Sam Altman - How to Make an Abundant Future - [Invest Like the Best, EP.484]

25:12And people have, so far, extremely complementary skills to AI. Another is that people have a great degree of trust and enjoyment in working with other people. And you can go hire an AI consultant right now or talk to an AI sales rep right now or hire an AI engineer or whatever. And somehow most people seem to still really prefer interacting with a human. And I definitely would like much rather engage with a person than engage with an AI for almost everything. I also think that human values have value because they're human. And as society evolves and as the potential space in front of us becomes so enormous, we are deeply hardwired to care about people.

25:57We're going to care about what people care about. And there's versions of this you can see today where AI can make incredible images and people only want ones that are created by a human or at least chosen by a human. there's the joke about at this point you can like the signature on a piece of art is most of the value but the truth of it is you want to know about the person behind it you read a novel you want to know about the person behind it and then in terms of business for my job for example i think the world wants to know about like the person that's going to be responsible for the decisions of a company and who they're going to hold accountable if they make bad ones and they don't really want an ai ceo if you think back on like the portfolio of like risks that you've taken in business or whatever.

26:38Is it the case that most of the ones that really worked well were at the start not popular? Yes, that's for sure. This was the thing I really learned from Peter Thiel and Paul Graham, both in two different ways, which is that the very best companies, the very best investment opportunities are almost never the ones that look really popular. You can do okay just following the trend of being a little early, but to do spectacularly well, you almost always have to do things that are not what everybody else is doing. You cannot be following the new wave. If you think about the model cycle that you've been in, which has been accelerating, and this weird fact that like the next six months, or I don't know what the number is, is going to be more progress in the last X years.

27:23Can you bring us into what it's like to live in that model cycle? One of the most interesting, important things that I've learned last decade is people in general can get used to almost anything. The world can go from dismissing a pandemic as a joke to completely lockdown to this is how it's been and it's fine and we've mostly adjusted in a shockingly short amount of time. And now there's either AGI or close to it. And everyone's like, okay, there's AGI. There's all kinds of examples in one's personal life where something incredible happens, like you have a kid or something terrible happens, like you lose a parent or break up or whatever.

28:00And you think you can't ever adapt to what a change it is. And then you can adapt to great things and keep being great. You can adapt to bad things and figure out how to go on with your life. But this is a remarkable thing that people can do. And so living through this feels like another version of that, which is, I thought it was going to be weirder to live through the singularity than it turns out to be. And it's not any less exciting to watch the models keep getting better. The first thing I do every morning is like, look at the model training progress. And it happens faster. And I have higher expectations, but it still feels really cool.

28:33When you get a new one, what do you do? How do you celebrate? What's the morning look like? It's happening faster and faster. What's your ritual? Many teams now work on different parts of it. And different teams have like some different rituals. There are some teams that always make a sweatshirt with some funny meme on it. There's some teams that like always go out to the same bar. But the sense of being in the room for the first time that the frontier of knowledge is pushed back and getting to see what that's like, there's really nothing that most people would rather do to celebrate than like get to use the new model first.

29:05Do you think we have the right measurements of how good these things are? Definitely not. In some sense, the eval that matters is, is this being useful to people? You can approximate it by revenue or by amount of usage or rate of discovery of new knowledge. We have some teams working on what does the real world eval look like for these models as they get to supreme and scale. What is the frontier of your own usage of AI? I have started just recently to experiment with what it means to let an AI look at everything I'm looking at on my computer. I don't have this built yet and I'm still trying to feel out like where the limits of my comfort and trust should be but this is definitely the frontier is figuring out how I get value out of that how you're comfortable with that what that's going to look like one takeaway is that my memory is terrible relative to the memory of an AI and the ability to keep in mind what email I read six weeks ago or what happened exactly in a meeting seven and a half weeks ago and have that like brought up right at the exact moment and feed into a decision.

