How AI adds to human potential: (LIVE) with Scale AI’s Alex Wang and Intel’s Lama Nachman

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0:41That's why over 3 ,000 firms trust Affinity, the CRM platform purpose-built for private capital. Affinity's relationship intelligence reveals your team's strongest paths to founders, investors, and decision makers using insights It's hidden in emails, calendars, and meetings. With powerful AI tools like Affinity NoteTaker and Deal Assist, you'll spend less time managing data and more time closing the right deals. Learn more at affinity.co slash marketplace. Hi, it's Jeff Berman, your host for Masters of Scale. There's so much talk about artificial intelligence taking things away from people. But on stage recently, I had the opportunity to speak with two leaders in the field about how AI can increase human potential, lowering barriers to entry for fields like content creation.

1:35How do you design human AI systems that can actually get you the essence of what human creativity is? And how do we think about what people need to bring their creativity to the table? You're actually democratizing a lot of these technologies. So now you're enabling a much wider spectrum of people to bring their creativity to the table. It's a huge boon for storytellers. The question for us isn't if we looked at the stories or the movies or the short films that are being done today, how efficiently could this be done in the future? That's Alex Wang, co-founder of the company Scale AI. And before him, you heard Lema Nachman, Intel's director of human and AI systems research.

2:19I joined them in conversation at an event called Intel Vision in early April. The event brought together business leaders focused on the challenges and opportunities presented by artificial intelligence. As AI advances at a blistering pace, it's a growing part of every business, in addition to being an industry sector all its own. I took the stage with Lemma and Alex to record this episode of Masters of Scale in front of a live audience of active stakeholders.

2:50Oh, God, you guys are amazing. All right, take a seat.

2:57You've got to have incredible talent at every position. It's like this huge push. There are fires burning when you're going home. Can you believe it? Such an idiot. And then you go back to, this is totally going to be amazing. There are so many easy ways. I have no idea what to do. Sorry, we made a mistake. But you have to time it right. Oops. Working out of a three-bedroom apartment. Stuff that just seems absolutely nut balls. Ten years later, we're like, well, that's just how you do it. We haven't made it just how you do it. This is Masters of Scale.

3:37One of the most breathtaking advances in AI came just a few weeks ago when OpenAI announced a new tool called Sora. It generates AI video from a text prompt. You type in details of a scene, the characters, the setting, the actions they're taking, and Sora creates a video from just those words. It's expected to be released to the public later this year, but Masters of Scale was granted access to experiment with its beta release. Now, it doesn't do dialogue yet, and of course, you can't see a video on this audio podcast. But I had to start the show with a Sora demo. Wow. And last night, some of you may have been harassed by me asking for some prompts, for some ideas.

4:18And I met Kathy and Sarah. I don't have Kathy and Sarah in the room today, but they gave me a great prompt, which if we can roll the next video, we got last night. And within an hour, we turned this around. Sarah and Kathy said, show me a French bulldog wearing a red fedora in Paris, eating a croissant. So what pops up on the screen is a realistic, adorable dog in this chic Parisian setting, chomping a delicious pastry. Who doesn't like French bulldogs wearing fedoras eating croissants? So you can see how quickly the pace is going. That's just one ambient scene. But recently, Sora released an entire short film with multiple locations, voiceover, character development, and real pathos.

5:01It looked a lot like an Oscar-nominated short. All of this has shaken up Hollywood, big time. Tyler Perry stopped work on an$800 million studio expansion because he just doesn't know what AI is going to do to film and TV production. Jeffrey Katzenberg, one of the legends of the industry, said 90 % of animation jobs are likely to disappear in the next few years. So I started there with Scale AI's Alex Wang and Intel fellow Lemma Nachman, and I asked, is this the end of Hollywood as we know it? So that's an interesting question. What we have seen as more capabilities have come up is much more interesting innovation that actually came out.

5:47So, and it's really, I mean, it's a choice that we make, right? Because you, every time there is an interesting technology that has the ability to automate, you can go the path of automation, or you can go and figure out how do you design human AI systems that can actually get you the essence of what human creativity is. It's like the complementarity between AI and humans. Of course, that will only happen if we design systems with that in mind. So it could go that way. I love that optimism, and I feel that. And yet, Alex, are you as optimistic about this? Or do you feel like we're entering kind of this interregnum where the old king is dead, but the new king is not yet born?

6:26It is something like an interregnum. I think it's a huge unlock for what film could be or what films can be. One way to think about this is a lot of films now have tens of millions, hundreds of millions of dollar visual effects budgets. It's true, they won't have to spend that much on visual effects going forward. The original advent of animation, advanced 3D animation as Pixar sort of introduced originally, was this huge change. There were these kinds of movies that you could create that you could have never made before, that were somehow significantly more relatable to children and much more meaningful to children, created a new canvas.

