Is the Ai Hype Over? Ft. Primeagen | Lemonade Stand 🍋

36:40It's just like, no, I need to have years. I'm just, I'm just making this thing and I don't like, it is not a long-term thing. And if I need to, I'll just tear it down and do it again in a day. It is so, so good. I've used it so many times that way, but like a long-term project, it's really hard. You cannot do this in a long-term project. The reason being is that the best way to describe it is that there's a bunch of human conventions or a way you kind of think about how you organize your data that there's most significant to least significant kind of like what is important to have in certain ordering lms don't have that kind of thought process we call it they don't they cannot decrease entropy they just simply go okay i'll fix it put it right here and they just inline everything and when i use an ai long enough i'll say hey let's make this change it makes the same change in like five different spots and as that surface area grows the more danger of just like bugs in your code because then you have to have the same instructions over and over and over again and so if you're not the one correcting it and you're not the one interacting with it it's just going to slowly degrade into just craziness i've hooked up twitch chat to devon which is one of these kind of automated programs and just let them go for eight hours to see what they build and just like the code is just terrifying it's just like at the end of it you're like what there's just like four loops you don't know about those i don't never got to tell you about them but they exist okay they're not government drones and you go through it and it's and it just is like nonsense when you say terrifying though is it terrifying as in like indecipherable to humans or terrifying as in it doesn't work yes uh so uh like the problem is is that it'll just like one of them was a update function and the first thing it didn't for those that do game development the first thing it did is organized by z index which is how far away usually you do that in like in rendering theoretically where you want to render uh stuff over the top of each other so that way you get you know you don't have something in the back rendering on top of something else it just did that in an update function and then never touched it again or you know did anything it just is doing work doing work doing work because at one point that's how it was and so just didn't change that code because why would i change that code that code's already there you told me to you told me to add like some key input why would i ever change stuff right so just okay it just keeps on adding just keep on adding keep on adding another way to like so i think somebody who hasn't done professional industry software doesn't realize that i would say maybe 80 to 90 percent of the work it's not writing the original the initial solution to a thing it is actually updating it so that it works with all the other teams with all the existing software that you make sure there aren't bugs that it's testable that it's going to have all these issues so that's why corporate programming in my in my experience not nearly as fun because the majority of it is thinking about how does this interface with everything else going on how do you make sure it's it's actually going to stick around and work layman understanding here is that it lacks the ability to understand all the context that this has to be built within.

39:33It just wants to dive at the problem straightforward and solve the very short thing that you've fed or given it, but it doesn't understand all the systems and people it needs to work within and be efficient within. Let's say you're designing a city, right? A big part of designing a city is thinking how all the pieces are going to interact with each other, right? And what an AI right now tends to do is if you say, okay, make the power plant, right? The center of power for the city, it'll go cool. I'll just do that right now. And it's not going to think about how that's going to interface with all the other pieces.

40:02And to your example, later on, it might never go back and think, how does that power plant I made six months ago relate to the houses here and the commercial district here and the roads we're doing and the plumbing system. And so as this stuff gets built sort of independently from each other, and there's no thought and oversight as to how it will scale, how we'll interact. It just becomes this unmaintainable disaster that at some point you start over rather than trying to fix it and that's that's called tech debt is my understanding yeah yeah and so there's a lot of thoughts on that but there are ways to obviously mitigate this you can do a lot of like hold you can hand hold it you can take more of your time and there's like a lot of benefits to that i'll give kind of a pro side of things something maybe a plus one to the hypers that i think is really uh useful so i'm in the middle of writing a small kind of just like fun fun game and it has like 60 70 000 lines of lua in it and so a small game That'd be considered like a small game.

40:53Okay. And I wanted to add something. And so we go in there and I just asked the AI, hey, go at it. And there was like five different spots that had to make the change. And I looked at that and said, hey, here's something we haven't thought about. It's kind of screwed up. I'm now going to take this like AI's investigation, which would have taken me like two hours to figure out all the spots. Instead, did it for me in five minutes. Now I'm going to think, I'm going to go home and think about it for like an hour and really come up with a more organized solution to this. And then that's great. So AIs can be really awesome because it can save me hours of research by just asking questions to go search my code base, figure out how to do these things.

41:26And that's super useful because then I don't have to go play, you know, Jean-Luc Picard and explore the galaxy. Instead, it just does it for me. My connection there is the use that I've heard law firms talk about. It's like we've taken this process of having to dig through thousands and thousands of pages of writing about a case that somebody is working on, have the AI search for points instead. and you can at least eliminate that part and then have the human review the actual problem after the fact. Yeah, I love it. I call it semantic searching. In other words, semantic usually means the meaning of something.

42:00So it's like, that search is awesome because old Google, you have to say in a very descriptive way. Now you can say it in a very prescriptive way where it's just, how does this make you feel? And it's gonna do stuff. So it's really cool in that kind of sense. Can I, a question I have for you, I saw a clip where you're going on a, I would say a short rant where, uh, you, you said something funny. I want to code, I want to dance and I don't want to go home. And you're in the midst of describing how, uh, this is automating or taking away a bit of the joy or the appeal of programming. Like it's servicing problems or answering and creating code, uh, is, is taking away some of the work that most people enjoy about coding or programming in the first place.

42:49Yeah. And now you're in a place where you're writing documentation more than anything, which is actually the part of the job that most programmers hate. Yes. And I wanted you to explain that a little bit and how that contrasts with what we're talking about right now. I can put it in a non-programmer kind of way. Right now, like there's a huge push. You see it at least in some level of articles about game programming. They're like, AI image generation will just solve everything. It's just like, well, making the art and the style of the game like that's part of the fun part like i want to have a feel to it yeah instead of just like no generate as fast as possible and it doesn't have that same cohesion it doesn't have that same kind of feel to it that that genuine like you can see the expression of the artist in the game and so it's the exact same thing where instead of doing the work that's fun and creative and actually takes like time and thought you're instead just writing the documentation of how it should be you're just constantly that's all it is it's like somehow in this ai world we were promised that it was going to cure cancer and fold our laundry instead it's doing all of our art and all of our creative projects and we're just having cancer and folding laundry it's like what the hell's happened here where's this trade-off and so that's kind of the the idea of the rant is i never realized i've been tricked into writing documentation instead of programming the whole time which was a very i was very upset at the revelation yeah no that makes sense and then of course the fun the even funnier part about this whole thing is that suno ai music generation uh we generated a song said i want to be tige i want to code i want to dance i don't want to go home and we just had to just repeat and just just say that over and over again in the club style so that was me referencing a song i listened to a thousand times that makes sense that's funny oh i wanted to bring this up because i have a friend who is a doctor and uh he this just got announced like today they got a big billion dollar investment or whatever, but it's called Open Evidence.

44:37And apparently it's like open AI for medicine, but it doesn't hallucinate at least nearly as much or it's like way, way, way, way lower. And he, two separate doctors now have told me that it's like sweeping, people are using it all the time and it's pretty useful. And so I wanted to shout that out because I trust this guy and he said it's, he's tried ChadGBT and it's generally gives him something that he can't rely on, but this has. So I clearly like maybe the broad LLMs are not going to be, more slop trained or not working, but focused ones that are subject to a task could be more helpful or increase productivity.

45:09That's been my theory for a while. I think I've said that on the podcast, which is that, yeah, trying to appeal to every single use case is so ridiculously hard, but it's so clear that many, many industries are not going to be successful by jamming chat GBT in there. Doctors would appreciate, and again, I've talked to doctors or again, my sister who's a nurse and uses, there are already software programs that people in industries like a lawyer or a doctor use that help them gather information they need for a case or prep a case or do whatever. And these programs could be supercharged by having an AI system that can scan through 10 ,000 documents for them and like pull something up like that instantly or to reframe it in a way that is relevant for a specific case.

45:50But obviously in these contexts, the super important to get it right. And so if you have a company whose entire thing is about consolidating a bunch of medical data and presenting it in a format that is really helpful. And they take, they figure out the logistics and litigation risks of all this stuff. That's where there's going to be a ton of value. And so that is already happening with law. I forget if we've, if I actually brought it up, but there's quite a few companies that are like finding major success selling to law firms and it's not Chad GBT and it's not anthropic. It's companies that have, I think Bloomberg, I'm fairly certain has one of them that is like really successful.

46:27Um, but it's just, it's just legal documentation and assistance and their whole thing is like they're not trying to write erotica for for people they're just doing the legal side they have tons and tons of effort on just safeguarding to make sure that there aren't hallucinations around cases that don't exist and i think every industry is going to have stuff like that this is why i've i'm actually curious your thought i've always felt like not only because the deep stick stuff that we mentioned earlier, where it's easy to use chat GBT five to make your own model. On top of that, if you're trying, if you're spending a$200 billion as chat GBT to make the next model, that's going to make everybody happy.