30:05That feels pretty magical. Pretty cool. This kind of sounds like personal agent-ish. What are the barriers to everyone having that? I want that. Compute, man. Let's imagine that we could build this product that could just do exactly what I said for all your stuff. Always on. Always on, looking at everything you look at your computer, listening to every meeting that you're in, reading every document you read. And then not only that, not only can it do all that, which takes a lot of tokens, you can just drag a slider about like while I'm asleep you can spend this many tokens thinking come up with useful new ideas for me do whatever work you can and then just like keep thinking about what I should do next what an interesting thing is like just spend more compute making your output better for me the next morning I would drag that slider quite far I'd be willing to spend a lot for that but the amount of compute that that would require if everybody in the world wants to drag that slider pretty far it's like a lot I'd love to hear you talk about how you think of the nature of this new intelligence.

30:59Someone told me recently, planes don't fly like a bird. And this intelligence is not - It's a very alien kind of intelligence. Yeah, it's a very alien kind of intelligence. And everyone's talking about how if you can verify something, it's just going to win. With enough compute and enough IQ, it'll just brute force its way to a solution. And then in other domains where humans and the data and evals that they've done have been a huge part of it, it's surprising to me how much money it's cost to get good at, I don't know, law and reasoning tracing law or something. I'm just curious how you would describe I'm not sure how your kid is.

31:28You have a boy or girl? One of each. When they're seven or age of reason or whatever, you can describe to them, like, what is the nature of this intelligence? How would you describe it? It's a beautiful question. I don't think I've been asked this before or even any version of it. The thing that's coming to mind right now is I would just say it's like a computer. And it's like a computer in the way that it can do a lot of things that people just can't do, like multiply two gigantic numbers very quickly and give you the answer. and then it cannot do some things that you would very easily do. The number of things that it can't do, I expect to keep receding.

32:02But in an evolving world, I think human judgment and taste will continue to be hard for AIs to model like where that's going to go. I don't have the right word for this. It's not quite taste. The world may need a new kind of word for the kind of judgment that people are very good at, that AIs seem to really deeply struggle with. What's it been like becoming a dad and having growing kids in this era? I'm thinking back to your optimistic early internet days. They're going to grow up in cheap, abundant intelligence age. Having kids is by far the best thing I've ever done. And everybody says that.

32:39Everybody says you can't really understand it. I believe enough people that said it that I believed it to be true. But the degree to which it has been true for me has been surprising. I think I have the best, most interesting job in the world. and it is still a very distant second to having kids. So it's been awesome and it is a real moment for optimism. My kids will never grow up in a world where they were smarter than computers. If you were born at the time of GPT-3, you had a time where you had better reasoning than the models, even though you didn't know when you were born. Yeah, you caught them briefly.

33:09Our older kid, like 18 months, that will never seem strange to him. That will never bother him. I don't think he'll care. He would be shocked to imagine in the dark ages when we had to like deal with products and services that weren't incredibly smart, he will be able to do things that you and I never were able to do. And he'll have expectations in life that you and I never had. And he'll have like a much bigger canvas. Do you run the business or teams or lead people in any way that is notably different because of the experience of having them? The answer must be yes. I feel very different having them.

33:42I think there's like a bunch of small things that are really different. And then again, this is like not a novel insight in any way. I think most people have had kids say, as soon as you have a kid, you realize that you care much more about them and the experience that they're going to have and you do about yourself and the world that you are going to leave them. And I think I have an unusual vantage point for that. People ask me sometimes, like, oh, now that you have kids, do you care more about your safety and not destroying the world? And the answer is, like, I didn't need kids. I really didn't want to destroy the world before.

34:14But do I think more about the role of human agency and what it means to have a fulfilling life? definitely much more for what we're building. And also like the people I work with, I want them to have it too. You obviously have extraordinary empathy for your kids, but the degree to which that extends to all kids and then maybe to all parents and maybe then to everybody, that's been a surprise to me too. In one of the posts, I think it was the one that's things you wish you knew earlier or something is about incentives and set them very, very carefully. Yeah. It's always been one of the most puzzling and interesting things about you that you don't have equity exposure to this company.