6:59I really think about as an evolution in that vein, which is we're continuing to create more engaging, imaginative, and powerful platforms for creative content. And Hollywood as a business is going to have to get on board with that. Do you think job displacement is coming in a meaningful way before these kind of new industries are created, new jobs are created? The pattern that we see over and over again is something like this. There's a very talented team or group of people within the company, whether it be engineers and coders or lawyers or consultants who maybe 20 % of their job requires very high ingenuity and capability and all of their training and all of their brilliance.

7:40But 60 % of the job is relatively rote or is something that fundamentally does not actually require all of their training and brilliance and capabilities. The pattern we see over and over again is how do you build co-pilots that are able to help them do the 60 % of other work and then maximize their time so they can spend most of it doing the stuff that actually requires their ingenuity and their capability. That's what we've seen with coding, where what the coding assistants and co-pilots do is they help not do all the boilerplate code or all the simple fixes or catch bugs more easily, stuff like that.

8:13Or the legal assistants help you just draft the entire document, but all the important legal decision-making is still left to the lawyer. This is the pattern of the future, which I think is a pretty optimistic one because this does not in itself result in labor displacement. Because most of these jobs that we're talking about, there's a shortage of them in the economy. We need more doctors, we need more engineers, we need more of them in the world. And I think this goes towards what I see as the longer-term trend, frankly, which is, you know, I think that the AI systems are moving towards being superhuman in some ways, but meaningfully subhuman in others.

8:51Already, GPT-4 is a much better writer than I am, just in terms of not making grammar mistakes and being able to structure very flowing prose and being able to write very beautifully, but it's much worse than me at reasoning. It's much worse than me at thinking in sort of like very long forms. It's much worse than me at getting factuality correct. It's much worse than me in some other ways. And so the direction of the future is going to be these hybrids between human capability and some superhuman AI capabilities to achieve better outcomes. Lemma, I hear Alex, and I want to be all in with Alex on this.

9:25And yet I have a friend who runs a small law firm. and because of the productivity gains they've been able to make using AI, they've been able to reduce the number of paralegals they need, right? It's logical. So that efficiency game, the ability to focus on higher level work makes a ton of sense and thinking of AI as a co-pilot, right? Microsoft did a great job branding their product there. But why, logically, why shouldn't companies then say, well, we can reduce costs by 40 % at the same time? Yeah, and they can and that will happen. The question is, is this creating an economy where the demand of all the new things that can happen will end up, you know, resulting in an overall more opportunities for jobs.

10:08There's no question that there will be a lot of jobs also that will be displaced, right? Making us more efficient will mean less of us will be required for that same amount of work. But the assumption here is that it is that same amount of work, all of that is really starting from this notion that it's a zero-sum game. I think that's actually kind of the missing piece of that puzzle, right? Because I think we're in such a generative world where opportunity and, you know, new things that we haven't even dreamt of doing will be made. And that will impact certain jobs that, you know, we're limited or unneeded in a certain way.

10:47But That means, right, it's an opportunity as well to continue to innovate. And differently from previous innovation, the reason I'm actually optimistic is that if we build AI systems in ways that can support and amplify human capability, then in some sense it's like, yeah, and that capability is helping the human continue to evolve. And do you think there will be that gap? Do you think that we'll see massive job loss over the next few years before new jobs come up? or are you more optimistic than that? I think that it's really hard to guess whether the ability to transition to different types of jobs, being enabled with these AI capabilities, if that's going to help people bridge that gap or not.

11:30Being an optimist, I see this as a place where we can train people very quickly with new types of skills because of the fact that AI can actually be a support system. But I would be shocked if there was no dip in some certain areas and fields, for sure. Alex, do you agree? I think it's certainly a possibility. And I think that the key, I think, for us as a society is that AI fundamentally should not just be a cost cutter. It should be a tool that creates new business models. It should be a tool that creates a lot of economic growth. It should be something that really spurs a huge amount of new products, new business models, new direction, and new capabilities outside of just displacement of human labor.

12:13Massive changes are surely coming to the labor market because of AI. And Alex and Lemma have very different views of the field, influenced in no small part by where they are in their careers. Alex is a 27-year-old founder of an AI startup who dropped out of MIT to go into business. Lemma is a researcher with decades of experience in studying technology. I asked them what business opportunities and jobs they see coming thanks to AI. We have just so much uncertainty in the world today, and this feels like it's yet another layer of it. I'm curious, Alex, you dropped out of MIT, right? College dropout made good.

