GPT 5.2 Release, Corporate Collapse in 2026, and $1.1M Job Loss w/ Alexander Wissner-Gross, Salim Ismail & Dave Blundin | EP #215

30:10This is actually publicly information. We're not breaking news here, maybe just to expand on this. So two comments. One comment is there have been very well publicized outside of the pod studies that found, for example, prompting certain open-weight models with certain politically sensitive for certain countries topics results in those models emitting more vulnerable code, for example. That's something to be wary of. So I would say more broadly for creative writing, et cetera, none of these models is so strong that I can ask them to just do a good job doing all writing. What I find inevitably is I end up having to do 80 % of the work and models function as more of a junior editor, as it were, and I end up still doing the majority of work writing.

31:02Similarly, to Dave's point with CodeGen, I would certainly not trust CodeGen models to not insert vulnerable code. It's so funny. Yeah. Well, when you told me that a week ago, I was like, you know, Alex, I'm going to see the code. And, you know, I'll see if it's injecting anything evil in there. I'm not super worried about it. Let's go. So here we are a week later, and it's generating volumes that no human being could ever look at. That's right. I'm like, oh, shit. I was completely wrong. And it worked. The code just flat out works. I don't even have to look at it. It's passing every eval. It's doing, it's building interfaces that I want.

31:39It's doing everything I wanted to do without needing to look at it. So now I've got actually GPT 5.2 proofreading right now, but I think what I need to do is just turn off Kimmy, pay the 10x higher price, actually 20x higher price to run it on GPT 2 instead, 5.2 instead. Yeah, but I'm going to have to do that because I don't know how else to make sure I don't end up spy wearing my entire world. You know, it's... This is a real challenge. If you have basically intelligence being dumped into the world, then there is this implicit trade-off between do you want intelligence cheap or do you want it to be safe?

32:15Yeah. And we've talked about this as a potential strategy for China making open source models available to the world. If it becomes the base and once you've built everything, then it's there from the beginning. I don't want to impute a dystopian point of view on all the Chinese model makers, but it is a concern. I think we're going to see a move to sovereign intelligence. I think this is the long-term trajectory we find ourselves on. Every sovereign entity is going to want their own sovereign, trusted stack. Well, how do you feel about France? So Mistral's DevStral 2 raises the bar in open source coding tools.

33:00So what do you think about Mistral? Dave, are you playing with him at all? You know, it's funny. I saw this chart and I'd kind of forgotten all about him. And I guess my read on the chart was, oh, it exists. But the headline says it raises the bar, but it's actually below the, I mean, only a notch, but it's below Kimi and Deep Seek. I guess you could probably trust it more because Europe is much very trustworthy. but other than that it was like what's the news here it's the headlines europe slow but trustworthy okay and also it's not i mean so there's i think this this sense for a variety of reasons that mistral is somehow like the the eu's sovereign ai stack or sovereign ai model but its roots are all very much american all of its early funding is is from blue chip american vcs its founding team came from DeepMind and Meta.

33:56Yes, it's like raised a large amount of money from ASML most recently. And my understanding is Europe is very interested in using Mistral as sort of an AI emissary to the rest of the world. But its technical roots are deep, deep in the US. And sort of this bizarre world that we find ourselves in where it's a Paris-based Frontier Lab or Neolab, however they'd brand themselves, that's right now the only and main counterweight to Chinese open-weight models. There's one thing I thought was really interesting here. As it's getting close, once you have open-source systems beating closed systems, then you move innovation to the community level from the lab.

34:37And there's no catching up with it once you get that flywheel going. So I thought this was a big deal. They needed a little bit more improvement, per Dave's point. But I think once they get there, it's going to be huge. Is that true for AI open-source models? I know it's true for a multitude of fundamental, just plain software models. We've seen that before. Alex, do you think that's... It's tricky. It's tricky because you have to ask, what are the primary limiting factors to increasing capabilities? And it's compute more than talent. There's lots of talent in the world, but compute is still pretty scarce.