34:46How should the world think about your incentives? I don't know what I can say beyond I have a front row seat to the most exciting moment of human history. That is worth more to me than any amount of money. I get to have an extremely interesting life and work with extraordinary people on something that I deeply care about. But somehow that doesn't do it for people. No, it does not. I'm curious how you think about robotics. You mentioned earlier, at some point, if we had automated labor in the same work and have automated intelligence, things might get even crazier. Labor markets, but there's a white collar market.

35:22If we don't have it, then things get really crazy. If the role for people in the world is to be like the actuators of AI in the cloud, very bad, very bad. So I think it's like much greater if we don't get it than we do. Help me understand your sense of progress in that because unlike an AI where everyone is now kind of on the same page, like it's going fast, you can find extremely smart people that say it's like end of this year and you can find extremely smart people that say it's 20 years from now or something. It's not 20 years. I would say we get the chat GPT moment for robotics in the next two or three years.

35:51What would that be? Do you know what that is? Something where most people have like a real wow not like I saw this video of a robot dog doing something crazy but I was somehow able to convince myself that a really important thing happened. One of the things about the ChatGPT moment was that you could just go use it. Yeah. Like you didn't have to like believe someone who said AI is coming soon. You could just go try it. And if you can go type in a command and a robot can do something crazy and you can like watch it, even if you're not physically there, I think that would have the same kind of like, whoa, it just did this thing.

36:25Wasn't ChatGPT like not this monolithic goal, but sort of like a side experiment that you decided to release? That story may be instructive for something similar happening in robotics. Everyone seems to want to fold laundry, but maybe it's something very different. When we launched GBD3, we're trying to make money, trying to get people to use this API. The only commercial use case that was really working, the model was just so dumb. If you went back and used it, you'd be astonished. The only commercial use case that was working was copywriting. So you pay some marketing firm 20 bucks and they paid us 20 cents for the AI to like write you a landing page or whatever.

36:57But in addition to that one commercial use case, developers were using this thing we call the playground, which was like a testing interface to chat with the model. and it was really hard to do because we had not tuned the model to be good to chat with so you had to like give it a few examples of what it means to chat and then do it and people really liked it and i had learned this great lesson from yc is you notice your users doing something like good on that path and so we decided that we would build a good chat bot since that's what people were doing and we started working on that and we finished gpt4 and we started using that internally we're like this is a big deal we kind of thought that all right this is going to be a real update to the world about AI.

37:37And there's a bunch of hard questions here about this is going to create a bunch of fake news. Is this going to say really offensive things? We're going to get in trouble. So we decided we would start with a weaker version. The chat interface and GPT-4 at the same time seemed like a lot. So we would roll out the chat interface and GPT-3.5. In fact, it was originally going to be called chat with GPT-3.5. We didn't plan for GPT-4 product. Didn't think it'd be a huge ship. I did think it would get people in the world to like catch up with this and realize something was going on. and we mercifully renamed it chat gpt a few hours before launch and put it out as like a research preview and the thought was we'd put it out as a research preview and then a few months later we would launch a product with gpt4 and for whatever reason that model was over the threshold where even though we had gotten used to it internally people said okay this is awesome there maybe wasn't that much utility yet but it was an incredible moment for people to feel ai progress and use something they enjoyed using.

38:34And then by the time we put GPT-4, something they really got benefit out of using too. Are you surprised that remains the intuitive interface between us and this alien intelligence, even including coding? Mostly that's me talking to the computer, telling it what to build. No, because I'm like a massive texter. I've been a massive texter my whole life. I think part of my own insight of why that was a good interface is I'm like, I know how to do this. I know how to do this. I know what it's like to just start chatting in a text box. Any thoughts on this notion of diffusion and how to make it faster?

39:02Like if the mission is get intelligence into the hands and more useful for everyone, the key part of that is, I don't know, a marketing campaign or something. How do you get this to diffuse faster than it seems to be doing naturally to me? I think the key thing is just make it better. I kind of believe that a truly great product markets itself. There was no Chagipity marketing campaign at the beginning. I think as we get to this next stage of models and we figure out how to make products that are as great as the models themselves, there will be such incredible utility that people will spread it very quickly.

