The AI industry is at a major crossroads

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1:01of it had to do with OpenAI. The company hosted its annual Dev Day in San Francisco on Monday, and I'm still here in person covering all the news. They announced a bunch of ChatGPT product features and new agent tools, and executives also laid out a pretty bold vision for the future of AI. At the same time, the new Sora iOS app has shoved AI-generated video into the mainstream, creating all sorts of unintended consequences and even surprising OpenAI CEO Sam Altman, who's become the face of sore immune across the internet. And earlier this week, the New York Times published a great story about how AI-powered job screening has become so prevalent that applicants are starting to sneak in hidden messages to chatbots inside their resumes, effectively trying to prompt and inject the automated job screening process for a better chance at an interview.

1:49I brought in Kanjun Q, CEO of AI startup MBU and a close watcher of the industry, to help me break all this down. Kanjoon has been both a tech founder and investor, and her perspective on AI and the broader tech industry in general is a very unique one. So I wanted to chat with her about this week's biggest AI stories to break down what's really happening, why it's happening, and the societal implications of it all. Okay, MBU CEO Kanjoon Q on the good, the bad, and the questionable in the AI industry this week. Here we go.

2:33Kenjun Q, CEO of MBU, welcome to Decoder. Thanks, Hayden. I'm glad to be here. So let's jump right into our first story of the week. Yesterday, OpenAI at its annual Dev Day event announced ChatGPT apps, making apps available within ChatGPT. Developers can build them. We saw it launch with a bunch of them. So Booking.com, Canva, Coursera, Expedia, Figma, Spotify, Zillow. And soon they're also going to have DoorDash, OpenTable, Uber, Target in there. So right now that obviously means you can, as a user of ChatGPT, ask for one of these apps to do something for you within the ChatGPT interface. I want to know if you saw that announcement and how big of a deal that was to you.

3:21Did you think that was the biggest announcement of the day? or just a small incremental step forward? I think that this is all to be expected. This is kind of where the entire agent ecosystem has been going toward. And the way I think about it is it's kind of like the iOS of AI, where you have this single interface that OpenAI is trying to build that is the way that you as a user get into all of these different apps through this single interface, ChatGPT. And I think that's a big deal. And I think that there are going to be really major implications on the power dynamics with AI going forward from that kind of approach.

4:01How so? Yeah, I think right now we're kind of at a crossroads on whether AI becomes another walled garden platform situation, just like the internet has been the last 10 years, or whether we end up having AI that actually democratizes and decentralizes power in the way that the original internet did or the personal computer did. And right now, we're in this kind of platform network effect ecosystem right now where, you know, you have these AI model providers, and they are providing something like this that lets you integrate with a lot of other apps through partnerships. And what that means is that just like with iOS, Apple, they're kind of trying to lock you into their platform ecosystem.

4:48And what we've seen, there's a really good talk from Cory Doctorow on what he calls inshittification, which is platforms, they'll start out doing great things, you know, being really useful to your users like Facebook. And then over time what they try to do is they lock in their users and then we end up being at their mercy and we can't exit. And so we're really in a place right now where the question is like, do we control AI or does it control us? Do we own it or do we just rent it from these centralized platforms? And I think there's a risk today of people losing the ability to shape the digital systems that control our lives.

5:28And you can see it a little bit in how we relate to our digital devices right now. Like my phone, I feel really aversive to my phone. You know, I need to detox from my phone or my TV or my computer. And that's a really weird relationship to an object in my life. Like if I had to detox from my sofa, then I would get a different sofa. Right. Right? But we don't think about that. So why? Why do we have to detox from our devices? It's because our device is full of things that are built by other people and have incentives that are not necessarily aligned with ours. And as AI gets more powerful, those incentives, those will become more powerful as well.

6:06And so we want to be in a different world. And so that's kind of the risk I see. I think it's great, like really cool, very empowering. And also, we're kind of at a turning point in time right now. That makes sense. I like what you said about the crossroads, about whether it becomes a walled garden. And right now, I wanted to also ask, down the line, at the moment for these apps, OpenAI is controlling distribution. Only large businesses are really being allowed to enter this space right now. But down the line, the current vibe is that anyone, any developer will be able to build an app and maybe it is integrated within chat to pt so what happens when this gets opened up like that do you think controls and safeguards from open ai will be enough you got at this a little bit a minute ago but yeah i'd love to hear your thoughts yeah i think that part is going to be quite similar to what we saw in the last 10 years with the mobile ecosystem with ios and android lots of people building quote-unquote apps and getting distribution through the platform and that's not a problem i think there will be plenty of safeguards and you know open ai has great incentive to try to make a really healthy ecosystem and good apps that don't cause people problems.