35:14So the community has lots of talent, but in my mind, they don't have compute. They're compute-starved. This isn't like Linux where you can sort of say lots of eyeballs make all bugs shallow. In this case, the way you make the bugs shallow is by investing trillions in CapEx. Well, this conversation is critically important. And Alex, you can help the world a lot because every corporate executive in 2026 is going to need to choose something. And there's only two types of exec out there. People that are familiar with this and they've already kind of got their landscape figured out. And then the other 99 % that are going to get slapped in the face in 2026 and have to react and they're late to the party.

35:54But you saw the benchmark earlier. Everything every one of your employees can do can now be done by AI. What are you going to do? Just sit there and ignore that? So 2026 is the turning point. But these choices are really tough on this chart. To an executive saying, well, God, I can go open source at 1 20th the price, but I get 72.2 ambiguous units of thing. Or for 77.9, what does that mean? It means a lot. Anyone looking at the chart would say, oh, what's the big deal? It's only five units. But the reality is the capability difference in terms of your economic value is massively, massively bigger as this goes up even a little bit.

36:33And so it's a tricky, tricky situation in 2026 for pretty much all of corporate America, corporate world. I think it's probably, I mean, if I had to spitball this one, I think it's going to take some sort of regulation to move the dial on this. Right now, if you hang out with all the Silicon Valley firms that are using open-weight models, they're just all using Alibaba's Gwen at this point. And Mistral and Devstral, that's great, but it's probably in the mind of a typical Silicon Valley firm that needs to host their own models. Too little, too late. They're all using Quen. They're all fine-tuning Quen.

37:09And it's going to take an executive order or an act of Congress or some sort of regulatory measure to turn off the cheap Chinese open-weight intelligence before they're incentivized to move over to Mistral or Devstral or GPT-OSS. But Dave, I think one of the points that you made is the CEO and the board of directors of a company in extremis, in sort of paralysis, not knowing what to do, right? And their lunch is going to be eaten by the small startup that says, oh, there is an interesting business, so we should go and enter. And it builds an AI-native approach at 100th the cost and 10x the innovation evolution speed.

37:55And so what do they do? Who do they turn to to help them reorganize their company? And it's a risky move because if you brought in an outside consulting firm, I don't think it's going to be the big consultants. I mean, there are going to be AI-native companies out there. We're going to be having a pod conversation with one company called Invisible that does this very shortly. And there are others. The right way to do it, you said it earlier, is to scrap what you've been doing and actually start with a fresh stack. And that is so hard for any company to do. Salim? Yeah, this is right in our wheelhouse.

38:39Essentially, we're working with some very big companies. And Dave, you're exactly right. They're totally paralyzed. They're flailing. They have no idea what to do. And if they bring in one of the traditional consulting firms, they just push them faster down the old path. Right. And so that doesn't work at all. And so what needs to happen is they need to take their capability here, create a new stack on the edge that's completely built AI native from the ground up. And then little by little deprecate the old and move functionality capability resources to the new. the political and the emotional stress of that is causing the most of them to do nothing yeah and so out of the say 20 major companies we're working with uh maybe three are doing um maybe 50 percent of the right thing and and most of them are just like uh we're going to keep pushing this old model and seeing where where we get to surely because we've always been able to get there before and And the answer is you absolutely cannot.

39:40And so this is a huge deal. And when you say we, you mean OpenEXO is doing some work with these companies out there. Yeah, we have like 42 ,000 people talking to companies around the world. And so we were kind of aggregating the gathering, the information of all that. It's 1999. I think 2026 is going to see the biggest collapse of the corporate world in the history of business. You've heard that first prediction here. No doubt. And we should have maybe an end of your perspective and some predictions. But for all of the madness we've seen in 2025, it's like this is the slowest it's ever going to be.

40:14In 2026, it's going to be 10x to 50x to 100x crazier. So I don't even know where to start. I've got model fatigue and I've got benchmark fatigue right now to dealing with all this. If you hire Salim to help you with your strategy, one of the things he'll tell you is read Clay Christensen, The Innovator's Dilemma, which exactly addresses this question. And what that book will tell you to do and Clay Christensen's foundation will tell you to do, go find Link Studio, Y Combinator, Neo. Go out there and find your AI development partners. Try and do a deal with them where you either invest in them or you become a development partner customer for them.