39:35We should definitely do more marketing. AI is not too popular. For as much as people use it, they have very understandable anxiety about where it can go. And so that kind of stuff, I think some great marketing would be helpful for. But in terms of value, people are getting out of their products and getting their products to grow faster. Better models, more compute, better products. And that will do it. your finance team isn't losing money on big mistakes it's leaking through a thousand tiny decisions nobody's watching ramp puts guardrails on spending before it happens real-time limits automatic rules zero firefighting try it at ramp.com invest as your business grows vanta scales with you automating compliance and giving you a single source of truth for security and risk learn more at vanta.com invest the best ai and software companies from open ai to cursor to perplexity use WorkOS to become enterprise-ready overnight, not in months.

40:27Visit WorkOS.com to skip the unglamorous infrastructure work and focus on your product. Ridgeline offers one unified platform that automates away the complexity across portfolio accounting, reconciliation, reporting, trading, compliance, and more, all at scale. Schedule a demo at ridgeline.ai. Every investment firm is unique and generic AI doesn't understand your process. Rogo does. It's an AI platform built specifically for Wall Street, connected to your data, understanding your process and producing real outputs. Check them out at rogo.ai slash invest. There was this period where the recruiting of researchers, the retention of them, the incentivizing of them was the defining story in the competitive landscape or whatever.

41:08I think there's lots of stories about you successfully recruiting great researchers. And there's been many that have come through OpenAI and had huge impacts, some of which are known, some of which are lesser known names. I'm just curious about this whole genre of what you learned about how to recruit this class of person, what matters to them, and how you did it. I've never heard you talk about the actual tactical moves you pulled to recruit somebody. In the early days, I think it was quite simple, which was that we believed that AGR was possible and it was worth going after. And we wanted to say that.

41:40And that was like an insane heretical belief. When we first announced OpenAI, all of these giants of the field. These experts were saying this is like insane. It's hypey. It's irresponsible. We have really respected people like Jan Lakun or whatever, telling journalists like, oh, these guys aren't very good and it's not going to work. But the fact that we were able to say we're going to go for this, it really appealed to a certain kind of researcher that also wanted to go on this crazy adventure with low probability of success. So an ambitious, audacious vision is a very powerful recruiting tool.

42:14You've written that it's actually easier sometimes to build things that are harder because of this reason? I super believe in this. It's one of my most frequent pieces of advice to YC founders, and I tried to really live it at OpenAI. Just do something harder. So do something that matters. Do something that is important, and if your company doesn't succeed, it might not happen. You were an investor and are an investor. You've done a lot of it, and at one point that's what you did. What have you learned about investors being on the other side? the number of investors that actually show up and try to help you is unbelievably small.

42:50Josh Kushner, absolute MVP investor, unbelievable, has like worked around the clock for what feels like years to help us. He's the only investor that I could point to that is proactively, incredibly helpful all the time. There are more people that could do that. And there are many other investors that have also been helpful and that have great strategic advice and that do things when we ask them to do it. But the like constant, just relentless, all in support is surprisingly rare from investors. Maybe I'm biased because I've always liked it when people said that about me, but I think founders really love that.

43:29And it actually moves the needle. And as an investor, it's the most fun way to do it. Me and my friend play this game where we text each other all the time. And the prompt of the text is something I don't want you to know about me. What does that bring to mind? I'm tired. I've been doing this a long time. It's tiring. How do you get through that? Just keep going. It begs the question, is there an amount of being tired that would make you stop doing this? No, no, no. This is the coolest job in the world. I plan to do this for the rest of my career. But it's like much harder than I have a way to explain to people.

43:57I feel very grateful to get to do this. This is not me complaining. What's coming next? We talked about automated AI researchers that next year, the year after. how do you think about what is happening in the next six to 36 months? Maybe that's too far out to forecast in this crazy exponential. Maybe a different version of the question is, let's say in a month 23 from now, we have something that everybody agrees is super intelligence. What happens in month 24? And my answer would be not very much. The kind of like cult worship of the machine God states those people believe that more is going to happen quickly than it's going to happen.