7:15However, it doesn't solve for the control problem of do we actually have control over our digital environments. Right. Let's talk a little bit about MPU's approach to AI agents compared to what we saw yesterday. So we already touched on this a little bit, but you guys are all about the decentralized approach. How does that play into everything we're seeing elsewhere? And talk a little bit about how you guys are hoping to do things differently? I think it's a really hard problem. And the moment in time we're at is kind of where we are in our digital environments today is what I said about our phones or our devices, where we're really renting these apps.

7:49We don't own them. Somebody else is making them and we're using them. And that means that, you know, there are incentives where people who make them want to make money off of them. And that's generally okay. The way in which we really get into trouble is these devices, digital systems, they have very fine-grained controls that capture our attention. They notify us. They are embedded in our workflows. And so because other people are controlling these apps, it's also easy for them to start controlling us. And so I think actually right now, today, we have a window of opportunity to really change this dynamic of control.

8:32In the past, the reason why we have this dynamic with software creation is because it's been really hard to make software. So you need to hire developers who are really expensive, build software, pay for the development, and then sell it for a profit. But we're starting to get into a world where, you know, as OpenAI Dev Day demonstrated, you can generate apps, generate things using natural language. And these language models are starting to get really good at writing code. And so in theory, we could go into a world where a lot of people can write code. And a lot of people could not just write code, but take a piece of software and change it to make it fit for themselves.

9:08An example of that is like a doctor who's dealing with an electronic medical record system where they have to put in all these fields. It's not suited for them. And a lot of doctors encounter a lot of burnout from this situation. And in theory, they could, in this future world, just have a system that helps them change the software at the point of use. We call this modifying at the point of use. And so I, as the user, know what's best for me. I know what I need. And I can change my digital environment right in the moment so that it suits me better instead of suiting whoever designed the software.

9:41However, that requires inventing a few different pieces. just like how, you know, the moment we're in, it reminds me of the 1960s. In the 60s, people were really excited about supercomputers. They thought, everyone's going to timeshare on supercomputers through these terminals. Like, we're all going to be in terminals, timesharing, and using supercomputers is going to be super cool. And then in the 70s, late 60s, a small group of people at Xerox PARC invented the mouse, the GUI, files, folders, windows, Everything that allowed us to make personal computers and that led to personal computing today.

10:17And what that did is it made the technology capabilities more accessible so that people could use computing for themselves and modify their computer for themselves. And I think we have an opportunity kind of to make the same inventions for the AI ecosystem. Got it. That makes sense. And back to yesterday at Dev Day, they made a lot of agentic AI announcements. Obviously, this is kind of just playing into OpenAI and AI companies in general's broader agent goals. But I would love for you to chat a little bit about how their agent updates differ from the decentralized approach you guys are taking.

10:57So one corporate example they used was Albertson's grocery stores using OpenAI's agent builder to ask about why ice cream sales were down and create a plan for getting them back up again using their own data and their own traditional marketing. So what did you make of those announcements and how does that kind of play into what you were just getting at in terms of changing things up at the point of use for your own devices? There's a difference between empowerment and control. And so the agent kit is super empowering. I can now do things I couldn't do before. And that's super cool. Like that's with all technology is empowering, you know, And that means I can build apps.

11:35I can answer questions I couldn't answer before. All of that is really exciting. The difference is with OpenAI's system, you can build apps, but only within their platform. Your agent runs on their servers. It follows their rules. It pays their API fees. You get distribution to their billion users, but you risk losing control over what you're trying to do. One kind of silly example is Imbue. Recently, we last Tuesday actually launched Sculptor, which is a tool for building software using coding agents. And it's a Mac app. And when we were trying to register with the Apple App Store, Apple banned us, even though we are a legitimate company.

12:17And it took us several days and pulling a lot of internal strings at Apple to figure out how to unban ourselves. And that's an example. It's a very trivial example, not huge downside effects, but it's a trivial example of a way in which we have lost power relative to a centralized platform. And so the question is, like, what would it look like if you controlled AI instead of platforms controlling AI and you using it through their platforms? We need to take a quick break. We'll be right back.