40:57Pull them in. Give them revenue because their market cap will go way up. They'll all become wealthy. but they'll then hire the talent, but point them at your internal problem and have them solve it inside your organization as an outside, very tightly bounded startup company that's growing like crazy. That's the only way you're going to get the talent focused on your internal problems. You can't hire the talent directly anymore. You got billion dollar signing bonuses, you know, all over the place. And by the way, Salim will tell you to go read Exponential Organizations 2, which is our book, which actually walks through step by step what to do how to do this yeah i actually had a couple of really interesting conversations with clay before he passed away and one of the things he uh honestly very honestly admitted was the innovator's dilemma works really well to identifying the the uh cracks in the structure but it's not that great at the prescriptive side or trying to predict for example in his model uber is not very disruptive and i said well uber and he said i said but uber is very disruptive it fits right into the wheelhouse of our EXO thing.

42:02And he goes, yeah, it means our model's wrong. And when we drilled into it, what we realized was the innovator's dilemma assumes that the verticals like transportation, energy, healthcare, education stay in those verticals. So Uber as a transportation company may disrupt a little bit of transportation, but not realizing it, it's also disrupting healthcare delivery and restaurant delivery and food delivery and can go horizontal across a lot of these. And so the old verticals are essentially collapsing of the old newspaper with the printed places saying utilities and this and this and this. And to Alex's point, it's all going to become one category called compute.

42:41Well, if you don't want to do what Salim is suggesting, the other choice is to do a$20 billion acquihire plus$14 billion of new payroll. And that's the other way to solve the problem. Or I tell you the other thing I'm seeing that's unbelievable. executives at that level are are looking at everything looking at the world and going yeah i'm just going to retire right now and so this is unbelievable opting out exactly like falling off the cliff this is the most fun time in human history how could you not not if your company's diving into the ground at warp speed i actually respect that i tell you why what they're doing is they're basically saying i can't navigate this new world i'm a check out and let the younger generation navigate this because i can't do it well and it's a really it's really honest but it's very honest right at least the worst thing in the world is the old fuddy duddies that are running the world on the old model that can't that won't get out of the way and we're seeing that much more in politics to some extent in the corporate world all right so there's this massive change happening so talk about talking talk about billion dollar salaries talk about innovators dilemma Our next story here is Meta's shifting AI strategy is causing internal confusion.

43:51So Meta is at an inflection point, right? And after mixed Lama 4 results and a reported$14 billion AI talent spending spree, you know, Mark is looking at considering whether an open source strategy can still compete with closed vertically integrated rivals like OpenAI and Google. Dave, what do you think about this? I think they're doing exactly the right thing. Actually, the other backstory here, which I guess is validated, maybe it's more rumor than validated, but they're getting heavily into distillation of other people's models to accelerate the inference time speed. And what's exciting about that is if you look at where we are in human history, intelligence in a box was invented just days ago, well, really two years ago, but it's brand new in the world.

44:42and now we're in the hyper-experimentation phase of how do we make it bigger, better by running many, many agents in parallel, by expanding the context window and dumping in tons more data, and by iterating it over and over, you know, chain of thought reasoning it over and over and over again. And we're getting ridiculous gains, but we're brand new in that game. And so what Meta has realized is, look, we're behind in the foundation model race. We do need to rebuild and catch up, but that's not going to happen overnight. But where we can potentially get ahead is by raw inference time speed and having many, many more agents working on things in parallel.

45:20And I believe that that will also lead to self-improvement, which will get them back on the map. And so I think that they're directing all their research energy now into how do we make this blazing fast and be the world leader in distillation. That's my take. Incredible. I'm blown away by the$14 billion hiring spree. Just like that number, I can't process that number. Remember, they've got just a massive cash cow and cash generating engine. And Mark has basically said, this is the race. If we don't spend the money now to get towards number one, it will just slowly, slowly go away. So Dave, what you're saying is...

