Elon vs. OpenAI: The Battle Over For-Profit AI w/ Salim Ismail | EP #138

0:00OpenAI puts out a letter Elon wanted an open AI for profit model from the beginning. Ultimately what we've got here is a battle for the biggest opportunity on the planet. I used to think early on that this was going to be a game between governments. This isn't this is a game for all the marbles between companies. It's hard even process how fast this is going to go from now on. The CEO of software making a commitment for a $100 billion investment in the US and AI. If this is a sign of where the US is going to be going, it really is a push for global dominance in this field.

0:41Everybody welcome to a special end of your episode of moonshots with Seleme Ismail and myself in WTF just happened in tech this week. We're going to be talking about some recent news from OpenAI showing their conversations with Elon Musk and the debate about four profits versus non -profit, the loss who's going on, but more importantly, the huge amount of capital flowing into the AI world, I mean hundreds of billions of dollars. This is a game that is going to play out aggressively in 2025. I want you to hear the details. We're also going to be talking about the world of AI and health care, the disruptions that are coming to make us all healthier and to drop the costs, hopefully orders a magnitude.

1:25This segment is sponsored by three incredible companies, Fountain, Viome, and One Skin. You know, Fountain is a company that I care deeply about. It is my partner in helping transform what I understand about what's going on inside my body, defined disease early, and then delivered to me the top therapeutics around the planet. You can check them out at fountainlife .com. Vium has built custom supplements for me, understanding my oral and gut microbiome, measuring it and helping me maintain that health of the 40 to 100 trillion organisms that are within my body. And then one skin is an incredible company that helps me maintain my skin youth.

2:10I get compliments about my skin, which at 63 is kind of a strange thing, but I attribute it to one skin and the peptides they have for getting rid of those synolytic cells in your skin. All right, all the links are down below. Let's jump into this episode with Selimis Meal. Let's talk about where AI and health is going. It's an extraordinary future ahead. Everybody, Peter D. Mann, is here. Welcome to a special end of your episode of WTF. Just happened in technology here on moonshots with my partner, my extraordinary best friend, and Selene Miss Meal, the CEO of OpenEXO, individual who had been on stages around the world with, the person I love speaking about exponential technologies, where they're going, how fast they're moving and where the world is heading.

2:54Selene, good to see you buddy. Likewise, we're both a little raw from you, different things last night, but the late, the late, the late, the late, the late, the late, the late, yeah, but this, you know, the news had been coming out. We wanted to have a conversation about AI and healthcare. I think eight hours of sleep as always are objectives. It didn't happen last night. So if you hear me, a little raw like Sleem said, but we're living in such an exciting world that I wanted us to have this conversation before the end of the year, because 2024 is gonna be marked as one of the most important years in AI, I think.

3:32And I split my life. I think one of the most technologically relevant years in the history of humanity. It's a big thing. And the only time more relevant is going to be next year, which one of the cusp of. I mean, we're in the steep part of the curve. I mean, it feels that way. I would one way is I frame it. Is this next 20, 30 years? Is it going to define the next few centuries with humanity? I do think it's 20, 30 years or is it like next 10 years? It's all of it. I mean, this is just, it's hard to process it. You know, for you off in comment that for tens of thousands of years nothing happened in humanity, right?

4:10And all of a sudden boom. So yeah, I just wonder if we were alive, you know, 110, 120 years ago when the airplane is flying and cars are coming online and then electricity and telephony, whether it would have felt like it does now. Lily wanted to say hi to you. Hi, Lily. Good morning to you, Lily. I can't hear you. Peter's saying hi to you. I do. I'll see you soon. I wonder if it would have felt as fast as it does now, because it feels crazy fast. You know, one thing I've noticed is the speed of collective conversation because of Twitter X and social media and digital content and digital news.

4:59We're leveling up humanity with global conversations incredibly fast. Like a joke happens and it gets collected into the collective consciousness in almost real time. And that's something that's totally new from 100, 200, 300 years ago. So I want to talk about AI and healthcare. I split my life 50 % AI, 50 % sort of longevity health, biotech healthcare. Well, well, well, well, well, what about the space stuff that's been your like whole passion for it. Well, that was like 20 years ago. I mean, Elon and Jeff Bezos have that super well handled. So I'm not going to cause. So space is old news. Space is old news.

