AI Video Is Eating The World — Olivia and Justine Moore, a16z

0:04Hey, everyone. Welcome to the Latent Space Podcast. This is Alessio, partner and CTO at Decibel, and I'm joined by my co-host Wix, founder of Small AI. Hello, hello. We have a very special double guest episode with Justine and Olivia Moore. Welcome. Hi, thanks for having us. We're excited to be here. I think you're the first twins on the pod. We're honored. We love that. Olivia, are you wearing glasses so it's easier to differentiate? Is that like a thing? No, we have opposite. Even though we're identical twins, we have opposite vision problems. So I actually need glasses and Justine doesn't. But it would be nice.

0:37Yeah, sometimes we think we should do like name tags on our foreheads or something. But I think the glasses work just as well. So both of you are partners at Andreessen Horowitz. But also, I think we're actually talking to you in a capacity of you're just very involved in generative media. We don't cover enough. And I can see a change. Latent Space itself was started because of Stable Diffusion. And then there was like, yeah, improvements in image generators for a while. You can see like ReCraft is better than blah. And then BlackForce Labs and so on, then blah. But like, they're all just image generators.

1:10I think VideoGen, and then obviously there was MusicGen for a while. VideoGen, I think, is like the current thing. And we really wanted to do an episode on that, I guess. And then also, I think the last piece that I will preview is that we really wanted to start using it for latent space itself. So we could use some help. We could use some overview of like what people are doing. We can sort of take it from there. You know, I have some of your tweets pulled up, but I don't know how you want to start. It's really funny, actually. I got into generative media too with Stable Diffusion in, I think it was like September 2022-ish.

1:46And it's grown so quickly since then. And Olivia and I talk about this all the time because it used to be that our friends in creative fields would look at the AI image and video generation and be like, I'm not worried about that. Or I can't use it in my job. This is kind of just a silly side thing. And then I think starting earlier this year, we started getting a few of them being like, maybe I should, maybe I should learn a little bit more about how these work and how to use them. And now we'll literally have people coming over to our house on the weekend so we can like give tutorials and walkthroughs of like, here's, here's the tools, here's how you use them, that sort of thing.

2:24I would say we've seen the same thing happen on, I mean, if you've been on TikTok or Reels or YouTube Shorts recently, in the past week, probably 90 % of your feed is AI-generated video. Like, even two months ago, it was like that little orange cat animation that was super popular. And then it was the Italian brain rock characters, but it was just a few people making AI video. And now there's like, I would guess, hundreds of thousands of people making and publishing AI video, which is just awesome. Sorry, I just want to clarify. Are the Italian bearing rod made by Italians? Or are the names...

2:59I haven't quite figured that out. I haven't been able to trace it down to the origins of the Italian bearing rod. It's complicated because it's a decentralized meme that people are taking and remixing. I actually looked into this question as well. And I think the answer is no, it did not come from Italians. But someone early on thought the name sounded vaguely Italian. And so they called it Italian Brain Rot. We're innocent. That's all I wanted to know. As long as we're not. It's not our fault. So I didn't even know about the Italian Brain Rot. But I wanted to kind of show and tell a little bit as well.

3:33so that our viewers can watch along. So this is it, apparently? Exactly. So this, essentially, it was kind of a universe of characters. Started decentralized, like one person made a few characters, and then a couple other people on TikTok added their own characters to the universe, and the best ones became kind of like canon. And they started as images, is probably important to clarify. And then people started animating them into video. Yes. And then some people, as you can see in this kind of music video, did like compilations of all the characters together or videos where the characters were interacting with each other and whole storylines were forming.

4:09And so it became this whole giant entertainment thing. I saw last night actually there, the IP has evolved to the point where people are now selling like toy sets and t-shirts and plushies. And the crazy thing about this first video to me is it's like a real kid who is treating these characters, like knows them by heart and is treating them like they're Nickelodeon characters. Why not? It's absolutely wild. But I get it because he's able to watch like dozens, if not, you know, hundreds of videos of these characters every day on TikTok, whereas Nickelodeon might put out like one episode of your show every week.

