OpenAI’s Bret Taylor: Your business can’t wait until AI is perfect

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1:18When Google moved from its office in Mountain View to its first campus, it was the Silicon Graphics campus. So Silicon Graphics was once a very great company that was big enough to have a campus, but had done so poorly that at some point they were selling their campus to another company. Brett Taylor. He was there at this time when Google was ascending to the pantheon of big tech companies. In fact, he was integral to the creation of Google Maps. It was the first of many world-changing companies he's been a part of. Later, he'd be named Chief Technology Officer at Facebook and work in another office building with a storied Silicon Valley past.

2:09When Facebook went from having a building in Palo Alto to having a campus, it was Sun Microsystems' old campus. So I had this experience early on in my career of being at these newfangled companies that basically took over the carcass of a once great technology company that at one point was at the top of the stock market and big enough to have these huge campuses. And I just realized that the half-life of big technology companies is not as long as we often think.

2:43You'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.

3:13This is Masters of Scale. I'm Reid Hoffman, your host. Brett Taylor is chair of the board at OpenAI, the company responsible for ChatGPT. He is also the founder of a new AI-driven startup, Sierra. And just to note, I'm an investor in Sierra, and I consider Brett a longtime colleague and friend. I was eager to talk to him about his views on AI and the decades of scale lessons he's accumulated. Brett, well, welcome to Master the Scale. I've been wanting this for a number of years, and finally we've made this happen. So I'm very much looking forward to this. Thank you. I am too. You have a new AI startup.

4:02Tell me a little bit about, like, Sierra and what you're doing. So Sierra is a conversational AI platform, which is a very big concept, but we have a very specific focus, which is helping consumer brands around the world build branded conversational AI agents. I have a 14-year-old daughter, and she's getting her learner's permit next year, which is insane. And I have a sense, if it were a few years from now, rather than tapping around my insurance company's website, I'd be chatting with an AI agent to add her to our premium. Every company will want their own agent, and they'll spend as much care and attention on their AI agent as they do building their website, as they do building their mobile app.

4:43This is going to be one of the main digital artifacts as a business that you make. And I think the concept of an agent isn't just about AI and automation. I actually think it's a new type of customer experience. My intuition is that with the advent of large language models and chat GPT being that inflection point with large language models, talking to software is perhaps the most ergonomic way we can interact with software because you don't need an instruction manual to have a conversation. And this isn't just about automation AI, though. That's a big part of it. it's almost like we're building your digital experience as a brand.

5:19And I think that's a really exciting business opportunity. So let's broaden out to AI. How do you see AI kind of transforming the kind of society around business? Like businesses, engagement with consumers, consumers, engagement with businesses, businesses operating with businesses, you know, and then the broader kind of social patterns. I found it increasingly hard to predict the future since the advent of chat GPT and the explosion of these foundation and frontier models in software. So I'll tell you what I think I know, but I've really tried to have a lot of humility and have very much an open mind to being wrong about many of my theories.

6:04And one thing is, I think it will change our relationship with software. I remember when my family members first encountered ChatGPT and they first encountered instances of hallucination. A hallucination is what we call it when you enter a prompt into a large language model and it generates an answer that contains false information. And I remember how hard it was for my family members to comprehend why. Because we have been trained for the past 30 years to think of computers as these extremely powerful rules engines. A correctly running computer could look up facts. When you search something in Google, all the results are valid websites that you can click on and visit.

6:50And now all of a sudden with ChatGPT, occasionally a computer would make something up. And it was just, it violated all the preconceived notions we had about computers. And then similarly, when I was recommending to my family members that one of the main uses of ChatGPT was actually a creative foil, it also violated their mental conception of what computers were good at. And I think at the end of the day, large language models are a new category of software that I think society is still sort of wrapping its head around. Thinking about this term hallucination or making something up. And how does that impact how we think about trust in these models and tools?

7:31I think the amazing positive impacts of these generative models and their flaws are very intertwined. what affords their ability to be creative and responsive and aligned with the person using them is also the basis for hallucination. If you want a contrarian take on this, I think it will help with the disinformation problem a bit because I think people don't assume everything coming out of these agents is 100 % accurate and they like verify it. And my hope is the combination of these AI tools as sort of the Ironman suit to help you verify that information is correct, combined with actually having people like double check the bits that they see online might actually have like a surprisingly positive effect on sort of how we view information integrity in digital environments.