44:35Eventually a lot will happen, but eventually a lot was going to happen anyway. The rate of human progress and how different each decade is going to be and how much each decade is more different than the decade from before, that's been happening for a long time. Obviously ups and downs, but directionally. And I think the right way to think about this, everybody wants to be the hero of the story. Everybody wants to feel like they were there for the moment of the machine god and they played some crazy role. But this is another step. And it was hard to imagine 50 years ago. And the step 50 years from now is hard to imagine from today.

45:04And I think the right mental framework is just the zoom way out. And it's a pretty smooth exponential. Tell me a little bit about the experience of watching Codex take off and how much that is tied to what I would describe as a competitive advantage of distribution that you build through chat. And this is a gateway into a question about like moats in general in AI, what you think will drive real competitive advantage in the business over time? I think Codex mostly is winning because it's the best product and the best model. we do get some advantage from chat gbt bundling but very very tiny that is mostly not what it's been about it has made me reflect a lot on this question of competitive advantage because brilliant intelligence can migrate from any product to any other product and network effects still have a competitive advantage economic scale and the ability to like make the cheapest compute fleets whatever still have a competitive advantage but the product advantage if we could get people to move over to codex and someone builds any better, they can get people to move from codex.

46:02So it has made me reflect on that a lot. There's a really interesting question about whether this is going in the direction of a commodity. Is intelligence going to be a pure fungible commodity like rate of the oil or something? Intelligence itself, I would say yes. So what is not going to be? Compute fleet, you know, like the scale of the compute fleet, the ability to make more compute, I think that's like a very durable advantage. I see. Even if the product itself is not, because codex can write any piece of software you want, the workflows, the integrations, the complex processes, the ability for teams to collaborate together, that stuff is all pretty powerful.

46:35Even like brand preference and familiarity is pretty powerful. Obviously, you've done interesting stuff in hardware that I'm sure you'll announce later this year. How does that experiment feel and aligned with this sort of consumer distribution that you have? One of the reasons I'm interested in new hardware is we were talking earlier about how a very powerful thing with AI is that it can be always on and proactive and just understand all your context. But current hardware is not good for that. We are working inside of a hardware paradigm that is 50 years old, something like that. And computers are amazing.

47:09Keyboard and mice monitor is an amazing thing. But we have to shape AI into that. I'm excited. I would love AI to be able to reference this conversation, but not so much that I'm willing to like crack my laptop open, put it here and have it like looking at you and listening to us while it's going. But I would like a piece of hardware that socially was acceptable to do that and also felt like it was designed for that kind of a thing. As you think about the open questions, what debates in your own head with your friends, with your colleagues here, what are the most interesting open debates or open questions that you don't feel certain about but feel important?

47:41One that I don't think gets much attention is how are we going to avoid cognitive atrophy? How are we going to use these tools and make sure that we are like stretching our brains more and more and continuing to understand the stuff that really matters. There's lots of versions of this that don't. I remember when I was in school, I had this professor telling me like, you've got to understand compilers. If you don't, you will never be able to be a good programmer. Somehow that wasn't quite right. But understanding at a reasonable level how the major components of a computer system work has been important to me.

48:14Forced to imagine a scenario where we are somehow oversupplied in compute in two years time. What would be that story? It does feel possible. If the models get so smart and so efficient that they can do everything we need and build every piece of software we want. And if the bounds of our attention are such that they just cannot absorb more than what it turns out a fair limited amount of compute can do, then we can get into oversupply. Also, if we don't drive the cost curve down because we hit some sort of scaling wall, we could also get into oversupply. The observation about uncapped demand implies a certain price.

48:47Can you give your point of view on scaling laws today? In some sense, scaling laws are like the most hated prediction of all time. Everybody always wants to say they're going to run out, they can't be like this. And yet it keeps going. Who are your favorite unsung heroes in this company's story? The first person that came to mind is Alec Radford. Alec Radford is probably the most important, not very well-known researcher in the whole history of the field. and also just a wonderful top, top tier human being. He did the work that really became the GPT series among many other important things. But he also is someone who inspired, guided, nudged people in many other directions that turned out to be super important.