4:41So you get attached fast, I think. So this is, I mean, this is actually for kids, not for adults. I don't know. Adults love it, though. They're making like musicals. They're making, yeah, movies. They're making more, I would say, adult-oriented storylines of like the characters cheating on each other. So I would say it's for both. It can be too fun to scroll brainwreck characters. I was wondering, like, how do you keep track? What is your process? How do you organize the universe? Apart from just mindlessly scrolling, you know, I think that's the hard part about covering something like this. Keeping track of trends or models or both?

5:18Trends first. I think models will come and go. Like, the current thing is VO3, but there will be a next thing, you know? I think, first of all, you have to know where the trends are originating at that point in time. Initially with AI video, it was actually Reddit. Like the early days of AI video, you had a ton of people making and posting stuff in those forums. Which ones? AI video, ChatGPT, Singularity, like basically all of the AI-oriented. The AI video one was like the one for a while. and then people like me would take the best content from there and bring it to Twitter and then like the very best would sort of make its way eventually to TikTok or Instagram but that happened pretty rarely now especially after VO3 and like Minimax 2 and like with the animals diving and that sort of thing we've actually seen like a flip where most of the viral content is now originating on the true consumer, like everyday consumer platforms, which I would say are like TikTok and Instagram.

6:25And so because people more like everyday people who are not technical can make quality, interesting content and they can remix content than other people have created. These characters like the Italian brainwap characters are like a million times bigger on Instagram and TikTok than they are on X. And so nowadays I'd say we spend more time on those other platforms and then sort of watching what starts getting momentum in the community like what are other people remixing and iterating on what are people making accounts for like the vlogs and then eventually like what what starts making its way to x and reddit do you have kind of like a contaminated account that you use for like max brain rot algorithm and then once you log off it's like you post that you post that in a safe i look at it no i like to live in the brain rot all the time.

7:14So I purposely do not have a separate account. I actually do. I even made my own account. I can share my screen. Yeah. Olivia's become like a TikTok creator for these videos. So once VO3 came out and now I've like maxed out all of my, my credit. So I need to use Justine's special account. But, um, I was like, okay, I'm curious, like how low hanging is the fruit here? Like how easy is it to actually kind of make money on this? Oh, you made your own. Yeah. I made my own. And then I was experimenting with all the prompts and trying the videos myself. Okay, let's see. So I started, you can see I'm exposing myself here, but I started when the fruit slicing ASMR videos emerged.

7:55And I was like, okay, let me get creative and try my own formats, like opening dragon eggs or cracking eggs or something. It didn't really work. So I did the fruit trend myself and you can see that did the best. I think the trend that always works, like in any format is lava. Like people love like eating lava, squishing lava, like peeling the crust out of lava. Like you can see in the comments, like people are just completely obsessed with it. And then I evolved into the interesting thing about VO3 is there's no IP restrictions, at least on cartoon characters. Yeah. On real people, there are. On cartoon characters, there are not.

8:30So you can make like Stitch from Lilo and Stitch doing his own ASMR videos, which was super fun. And then I just kind of honestly was like following the trends of like what was popular, like gold bar squishing became a thing for a while. I would say the thing I'm most ashamed of that I eventually ended up falling for is the Tide Pod consumption. This is a very popular genre of videos. And as you can see, people are admitting that this is their live stream to be able to eat a Tide Pod and the AI characters can do it completely safely. So these were super fun to make. And I would cross publish them on like YouTube and Instagram.

9:10And it was fascinating to see like what worked differently on what platforms. Were all of these text to video directly? Do you ever do frame to video to maybe steer it a little more? Yeah, almost all of them were VO3, just directly text to video. I did a couple on the Minimax model, especially the new trend of like animals diving off the diving board at the Olympics, which went mega viral. I did that with the Star Wars characters and I just wanted to get the sound effects like super dialed. So I actually did that with the Minimax model and then use the new Eleven Labs sound effects models to hand generate the sound effects, which took a very long time to kind of generate them and then line them up at the right spot.

9:54in the video, but it was very satisfying when I was done. Because the thing to know about VO3 that I think a lot of people don't know until you use it is you actually can't do image to video with audio. Google hasn't released that yet. I would assume for trust and safety reasons. In the interface, you can start with a frame. But once you do that, if you're doing it on the VO3 text to video model, it will switch you back to VO2 and will tell you, hey, we're switching you to a model that's compatible to starting with an image, which means that it makes it super hard for like character consistency, right?