8:29An optimistic, techno-optimistic view, which is, you know, one I concur with. I also think that more and more software will actually complete a job. I think software to date has been a productivity enhancer. Now we're going to have AI that actually returns the results of doing work. I think that will change our relationship with software. It will create a lot of questions in society about everything from job displacement to personifier, anthropomorphizing software in our workplace. And I think this wave of software will, like the early waves of software when we first brought the PC to many businesses, hopefully drive productivity into the workplace in ways that we haven't seen for a very long time.

9:12You know, what's your advice to young people, your 14-year-old daughter, you know, kind of coming into like, okay, what is this new world of careers and productivity look like given the coming tsunami of AI productivity? I don't think my perspective has changed that much about how to think about education because I've always thought of education as something more than learning a skill. You know, while it's a bit trite, you know, most university presidents would say the role of the university is to teach students how to think. And I think that is broadly true. And similarly, as a software engineer, the act of typing the code into your terminal, I guess I'm showing my age, typing into VS Code these days, still a terminal guy myself, isn't the job.

10:00The job is to create robust software that functions correctly. and you say, okay, we're going to have AI emitting a lot of code for software. What is the role of the software engineer? I would hope that it makes the role of software engineering sort of more self-actualized. That while we might be not typing as many characters, we might be operating code generating machines. I think the operator of a code generating machine is actually a more strategic role than typing if statements, you know, all day. And that's one example, which is writing code, just because I think it's one of the professions that has been most immediately impacted by AI.

10:39But I think that's true of a lot of professions, which is, I think it will make the better people even better by giving them more leverage. It will probably increase the gap in the distribution between the best people and the worst people, because the best people will now have an Iron Man suit, you know, of AI capabilities, giving them, you know, kind of superhuman abilities. How much does that broaden across, like, all of the functions, whether it's, you know, business operations, finance, legal, you know, customer service, sales, etc.? Give some broadening from the software engineer into the other job functions.

11:22I think a new graduate will probably assume that the skills of their craft and the tools of their craft will almost certainly change in their career. Just think about what it meant to be a marketer 20 years ago versus a marketer today. It's almost a completely unrecognizable profession. It's almost data science at this point compared to what it was. And I think if you go into your career understanding that like your tools don't define what you do, but actually it's the impact. And I think the folks who become ossified and the tools that they use defining their career will get left behind. And I think employers on the other side of that will need to embrace reskilling, tool learning, things like that.

12:08And just imagine being the first accountant to ever use Excel and how intimidating that must have been. We're all going to have those moments in our career, is my take. And I think having that learning mindset is the most important thing. I'm a huge believer that when old jobs go away, new jobs get created. And it can feel really uncomfortable. I have a strong intuition that 40 years now, 50 years from now, there will be a number of new jobs that might not even match our mental model of what a job is, but there'll be jobs. And I think it's because humans want to work. I think it's because humans want to differentiate themselves.

12:48If you go into a classroom, some kid wants to be the smartest, some kid wants to be the strongest, some kid wants to be the fastest, some kid wants to be the best looking. We're all competing for status in this world, and no amount of productivity in the economy will change that aspect of society or human nature. And as a consequence, we'll create an economy around the technology that exists around us to enable us to be what we've always been, as flawed as humanity is. And it's on all of us to sort of help mitigate the disruption and downsides of that change. But I'm an optimist in the long term.

13:26So then as kind of business owners or executives, what do you think the smart thing to do vis-a-vis this AI transformation is? What's the way to think about everything from running your business well, dealing with workforce? Let me start with just a really simple rule of thumb that I believe in, which is get at bats. And what I mean by that is use this next generation of AI, use the foundation and frontier models that are now widely available in your business as widely as you can. Not every one of those experiments will work. But if you believe that this is a force that will change your business forever, you don't want to start developing experience in the technology once you know it's perfect.

14:19because probably the reason you'll know it's perfect is because your competitor proved that it works. Just being direct about it, right? And so I think right now, I think it's really important for leaders to give their management teams permission and in fact demand some experimentation here, recognizing that not all of those investments will bear fruit, but on the other side of it, the companies who get a lot of at-bats, get a lot of experience, once the technology is truly mature, will be meaningfully ahead of their competitors in sort of applying this technology to drive real business outcomes.