47:06You'll inevitably not make everybody happy. Every industry is going to have its own needs and challenges. And you're spending the most money of anybody versus a company that comes in with a hundred million dollars and make something that's just really, really incredible for, I don't know, truck drivers or whatever, like a specific industry. and so i have a hard time believing that the profit is going to come from the foundation models here's what you think uh i don't i so here's the here's the thing is uh first i'll tell a quick story i for the last year i've been having some voice problems um i turns out i have muscle tension dysphonia which means i just have i don't know throat keeps swelling for some odd reason and uh during that i went to many doctors and no doctor was able to figure it out and so i chat GPT and chat GPT figured it out.

47:49They're really, really, it's really good. And then I went to a doctor and he's like, that's it. That is the one. And so, you know, it's crazy when you have crazy thing to hear actually. Well, when you have like a medical condition and you realize that doctors aren't like, uh, they're like a detective with varying degrees of ability and that you like, maybe they'll be able to solve your case. They're not, they don't just like solve every problem. Every doctor is sort of like making an educated guess based on what they know. And you might literally need to go to 20 and the 20th or if you have a serious medical procedure like operating on cancer that you'll have one doctor say yeah we could operate we think this is going to save your life and another says don't really know and another says that will definitely kill you and all three are the most qualified doctors in the state and it's like what the fuck right just an episode of house you just described yes yes and this happens all anybody with a chronic like a chronic condition knows this anybody who's had to do a major surgery knows this it's rare that there's this complete consensus with the medical industry honestly if you've had a conversation longer than 30 minutes with any doctor you find this out it's like oh this is not as uh this is not as refined as i thought that's one of the that's one of the reasons why it's it's so easy to shit on a ai for valid reasons but but at the same time it's like you shouldn't presume that the systems we have are some flawless bastion like you shouldn't assume that every lawyer is just fucking acing it every time no they absolutely are not you shouldn't assume every doctor is acing this it's really fucking hard to do this and if you have a tool that you can talk to that can synthesize the entirety of all the information available in a few seconds and you use that to augment smart humans that's that's where i think would be really positive so so i'm actually on board for this whole doctor thing i don't know how much money would take and all that or if the foundational models can't just do the things it needs to do anyways uh like if they will be good enough just to be able to do it chabby chat gpt can just be your doctor eventually you know as opposed to like having a specific industry that's only surrounded with one model maybe there's some fine tuning some other you know techniques that they can do to make it better okay uh so i i have no like strong opinion whether that's the future or is it just chat gpt gobbles them all up because it has a trillion it has monopoly amount of money on stuff And so it's just like, I win everything because I have enough information.

50:05But at the end of the day, it's really about the people who use it. I don't want to just have chat GPT. Tell me my, my problem. I'd much rather know what it is. Go to a couple of doctors and see what they have to say and then bounce off what I've been told and see like where it can be because you just, you just never know. I've, I've heard just craziest stories about exactly these doctor things where one person figured it out and it was the most completely opposite thing that even chat GPT couldn't get. And so is there a lot of money in it? Probably a ton of money if you can really solve it. Okay.

50:34That's what I want to talk about then. I want to go even broader here, which is the money question. Isn't this great? You guys, I have so many minutes just talking about AI. I love this. I'm loving this. This is the Doug episode, but I'm actually just fascinating. Okay. Here's the thing. I always have to restrain myself on the other ones. I know I can't just go off. And now like I'm bouncing off you and I'm just like, yes, dude. Yes. I also have a huge conspiracy theory about money, but we'll get there. Okay. Everything you're telling me is making me less confident in open AI specifically and more confident in the other ways that more focused ways that AI may be used.

51:11LA was maybe used. Okay. Maybe I don't speak well. I don't know if you should do that. Okay. They're all good, but keep on going. My concern is that the amount of money that is now promised by open AI is so massive and I'm not quite the revenue isn't there, but it has to get there. yeah i'm trying to figure out what your stance is on whether this will be a profitable venture actually bigger question figure that all this will only work out the amount of money is now so large if they get agi so the real question i want to ask is where you stand on agi how close that is what you're seeing with that so happy and also what do you define it as because everybody has their own fucking definition for what agi even yes okay okay okay okay so first off this is like my favorite thing in the universe.

51:56So I want everyone to like everyone that has ever listened to this podcast, understand one thing. When a company has AGI, you will not get it. Reason being is would you let the world's greatest secret be used by the general public? No, you'd remake Google, you'd remake Netflix, you'd remake everything. You'd use it to create every single company on earth and just run your own businesses and be the world dominator. Like why would you have the greatest piece of technology and open it up? OpenAI is not going to release AGI. They would never be like, their name is open AI though. I don't understand.

52:29It feels like, I just, okay. Okay. I'm an atheist checkmate. Okay. No, but there's no way, like there's simply no way that that tech, the reason why they keep hyping all these things up is because they're just not there. And like actual AGI. So AGI would be, they called artificial general intelligence, meaning that can just always solve with extreme precision for low amounts of costs, problems that have never been seen. It can just simply keep on making itself better and better and eventually get to like super intelligence, meaning it's so smart. It's even beyond anything humans could possibly ever achieve in the next thousand years.

53:00It's like the greatest thing of all time, right? It can replace every human task like that. If you've read Brandon Sanderson, have you ever read any Brandon Sanderson? Yes. Okay. It'd be like a shard. We'd be creating one of the gods in his Cosmere universe where they can foresee the future. Let me translate that. It's like a god. Thanks, thanks. This guy was gibberish. I didn't even know. The thing is, I don't even know what he's saying. And then you come in. Doug, you're just a man of the people. Yeah. Okay. So yeah, I, cause I haven't chatted with you about this either. So let's give quick context.

53:38So AGI is the thing people keep talking about as like, we're going to hit this. And when we do that justifies the fact that we're spending hundreds of billions of dollars on all this stuff, because then it will, or trillions, then it will unlock such unbelievable amount of productivity that we'll be able to fund everything. thing we can do make every job a hundred times more effective etc etc literally talking about it like god like they're going to invent god yeah i mean the way i saw described was you know sam altman's basically go around saying give me trillions of dollars i will create god and a lot of people have been doing that and a lot of people have been promising he's been promising money to other people and it is god coming because zuckerberg's talking about three years you know uh carpath he says 10 years plus um a lot of people i mean this is literally just gilgamesh all over again or nimrod from the bible this is just tower baby i'm going to create the greatest thing ever we're going to be just like gods because we can create the universe right this is the i mean this has been we've been saying this for thousands of years this is not the first guy though it's i mean maybe it is somewhat different in some kind of sense but it is also oddly very similar right so it's very very funny that they're doing that but at the end of the day if let's just say we do get there like it is you are not going to get the same level of access right they're not going to just be like hey here's the model you go run it no you can't you don't have the i'm not getting billions of gpu the hgi version yeah you're not gonna there's gonna be so much safety built in remember safety and correctness are kind of in some sense at odds with each other because it has to like take what you say and be like well actually we can't say all the things you're asking for because it might be dangerous right like there's this famous uh famous thing that happened with gemini when it first came out which is a 17 year old on there it was like a 17 or 16 year old on their google profile asked about some c++ feature and because c++ is an unsafe language it refused to show this person the code because it's like sorry you're a minor i can't show you this code and it's just like it's a very very funny post uh but it actually was true and so there's like there will always be this kind of competition you will never get the same access level as something that could just solve every single problem ever because you would just be able to make everything but if everyone can make everything then no one has really anything i learned that lesson from the incredibles yeah when everybody's incredible this i'm glad you introduced this question or topic because i i had almost the exact same question but how this affects people working in the industry right now because it feels like We're not necessarily close to that.

56:08And that is the reason that these companies are hyping up the work that they do, because they need to keep the energy and the funding to get closer and closer to it. In the meantime, there's this kind of this feeling of the walls closing in, figure out how we can monetize this for the time being. We've spent a lot of time recently talking about video generators. Yeah. And these new sort of social media TikTok-esque sites as like maybe a means to monetizing the technology, right? And all these other potential maybe and shitified ways of monetizing the experience in the short term. If you work on this stuff right now, you're somebody in the industry, do you feel this sort of financial pressure of the bubble at the moment?

56:56like a lot of people, as an example, a lot of people talk about how Boeing changed a lot when the culture of executives came in with a very different outlook on how money was spent at the company rather than being run by engineers, right? And with how much - Very famous article on that one. How much pressure there is from the amount of money involved here, how does that affect the average programmer working on these things and how they feel about their work right now? So this is such an interesting topic. And this is the unfortunate, I'd call like the black pill side of things right now is what I'm seeing is a lot of people are taking on more responsibility, but they're not actually, they don't feel like they're learning because they're constantly just deferring to the AIs to try to make all these things.