10:28If you're not able to start with an image of the same character over and over again, which is part of why you're seeing so many of these viral trends using things like a stormtrooper or like Jesus, where there's like a known identity that the model already understands and can recreate without a starting frame. A lot of the Yeti and Bigfoot videos have gone super viral. Like they have their own channels where they're making daily vlogs and they're getting like millions of followers and hundreds of thousands of likes. And they're genuinely really entertaining. And you start to feel an affinity with the characters, which is super fun.

11:02This is the one that somebody posted about. I've actually, I'm subscribed. I'm watching it. They're so good. And they're like real storylines, especially I think there's a lot of people who are like not happy with the way the official IP has been going. And so they prefer to watch, they're like, I can control the story myself now. Also, I mean, obviously it's nice that you don't see their mouse. So they can speak. Yeah. So how come you haven't done a vlog? You're just focused on ASMR? Exactly. Those are easier to generate for sure. I've been shocked by how smart VO3 is. And Justine, you probably know more about this, but from a pretty under-optimized prompt for something like an ASMR video because I don't know.

11:48I have to imagine it's at least somewhat trained on YouTube data. So anything that already exists on YouTube, like any genre of video that already exists, it does a really good job of taking like a one-line prompt and like turning into something that you would see like a professional creator publish. But the vlogs, the narrative character driven vlogs are a little bit more complicated outside of my skill set right now. I would say I generate dozens of VO3 videos every day and just don't post most of them on TikTok or Instagram. So I've definitely experimented with the vlog format and it's pretty easy to do.

12:22How much of a part do you think the character familiarity plays into it? You know, maybe the Stormtrooper content is actually not that good, but there's so many Star Wars fans, including, you know, I mean, you can see I have a Vader helmet right there. Do you think there's kind of like an initial slope of like, hey, let's remix all known IPs in like this new format and you get a lot of attention, then you kind of see that peter off or we're not consumer experts. So I'm curious to hear your thoughts. It's such a good question. And a lot of our portfolio companies ask us this because obviously they're all trying to figure out how do they make their content stand out or how do they help people make more interesting and viral stuff using their platforms.

13:02So we've thought about this and studied this and A-B tested different video formats. I think there are like a couple things that benefit new formats like AI video in general. One is having some element of familiarity, but then having an interesting twist on it. I think it like hits multiple of the like good sectors of people's brains when you're like, oh, it's a stormtrooper. I know this. I'm going to like keep watching because I'm like already bought into the storyline of Star Wars and I want to see what happens next. But then like you get this other weird happiness in your brain when the stormtrooper does something in the AI vlog they would like never do in the real cinematic universe.

13:44I mean, like 2 % of like the Star Wars hardcore fans will like leave an angry comment like this isn't realistic. But like a ton of them are like, oh, this is super cool. Like, I always wondered about this. And like now it can happen. One of the benefits of starting with established IP is like you're already tapping into a known association in people's brains that makes them stop scrolling and be interested. The second thing we've seen work, though, honestly, is like just super weird stuff. Like this is why the Italian brainwreck characters like they're not based on any existing IP, right? They're just completely new.

14:18but they're just strange and interesting enough that you're continuing to watch just to see like what the heck is this like am i hallucinating are they speaking a different language or is this english and i just don't understand it and so i think over time we'll see more ai like ip like that one of my favorite examples and i'll screen share again is kim the gorilla which is another TikTok character. And this is a new character. I actually don't even know who makes it, but it's a gorilla in a zoo named Kim who has a real attitude. And the storyline over time is just her constant conflict with a zookeeper named Becky, who she's fighting with and trying to escape from.

15:00And you can see like all of her videos get hundreds of thousands of likes. She already has like 300 ,000 followers in like a really short period of time. Yeah, that's Becky that she's kind of fighting with in most of these storylines. She already has her own website, her own free merch, where she tries to escape from the zoo. And so it's this kind of thing where it's like, who knows if this person would have been able to make this content before. Like, I'm guessing they're not a professional filmmaker, but like... Or had access to a gorilla. Like who... Yeah. And a great gorilla actress as well.