14:58If you were kind of just throwing out things to get people more concrete imagery about at-bats, like what kinds of things? Like, you know, would it be stuff in sales, stuff in internal analysis, stuff in like, what would you say? Like, here's a few things to kind of generate at-bat thinking. I'm a big believer in giving your employees access to ChatGPT. And I think that right now it's an incredibly useful tool. Your employees are probably already using it, by the way. So tell your employees, you should be using this as a tool in your day-to-day job. You know, you should be using it to help refine an email.

15:43You should be using it for advice. You should be using it for analysis. So that's just the baseline. And I think every employee should have access to AI. On the sort of big internal jobs, one of the great things about large language model is synthesis and summary. Looking at data and summarizing large amounts of content is an incredible opportunity. If you have transcripts from a call center and want to summarize them, what a great job for AI. There's just so many, I would say, I hate this term, but low-hanging fruit in that area internally and sort of back office operations. You don't need to start with the core of your business.

16:19But if you're not, you know, deploying an AI for every customer, if you're not automating some back office processes, if you don't have a branded AI agent facing your customers, now when? You know, when are you going to start learning about these experiences? Still ahead, I talk with Brett about his role on the OpenAI board and scale lessons he's learned from his time with Czech giants like Google, Facebook, and Salesforce.

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18:00aws.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. So if you're scaling, make it simple with Deal. Go to deel.com slash mos and get up to three months free. Welcome back to Masters of Scale.

18:47You can find this episode and more on the Masters of Scale YouTube channel. You may remember that back in the fall of 2023, conflicts between OpenAI CEO Sam Altman and the board of directors there made news after the board ousted Sam. Soon after, Sam was reinstated, and some people left the board. This was the tense moment when Brett Taylor came on as the board's new chair. Despite your intense focus on building a company and being a super-focused operator, you were persuaded to join the board to help with OpenAI. What was the thing that kind of made you kind of go, okay, I have to step into this?

19:34It's a great question. The personal emotional reason is I think it's important for OpenAI to exist. I remember when we had dinner right after ChatGPT had come out and you were on the OpenAI board at the time. And you couldn't really tell me all the things that were coming. But I was talking about the impact that both Dolly and then ChatGPT had hot on me. And I could just see the excitement in your eyes. And, you know, I'm probably paraphrasing incorrectly, but you sort of said, I'm going to devote my career to this. Like, this is all I want to spend my time on. And I credit OpenAI almost exclusively for that affiliate inside of me.

20:17I remember the summer where Dolly, I think maybe Dolly or Dolly 2, the moment with the avocado chair, I don't know when that was. It was the sort of summer prior to ChachiBT. When I saw that, I had this just purely emotional reaction saying, like, I had no idea that computers could do this. And I'd spent my career as a software engineer, obviously not on the frontier of AI research, which is why it surprised me so much. And then ChatGPT came out, and it just impacted society broadly. And then when the governance crisis happened and, you know, I got some phone calls from both the outgoing board and Sam and there was some mutual trust that I could help mediate the outcome.

21:02And there weren't a lot of people that those parties had mutual trust in. I felt like I was in a position to help this organization that had such a huge impact on me and some people I knew just to help it survive. Because I think there was a period in there when I was pretty concerned it might all fall apart. OpenAI was created in a pretty interesting and unique way. It started as a 501c3, a not-for-profit with a mission to benefit humanity broadly. Later, it also added a subsidiary that's for-profit. And there aren't many companies of any kind making more waves right now than OpenAI. When Brett joined as the board's chair, he agreed to uphold what's called a duty of care and a duty of loyalty.

21:47Basically, his job is to steer it honestly through the society-shaping moment. So the mission of OpenAI is to ensure that artificial general intelligence benefits all of humanity. And I joke when I was talking to my attorney when I was considering joining the board, I'm like, so I'm a fiduciary to humanity? Is that what that means? And, you know, he laughed and said, well, kind of, yes. But it really means that when you're thinking about, you know, what are my obligations as a, you know, member of the board here, it has to do with what does it mean to benefit humanity? And the hard part about a mission is it can be sort of an inkblot test.