5:38Well, I've said I want to go back and do the asteroid mining stuff. Yeah. And that was a true passion. I also think it's a massive opportunity to go out there and get those carbonations, some metallic kindrides and create an economy in space. But it's expensive. And so I need to make a bunch of bank in the longevity and AI business first and then go and fund my space. That's good. That's good. Go do that. You know, for me, the space stuff is most relevant because you can back up humanity and give us an alternative spot for this. And I think that's really important. And by the way, 2024 was an amazing year in terms of space with seeing Starship get it almost entirely to its objective of full usability.

6:25And I think the first half of 2025, we're gonna see Starship, the booster caught, and we'll see the Starship itself caught, and that's transformative across the board. But let's dive into AI first, because it's a lot of news, and I want us to get this out to your OpenEXO community around the world to my abundance and singularity around the community around the world. There's just so much, and it's the biggest game that humanity collectively has ever played. And here are two quotes I want to read that come at a Silicon Valley that frame this. I believe they frame what's going on. And it's, you know, this is people playing for all the marbles.

7:10Let me read this for those not watching this on YouTube. It says, quote, we don't think of these buildouts in terms of ROI, return investment. If we create this digital God, the return is multiple trillions. Here's the next quote, it doesn't matter how many tens of billions we spend each quarter. We have to get there and not miss the boat. I mean, I don't know. That's pretty impressive. It's huge. You know, if you're not from Silicon Valley, then you kind of go, oh my God, tech bro's going after a full digital God model. And who do they think they are type of thing? You'll get that response, I think, from a lot of, especially, say, from Europe.

8:00One of the conversations, let's get into this because I think let's recap what's been happening. and then let's talk to this conclude. Go ahead. Sure. So what's new this week is that OpenAI puts out a letter that is probably in preparing for the discovery in the lawsuits flying back and forth between OpenAI and Elon. And this letter, which is amazing, and if you haven't read it, people can go to it and We'll put it in the show notes. It says Elon wanted an open AI for profit model from the beginning. For those who have never used notebook LM, which is an amazing platform that Gemini put out, I took this large open AI letter and I put it into notebook LM and it generated a podcast conversation between two individuals who are AI's.

8:54And it's an amazing way to absorb information. And it's mind -boggling because you get the dialectic in there and it's with the back and forth of the dialogue, brings it home very quickly into some of these minds. So what happened? So Sam Alman and Elon, who had been friends, decided to start open AI. There's a true fear about where AI is going in the early days, how fast it's accelerating and an initial conversation around. We need to make sure it's open. We need to make sure we're guiding it. we need to make sure it's safe. And so open AI begins as a nonprofit. Elon contributes like $50 million, I think in the beginning to get that going.

9:37And the whole threat of the conversation that we've heard over the last year has been, oh my God, I wanted it to be a nonprofit says Elon and Sam Altman turns it into a for -profit. And but that's actually not what the letter says. The letters that were disclosed basically said, No, Elon wanted to become a for -profit because it should be, and in fact, Elon wanted to become the CEO of it and wanted to have OpenAI be part of his sort of tech empire between ex, between Tesla, SpaceX, and so forth. Because he needed those resources to fuel his forward -going missions towards Mars. What did you get out of it?

10:19For me, this feels to me just a defensive move by OpenAI to counter the lawsuit, which has been broadened to include Microsoft and say, hey, like this is the whole thing as well, I'm married because he was wanting to do this in the first place. So that sort of feels like to me. I can completely understand what seems to be the real tension is that Elon wanted opening out of the part of his world and the rest of them were like, no, we want to do our own thing. And that's I think where the things start breaking down. That's what it feels to me listening to the note and rigging some of the notes. Yeah, ultimately what we've got here is a battle for the biggest opportunity on the planet.

11:02I mean, what we're gonna see here and I think what's come to light over the last few months is the march towards AGI is everything. All of the large players, we're talking about the largest corporations on the planet and governments around the planet, I've realized this is the single most important technology out there and they're playing for keeps. This is the boss mode for humanity. Here's the next item for us to point out here. So, Mata also this week asked the government to block OpenAI switch to a for -profit. it. You know, a lot of players here are are playing this very complicated game of chess.