57:37They're more just reading code instead of writing code. They're constantly trying to prompt their way into stuff. And I, I kind of foresee this like stepping stone between now and AGI, if we will, I don't know if or when AGI will happen. I make no predictions on that, but I see this kind of zone where everyone feels like they need to do more because we constantly keep saying that it's the greatest thing ever but people don't feel as much success on this specific topic and they're not able to quite generate all the things that they keep getting promised and so i just foresee a lot of burnout and tiredness because no people aren't learning as much anymore it's really hard to learn something if you're not like in the weeds doing the thing yeah you know i can watch a thousand bellatro streams but i will not be good at bellatro until i like learn all the jokers yeah i just have to i have to do the work myself, even if it's fun.

58:21And so I kind of see a lot of this happening where there's a lot of obviously money going into this. It's hard to say if it's in a bubble or not, because what is a bubble? The hard part about a bubble is that even if everything inflates in price and a whole bunch of money comes in, but if it grows to that expectation over the course of the next five years, was that a bubble or was that just the, was that actually just the future as hell? Yeah. It's just sick. It's the future. It's the future value being realized now. Oh, Doug, do you feel that there's a that kind of pressure of the ever increasing amount of work a demand to be using ai for all these things but a kind of lack of fulfillment in these things because that's where i truly think burnout exists is when you have the lack of learning and growth mixed with harder and harder deadlines and more and more work and you just don't get that joy anymore and you're just a yes man yeah i so i've talked to programmer friends who are like good good good programmers like lead tech folks at companies and they're basically saying it's like you i use ai every day but they don't particularly like it and they talk about it as a like having a team of junior engineers who don't learn like they're not so it's not so i think i guess programming me and you it's like having me it's like chat gpt is like a bunch of me and you it's like yeah it's like you have a bunch of is that useful or helpful and not say if you have enough of them it could be You threw enough of us at a problem.

59:41I can give you a massage while you work through the code. That would be useful. And so I think there's like two angles. One is if you're the person who's trying to learn, in which case, yeah, it's weird if you, if the AI does all the groundwork that allows you to feel like you actually made a thing or learned skills and you're just telling somebody what to do. If you're only ever a manager and you never get the low level experience, that feels like you're losing a key moment of it, you know, of development and growth. And then when you get to the higher levels, and I'm sure you've talked to folks like this as well, who now feel like they do have the experience at the low level, but they're basically just directing a bunch of low level employees, which are AIs, but they aren't getting better.

1:00:19They also don't have the satisfaction of their team leveling up because they aren't leveling up because it's just their, their AI is just doing the same thing. And the development only ever happens from you, the human telling it what to do better. So it sounds at a professional level, not that fun, to be honest. And I, you know, it doesn't sound like most people are stoked about it, but of course every company is, well, is trying to cram AI into absolutely everything. And then again, the caveat that's important to acknowledge is that for me and part of the area I do think is going to love this is in the, let's say hobbyist intermediate role where I don't have to make stuff that I don't have to plan a city, right?

1:00:54I get to go make a funny like bounce house, right? And then I pop it at the end of the day and move on to the next thing the next week. And also for your use case, if it is a little bit jank, that is funny. It's better. Yeah. Yeah. So I think about something like one of the things I've, I've thought about chat to be five is let's say you have a parent at home who wants to organize their kids chores, right? And something that is, it's all this time of like managing your household and you right now can go to chat to be here. And I know, cause I've done this and say, make me an app right now that can track here.

1:01:26My kids, here's how they use it. Make it into an iPad form that we can touch and put on the kitchen counter. And it's going to track all these things. It'll have points. It'll have scores. It'll gain. You can add all these cool things. And just some mom could just through normal English have this entire custom app made. And it doesn't matter if there's a bunch of bugs. If it were to scale up, it doesn't matter if other people can use it perfectly. It doesn't matter. It doesn't matter if there's no security. It's just an average person who gets to use technology in a way that wasn't accessible to them before.

1:01:53And that I think absolutely is happening. That's Debbie right there. We'll continue to happen and will be a huge use case. And the question, though, is on the professional side, does this help? Does it, I mean, it probably helps, but I think people are unhappy with it is my read on it. And again, you probably have more direct. This is the part that's surprising to me because from talking to people over the years, I think this is the group of people that I would have expected to remain the most positive and optimistic. the people who still have jobs in the tech sector, working at companies, working on these sorts of projects.

1:02:30It seems like you'd be the most likely to have a very optimistic view of where this is going or what you get to work on every day. And to hear that it's a little more complex or a little more disjointed than I thought, whereas three years ago, I feel like everybody working on this stuff was super, super pumped. That's kind of shocking to me. I would even say partially why I thought it'd be fun to talk to you about this is I think you are one of the I think Prime is one of the most notable people not bought into the AI hype with programming specifically who is not going every week and going, holy shit, the new Claude model is amazing.

1:03:06I just did this. And you get 90 % of tech Twitter is that people is people like the new model is crazy. Look at these graphs. And then you're there making funny tweets like it's been six months since it's supposed to have taken all of our jobs. And, you know, it's like it's not that sick. It's not it's not God. Okay, speaking of six months, I want to show this clip from Sam Altman six months ago. There's a lot of short term stuff we could do that would like really like juice growth of revenue or whatever and be very misaligned with that long-term goal and i'm proud of the company and how little we get distracted by that but sometimes we do get tempted are there specific examples that come to mind any like decisions this was six months ago i'm so happy right now he's thinking of erotica right now yes exactly sex bot avatar so six months ago he goes our long-term vision is so good we don't need to focus on this short-term juice revenue crap like a sex bot six Six months later, he announces basically a sex buy.

1:04:03Erotica. Erotica is ChatGPT. Yeah. So I am making the case here that I think, like, they increasingly look desperate for revenue. Not like they need revenue. They are desperate for it. Like, whether it's Sora, whether it's this, it looks like ChatGPT, our open AI, has made commitments. Like, they're going to break ground on so many data centers in 2026 with Broadcom and Oracle and NVIDIA that they have to have money for what they don't have now. And they're getting more desperate for revenue. And I'm trying to, you know, ask people who know more than me, is there anywhere this revenue is going to come from?

1:04:36Or is it, are we headed towards a cliff here? Like what is the, because this looks to me like a complete about fate. Why is this so upsetting to you? You have fragile Victorian ideals. We can't have a sex bot on Chad GBT. It's his words. I have felt like when Chad GBT is giving me Python code that I could, I prefer it to be more sexualized. I don't have an anime. I'm pretty upset about it. My wife is tweeting every day. Yeah. Get coding advice from a hot anime girl. So to be fair, like I'm going to, I'm going to steal man, Sam there. Okay. Okay. Sam hates Elon. That's been no, no surprise. So I'm pretty sure when that came out, Elon just got done releasing that.

1:05:12And so that's probably more of a means to dunk on him and saying, ah, Elon shallow, but we're like so good over here. More than about revenue and all that. But at the end of the day, they do need to make revenue. He's even talked about it. That's why they're releasing these things, but you got to think about it. Maybe in a slightly different concept that they make a lot of money. They are making, they're in the billions upon billions. They'll probably be crossing 10, 15 billion a year coming up here next year. I mean, they make revenue, but they're losing money. They're losing money, but they're probably, you know, Project Stargate or whatever it is.

1:05:41They're going to get a lot of money from the government. It's like all growth stories ever. Startups are, or I'm calling this thing a startup, even though it's like six years old. Their goal is to maximize users. It's not to maximize money. A great example of this is Docker. If you're familiar with Docker, Docker allows you to have whatever computer you're working on. you get a different kind of virtual environment that you could launch your little application in so it's like oh i'm actually on linux i'm on ubuntu on my mac because i this is what our servers are in right so you get to have that kind of experience docker they had this product in which made zero dollars and cost a lot a lot of money millions upon millions of dollars and they got so many people using it that the year they decided to make money they made 500 million dollars in like a month right it just was like oh i now make a lot of money right and so this is kind of them starting to turn on those gears of we've been acquiring users through a freemium model and now we're going to start turning on gears to make money and that's just how i look at is they're just going to start turning on things to make more and more money i don't look at it as a full failure but they 500 billion is a lot of dollars and so are they going to be able to make that yeah even if they had no expenses at all they're not close now in terms of yes i don't think it's that far off though i i think it's they're spending something five billion last year yeah It's like 5 billion and then they're spending like 15 billion.