15:32Yeah. Not just a gorilla, but a gorilla who can act on camera. It's not also like anyone with VO3 is going to come up with a really fun, great narrative idea like this and keep it going over time. So in my mind, it's still a mix of like, we need great creatives, but now they just have like a different tool set. Yeah, they're just going to be a lot more creatives. Yeah, I would just appreciate we're more face blind to gorillas so that that solves the consistency problem. And then you add the pink bow that makes it more recognizable, even if it's like misplaced. It's so smart. It's just like, I feel just dumb when I look at these people and how they solve AI problems, you know?

16:07I think the really interesting thing, too, is people remix each other's work. Like someone does a Yeti and then other people realize like, oh, I can get around the eight second limit by having a Yeti look consistent across four different clips. And then someone's like, oh, I'll do that as a stormtrooper. Someone else is like, I'll do it as a gorilla. And then someone else sees the gorilla clip and is like, I'll make it a female gorilla, like feuding with a zookeeper in a zoo. And when I talk to AI creators, some of them have just completely new original ideas, especially established creatives who have been doing it for a long time and storyboard and come up with these whole storylines.

16:46But many are just literally remixing other people's work like this. And then the universe evolves from that. For people who are kind of newish to this whole field, it is actually very valuable to have your own IP that you entirely control. So effectively, I actually tried to get an interview with Lil Mikaela. Ah, yes. This can be cynically taken or whatever, but like the cynical version is you have an influencer that will always obey you. Right? Yeah. So it'll never speak out about like political stuff. It will just do what you ask it to do and behave. and like, you know, that's rough for the AI model, but hopefully they're not sentient yet.

17:25But in the meantime, you have like a property you completely control and like you can pose them and put them in all sorts of situations. That part is so interesting. I have like a very hot and controversial take on this, which some people hate, which is like before, honestly, to be like an Instagram or YouTube influencer, most of them are hot people. And now it's like anyone can be a popular influencer and you don't have to be a hot person. Like how many friends do you have that have like are like really funny and have like great personalities and are super creative, but they like don't fit the exact beauty standard of like what an Instagram influencer is.

17:58And now it's like anyone can create a character who like an AI character who meets the beauty standard and then it can be their brain behind the content. We already saw this with whole startups or stacks of products. And Justine looked at a bunch of these where it was like basically make money by building your own Instagram influencer off of AI images. And a lot of people were making, yeah, tens of thousands of dollars through that. They would even have sometimes like a subscription that you could sign up for to get extra content for them that would make like a ton more money than they could make on Instagram ads or something like that.

18:32But I feel like with AI video, it's just going to explode 10x. how do you see the monetization kind of landscape so there's the i use ai to make a fake person that then sells some product i make the italian brain rod things and then i sell the toys or i just get a lot of views i just spam videos on socials and i get views and kind of get the views per per million do you see a future in which maybe like patreon or like some of these other monetization things end up being ki slot feats or i'm curious your predictions Okay. Yeah, I think there's a mix of ways that people are monetizing. I think the number one way is what you mentioned, which is the like, you get paid by a social platform for like driving eyeballs and engagement to your videos.

19:18Another way is, yeah, we've seen people use them for like ads or driving traffic to an actual business. We've also seen people who are like really skilled prompters, people like a Nick St. Pierre, who sell online courses or do a lot of consulting. Like a lot of actually the best AI creators do a lot of consulting work behind the scenes, whether it's with companies or with brands. And the viral content they create is like generating leads for these people to reach out to them and be like, hey, I want to learn how to do this. And then they either like sell a course or they sell their consulting services.

19:52What I'm waiting for is like, what is the first AI native IP or AI videos that get packaged and bought by like a Netflix or like a Hulu? And then like from there, how do you even determine like who gets paid in that scenario when like this gets bought because it's the brainchild of like a thousand different characters? But like, I'm sure given the popularity of Italian brain rot on Instagram and TikTok, like you can totally imagine someone like Netflix wanting to buy and reuse or license those characters for their own content. My learning of making a bunch of these videos and trying to post them on social feeds is it's actually like very expensive still to produce just because VO3 is so expensive.