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14:11We're back with MBU CEO Kanjun Q talking about the biggest AI stories this week. Before the break, Kanjun and I were discussing OpenAI's big dev day announcements. And Ken Joon's perspective was that we're at a crossroads in the AI industry between an open, user-controlled vision for AI and the more walled garden, platform-centric approach that dominated during Web 2.0. But now I want to ask Ken Joon about the other major open AI story going on right now. That is, of course, the Sora app. Let's get into our second story of the week, which is Sora 2 and AI slop in general. Obviously, over the last week, you, I, and everyone else we know probably has seen AI-generated video blowing up.

14:51It's because of Sora 2, OpenAI's new iOS app that, though it's invite-only, has started flooding social media feeds with videos of Sam Altman, Nintendo characters, Nickelodeon characters, and even some unsettling political commentary. So I wanted to see if you have access to Sora. Are you using it? What have been your thoughts so far on the first week of this strange new platform? I think Sora shows what happens when AI capabilities meet platform incentives. It's really interesting. Platform incentives we talked about with social media, they optimize for engagement and attention capture. And that's what allows for making money, profit, ads, etc.

15:30Generally, this is not a huge problem until you take it too far. It's actually a perfect case study when we talk about the shape of tech power. My friends at OpenAI talk about how it's actually cool. They're trying to create a video generation app that creates joy, gives people moments of entertainment and joy. And I think from my perspective, that's a great thing. And any time you're trying to create joy and also maximize engagement to maximize profit, it is not necessarily, I think it's like very difficult to trust. And so I think what I would expect to happen is that this platform engages a lot of people, gets a lot of users using it and creating lots of videos.

16:14And there will be people showcasing videos and how cool what they made was. And that's not such a bad thing. However, over time, a lot of people will feel similarly about this as they feel about TikTok. Hey, three hours went past and that's not what I intended. What happened? And it goes back to kind of this idea of control. We're in a world where our digital technology controls us and not the other way around. That makes sense. I was going to ask you if you think OpenAI is trying to cash in on the entertainment industry side of generative AI with Sora. Is it just a money-making effort at the expense of our attention spans?

16:49And yeah, you just gave a pretty good answer to that. In fact, yesterday at Dev Day, they had a Sora Cinema pop-up where you could watch some of the videos that people have been making. And I and a few other reporters did feel a little depressed watching some of them. It was an interesting case study, like you said. I would also love to ask you, so I've seen OpenAI moving pretty quickly here to try to make a good faith effort to rights holders, or at least they say they are, and prove that they're not in the business of rampant copyright infringement, which is something that was super controversial the first week of this app's lifecycle.

17:21But the bigger question here beyond the licensing and rights issue seems to be more about whether this is actually creating any type of creative value or in fact just contributing to an already toxic internet. So where do you land on AI generated video? I know you already mentioned a little bit about how it may end up just being like TikTok and just a thing that takes some of your time away unwittingly and no worse than other social media apps. But what about the misinformation side of it and the fact that this system specifically is a lot more realistic than most others? You're not seeing any six-fingered hands anywhere.

17:54I think it's a really complicated situation because on the one hand, it is true that AI-generated video lets a lot more people express themselves. Who couldn't before? They didn't have the tools or the tools were super hard to use. And I think that's really cool. That's really powerful. And on the other hand, like I always say people are not bad. Incentives are bad. Like on the other hand, we're in this incentive ecosystem of the internet right now where there's kind of like rampant attention capture as the primary way of making money off of things. And what I would expect is some people will use it to really deeply express themselves.

18:39And it's going to be really cool. And other people will use it in order to capture attention and optimize for that. And OpenAI, as the platform, also has an incentive toward capturing attention and increasing engagement so that they have more users. And so I think that the technology itself, Sora, generating video, is really, really cool. And, yeah, it has misinformation problems. We have to figure out how to do watermarking or something to verify the reality of something. I think that has to be solved a different way. But the problem with it is that it's being launched into an environment that has rampantly inhumane, I think, incentives, where as humans, we are losing control over our attention.