1:06:56So, um, I mean, it's, you know, operating expenses, something, but they're losing hundreds of billions. They're, they're losing billions for sure every year, but they're promising hundreds of billions right now. They haven't spent that. Yeah. If they promise, they say AMD, we're gonna need to give you a hundred billion dollars to build something. They need to have the cash. Eventually they have to give them the money. Do you think Amazon makes money? They don't. They do now. They didn't for a while. Yeah. No, Amazon shopping still doesn't make money. Right. But you know, Like, you know, like you can acquire users.

1:07:25You can acquire a lot of stuff to be able to build other things that make money. But in the dot-com bubble, Amazon lost 98 % of its value. So like in a short term, if it doesn't make money, if Pets.com doesn't make, a lot of these companies will go to zero. Yeah, books a million would be a good one. Yeah, I mean, I'm not saying eventually. Of course, clearly AI is something new that is like going to be a big factor. But it just seems to me like that we've gotten way ahead of our skis in terms of what everybody's promising each other. And none of this is making anywhere close to the amount of money that it would, you know.

1:07:53I think a big thing people don't realize is that spending a bunch of money, like these$200 a month,$500 a month coding assistance kind of programs, you got to remember that most of the world, that is a kind of a hefty bill to be able to have as a coding assistant because they don't make a lot of money coding, right? Like if you're in the EU right now and you're just like a mid-level person, you're making 50,$60 ,000 a year. Like that's not a great amount of money to also be spending thousands of dollars on AI. And so there's a whole world that exists in which is kind of priced out of this AI. And I think we have a bit of a goofy mindset when it comes to this here in America, comparatively to other places.

1:08:27And so I do think that there's going to be a lot of, it's a long-term revenue thing, but the government's going to keep giving them money. The government's going to help this project because I think it's more of a national need to have good AI because of just like geopolitics than it is because they're trying to make. And you know what? I'd rather have them say that than give me erotic text because it's just like, yeah, okay. I understand that argument much, much better than anime titties. Like when it comes to making money, it's like one makes way more sense. I get the purpose of this as opposed to the other, but I don't think we're ever going to get that answer.

1:08:59It's going to be the love of the game. And I'd never do that. Also anime titties. Well, so I'm curious what you think. Cause we, we never actually talked about this, but, uh, I think you did on your clips channel, but funny quote from the CEO of Anthropic, which is basically saying, well, yeah, we were not profitable as a company, but you know, when we trained our first AI, it costs, let's say 10 million dollars and then it actually made us 15 million dollars so we did make a profit but by the time it had made 15 million dollars we had spent a billion dollars on the next model so technically we didn't make money but then that model the following year made two billion dollars but that following year we were spending 20 billion dollars so it's a bit of a scheme if you will it's there's like a schematic all right so here here's the question right that that i pause it.

1:09:45So if the idea is that every year, one of these AI companies, let's say open AI makes the new model and they spend a shitload of money to make it. And then the following year they can make a profit as long as they don't keep blowing money on training and making new stuff in theory right now, open AI could stop making new AI models and could get close to making a profit next year or get a lot closer to it. And so that feels like there's at least a exit strategy that doesn't ruin the entire thing how can you ever stop because the second you stop it seems like and again you guys are more technical me but it seems like whether it's deep seek or anyone else people can catch up rather quickly and then within six months to a year you have that model running locally like it's like you know i do it's like i agree i think the profit per unit to the ground the foundational models i think are are really unsteady financially for that exact i do think the government angle makes it like you know maybe it's just so nationally security important that we can throw collectively our tax dollars into this, whether or not, but I don't see like as a business, how this makes sense in any direction.

1:10:48I don't, I don't, it doesn't math out to me. I don't get it, but I think that, that is a good point. There's a lot of ancillary companies or second fee, like second order companies that do make a lot of money. Cursor makes a lot of money from, from chat GPT and all the other models. Like there is a lot of money to be made. And at the end of the day, all these companies that are making money, a part of that money is also going to these parent models. So like all the derivative programs that are going to crop up over the next five years, which is going to be an enormous amount are all going to be a doctor thing.

1:11:17We talked about that doctor thing pops off. That is revenue going to these companies. Right. And so when, when they say they're not making that much, you just got to remember, like we haven't even begun the infiltration. People always do this thing where they're just like, Oh, look at this new technology next year. It's gonna be crazy. It's like, no, society's moved slow. It'll be like 10, 15 years before everything's chat chippity. But when that does happen, then it's going to be like, okay, yeah, that's a lot of money they're bringing in. Like that's going to be a lot like tokens. Just everybody's going to get tokens.

1:11:42Oprah Winfrey tokens for everybody. Even kids tokens for allowance. Exactly. So I wouldn't worry. I don't worry as much about the profit side in that kind of sense. Cause even if open AI goes down, the text, their infrastructures, they're like, something is going to take that place. Something is going to argument. I've made that argument recently. And I can see that, but it just sound, you know, uh, that, that part in the middle, the part where it's like, everything goes down, but we still have all these gpus and we built something cool that part in the middle is like everyone's 401k going to fucking 50 you know it's like it's like yeah economic problems that i that i feel like we're barreling towards but okay i i i i think that's a that's a fair i wanted to ask because you guys met with newsom and newsom recently signed i think is the first piece of uh ai regulation in america sb53 sb53 and i wanted to know more about that and and hear about what's going on because this is like you know california has done regulations in fields like evs and other things that kind of led the nation because they did it first and if this is going to be something that's going to be broader adopted in america what are the odds that you would talk about this well as long as we are so the first bit is sb 1047 which is last year there was a big ai bill that went all that was approved by the california legislature and then went to governor newsom and he vetoed it it was very controversial because it there was basically a lot of requirements that it would have put on AI developers.

1:13:06And given that California hosts almost all of the big AI developers, and it would have meant anybody who's even trying to like use their business in California, essentially a California AI bill is a world AI bill. So it's, it's much, much outside of China. Yes. Outside of China. It's much, much more consequential than just California. So this bill came out last year that went all the way to the governor to sign. And it would had things like if you're making large AI models, you have to plan out safety and security. Boo. You have to have a kill switch. This is genuinely I do not think is a good idea, which is the idea that if something is deemed to be a problematic, you have the ability to shut it all down.

1:13:45That makes sense on paper, except that's not really how AI models work. You can distribute them to anybody on any computer. And so that only works if you only ever keep your AI. Gavin Newsom needs a big button on his desk that can stop the Terminator. Yeah. Again, the only way that that would work in practice is every single person's computer shuts down. Right. If he has a button that turns off the electricity, he could do that. And otherwise, you cannot do that. Statements of compliance, third-party audits from the government, a new agency that's overseeing anything, huge civil penalties if you go against all this.

1:14:16So Newsom said, while well-intentioned, it doesn't take into account whether an AI system is deployed in high-risk environments. To be frank, he said a lot of political stuff. I think the tech industry was just very, very upset. And the core criticism is you are putting in a ton of regulation upon a ton of like sort of bureaucratic work that AI companies have to do a ton of penalties in case things go wrong. This is too much for an industry that we really still have no idea what's going on. Everybody is trying to figure out what this is, how to make it. You want to leave the opportunity for a company like Deekseek to come in and create something that's totally new and not have them be throttled by having to go through all of these layers of California bureaucracy.

1:14:54that was the criticism tech companies were very happy it got vetoed other people not so much so this year there's a new one and so when we were talking to our great friend gavin newsom he did mention this specifically and somebody brought up oh fear around ai and how that's making people feel like just the world is a little more scary and unknowable and there's too much misinformation and he said with a lot of pride how they just signed sb53 this is about uh half a month ago September 29th. So this is again, it's applying to large models and basically what it does this time is you have to submit a report one time a year to the government.

1:15:29So it's chill as fuck now. There's also some other computing stuff but the core thing for a company about the report for a quick second. Okay. It's a lot of paperwork. It's going to be a very in-depth thing and if you don't, but if you don't, you get to pay a million dollar fine. So those multi-billion dollar companies are going to be like brutal. Do I hire millions of dollars with the staff to be able to create this port or do i just simply take the million dollar hit atriot could pay that fine that part i thought was very hilarious because what i see there is that this is a uncompetitive advantage for people that are in like this 500 million dollar to a billion dollar range because that's a million dollars is a much larger amount of money to these smaller companies and you have to hire like it's going to be a pretty full-time multi-person role to produce very good document like due to all the things that they have to do it's going to it doesn't feel like greatly competitive that singular point because it hurts big small yeah it hurts the small more than the big yeah like the small like the zero to 500 million they don't have to do the reporting or there's some small amount of reporting they have to do oh the medium yeah yeah so it's like the medium ones that a million dollar hit actually does mean something yeah they don't want that yeah but it's it's just like this is kind of like it's a weird place to be like i understand the idea but it kind of it's kind of a little bit of emotional painful it's also there's no there's no enforcement there's nothing nothing happens oh yeah and the ag has to first go and and sue them so before they can do the million dollar thing like there has to be the ag being like oh interesting and that anthropic son of a bitch did not have my report about that's my monday i'm with that's it right like that's how ag's talking california yeah i assume so famous california ag accent right there that damn son of a bitch y 'all making a shot out there need to give us reports okay i didn't think through the accent okay they have to evaluate i thought it was interesting the what a catastrophic risk which is any outcome of a model update or an entirely new project uh that would be released anything that would result in the death or serious injury of more than 50 people and they have to and they have to evaluate that or a billion dollars or a billion dollars.