20:36And especially if you're making more complex content than like someone slicing a glass fruit. And even that in itself, like I would have to do, you know, eight generations before it was cutting the fruit in the right way that I could post it and people would be happy. But especially if you're doing something more complex, like, and you're using something like VO3, it's really expensive to run these because you get a certain amount of generations on kind of the core plan, but then you have to pay for extra credits. Exactly. This is the fruit example. Like, lots of times when I tried to generate it, it would, like, you know, cut it horizontally instead of vertically, or the layers would look weird once you cut them through.

21:12And so you would end up having to do a bunch of generations to get one that works. But yeah, my learning is that the generation is still expensive enough that it's like, you have to kind of be smart about how you're going to make money from it. Otherwise, I think a lot of people are going to find that the ROI isn't really worth it. And roughly the payouts on the social medias are like 20 bucks per million views, something in that range. That sounds high. You have to go, well, it depends on the platform, but it's like you have to go viral enough or get enough views to even qualify for like a creator program where you can then make money.

21:48Like with my videos, I posted on TikTok. I'm not part of the creator program, so I'm not making money from those. So it's first like you have to have one or two videos that ideally go hyper viral and qualify you. And then after that, it's like, yeah, you have to get enough views on each incremental video that you're actually making money from them. So it's not like cash sitting on the ground, I would say on these platforms quite yet. I was going to correct myself. 20 per million is actually low. I think, oh, maybe that's TikTok level. I was thinking 20 per meal, which is a thousand, but yeah. I think it also depends on like the engagement and stuff like that too.

22:26But like the other really interesting thing is a lot of people are, so some people are motivated by, I make these viral videos and then I use it to sell something, whether it's like my time or a course or whatever. A lot of people just finally have the opportunity to grow a big account online. And the dopamine hit of getting tens of thousands of likes and thousands of followers on an account doing AI gorilla vlogs when you were never able to grow a big social media account before, I think that is motivating a bunch of people too, which is fascinating. Like these people are all experiencing what it's like to be early adopters who are like pioneering a new form of content and people are going crazy for it.

23:09That feels sort of really rewarding and fun. Yeah, I agree. I had a cheap joke that I was going to throw in there, which is like, you know, people who are not hot enough for Instagram or TikTok, you know, to go to Twitter. Exactly. I think this links very closely with creator economy stuff. Creator economy, I think people were very excited maybe five years ago, and then it kind of died-ish. I don't know if you would agree or you would vehemently object, but maybe this is the return of the creator economy. There's another way to slice the monetization stuff, just to put VC head on a little bit, which is there's the creators.

23:46I think we talked about them. But then there's sort of the creator-enabler platforms. Let's call it like a CREA or a Comfy UI or whoever. And then there's the direct model layer itself. And I think like right now, especially with VIO, just like directly offering a platform, like it's going to be the model layer that's like gets all the money, unless it's an open model where then it goes to the model enabler, the model workflow platforms. Is that accurate? Would you change that mental model of how money flows? I would say it's somewhat accurate. I agree with kind of the distinction between the, we call it sort of like the interface layer or the application layer, companies that aren't training their own foundation models, but are making it really easy to use other people's models.

24:31And then the core model layer itself, like a VO3 or like a Minimax or like a Kling or all those folks. Some of the model providers are better than others at building the consumer interfaces. So like Kling, for example, which is one of the really good Chinese image to video models, has like a pretty good interface to be able to upload an image, make it a video, add sound effects in their platform, that sort of thing. I think like VO3 is in my mind actually like a counter example where it's super hard to figure out where to access VO3 within all of the Google products. Like you have to sign up for this separate product called Flow, which requires like a subscription to one of two like very expensive Google plans.

25:15And then from that subscription, like you have to make sure you're logged into the correct Google account when you try to access the subscription because we all have like three Gmail accounts. And so honestly, what we see is like a ton of creators are just going to the model enablement layer, whether it's a consumer facing interface like CREA or more of a developer facing interface like a fall or a replicate where you can generate like videos on a one off basis and like a pay as you go model because it's easier than trying to navigate like the behemoth that is the Google product infrastructure.