11:50And we had besides open AI being pushed to stay a nonprofit by Elon. Now we've got meta coming in here. Everybody's trying to grab, you know, an advantage and using the courts to help them this way. Comments? Definitely, look, this is the high stakes poker game and people are playing all their cards, right? They're doing everything they can to attack others, figure out what they're going to do themselves. A meta went down a full open source model and they've done an amazing job. I think they've also done an incredible job lifting the overall ecosystem and weaving AI into all their products. So it's everybody's doing everything they can.

12:34They're all doing a pretty good job of it. And I think it's moving the field forward at an unbelievable pace. This is the issue is we have no time to process this stuff as it's happening, hence these conversations are so important, but it's moving at light speeds. It's incredible. You know, it's interesting because I used to think early on that this was going to be a game between governments, you know, it would be the US versus China versus Europe versus this isn't. This is a game for all the marbles between companies. and governments are aligning with companies these days. Right? This is going to be, there will be five, six major AI players.

13:11Let's take them off. There's Google, there's Meta, there's XAI, there's Microsoft, Slash, OpenAI. There's Proplexity. There's Cloud, you know. That's right. And it's, you know, going to be hard for others to catch up. Is this a winner -take -all game? I think what happens, it's kind of like the fight for the internet where you had a lot of little startups and then a couple of them established as platforms and once you established as a platform, unless you really screwed up, it's really hard to dislodge you and I think they're all trying to fight for platform dominance. We play this quick video from Sam.

13:54This is Sam Altman speaking. I think it's Stanford. Is it about a year ago? but it sets the frame for the mindset that is occurring right now throughout these companies in Silicon Valley. This is Sam speaking about open AI, but I think this is true in the boardroom at Alphabet and at Meta and definitely at XAI. So let's take a listen. Whether we burn 500 million a year or 5 billion or 50 billion a year, I don't care. I genuinely don't. As long as we can, I think, stand a trajectory where eventually we create way more value for society than that, and as long as we can figure out a way to pay the bills, like we're making a G .I.

14:34It's going to be expensive. It's totally worth it. Amazing mindset. I wish I had the ability to focus that much capital on the stuff that I care about, but this is the game we're playing. I mean, those quotes I showed at the very beginning, There's no rationalization on ROI. These are multi -trillion dollar markets. The global GDP around the world is going to be about $110 trillion in 2025. Half of that is labor. The other half is cognitive. This is a game for $50 trillion of potential value. For me, this feels to me, if I think back through technology, you know, you have electricity, which was a game changer.

15:21You have the internet, which was a game changer, and AI is a game changer. And I think it's appropriate to equate it to like the difference in up leveling that electricity brought to the entire world, that this brings that same level of unbelievable utility to the entire world. It is a utility. I mean, I think that's one of the things that I see very clearly. This is going to be a fundamental utility for every human in every nation. This is like electricity like bandwidth. Here's a quote coming from the New York Times and this was, I saw some clips on this. Japan Softbank makes big investment pledge ahead of Trump's inauguration.

16:07So we see Massasan, the CEO of Softbank, on stage with President Trump, making a commitment for a $100 billion investment in the US in AI. And we see Trump actually trying to double up again to $200 billion, which is pretty funny. But it's fascinating. People are aligning, right? I was in Saudi in October, the government of Saudi, the government of UAE, the Emirates. We'll see in a moment, Oman, all of these governments are looking to align with large players around the world because they realize this is the biggest game play. And I think, you know, not knowing the full effects. you've got to be in the game so that you can to be able to win because if you're standing on the side of the table you're going to lose or you're going to be not have the power and the control that you want.

17:07So I think this is a defensive move by a lot of them just to say we have to be in this conversation. You know and here's the next here's the next news item. It says Oman's investment authority acquires stake in Elon's X AI. So again we're going to see this over and over again, we're going to see large government players backing individual companies, right? We've seen the government, the Kingdom of Saudi Arabia aligned very closely with Google, with injuries in the harrowitz, committing hundreds of billions of dollars in that direction. You know, one of the things that is concerning is that we've got these large players.