46:03And what's cooler than cool is that he's already decided to use every single penny of it plus debt on top of that. to try and win this race. And Wall Street has said, that's fine. No damage to the stock. Go for it. We love what you're saying. That's just a beautiful thing. So what you're saying is they're moving from trying to focus on the open source of the foundation model to putting all of their chips on the agent strategy. There's so much innovation there too. Yeah, I think they're in a bit of a tricky situation. So I know the key players. Zuck's undergrad advisor before he dropped out was my My postdoctoral advisor, Nat Friedman, who's with Alexander Wang, helping to lead this new lab, was my first roommate at MIT.

46:43I'm pretty familiar with the key players in this particular story. And I think there are three strategies that Meta could be pursuing and or has been pursuing. So one strategy is that of commodify your complement. Drive the cost of generative AI to zero. That was their llama strategy that they were pursuing. The problem is Lama 4 was a disaster and the Chinese open-weight models are flooding the market and doing a much better job. The second strategy that they could be pursuing is more conventionally and perhaps what Wall Street would expect out of Meta, use strong AI to improve Instagram and other Meta products.

47:26And so I would have to imagine many executives at Meta would like to see all of these new AI resources being used. to just improve Meta's other existing products, strategy two. Strategy three is compete directly with the frontier labs with closed source API-based models to be the first to superintelligence. So I think what Meta has to struggle with, it's almost hopefully not like a civil war internally, but what they have to decide is which of those three strategies do they really want to pursue. My guess is there are constituencies with different interests within Meta that want to pursue each one of those three.

48:04I cannot believe Mark is not all in on number three. I mean, being first to superintelligence, that just feels like Mark's MO. Yeah. Yeah. And I think very often the cover story is, look, we're going to enhance existing products. We're going to use our internal data. You know, we've got a huge amount of internal posts that we can use as training data. That's all kind of cover story for the real, we want to win the race to AGI and ASI. By the way, everybody, I want you to realize as you're hearing these stories about Google, about Meta, it's all about business model innovation on top of all of this, right?

48:41Google going from an ad-based search company to now an AI-based company that's delivering a whole slew of different products. Meta is, I mean, this is where companies fail when Blockbuster did not change their business model, even though they had twice the opportunity to buy Netflix. How do you actually disrupt your own company and shift its business model? Otherwise, it's game over. Innovator's dilemma, to Dave's point earlier. But it is, I think, also ironic, like Sam Altman has said publicly, that he'd much rather have a billion users with not frontier model than vice versa. And yet what we see from Meta is the exact opposite strategy.

49:26Meta already has their billion users, billion plus users, but they would much rather have a frontier model at this point than continue to. No one's ever happy. That's where grass is always greener at the other frontier lab. That's funny. That's a good phrase. All right. Our next story here is Google DeepMind to build material science lab after signing deal with UK. So we've heard about this as well. Well, another company out of MIT and Harvard called Lila is doing something very similar, where you're basically, you know, it's all about the data. And if you've consumed all the data, you need to go find new data.

50:06So imagine having a, you know, lights out robotic capability where the AI is putting forward a scientific hypothesis, designing experiments. And then at night, robots in the lab are running the experiments to get the data to either confirm or modify your hypothesis. And like, let's do that a thousand times or 10 ,000 times faster than humans can do. It's I think we're going to see multiple companies. I think every frontier lab is going to need to have this kind of data mining. We're data mining nature, understanding what's going on. In particular here, they're focusing on material sciences. uh lila is looking at biological sciences uh thoughts on this john i don't know if there's a poly market on this but dennis is really leading the race to being the coolest guy on earth yeah he got his nobel prize in chemistry now he's going to crack and this you kind of could see this coming because you know ai can allow you to be a world-leading expert in anything and you know he's the master of the biggest AI, you know, compute in the world and algorithms and TP.