49:32And the thing that I think is cool about him is if you talk to people that worked with him, they will of course say generational genius, brilliant, innovative thinker, just so deep in his understanding and his work. But everybody will tell you before they finish their statement that just one of the nicest, most positive, best people they've ever interacted with. I love formative moments. And so as we wind up here, I'm curious to ask one of each. If you think about the whole OpenAI experience, what moment or chapter or whatever are you most proud of your own involvement? And we'll start with the other one, which is what was like the most instructive thing that maybe you got wrong or did wrong or what have you?

50:12And what was it like to learn from it? I mean, a lot of things have gone wrong. A formative one that went wrong, which I haven't talked about much, is I think we made a mistake to try to innovate in our structure in the beginning. We had a very good reason for it, which is we didn't know how we were ever going to make money. And we really, at the time, weren't sure at all what we're going to look like when we grew up. And of course, we care about our mission. And we wanted to be structured in a way where even if the technology went on a very fast takeoff, our mission was protected. And so we had this nonprofit structure.

50:43But I definitely learned something about why people don't do that much. We would have saved ourselves a great deal of pain in many ways if we had not tried to innovate on our structure and found some other way to preserve the central importance of the mission. Maybe there was no other way. Maybe there was for what we were doing and kind of the importance of it. there was nothing other than an exotic structure we could have come up with. But I really learned over the last decade, a big lesson about why people don't usually do that. Is there anything else formative of your life that makes you you that we didn't talk about?

51:14This is the question that's always the most interesting to me. There are things like becoming relatively immune to people having strong opinions about me that I think I developed later in life, realizing that, man, just if you're going to be at the center of like this crazy revolution, everybody's going to project a lot of stuff onto you and you got to just quickly learn to make peace about that. I think there were also things I learned later in life about like how to be very calm and not anxious really about stuff. But in terms of what drives me and what I care about and how I want to live my life, on the whole, I felt like for whatever reason, the like 10-year-old version of me it was pretty like fully formed.

51:56I think I just like kind of came out this way. How about the thing you're proud of looking back on? I'm most proud of how many times we were right when the rest of the world was wrong in an important way that put the world on a trajectory now that I'm very proud to have played a role in. That feels awesome. And then also for all the crap that's happened, the spiritual growth, whatever you want to call it, that I've gotten to have of learning just incredible resilience and what that does for like making me happy in the rest of my life. I'm very grateful for that. When I do these, I ask everyone the same traditional closing question.

52:29What is the kindest thing that anyone's ever done for you? I feel incredibly lucky about how many people have gone way out of their way to be very kindly for my entire life. As I'm thinking of this, there's just this montage of moments from life where people have been unbelievably nice to me. Yesterday, my kid shared his blueberries with me for the first time. That was very sweet. Good moment. Keep it simple. Thanks, man. Thank you. if you enjoyed this episode visit colossus.com you'll find every episode of this podcast complete with hand edited transcripts you can also subscribe to colossus our quarterly print digital and private audio publication featuring in-depth profiles of the founders investors and companies that we admire most learn more at colossus.com subscribe

53:22Thank you.

53:52giving you a single source of truth for security and risk. Learn more at vanta.com slash invest. The best AI and software companies from open AI to cursor to perplexity use WorkOS to become enterprise ready overnight, not in months. Visit workos.com to skip the unglamorous infrastructure work and focus on your product. Ridgeline is redefining asset management technology as a true partner, not just a software vendor. They've helped firms 5x in scale, enabling faster growth, smarter operations, and a competitive edge. Visit ridgelineapps.com to see what they can unlock for your firm. Every investment firm is unique and generic AI doesn't understand your process.

54:28Rogo does. It's an AI platform built specifically for Wall Street, connected to your data, understanding your process, and producing real outputs. Check them out at rogo.ai slash invest.