12:52Lem and I were talking before we came on stage. We both have 17-year-olds who are anticipating going on to college in a year and change. What are the skills that you think young people need to develop today for the economy that's coming? I think prompt engineering is a very important skill. The knowing how to interface with AI systems is an incredibly critical capability that I think is very akin to software engineering over the past few decades. But if you take a big step back, what are these algorithms really good at? They're good at things that are present in their data set. And most of them are trained off of the entirety of the internet.

13:28One thing that's not present on basically any of the internet or very sparse in all of the data that these models are trained on is very consistent and thoughtful long-form thinking. So let's say you're given a very tough problem at work or in school, and it takes like, you know, you have to try one thing and it doesn't work, and you have to try another thing and it doesn't work. And, you know, it takes like maybe like 30 or 40 steps to really work through it. And I think for most of us in our jobs, most of the hard things that we do are akin to this. You know, if you have to organize a very complex project, there's a lot of trial and error that goes into it.

14:05Oftentimes in the field, we call this agentic behavior or agent behavior. So how can the model actually be able to deal with new information and make choices and kind of like think through many, many steps? One thing you'll notice is the models today are pretty bad at this. They're very bad at thinking multiple steps. They usually make a mistake on the third or fourth or fifth, sort of like what's called a reasoning step or chain of thought. I think this is something that humans will always be differentiated in because we're very good at long-form reasoning and very good at thinking over very long time horizons.

14:37Models are not good at that fundamentally. They're very good at predicting the next token. They're not good at thinking over a very long time period. I, again, want to be with Alex on this. And yet, I look at the evolution just of AI video, for example, in the pace, it's unbelievable. Do you agree that the models are going to take a long time to get there on the long form? Or is this actually just one breakthrough away and it's coming tomorrow? There is no question that that's where AI struggles. And a lot of people come to me as, oh, what do you think people should study? The one thing that I would say is really critical, right?

15:12Is really critical thinking and reasoning, right? Especially given the fact that you can't even trust what an AI system will even generate, right? That's part of my concern around a lot of the state of where AI systems are today. Even though we think about it as an equalizer and it improves equity and democratization, all of that, in reality, people who are experts can take what they want out of it and know what to ignore. And it's really people who don't have that capacity are probably more vulnerable to the mistakes that these systems actually make. This is where what you and Alex are saying dovetails really nicely because prompt engineering and critical thinking reasoning actually go very much hand in hand.

15:55I want to just give a quick personal example and segue into really personal AI. Seven weeks ago, my 14-year-old and I were having lunch and we were planning a spring break ski trip. We went on ChatGPT and we asked it to compare this year's weather data using Bing to the past 10 years of weather and snowpack data. We included a few other variables to avoid altitude sickness, ease of travel, etc. It sped out a suggestion. Ended up being a terrific trip. What I'm imagining is the next step, the integration with my calendar, the integration with my purchase history, my credit card, my bank account, etc.

16:32And the leap from asking that one question through that one prompt to surfacing flights, car rental, a hotel, restaurant reservations, etc. feels quite short. Alex, how close to that do you think we are? I think that like what I'll call L2 level, that's already basically here. So I'm on the board of Expedia. Expedia has launched a general AI travel assistant. Plenty of customers use it. they find it very helpful and useful. As part of that, Expedia built models that were sort of fine-tuned and customized to be really good at these travel workflows and sort of these travel agent-like questions and answers.

17:14And so I think that's more or less here. And I think the key unlock is actually the consumer experience on how to make that really natural and easy and flow into all the other behaviors. What I'm excited about, and I think is actually closer than we'd think, is the next unlock that we're talking about, where it's like actually autopilot, true autopilot for everything. And that reliability boost in the models, I think could come here faster than we expect. I think there's a question about what type of an interaction and engagement one wants, right? I love the example of autopilot. So I have a Tesla and I've tried self-driving and it drove me crazy.

17:54And I was thinking about this as like, I use self-driving ride share and Waymo in San Francisco all the time. I don't have a problem with that, but I'm sitting in the back seat. I'm not trying to control its behavior, right? That's all I want. If I'm sitting behind the steering wheel, that's not my natural interaction, right? I am wanting to control that experience. I am wanting it not to change lanes when I don't want it. Like, why are you changing lanes? That makes no sense. Because I'm trying to map it into my own control level and thinking of what I want done, right? So it's really a big part of whether that we're ready for what experience has a lot to do with what type of interaction we're actually enabling with these systems.