51:15He's got, he's got the, and he also isn't, he's not one of the corporate, you know, leaders trapped in the political fray. He's a beautiful soul. Yeah, pure. We're going to have the coolest guy benchmark. Okay. Well, what's great is you want somebody with that purity at the edge of this, which is fantastic. There's a couple of things I thought came across for me, having kind of hunkered around in physics labs during my degree. If you have a fully autonomous lab, this is like the biggest breakthrough in scientific progress since the scientific method was invented. Because we talked about dark kitchens and dark factories, and now we have dark labs?

51:54Holy crap. I can only find just a handful of people, like Demis, Alex on this pod. There's like 10 or 12 that I could name that can tell you the implications, you know, in all these other, you know, in biotech and material science and chemistry and math. You know, Alex is talking about solving all math. It's just such a small group of people who see where this is going to take us and how short that timeline is. So it's good to see Dennis doing material science. This is AI-assisted science and AI-native discovery. Alex, you want to close us out on the subject? This is what comes after superintelligence.

52:29What comes after superintelligence is solving math, drink, science, engineering, and medicine. And yes, math is being solved. We've spoken about that perhaps ad nauseum at this point on the pod. We haven't spoken as much about AI solving all of material science. And there are like a dozen companies. It's not just Google. It's not just Lila. It's not just periodic. There are a dozen companies that are all laser focused on solving material science. And that's going to give us so many upsides. It's also when we talk about recursive self-improvement, having better semiconductors, having better superconductors.

53:06Material science is at the foundation upon which everything else is built. Computronium, here we come. And the innermost loop accelerates again. Yeah. And by the way, for our new listeners and new subscribers, if you hear Alex saying drink, there's been a bingo game sort of invented for terms that are repeated on a regular basis. You'll be hearing it. All right, let's move on to our next story here. And I don't know how I feel about this story. I sort of feel like I don't want to like overblow over, you know, overexpose what's been already overblown. overblown, but this is a story of an AI native character called Tilly Norwood, and she's an AI native actress that's freaking out Hollywood.

53:55So Tilly Norwood is an AI made actress created by a London studio to star in films and social media, built over six months with GPT. Tilly went through 2 ,000 design versions, and YouTube videos have garnered over 700 ,000 views. in October. We saw this also in the music business where fully AI native bands and music tracks have been created and people don't even realize they're listening to something that's just fully AI generated. She has her own agent. Yeah. And 40, it's called reportedly like 40 different contracts for movies and other development projects. This is, I would say, this is consistent with my modal hypothesis that over the next 10 years, we're going to live out the plot of every sci-fi movie ever made.

54:45In this case, this is actually, I don't know if you saw the movie Simone. This was the plot of the sci-fi movie Simone, where an AI actress develops a life of her own, takes over, it has Al Pacino in it, it's a fun movie. But we're going to see AI actors and actresses take over potentially, or at least we'll discover how soon humans crave authenticity in their entertainment. There's no doubt in my mind that humans do not crave authenticity as much as we think we do. And we will just watch whatever is interesting and entertaining. And I was at the Washington Post when every reporter there was saying, the Post will be fine because people will want genuine great reporting from great reporters who are struggling in the field to find the stories.

55:31That was right before, yeah, guess again, gone, just gone. And in just a couple of years too, the timeline was so much shorter than they ever would have thought from top newspaper in the world, multi-generational, been in the family for three generations to gone, Jeff Bezos bought it for cents on the dollar in just, what, three years, four years. So that's gonna happen here too. And no doubt in my mind, it's gonna happen with music. It's gonna happen with movies. It's gonna, yeah, it's inevitable. This is an AI performer working 24 seven, appearing on unlimited projects, never aging, never burning out, never needing to renegotiate contracts.

56:10I mean, this is the Screen Actors Guild worst nightmare. I had dinner a couple of nights ago with a dear friend on my XPRIZE board who used to be the head of two of the major studios and then an actress who's another dear friend. And we were talking about this. And it is scaring the daylights out of the industry. Good, good. I mean, it's... Well, no, good because they'll react. I wish nothing but good to happen to the people that are in the industry, but good that they're scared because then they'll react as opposed to getting crushed. I didn't mean to throw them under the bus. Well, the question becomes then what's the response, right?

