I don't think that the government should come in and regulate these guys and tell them that they can't take stuff down and whatnot I really don't like the precedent it sets period I also think that it's a terrible idea for YouTube and Twitter to take stuff down um and I think that there's an incredibly difficult uh balance that they're gonna have to find because if they do this as we're seeing right now the quality of the experience for a set of users declines and they will find somewhere else any Market will develop for something else to compete

effectively against them and so I that's why I don't like the government intervening because I want to see a better product emerge when the big company makes some stupid mistake and does a bad job and then the market will find a better outcome and it just it's messy in the middle and as soon as you do government intervention on these things and tell them what they can and can't take down I really do think that over time you will limit the user experience to what is possible if you allow the free market and this is where the the industry needs to police itself if you look at the movie industry with the MPAA and Indiana Jones and the the Temple of Doom they

came out with the PG-13 rating specifically for things that were a little too edgy for PG this is where our industry could get ahead of this they could give algorithmic Choice an algorithmic app store and if you look at the original sin it was these lifetime bands like Trump should not have been given a lifetime van they should have given them a one-year ban they should have had a process they overreached we wouldn't be in this position when you talk about like having a industry Consortium like the MPAA what you're doing is formalizing the communication that's already taking place is already happening between these companies and what is the result of that

communication they all standardize on overly restrictive policies because they all know there is no free the same political bias no but if they did it correctly it's all in the execution sacks it has to be executed properly like the movie industry it doesn't matter you'll end up with the same problem as having the government intervene if you have the government intervene or private body intervene any sort of set standard intervention that prevents the market from company I just I disagree with you I think you can create more competition if the government says um okay folks you can have the standard algorithm but you need to make a a

simple abstracted way for somebody else to write some other filtering mechanism and to basically you so that users can pick the power users yes what the mpia did was I don't know why isn't that more choice because that's a product that's a product company I don't want to be told how to make my product right if you're not on YouTube you have you have an algo you're now saying that there is this distinction of the algo from the ux from the data and my choice might be to create different content libraries for example YouTube has YouTube kids and it's a different Content Library and it's a different

user interface and it's a different algorithm and you're trying to create an abstraction that may not necessarily be natural for the evolution of the product set of that company I would much rather see them figure it out that's not a good argument that again if you were not a monopoly I would be more sympathetic but because like somebody somebody's feelings would get hurt a product manager's feelings will get hurt inside of Google feelings reason to not protect free speech I think you're unnaturally disrupting the product Evolution and I tough luck that's what that's what happens when you're worth two trillion dollars when

you impact a billion people on the planet when you start having massive impact in society you have to take some responsibility those companies are not taking responsibility if you're not super super successful if this is not going to affect you so you don't have nothing to worry about you'll see you'll see apps offshore and you'll see Tick Tock and other things compete because they'll have a better product experience no no nobody's going to create a new Google because they're downranking one to ten percent of the search results agreed some accountability hold on in the ideal World Companies like Google and so forth would not take sides in political debates to be politically

neutral but they're not you look at all the data around the political leanings the people running these companies and then you look at the actual actions of these companies and they have become fully political and they've waded into all these political debates with the result that the American people's rights to speech into earn have been reduced you have companies like PayPal which are just engaging in retaliation basically Financial retaliation purely on based on what political viewpoints they have why it's not like face it's not like PayPal needs to be in the business content creation let's continue this conversation call in ama uh if they can get some servers over that I don't know maybe so

you got to raise some money stacks for this app and get some more service all right listen for the dictator who needs to hit the Lou to do a number two yes I am the world's greatest moderator Friedberg is the Sultan of Science and David Sachs is the prince of peace see you all next week on the episode wait wait is this 98 or 99 no it's 99 it's 99. only one episode left Wayne Gretzky get it well less enjoy it well less that we're wrapping it up here all right we'll see you all next time have a great movement bye bye we'll let your winners ride [Music] we open source it to the fans and they've just gone crazy with it [Music]

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