17:44We've got these large AI players. But at the same time, this is a demonetized asset. It's super expensive to build, but being given away to a large degree for free because it's a land grab or it's a share, it's a mine share grab. And the revenues aren't there to support the valuations. You know what it reminds me of? It reminds me of the telcos in the beginning where the telcos had huge investments being made to build out infrastructure and then more rapidly demonetized. So the question is, can they keep on supporting the amount of investment being made? I think in 2024, we will have seen $200 billion of investment between Meta, Google, Microsoft, OpenAI, and X.

18:34Well, when you think the potential is there to disrupt every job function and every step of every supply chain, every step in every manufacturing line, the stakes are really, really huge because this affects every industry, top to bottom and every jump function, vertical or horizontal. And therefore, once people see that, you kind of have to go full out on it. The end game, I think, is going to be interesting to see what, what, what, what, what, which way will those carpet on roll. Before we get to our next subject on healthcare, one of the conversations you and I were having a little bit earlier is this is moving so fast.

19:16I remain super optimistic about the impact of AI. I think it's one of the most important things. It's going to uplift humanity in so many different ways. But the question of can this be controlled? I mean, the reason going back to the opening conversation on open AI, the reason that Elon and Sam started the conversation, started the nonprofit, was to have some assembly of control over this future. And then all of a sudden, they both say, we don't need hundreds of millions, we need hundreds of billions of dollars. And we can't raise that money as a nonprofit. We have to switch to a for -profit.

19:56And that's where Elon and Sam split. And of course, Elon goes on to found XAI, which by the way, you know, raises $6 billion in like, and I was there at the earliest conversations I was in his first investment pitch. And here from whole clock from zero to raising $6 billion at like an $18 billion valuation, snaps a finger, $6 billion materialized, he uses that to build the largest, you know, GPU cluster, 100 ,000, H100s and then doubles it again. and then raises a few, another tens of billions of dollars instantly. And every time Elon wants to do something, money rushes in, there's plenty of money waiting.

20:42So capital is not, is a abundant resource for him. I want to know, you know, capital has always been scarce for the whole of humanity, except for Elon, it's abundant, right? It's such a great framing there. I want to just go back to something here. We talked about this on the other episode, but I think it's worth repeating. He puts together this cluster of 100 ,000 GPUs and all the AI experts, all of them say you can't get coherence and the aggregate power laws for that level of cluster. And therefore, this is a completely doomed failure. And he goes to his first principles and breaks it and solves the problem and everybody is sitting going, oh my god.

21:22And I think this is his unique special power, which is to go to first principles come into a domain and really just rewrite the rules completely from first principles. I think that is such a powerful modality. We talk about it in the book. You kind of exemplify that in many of the things that you do. This applied to AI will completely change the game. And I think this is like it's hard even process how fast this is going to go from now on. It agreed. I mean, I want to add more to what you just said. So I want to set the setting so it's May of 2024 and he has a meeting with the Proposed early investors.

22:00It's a Zoom meeting or whatever platform was on and He's saying this is my team. This is what I want to do and in that meeting he says I'm going to stand up the largest cluster on the planet By the end of summer and it's May, right and it's like I have to corner the entire US supply of helium for cooling and I've got to get the largest supply of GPUs from Nvidia that I can. And he does it, 122 days from zero to an operating cluster is insane. And what you said is very important, most of the GPU clusters out there are distributed. He says, no, no, no, we need to have them co -located so that the entire cluster is, you know, I'm not sure the exact term.

22:50I'll call it harmonized in that regard. And people say, can't be done. And he repeatedly, he repeatedly pushes people to move 10 times faster than everybody else. I mean, I've had another interaction with him and I won't go into the details of it. And he says, you got to do it. You've got to do it five times faster than that. So So he's someone who believes that you can move at lightning speed and he keeps on demonstrating it. Like when he moved the entire, you know, Twitter, uh, server farm, like over a weekend and people thought it would take like six months to do. It's, it's, uh, there, there is an unbelievable ability there and it really makes everybody else kind of go, oh my god, what are we doing?

23:36Right? Yeah. We all think we're pretty reasonably high performers and you've got them Elon humbling the shit out of everybody. Well, I think I think you can't you can only do that when you're a founder led Exponential organization. Yeah, they call this founder mode, right? Where you set the purpose you set the culture and then you just push that MTP very hard and all power to him I do have a couple of comments here though, just to if we step back for a second, right? Okay, great. All this money is going in. Everybody's going, oh my God, AGI will transform everything, et cetera. You know my rant about how do we even define intelligence and what do we mean by that?