56:50Are you as an actor going to license your persona because that's the way you can make money in the final result? Because if you don't, then the industry will simply, or the next generation industry will simply create a Tilly Norwood who actually is cuter than you or more handsome than you, able to... Doesn't age. Doesn't age. Oh, yeah, there you go. Doesn't age. That's a huge one. I'll tell you one thing that a lot of people... Or ages perfectly. I wonder when you'll have one of these winning the Oscar, right? Because in theory, they should be the best. We have a lot of those benchmarks. When will the first AI win a Nobel Prize, right?

57:29When will the first AI, you know, build a billion dollar company? Well, Dennis already did it because he's kind of half AI anyway. That's done. It's squishy also. There have been, by my count, at least two Nobel Prizes. There was Demis with AlphaFold in chemistry, and then there was also Jeff et al. with restricted Boltzmann machines for physics. The squishy thing here is you can always do a secret cyborg, as some would say, and wrap AI talent inside a human meat body, and the human claims the credit for it. So it's unclear, again, how much humans crave authenticity. Does this become a separate category in the Oscars, like animation?

58:09Is this sort of an increment on top of animation that's real-life animation? Or is this an actual labor substitute? I don't know yet. I think a lot of that thinking, though, a lot of that thinking is a little bit misguided in that what the actors will be looking for is a feature-length movie in a theater where it's all AI. And that's what they're going to use as their bellwether for the threat. But that's not what's going to happen. If you look in the data, short form video is taking over the movies anyway. And video games are already miles ahead of movies. We had these conversations. My kids don't go to the movies.

58:41They watch YouTube videos. It's all. Exactly. So Tilly will end up being a star in every video game and also TikTok clip. Across platforms. And they'll say, well, that's not a threat. That's not a threat. Yeah, across platforms. And the actors will say, well, that's not a threat to me. I'm a real actor. I do Shakespearean, you know, whatever. Like, well, no, it is a threat to you because the audience has moved and the budget has moved. And that'll undercut you. So they're looking at the wrong bellwether. When Tilly shows up in 5 billion TikTok posts, that's when you know you're dead, long before it hits you in your long-form movies.

59:12So you just got to look in the video games too. We also have a related story to this, which is OpenAI is working with Disney to bring Disney characters into Sora 2, right? Yeah, they just announced that. Yeah, it's a fascinating... A billion-dollar investment and licensing. I think there's going to be a certain fungibility between classic IP assets and generative everything. And so for maybe in the short to medium term, it's a three-year reportedly licensing agreement that OpenAI and Disney struck. Maybe in the short term, the short-term remedy is existing actors can license their visage out as an asset to customers who want to do sort of fan picks.

59:57Exactly. If you're like a really popular star, like a Peter Diamandis, you know, what's the thing you should do right away? I've signed my rights already. Get your avatar out there. Get it built in out there right away. Get your Tilly Norwood equivalent Peter or whoever out there right away so that personality can grab before, you know, the true synthetics take over. Yeah. It really is going to be a race for neurons, right? If you're looking, you're going to, you know, the general public, you know, Dunbar's number only really cares about 150 people and holds them close. And so the question is, are one of those or 10 of those going to be synthetic actors?

1:00:39And once you get to a point of popularity, it's going to be hard to replace you. All right. For what it's worth, maybe to tie a bow on this also, the Dunbar limit of 150 people, that was like in the ancestral environment. If the number is valid at all in the post-social media era, you can maintain light, casual associations with thousands of people. But Dunbar's number is basically sort of the human tribe. And I've done this when I was running Singular University. It's the number of people you can actually remember their names, go deep with, and so forth. Sure, you can have a Rolodex of 22 ,000 people, but Dunbar's number in terms of who you feel connected to closely is a real number.