18:42Right. It's context dependent. Exactly. I'm actually hearing two different things. One is humans are notoriously bad self-reporters. We're really bad witnesses even about ourselves. And so we say we want this, but really we kind of want that much of the time. So there's a version where we say, I'm headed to Phoenix for the Intel Vision Summit, and I'm looking for flights in this time frame and whatever. And okay, great. There's also a version where it's got access to my calendar, it's got access to my email, it's got access to my flight history, and it's able to say, Jeff, it looks like you need to go to Phoenix for the Intel Vision Summit.

19:16Based on your past history, here are the three flights I'm recommending for you. And so I'm going to push into the privacy question here because this kind of AI personal utopia state of it inferring with 99.79's accuracy what I'm likely to want sounds beautiful. But like, should we be scared about the privacy components? We should absolutely be scared. Where do you see this going and where should it go on the privacy front? Clearly, the privacy issue has been around for quite some time, even before Gen AI, right? I think clearly the need for massive amount of data to train these systems has made the problem much worse.

19:57That, in some sense, is a little bit different than the, does it know everything about me so that it can hyper-personalize. Whether you're talking about a consumer or any other type of application, the reality is these systems are being trained on our data to be able to actually get to that level of intelligence, right? Irrespective of whether it's actually personalizing to our needs. So I think that can only be solved by regulation, right? You don't think a robust open marketplace will solve that problem? It's going to require government intervention. Yes, an open market is something that will bring privacy as a value proposition, and people can always give up whatever they don't care about.

20:43And that's true. But there needs to be regulation to ensure that actually the privacy constraints that people are claiming are actually true, right? I think it should absolutely be up to people. It's your data. You should be able to say, I want to give it up or not give it up. Like I think the reason people have not taken care of privacy in that way is because they need that data, right? It's not because it's impossible to make these systems private. it. You can build systems that can do that and not have your data being taken away and used to train other systems. But today, the reason it's not happening is because that's not advancing the state of AI more generally.

21:22The need for more and more data to advance AI bumps up against the need for government regulation. We'll hear more on that from Intel's Laman Ahmed and Scale AI's Alex Wang after the break.

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22:31And here's the best part. Join AWS Activate today and you could score up to$100 ,000 in AWS credits tailored to your stage and network. Go to aws.amazon.com slash activate and start building. Expanding your business in the U.S. can feel like a maze. Every state has its own payroll, benefits, and compliance rules, which can pull your focus away from growth. That's why founders use Deal. Deal is the professional employer organization, or PEO, that gives you a dedicated HR expert plus Fortune 500 level benefits for your team. The National Association of PEOs says businesses can grow twice as fast if they use one.

23:14So if you're scaling, make it simple with Deal. Go to deel.com slash MOS and get up to three months free. I'm Jeff Berman, and this is Masters of Scale. You can find videos from our interview catalog over at the Masters of Scale YouTube channel. Here's more now of our live taping at the Intellivision Summit on the dizzying pace of AI and the consequences for business leaders.

23:46Alex, I spent four years early in my career as chief counsel to member of the Senate leadership, which I feel makes me especially well qualified to say how spectacularly unqualified Washington is to regulate AI at this stage. You're spending a lot of time in D.C. What are you seeing from Capitol Hill and the administration? And are you bullish on the path toward regulation or are you bearish? What we've seen over the past year, basically ever since the launch of ChatShiftBT, has been an incredible amount of engagement from all of D.C., I would say, Capitol Hill, from folks in the White House, from folks across many of the departments, in really understanding what the risks are and what risks do we need to be very concerned about, such as deepfakes, what are all of the various risk factors that the technology holds, as well as what are the opportunities with the technology.

24:37If in the United States, we're going to have private enterprises investing tens of billions, potentially hundreds of billions of dollars in the future to build very powerful AI systems. We need the proper guardrails and safeguards in place to ensure these technologies serve the needs of humanity and don't have major risks associated with them. And the risks are massive. I mean, we got social media spectacularly wrong, right? I mean, every bit of data says so. And yet, if we regulate badly or over-regulate early, we're going to stifle competition. We're going to fall behind the rest of the world.

25:10Like we can't have that. Here's the fear I have. We've already seen deep fakes. We've already seen a deep fake robocall of President Biden in New Hampshire. The consumer platforms are at best going to be a half step behind, right? What do we do about that? There are very different risks, and the solutions for these different risks are very different, right? Maybe one simple way of thinking about it is thinking about people who are actually trying to do the right thing, but these systems are so complex that it's very hard to control. Then there is the other bucket, which is people who actually want to blow up the world and they're actually utilizing AI in ways, you know, these are like the catastrophic events, the terrorist threats, things like that.