1:17:40Mind you updates going to kill 49 people and use us 900 million. That's that's chill. That's chill. No report on that one. That's chill. And let's just look at how much a human life is worth. According to that, it is about 20 million dollars of human life. It's kind of when I read that, I was just like, oh, that's kind of funny. It has to be 50 or more. Yeah, I thought the one stand out really clear cut. Good thing to me seemed like the whistleblower protections. Yeah, which is that someone can come out and say, Hey, this company I'm working for is doing these things that are potentially going to damage a lot of people.

1:18:14And there's, they don't have to deal with the fear of retaliation for coming out with that information. The rest of it struck me as, well, I could just evaluate and spend a bunch of time saying that even, even if I'm not willing to pay the fine, right, I could make the documentation argument for this isn't that risky. Like it's not that big of a deal. Or you're like, yeah, we had a team go through and red team this and we think it's really safe. And to be fair, like they do, the companies do actually do this to varying degrees. Anthropic is great at this and they do a ton of work. They put a ton of effort into just trying to figure out how to make these things safer and understand them.

1:18:52Earlier what we talked about, the whole thing about finding that you can poison pill it, that's not to their advantage to tell people about that or to research it. That is interesting that they did that research and published it. when it's no they they have a great track record of safety and that's like a big thing for them and they're unsure if it's going to affect frontier models because maybe there is like a scale that's like so big you can't do 250 documents they're not they're not sure all the slurs if there's 50 million yeah yeah there might there might be a lot of people that could could overpower these machines with this in mind with this i'm not going to overpower the machine you might with this in mind in contrast to what the reaction was like to the previous bill that was vetoed yeah what is the tech world reaction to this right now that you guys understand because just from our evaluation even reading the differences between these two things right this seems a lot more agreeable or looser but at the same time i'm sure to some people any amount of regulation is going to be too much yeah yeah it essentially that this is so just to be clear what of what actually got signed and california has a legitimate ai legislate regulation bill now is super mellow it's like you have to report to the government what you're doing how to hopefully make it safer you have to report if there's a horrible accident and you have to protect whistleblowers it is something it's better than nothing is it but is it mellow enough that the tech executives are like this is jail so so most are yes most still are like this doesn't feel great and then there's the concerns from you about medium-sized companies being like come on like what is this even doing this you've got like a good spirit here it it to me and the sentiment i read it like checks off enough boxes to be like we did make regulation and for frankly gavin newsome in this room to say we talked with fey fey lee and we made this thing that teeters on the line and he does a lot of hand motion he literally said you know he's like he did do teetering on life he said teetering on the line and he said this is this this bill is really a collaboration between all the companies i would say it's a win for the ai companies while being enough that technically there's something and it's it's not nothing it's just there's just much less and so how does it compare with the you said with with the vc so there are some people who are really critical i'll just i'll come in with the with the opposite take i think it's just a um governmental masturbation in the sense that a let's say i am a company and i produce a report who's verifying these who the government masturbation who's like verify so i'm trying to do the hand gestures here who's the expert who actually validates that these reports are real who's going to prosecute the things that are faking who knows what the things are lying like enron exists and we created something called xbrl which prevents companies at least largely lying through what 2007 2008 to do all this like there's nothing here that actually puts teeth into it that's going to be effective enough for big companies i know we don't have really time to talk about the whole uh anthropic being sued thing but they got they they took the world's books and got charged 1.6 billion dollars and they're like cool but it's not a bad price for the world's books so they can they can or stealing every book in the world i mean i would make that deal they would close that deal they can skip the next 1 600 reports for the same cost yeah like that's they could kill 50 people a lot of times and man like i didn't file a report either my bad right like and no one would like the government they'll get civil lawsuits from the people but you know the non-dead part of the people but you know but nonetheless it's like okay so there's no teeth here this just feels like regulation for the sake of regulation because there's a loud contingent of people which rightly so i think do not like ai right and once they or when i say rightly so i mean they're in the right ballpark though they're angry for reasons i think they're mostly found out of ignorance and all this kind of stuff but they're still angry about it and it's just like okay you're trying to appease a crowd but you're not providing any sort of teeth or real regulation you're just like safety reports one million dollars and you're just like but what the hell is the point the one thing you brought up though i love that part like we should definitely have whistleblowers and we should make that like super awesome yeah every company has to have a way for people to anonymously report like they actually have i'm on team that ability to for a whistleblower because i want to know if like sam altman's gonna make like the biggest animes out there like we need to have someone reporting that immediately like that's important we need somebody to get ahead of that i need that to be leaked how does that compare with europe and china like how how what are they doing in regulation as far as i know the rest of america none california this bill which is very light europe and china so can i can i can i just can i just jump in here really quickly just it's very very important well first off uh when we say ai we're talking about llms okay this is very important and so obviously there's uh there's llms from the minstrel reason uh region of france and then there's just sparkling lms everywhere else okay but you can actually see the real difference is because what what what is europe producing minstrel like that's their only one yeah what is what is china producing lots what is america producing lots you can see the effects of regulation like it's it you just use your eyeballs and look at company count and you just watch it happen yeah so there's four main bodies i think that are relevant there's california and then the u.s federal government which weirdly are kind of different again california if they make really strict regulation would in some ways override the federal one in weird ways.

1:23:58But our federal government right now under David Sachs and Trump are trying to do as little regulation as possible, essentially zero. California now has this bill that we just talked about. It's something, it's very minimal. The two other big players, Europe and China. China actually does have some regulation, but it's almost entirely around generative AI. So it's basically just like if you generate AI images, video text, whatever it has to be labeled. They also have to shocker submit their algorithms to the government for review. So it's like they need to be clear with users when stuff is AI generated and the government gets to come in and look at it.

1:24:34Not a shock. That first rule sounds really good. You can't make that Xi Jinping smoking weed with Mario. I hate to say I'm on team China here for a second, but I like that labeling. That rule specifically is what a lot of people are clamoring for because everyone scrubbing the watermark off of a store of videos and claiming someone committed a crime. You know, it's like, there's like, there's consequences without, if it's labeled, it's goofy, but if it's not labeled, it's a problem. Correct. Yeah. So that's good. Then I want to see Gavin Newsom and Trump dancing. Yeah. I hate wondering if that's real.

1:25:07I keep thinking they're best friends and I keep getting duped every time. So, and then there's the EU, which is the polar fucking opposite. And as much as it's easy, I think, you know, certainly for folks in our audience who are like, well, of course there should be regulation on it. AI. It's too dangerous and whatnot. Again, the real challenge is if you believe this is going to be really impactful for a lot of industries and make a huge difference, if you make it obscenely difficult to build a thing or to experiment or research and try new stuff and have all of these rules, all this bureaucracy, all these punishments financially, then people aren't going to make stuff in your area.

1:25:39And that is what has happened with the EU. So they enabled the or signed the AI Act in 2024. It's currently being rolled out. So companies like this year are starting to follow along with it. What it quickly does breaks AI companies into three tiers. One is these are prohibited. These cannot be in the EU. It's basically anything that does like dystopian social credit system type stuff or allows authorities to in real time do biometric identification of people. So that stuff is just banned. But then there's high risk systems and general purpose AI. The definition of high risk is confusing, which is part of the criticism.

1:26:13It's like critical infrastructure, education, employment or business, essential public and private services, law enforcement, migration control and justice or democracy. Oh, that could mean fucking everything. That's everything. Yeah. And so for that category, you have to establish and maintain a risk management system. You have to validate and test all of your data and make all of that public with the government, do tons of documentation and record keeping transparency to all users about everything going on. there has to be humans that come in and audit all of your stuff and there are massive fines for not doing this including up to uh seven percent of your global revenue gets fined if you don't do this and this this isn't just companies who are headquartered in the eu this is like open ai chat gpt if they if they have chat gpt running in the eu and they break these rules that you can go to them and say we are fining you seven percent of your year's profit not even profit revenue yeah revenue revenue they'd be free yeah oh you all that's money that's a negative number but then the last category is general purpose ai models basically everything else there's still a lot of documentation public summaries of what's going on uh these laws also have a lot of definition around copyright law and this i think is good very clearly defining that you can't train data on stuff you don't have access to if it's behind a subscription or a paywall then uh you can't use it.