22:30You know, if you talk to some people about what does it mean to benefit humanity, maybe they'll fix it on the benefits. You know, they'll say, how can we make sure that there's no digital divide? How do we ensure that a person with the lowest powered smartphone in the middle of a country with very poor internet access can access AI? You might talk to another person who's really focused on safety and say, I've seen Terminator. I know what Skynet is. How do you ensure that doesn't happen? So that's one of the nuances of the mission, I think, capturing everyone's most optimistic and most pessimistic takes about the impact of AI in society.

23:07I consider it a privilege. I think everyone's acting with the best intentions, just to be clear. And I think it comes from the fact that this mission is something that, like, the company, the organization has interpreted in a certain way. But not everyone agrees about everything, and that's very, very complicated. Technology is neither good or bad. It's how it's used. It's how it's applied. So I think the mission really defines what the organization does. One of the specific things is OpenAI has a safety and security committee. So what's the specific role that you're taking there? What's the way the world in general understand this as part of having good governance and navigating this world-changing technology?

23:46When you think about OpenAI and its mission, you know, safety is just a hugely important part of it. And, you know, this is a geopolitical issue, not simply a technology issue. So the committee is a combination of both members of the board and members of management to provide broadly oversight and governance on safety decision making around the models. I view all of these things as evolving. I think the goal is to ensure that OpenAI meets its mission. So the creation of that committee was essentially a reflection of just how important that safety and security are individually to the mission. And how that committee operates, it would disappoint me if it didn't evolve as the models become more advanced.

24:29But broadly speaking, the OpenAI methodology of responsible iterative deployment, this committee is just obviously a really important part of that process. One of the things that people who followed your career some know that you've already done two successful startups, FriendFeed and Quip. Going into Sierra, what are the kind of key lessons from your earlier startups? with FriendFeed, which went to Meta, and Quip, which went to Salesforce. What were the startup lessons that you would give the Masters of Scale audience? Both FriendFeed and Quip were, I think, new ideas. And I think for Sierra, we are building sort of conversational AI for customer experiences, and it's a very competitive market.

25:12But I'm not convincing people that, hey, this AI thing's kind of a big deal. Like that's usually when I'm walking into the room, people have that worldview already. And they're saying, why does your thing work? Why is it better than our competitors? Particularly a question, I would say I've had the privilege of not only starting two companies, but working at some of the great companies, Salesforce, Google, and Facebook. And I really do view my philosophy on management technology as a composite of a lot of the pieces that I loved about each of those companies. What I really liked about Google was its first principles thinking about developing infrastructure and scale.

25:53I think that it was a very vertically integrated company, the way it built data centers all the way through the search engine. I think a lot of the great AI companies have kind of very similar philosophies. You have to pay attention to your infrastructure and your cost to serve if you're going to make a decent margin AI business. And I think for me, Google was one of the great examples of that in the early days of the internet. And it would not have succeeded without that, by the way. Facebook was by far the most interesting and innovative product culture. There was the sort of malign now move fast and break things.

26:28But I actually think at the time what that really meant was giving people permission to iterate and experiment. And, you know, I really loved the pace of Facebook really comes from Mark Zuckerberg. And then Salesforce, I think it's, you know, the great enterprise software company, both organizationally, but, you know, how that company executes its go-to-market, how it engages with the customers. And it comes from, I think, Mark Benioff's just completely unique and amazing ability to create sort of excitement around this technology, how it does branding and, you know, something that I was really inspired by.

27:05I would love to say that Sierra represents the best in class of all of those. It's obviously more nuanced than that, but I just actually feel so grateful to have seen greatness so many times. And if I can, you know, mimic even a little bit of all of those things, I'll consider it a great victory.

27:26You have the perspective of having worked at Google, Facebook, Salesforce, and then also being a startup person. What would be the thing that you would say, hey, people should think this way differently about these large tech companies? I've lived through the transition from technology companies being largely beloved to sort of a vibe shift in, you know, popular culture. I remember when I was on airplanes and I had my Facebook bag early on, the worst someone would say is like, you know, you have a like button. I want a dislike button. You know, I don't always like everything. And that was like the harshest criticism.