19:22And that really sucks. Like, I don't think that's a future we want to live in. It's also interesting because the watermark aspect of it all, there have already been a ton of tools proliferating that I've seen, whether it's tutorials for removing the watermark, people coding their own ways to remove the watermark, or using like magic eraser type tools to remove it. I've seen a bunch of these types of videos on other social media apps with no reference to it being created with Sora. And in some ways, OpenAI isn't responsible for what people do once the video leaves the platform. But in another way, they did make the technology and we're seeing the president of the United States share a lot of AI generated videos.

20:02So I'm wondering when we get into another election cycle and it's hard to tell what's real and what's not, how this is going to affect everything. Just as the tech becomes more and more advanced. I used to pride myself on being able to always tell when something was an AI generated video. I mean, we all could. Now it's a little bit more thorny. Yeah, it's really hard to tell these days. I think to your point, the current technology ecosystem, we relinquish responsibility over the technologies that we build. And I think that's actually not a very healthy moral philosophy of technology builders.

20:35As technologists, I believe that we should be ethically, morally responsible for the way that what we build impacts society. And you said in a way it's not OpenAI's responsibility, but I think in a way it is. And we are responsible for what we create and what we allow people to do. To your point about watermark removal, I actually think longer term we need a different mechanism for trust and verification on the internet of information and of data, and we just haven't figured that out yet. Yeah, based on that, do you think likeness laws, copyright are equipped enough to handle AI-generated video and images?

21:13Are we going to need to update our entire conception of intellectual property to figure out how this tech fits in? I do think we need to update our conception of intellectual property. Yeah, I agree with you. It's interesting to think about who's responsible for what here. And yeah, we're going to be dealing with a lot of these questions over the next few weeks, months, years. We need to take another quick break. We'll be right back.

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23:32The Insolvenzantrag is set. And suddenly everything is in all-tempo. For our protagonist, the hardest phase begins. In episode 4 of our series,

24:04We're back with MBU CEO Kan Jun-kyo. Before the break, we were discussing Sora, the unintended consequences of unleashing ultra-realistic AI-generated video across modern social media, and the implications of technology like this to spike guardrails. Now I want to turn to the last big story of the week that we'll discuss, how AI is transforming the relationship between companies and job seekers, many of whom are now facing an increasingly uphill battle, trying to break through automated systems to land an interview. Let's move into our third story of the week, which is recruiters using AI to scan resumes and applicants trying to trick the system.

24:42The New York Times posted a story about this. There's a lot of concern about AI screening and how it might be factoring into everything from housing to hiring, of course. And this story today was about how AI, now a pillar of corporate job screening, has put all kinds of pressure on job seekers to try to game the system, making sure their resume is seen and not just going into a black hole so they can land an interview. And the opening detail of the story is pretty remarkable. It's about a recruiter in the UK who found that one applicant was hiding instructions for ChatGPT on his resume in a different font color, instructing it to select him as an exceptionally well-qualified candidate.

25:17Do you think these concerns about AI screening are justified? And what do you make of all this? So this is actually a perfect example of when AI mediates human relationships. So we're going into a world where algorithms, AI, I use them interchangeably, and algorithms are making more and more decisions about our lives, whether we get a job or whether we get our mortgage or whether we get approved for something or prisoner recidivism. There's all of these different things where the algorithm is making the decision. And this is like a perfect example of what you'll see in that situation when there's no recourse for the human.

25:56So when there's no recourse for the person who's being affected by the algorithmic decision, we will see these arms race effects. And so, yeah, I think this is basically, let's see, I actually built an ML recruiting startup in my last company and saw that, like, when AI systems are black boxes, people will try to game them. And ultimately, I think the real solution is, like, better incentive alignment between the creators of the algorithm and also the, like, the users, quote unquote. And also laws, better laws that protect people. It's about power and, in a way, about control. Like when you have a human making these decisions, you can generally appeal like, hey, I think you misunderstood or something like that.

26:41But right now, our legal infrastructure doesn't cover algorithms very well. Like we don't have very many laws that talk about how should we govern the way that algorithmic decision making affects people. When we have people making decisions that affect people, we do have laws that govern like discrimination and things like that. And some of those laws also cover algorithmic decisions. but it's not complete by any means. And internally at Imbue, we have this notion we call lawless spaces, where a space is lawless if there are not many laws, like the Wild West back in the day, where you could go steal money from a bank and not get punished, or you could do whatever you wanted.