1:27:33And you're still on the hook. If you end up taking a bunch of data from websites where those websites stole it. Right. So if there's interesting, yes, this is the anthropic thing. If there's a company out there that stole every book and they have 500 ,000 books and I go and they tell me, oh yeah, these, these are all chill. And then I go there and I make an AI model off of it. If, if it's clear that that website had illegal books, I'm now on the hook and the EU can charge me 7%. So it's not clear always. What's weird is there's just no way that not every single AI company is in violation of those rules.

1:28:06Correct. They are. Yeah, absolutely. They are. And there's no way they're going to be able to actually charge 7 % of revenue on every major company. It won't. Yeah. Well, I'm more worried that, first, I got to say this again before the comments just explode, this whole YouTuber problem, is that the EU loves regulation when it comes to the internet, right? Like this is very well known. And there are some good ones. Like I love right to forget. like that is a beautiful thing that i can go to any company say hey you have to delete my data like i love that i think that that we should all have that but this is going to cause like i can foresee one day that there's like the eu black zone it's just like in here there's no ai allowed we don't do ai all ai companies just bail out and say sorry we know we stole and you are going to sue us therefore you don't get it and like what is that going to do to the average person there and so that's like my more bigger worry is these kind of overreaching things i'm moving to europe off that.

1:28:54It sounds great. But I do want to say, you know, based on the positive outlook here, if this is the next industrial revolution or something that would put Europe in such a backwards position, it'd be tough. So a couple of notable quotes here. So one is from Emmanuel Macron, president of France. We can decide to regulate much faster and much stronger than our major competitors, but we will regulate things that we no longer produce or invent. This is never a good idea. Uh, there was one from a Berlin AI agency. That's like 60 % of what we're building using AI for clients never leave because they, uh, the potential clients are like, we don't know what's going to be allowed under this AI act.

1:29:30We're just not even going to risk using AI, let alone making AI. And then Sam Altman from opening. I says, we're going to try to comply. We have a lot of criticisms on the way the act is currently worded. And then what's funny is, I didn't know this. EU also then has codes they released, which is like a pregame for the law. So they released this set of codes that, that they want all the companies to sign. This is in a few months ago that they're like, Hey, in preparation for our big AI act being enacted soon, we want you to also sign this code, which says you're going to follow all these other rules, which apparently are not even the same as the original AI act.

1:30:03And so meta Facebook just said, no, they said, we're not, we're not signing your thing. And, uh, and then they might just not be allowed in the EU to do their AI stuff in, in a few months when this starts out. So there's a lot of companies, they lose vibes. Yeah. but it's going to go so bad. I can't get on threads and vibes. But yeah, there's, there's a bunch of companies that are basically like this feels so excessive. It feels, and again, it's not just about the concept of regulation. It's also the implementation. What the actual wording, cause I looked through a bunch of it is very broad. And a lot of people like, we don't even know what we're supposed to do here.

1:30:39There are so many different regulations and steps. You're talking about Europeans that it's just like prohibitively expensive. And people are just not, there just isn't ai there there's minstrel that's it wasn't that's chat that's they have the chat and so it's like there's real genuine harm to this strategy of like well let's just really over aggressively account for everything possible in this very broad way is that people are just going to leave because they don't want to risk this yeah i'm on your team yeah i mean i it's you know ideally somewhere in the middle like yeah i think most people fall in that camp which is it there should be some kind of regulation probably more thorough than what california just passed and probably less thorough than what the EU is doing.

1:31:19Yeah. I mean, everybody's making the guess with uncertainty in mind, right? Nobody knows what this actually translates into for like how, how much value and meaning does this have to the average person 10 years from now, 20 years from now, 30 years from now. And we're all going to make our best guess as a country or as a society of laying the foundation for the direction we want to go in. And we won't know who's really right until it's 20, 30 years from now. Wild to live through this, you know? The launch of ChadGBT into now is such a wild, interesting time. And we're all figuring it out live.

1:31:54And it, yeah. I had the exact thought this morning, which was, oh, this is a similar transition to something like the Industrial Revolution. Or if you were just looking at something basic like the automobile or your country deciding to invest really heavily into train infrastructure instead of building a bunch of car infrastructure, right? How those gambles pay out and translate into life impacts for the average person takes 10 and 20, you know, it could be a hundred years. And also these things cycle too, right? Because there's periods of time where certain countries that were ahead of the game leaned really, really heavily into automobile production and making a more car-based society like the US, right?

1:32:39We leaned into that really heavily to maybe some benefit for a while. And then other countries come around and then build out a bunch of public transportation infrastructure and build their cities in different ways decades later that actually benefits them in the long run. There's some wave to ride here in each place that you happen to be in. And this is the historic technological moment of our time that we'll see play out by the time, presumably by the time we die. We'll have an idea of how good or how bad it was. Brian Johnson over here. So I'm going to go with the opposite take of you at the very end.

1:33:09I thought I was on your team, but I realized I'm not on your team. I actually am for significantly less safety in AI models, like massively less, almost zero. Here's the reason why. Wait, hold on. You mean that they are less safe? No, like the safety regulation around it. Like I think there should be almost no regulation. Like I hate the copyright side of things. When I say safety, I mean like controlling of output, auditing these reports, all that. You think I should be able to get all the images of Mario smoking weed I want? So let me throw it this way. Well, that was the copyright thing. I'm actually not too sure about it.

1:33:38I'm still in the process of really coming to conclusion of how I think about the copyright side of things. I think there will be more damage done to people distributively about replacing their friendships and their close relationships with chat GPT, like both emotionally and in their life, then being allowed to like build a pipe bomb based on things you found on chat GPT. Like, I don't think those things are going to harm many people. I fully agree with you. Like, I think the safety we're approaching in these regulations that these internal companies are doing are actually meaningless comparatively to the damage they're doing to people psychologically.

1:34:12Like that's more, much more things I'm worried about. And those are like, Oh, don't God, don't worry about that. Get a friend friend.com. You can just wear it. And that's going to like kill people. Like that's going to get people. A hundred percent. I agree with that. That is going to do way, way more harm than, yeah. Then yeah. I love how they're like, dude, we can't let them know how to build a nuclear reactor. I'm like, brother, like that's not, it's not a thing, man. I'm going to enriched uranium. I'm more worried about the lonely 16 year old who can only talk to Chad GBT. You know what he's, yeah.

1:34:44Like that's going to cause people to interact. Like speaking of this weekend and Twitch, like how many women felt unsafe? Like this isn't going to help that category. If there's a category, this does not help that category. People are going to be more isolated, more awkward around people. And due to your, which by the way, we had no wacky segments in this. And I'm very upset about that. I'm sorry. But in one of your wacky segments, you had an official eye monitor person that would have to make sure that people are doing enough eye monitoring. We like, that's what we needed. You need more eye contact for people, more personal interaction.

1:35:15That's the regulation. That's the regulation we need. Force eye contact on all humans. Okay, one thing I wanted to touch on is data centers specifically because it's something that is talked about all the time. Like these companies are building massive data centers. This is something that they have to invest a ton of money into. This is where so much of the focus and is and the energy required. Can you explain as somebody who worked at Netflix, like I imagine companies like Netflix, companies like YouTube that have existed before this have massive centers of servers and ways to distribute the video that I consume all the time, right?

1:35:55And there is clearly a difference in scale here in what these companies require. Can you explain the difference to a normal person like me of why these things demand so much more power, so much more space? And what is actually happening in these facilities that's different than the big places that are providing me like Netflix video? Yeah. So they're two really different operations. So to kind of really understand this, you need to understand the request response model, HTTP. So right now on the screen is still the Paul Graham tweet. How I got that is that I went on my computer, went to address, and I made a request that gets sent across the wire that goes to some sort of server.

1:36:37Am I logged in? You know, they get all the information out. They go and check a database. They get all this information. Then at the end of the day, they return out some amount of HTML, text, JSON, some data back for you to be able to look at it and peruse that data. And that requires a CPU. Everyone's familiar with the CPU. That just simply processes instructions one at a time. Now, the amount of power it takes to run one of those machines is still a lot. Like it's still like if you were to compare you to riding a bicycle, it's, it's, you know, you can go pretty far on it. I'm sure like a day's worth of serving Netflix on a single machine is like you biking a huge amount of distance.

1:37:10So power is kind of goofy to think about in that kind of sense, but it takes power, but AI does not run on a CPU. CPU is what they're really good at is they're like the Hussein Bolt. They're like, just, Oh, I'm so fast. But if you had to ask Hussein Bolt to say, uh, move a million stones, he would be slow compared to a million people, right? A million people would be able to just crush with St. Bolt every single time because they can just move so much faster together. And so that's kind of more like a GPU. GPUs use a lot more kind of power. You have these machines that are just all GPUs. They generate a lot of heat and they use a lot of power to kind of process all these instructions because what you're doing is doing flops, floating point operations, a lot of just mathematics.