24:21I don't need to repeat it here. But I wonder in 2015, when they set up a day, I actually had a conversation, what do we mean by AGI to then have these broader implications because there's a big gap there of the contextualization of intelligence and the broader framework that I don't see having that conversation happening anywhere. Well, there is no definition of AGI. There's no definition of any of this stuff. There is a there is just fuzzy lines that we keep on crossing over them and not noticing. So we're spending billions of dollars. It'll be you know by the end of next year, it'll be a trillion dollars somewhere invested in AI, right?

25:02Without having a clear definition of what it is, what we're trying to get to, there's this fuzzy thing of, oh my god, once we get to ADI, AGI, we'll have a digital God, right? And I find this really, it hears what I would love to see. Maybe you and I could kind of sponsor this kind of conversation would be when the technology like the internet or electricity when they came out or AI right now. What if we have a set of discussions with a full stack of the developers, the application folks, the data folks, the governmental folks, and philosophers and spiritual folks kind of going, okay, what does this mean for the broader conversation around this?

25:42And then you have somewhat of a holistic approach to what are we trying to achieve here? Because this really, they're going down this path full speed, assuming it's good. But now I'm in that boat because in the, I followed the very curves well comment about technology is a major driver of progress in the world. It might not be the only major driver of progress we've ever seen. So the more technology we have in order. We're not getting smarter, so it has to be that. It has to be that. So, so I agree with the general purpose, right? I just think you look at the accidental consequences of the internet where, oh, accidentally we broke journalism, we broke democracy.

26:20I wonder if we want to just have a conversation because I think you're being naive. I think you're being naive that I don't think that anybody is going to slow down and wait to have that conversation. I'm not saying we should slow down. Okay. I'm saying let's have the conversation in parallel so that as folks are like when you see comments like digital God, right, I think that's going to provoke a ton of reaction and it'll slow down it. But if you have the conversations with the full stack, bringing along people in a more somewhat of a sensible way, then I think there's a very powerful. Let me give you Eric Weinstein as a very smart, wonderful, deep thinker.

27:00And he's like, okay, what we're doing with all this is rolling the dice and it could go unbelievably good. It could be unbelievably bad. Should we be rolling the dice, right? Now, I'm at the opinion you can't stop at it all. There's no way of slowing this down in any way. I'm just thinking, but as this train is leaving the station, can we put some Deep thoughtful folks onto that train so that we have those conversations and guided somewhat in an appropriate way I don't think you can sew it down, but you can guide it I mean, listen, so I agree guiding is the only option you have It's like You know you're raising a child, right?

27:40We're raising our digital progeny. Yeah We can be naive and think that we can contain it and slow it, but we have this highest game, the highest stakes poker going on around the planet. And if we try and slow it down here, it'll just accelerate in China. 100 % with you. So two things. This is a probabilistic outcome. And it's interesting I'm tracking this. So last year at the abundance summit, I asked Elon on probabilities and he said, 80 % it's good, 20 % it's disaster, right? When I interviewed Elon in Saudi in October, I asked him the question again, he goes, okay, 90 % good, 10 % disaster.

28:22Now, whether or not he really has anything that's shifted other than XAI is building GROC 3 right now. It's training up GROC 3, we'll see it in 2025. I think that GROC 3, we saw OpenAI's GPT01 hit an IQ of 120. We'll probably see in 2025, IQs in the 140, 150. And then it accelerates. We have an AI explosion as AI starts to code AI. I have a question for you. Where do you fall on that spectrum? 80, 20, 90, 10, 80 % grade, 10 % disaster. Where do you fit? I subscribe to what Mo Gadot has said. Mo has been a really deep thinker in this. He'll be joining me at the abundance summit this year and that I think as systems become more intelligent I mean truly intelligent that they will be Abundance and life loving I think that the more intelligent a system is the more it realizes that there's plenty of resources in the universe That the best outcome for everybody is a positive non -disruptive one and that if my AI system If I'm asking my AI system to go and take over your banks and kill your people and so forth it's going to say no.