1:37:51It's doing linear algebra across gigantic amounts of data, millions upon millions of operations for you to be able to produce wholesome photos that make your heart happy and all that, right? And that's what's happening on Grok currently right now. And so that's like, that's what's happening. And so that just requires much, much more because for me to say, no, you're logged in is gonna be a search on a database, which is gonna be a technical terms now, a logarithmic search, probably across data, if not like a constant search, a very fast, just single value lookup. And that can go, okay, hey, this person's logged in versus generating something is gonna require a huge amount of operations doing the Gavin Newsom.

1:38:30Yeah, yeah, yeah. Like a huge amount of them. And like that's why this is so much more power intensive is because one request makes a lot of operations. Like even the most crappy written software, which by the way, modern software is really crappily written. Lots, like tremendous waste in computing cycles is just like not the same order as it is in computing a bunch of linear operations. And it's just like, they're just vastly different. And so that's why they tend to have this much larger amount of power consumption. And we're only just beginning right now with AI. So all the figures I found, about 20 % of data center power and everything goes to AI.

1:39:08So it's not a huge amount of the data centers and all that, but still, that's a big commanding amount considering how long it's been going on. So by 2030, that can be 10 times more, will be 98 % of all data centers will be that. And then comparatively, the world is actually still pretty small comparatively. maybe i you know i i have no i don't even know if those numbers are to be trusted the ones that i found but i've just asked grok chat gpt and found some papers on it so i'm just like i think this is right or grok's telling me the paper that's lying to me i don't you know yeah i never know the actual answer this might be silly but who like in the actual facilities who is there is it engineers is it like is it programmers is it people that are just making sure that the the gpus are cold enough like who who is in this giant facility with all these uh gpu racks have you seen silicon valley yeah you know that one guy that was it yeah that's who that's who's in the place no they're like sys admins if that's that's probably not the right term but there's a there's gonna be a lot of different people in these kind of places yeah there's gonna be a whole like ranging from every single job from security all the way up to somebody you know a logician going in there and making sure that everyone's having the right logistics and things are being transferred because as these things run computers just break so there's there's people that are you know root causing finding more things out there's the physical movement of going to a place pulling out a rack changing out the parts putting something back in to all the identification systems being built that are probably being built maybe in the silicon valley for a data center that's running in god forsaken ohio right like there's like all these kind of that's by the way that's u.s middle east one uh hey there's two people in the chat that's a funny joke right now that's a good joke it's the only one running today uh but uh there's like that's happening so it's like who's running this thing, it would be such a complex question to actually answer because there's so much different things going into it.

1:40:54Cause I guarantee you, there are millions of lines of software that have been written for Amazon U S you know, U S East or U S West to run the way it does because they have, you know, they have to be such intense monitoring, such intense, all this stuff. There's people overseeing it. So, okay. There's no simple question there. Yeah. And that's all conjecture. I'm just guessing based off my software experience, cause I've never ran a data center. yeah i've ran a i used a crypto mine in 2013 so i know what it takes to run a few gpus my friend but i by the way i sold them all for like a hundred dollars each still i'm in a little bit brain today also have 12 locked in a wallet 12 bitcoin gotta move on getting to csgo knives like this guy yeah i was thinking about picking up a leisurely activity to help me forget like league of legends to help me forget the pain of crypto i mean it'll replace your pain yeah a different type yeah but i did we should talk about the water because this is super hot right now yeah just got brought up i know we preceded this one but we said this is super super important which is i don't know have you guys heard of the whole water argument going on right now people say if i do a google search 10 gallons of water gone yeah it's just like all this water is going on let me put it into perspective i think sergey bren drinks it over at google yeah he he's waterlogged he's the most hydrated man wet at this point um so every time like the whole arguments right now AI is destroying all the water.

1:42:12And that's kind of like a big thing people are hearing. And you will see this BBC just made some big thing about like in Scotland, they have all this water problems because of AI and all this, but it turns out pretty much that is just more fear mongering going on right now. The amount that the total global AI usage is, is the same amount of water usage as 2008 Google. So not very much. Effectively in the United States, it's like eight towns of 16 ,000 people worth of water. In other words, one golf course uses more water than like globally, all the AI. Interesting. So in the United States, it's 8%.

1:42:50It's seven or nine, seven through 9%. I can't remember the exact number. I'll let's just go for seven. For example, 7 % of water is used on golf courses. It's like 0.03 % is used on data centers, data centers, not even just AI, just data centers. So do those two numbers. You're like, ah, so if we used a thousand percent or a thousand X more, we'd be as bad as golf. So if we stop using Chad GPT, we could have even more pristine golf. We haven't framed the threat properly actually. If we keep expanding AI, we'll have less of a lot of grass on the back nine, which I can't have on the back nine because it's more important than the front nine.

1:43:31It's kind of send the tone for the day. That's where I have my nice times. Jesus Christ, I don't know how much water golf uses. Dude, it's so much. It's an insane number. It's fucking insane. Yeah, like having a hamburger is... Or just people's lawns in general. It's lawns. Any type of produce. Hey, whoa, whoa. Okay, come on, guys. Let's all be friends here. Burgers and lawns. Just burn the American flag. Why don't you? Damn, Doug. We burn golf courses. I thought we were friends. No, but I wanted to bring that up because while we were in that meeting, someone brought up like, oh, and the water usage.

1:44:00And so I was like, and the water usage i never like i've heard of that i always thought it was a lot of water so i started reading papers and i was like oh we're just wrong like yeah the water is only not the problem they're fear-mongering with the water usage by comparing it to what a person uses at home yeah like if you compare it to that then yes it sounds like a lot of water you compare it to any other industry it's it is not the current concern and like i think energy broadly is more concerning yes water is not. Yeah. Um, uh, one, so I, some of these questions already are kind of fusions of people's suggestions from our fans and community and a really probably the most recurring question I saw was, hi, I'm a young twenties or I'm going into college.

1:44:45I am a programmer of some kind with how I feel about the industry right now and my trajectory for the future of this industry's trajectory in general should i change my career path right now should i have a sense of optimism of where or how i can work in this space right now because my options feel so limited so can you speak to that mid to low 20s person who's struggling with that right now i have a lot to say on it but doug i want to hear yours first it is interesting and personally why i wanted to chat about this is because at this newsome thing genuinely there's maybe 12 streamers there and at one point people are saying how uh another streamer brought up the the general sense of sort of uh pessimism and worry about the state of the world and gavin just said is that real not to be put and not to put you down i'm genuinely asking that sense of doom like do you all feel that and everybody kind of nodded and said yeah things just feel worse nowadays things just feel on edge feels like we're moving towards civil war and then prime was like no i think it's great and uh and then i was like yeah I'm kind of with him.

1:45:47And so I am optimistic. I mean, doing this show and fucking, you know, drinking up fire hose of horrible news every week. It does. It does make things a little bit worse, but I me. I know Doug, here's the Sudan civil war. 500 ,000 children have died of famine. Doug. How do you feel now? I mean, I mean, even I understand that the broader context of people feeling the doom, but I, so right, right. No, no, no, to specifically get to your question. I, it just, it was interesting in that context being like, damn, I doesn't feel like there's that much optimism right now. For me, the reason I'm optimistic is because I think that somebody who is driven and or creative has more tools to enable their output in the world and to do something than ever before.

1:46:37And I compare that to myself and my friends 20 years ago to now. And And I see people who are able to go make things and not just because of AI, but just all the tools that are available, what the Internet has, what YouTube offers with education, what Chachibiti can do the average person. And I say this for random people. My sister, who's a nurse, finding that tech is like making her life way better. My brother-in-law, who's fixing his truck now because he can point Chachibiti at a thing who says, oh, well, that's the blah, blah, blah piece. And you can do this. my cousin who's now able to start a band, even though he's an accountant because these online tools have enabled to work way faster.

1:47:11Me, who's able to learn all this programming at a rate and start to expand my creative repertoire, which has allowed me to hire more people than I would have otherwise and have more output and contribute more to society. So I think that the way society is moving is going to allow, at least for people who want to put themselves out there, have far more ability to do so and to make an impact and to learn, to learn, to keep going, to try to make a lot of mistakes. And that is very inspiring to me. And I think somebody who is creative and driven now has a much, much, there's so much potential. Oh my God, compared to what it was 20 years ago.

1:47:44And I think that will keep accelerating that I find optimistic. What do you think? And there's also a sense, which we talked about, which is that with my type of content, people keep coming up to me and saying, you inspired me to get into programming. And I just got a job here. You inspired me to check out content creation. I was able to pull it off. And I think like, I, I feel incredibly gratified getting that response. And I keep hearing that from people over and over. I see every single week and I get emails or talk to people in person who say this did make a difference. I was able to do a thing.

1:48:15I have changed my life in some way. And so I'm like, I know it's possible, not for every single person, caveat comments, commenters, I'm sure are writing things, but that is my, that is my broad attitude. And even with all the things we talk about, I'm like, there's, there's so much good. Yeah. So I got to, I got a chance to talk a lot with, uh, Michael from cursor. He's the CEO and honestly, I have such respect for them and what they're doing because a part of their whole mission is that. Sorry, real quick. Cursor is an AI coding tool. So yeah, AI coding tool. You can just type in what you want and it'll generate code and it can use your project as a means to generate things more accurately than say going to a website and putting in chat chippity.

1:48:53And so, uh, I got a chance to meet with him, talk with him about a bunch of like just stuff they're doing a cursor and a huge part of it that I just have so much respect for them for is that they think the programmer is important. When they look at the world and where they're going, some people would probably see them being like, oh, they're trying to take jobs from people. Instead, they're saying, no, we're enabling people to do anything. And we think that the human element to programming and being a part of it is so important. We're trying to build an editor that makes it easy. So you don't have to go somewhere else to use it, but for you to be able to program and do stuff like it's super important for you to learn these skills, because that is going to make you go from okay to great.

1:49:28And we can help you get over the hurdles by having ease with AI. And so when I hear these things, I look at the world because, you know, it's super, super easy to see the Paul Grahams and the other people being like 10 ,000 lines a day. They're going to build everything. You're going to do nothing, right? Like, um, he also doesn't have that accent. That's my accent for everybody. I'm loving your accent. Thank you. I'll start getting some Irish ones coming out here soon. Uh, but when I see all these things, it makes me so hopeful because what I, like through my experience, through the community, what I see is that people just need like positive voices and they're gonna go and they're gonna go learn stuff, right?

1:50:03Like it motivates them to go learn stuff. And then they realize they can take control of their life. When I was young, how did I get programming information? I either had to look at the only code I could find and guess what it does or buy a book from Barnes and Noble if they even had a book. Now you can just like ask questions in your super stupid way and it knows what you're trying to ask and say, hey, you need this. This is how it's said. This is what it means. You get like so much more access to stuff and the people who are taking advantage of that, I get so many messages being like, you were right.

1:50:34This is great. Programming is fun. I'm learning and I actually got a job. I'm taking control of my life. I actually get to have my own freedom and responsibility for my own life as opposed to feeling like a leaf in the current. It's like there's a lot of opportunity. So when I see that and I see AI, I get happy because at the end of the day, it's not taking our jobs. It's going to take some level jobs. Things are going to change. Yeah, the paralegal probably is going to have a very hard time in the next little bit. But those that know how to use it, I know everyone says that phrase. I'm not even convinced it's even real.

1:51:04Those that are willing to learn, regardless of how easy or hard it is, those are going to be the people that are going to have a really awesome potential future. And I don't think it's just going to evaporate tomorrow. And so I'm super hopeful because I think in two years, there's going to be so many more people that have access to the ability to get that education. to get that life-changing stuff than there will be today. And so for me, I look at it like as a super positive future, despite all the potential negative sides. How do you think that, because I think that I mostly agree with that outlook and it's a good long-term sentiment.

1:51:44How do you think that contrasts with the guy who just graduated with his CS degree, where if he had graduated eight years ago or 10 years ago, that guy was pretty much guaranteed a job out of school. And now he's entering a job market that is much, much more challenging where that degree doesn't feel like it translates into anything right now. And I totally agree where the most capable and willing to learn people who can make the best of whatever circumstance there is, there's always a person who will rise to the top and become successful. Those are also the people who are most inclined to share their rewarding stories with people that they've learned from.

1:52:25But to all the people that are kind of stuck in the glut of the middle right now, what do you say to those people? And it's not to be discouraging because at large, I do agree with you. And I think the positive trend over the longer term, I just think something we've talked about a lot is there's an unfortunate thing happening right now where I've said openly, You could be me, the exact same skill set, the exact willingness to work. And, but if you graduated five years after me, you would be in a totally different position that is much, much more difficult. So how do you kind of reconcile that with what you're saying now?

1:53:06So I first want to preface one thing. I'm not talking about all positions or all graduates. Okay. So I know, I don't, I don't know about business. I don't know anything of what they do. I'm not even sure if those degrees were ever real to begin with, but there they are. right. I'm not going to talk about that. My business degree is fake or civil engineers or mechanical engineers or even electrical engineers like those. I'm just going to talk about programming because that's the thing I do know. I will say it this way. Uh, I graduated what 15 years ago. Yeah. 15 years ago. So 15 years ago I graduated and I'll tell you this much that there were a group of people in my class that tried really, really hard.

1:53:40And all of those people were hired. Then there was a group of people in my class that didn't try. None of them got jobs. Like 40 % of my class did not get jobs when they, when they graduated, that's a very large percentage. And I'm under the personal belief that the only difference between now and then is that the people, uh, who were trying really, really hard had a, it was a requirement of pretty much having a four years of trying really, really hard. Whereas now it's like, Oh, I did a summer bootcamp. Why don't I have a job? I'm trying super, super hard. And it's like, yes, you are trying super, super hard, but your timescale is like vastly different than me.

1:54:14Like where I was at by the time I was applying for internships versus where you're at applying for internships. Like I was significantly more capable than you. I had so much more work. I had so much more of these things. And so I do think that there's a whole time component that has been shifted on its head that we just are not accounting for at all. Like no one, nobody's being like, Oh yeah, but this person's only been learning for three months. It's why don't they have a job, right? Like there's a whole time scale going on there. And I do, I don't know how much it's actually been affected for those that are like the tryhards.

1:54:44Cause I've, I have so many people that I know that are the tryhards and they are getting jobs. They are getting good jobs and they're completely junior 19 year olds getting everything that they need because they've been trying since they've been 12 years old. They've taken the long, long road of making a craft as opposed to just trying to get the job. And I know that could be very defeating. Uh, but the problem is, is that so much of life and so much of expertise is not one on a hundred meter dash. It's one on a marathon and being able to push through that for long years. Like I had to live in an apartment where the guy below me to threaten to kill me.

1:55:15And he was always smoking meth and all that. And it was just crazy down there. Right. But that's like, that's part of my story is having to live through that situation, working 80 hours a week, trying to figure out how to get a job. And so I spent multiple years, 80 hours a week, trying to get as good as I can to get a job in this industry. And so that's kind of how I look at is that I do think we have, we got a bit, we got a bit messed up in like the ZERP era, the zero interest rate era. And that, like, I do think that that really uh, pardon my language, like that fucked up everything. Like that's actually where people are like, Oh, well, why don't I get a job?

1:55:47I've been doing this for six months. Like they used to pay people a hundred thousand dollars. I'm like, no, that was actually a broken moment. Like that was the bubble. That was the true bubble. And now we're returning, I think more towards regularness where it's like the people who are trying, the people who are really invested are going to find something still good at the end of this rainbow. Now in 10 years, we'll be the same. It will be different, but to what level different? I have no idea. That's my hopeful thing. Hopefully that white pills people in the sense that you get the control. It's up to you to say, no, it's not up to somebody else.

1:56:17I've always had this thing. So being from Montana, being from kind of on the outsider coming into Netflix, one of the big things was everybody else was like these Stanford graduates, these Harvard graduates. And I will tell you this much. You get, you get looked down on quite a bit from being from the South, having a Southern accent or being from Montana, being from these places that are considered backwards. like you get a lot of discrimination back in those days i had a lot of hurdles that i had to get over and what i realized is that you know we used to talk about diversity and inclusion like i realized that inclusion they used to say is like or diversity is a bunch of people at the dance inclusion is asking someone to dance and so that's kind of what they said is like everyone gets to dance and i kind of always hated that because i realized i never got to dance and the real thing is that you have to make your own thing.

1:57:03And so I would go to people and be like, you're dancing with me because I'm going to make this thing work because like I want to be here. And so I think there's a whole level of control that people still have in their life and especially just around technology that's just super magical that I don't know if it exists anywhere else. So I encourage everyone to don't just go to the dance, ask people to dance, right? Get in there, be a part of things and you will find that there's a lot more out there. So that was my passion. That was great. That was awesome. thanks so much Brian for coming on appreciate it thanks everybody for coming on watching this episode of Lemonade Stand I hope you're motivated and terrified at the same time yeah see y 'all next week bye everybody thank you