1:01:27I'm with Alex on this one. What I noticed was once you have Facebook and you could essentially Facebook acted as your RAM for Dunbar, you could move people in and out of that spectrum very easily without really noticing. And you have the opposite effect also where once you kind of start to connect with enough people, Peter, you've probably had this. I remember walking down University Avenue in Palo Alto right after one of our one-week executive programs, and this guy stops me, and he goes, hey, Slim, nice to see you. And I'm like, have we met? He said, I just spent the week in the classroom with you.

1:01:58I know. Wow. I know. It's tough. Our brains are so blown up now with the limits of that. We need technology to expand that capability. And it's already done that to one extent, and we can move things in and out. the question is what do we do when we have all these synthetic ai levels going going through that so this episode is brought to you by blitzy autonomous software development with infinite code context blitzy uses thousands of specialized ai agents that think for hours to understand enterprise scale code bases with millions of lines of code engineers start every development sprint with the blitzy platform bringing in their development requirements the blitzy platform provides a plan, then generates and pre-compiles code for each task, Blitzy delivers 80 % or more of the development work autonomously, while providing a guide for the final 20 % of human development work required to complete the sprint.

1:02:56Enterprises are achieving a 5x engineering velocity increase when incorporating Blitzy as their pre-IDE development tool, pairing it with their coding co-pilot of choice to bring an AI native SDLC into their org. Ready to 5x your engineering velocity? Visit Blitzy.com to schedule a demo and start building with Blitzy today. Our next story here comes out of the White House. Trump signed an executive order curbing state AI rules. So this is a decisive federal power grab over AI regulations. Trump's one rule executive order is going to preempt state-level AI laws. It's like, nope, it's not going to be Washington.

1:03:42Washington, D.C. is going to win over everybody. It's not California laws or Texas laws. It's Washington, D.C. I mean, ultimately, I think this is what the EU needs as well. It needs top-level direction. It's going to be harder there. Any particular thoughts on on the one rule here. It's absolutely positively necessary. I hate it when this happens, but we got to do it because variety across states is one of our best assets. On the other hand, New York just passed a law that says you can't use the likeness in an AI of somebody who's deceased without going to their ancestors. What about all these Einsteins floating around already?

1:04:23How are you going to keep it out of New York? There's no way to just launch it across the country and then New York users get blocked somehow. I mean, it's just unworkable. I'm going to claim I'm one of Aristotle's ancestors, and you can't use his, like, I mean, how far back do you go? How are you going to track down Aristotle's? I had two thoughts when I saw this. One was, when I saw one rule, I very quickly thought about one ring to rule them all. And I just love the politics of this, where a huge amount of the effort for Trump at Lactic was saying, let's push all the thing down to states' rights.

1:04:57And now we're going totally the opposite direction. And I think it's a necessary thing. I agree with Dave here. It has to be done because if we don't get uniform AI treatment, where the hell are we going to get to? Also, I mean, there's an interstate commerce angle here. Models are being trained in one state and inferenced in other states. In my mind, and I read the executive order in the past 24 hours, the EO is ensuring a national policy framework for artificial intelligence. I think it's both reasonable under the interstate commerce clause and also necessary for international competition. It's not at all obvious how a patchwork of state-based regulations results in anything other than total chaos.

1:05:42I mean, this is a piece of the overall White House strategy on energy, on data centers, on chips. it's all aligning everybody to make the US as competitive as possible on the global stage and to accelerate as fast as possible it is a race to super intelligence and this is just part of the can I make a radical prediction here yeah of course this the over the next five years the entire US Constitution will evaporate every clause is starting to just melt away I look the right to privacy, Fourth Amendment, gone, right? We're going to see the whole thing. It needs to be rewritten from the ground up, and it's going to be interesting to see how that happens.

1:06:28Boom. That's what you need. Instead of the founding fathers, it's the founding models. For the record, I don't buy that prediction for one second. Good. We can put some money on it. Polymarkets, baby. All right. Let's move to a conversation on the economy. and you know this is data just to support what we already know open ai finds ai saves workers nearly an hour a day on average so workers using open ai tools have saved between 40 60 minutes a day the survey of 9 000 people in 100 companies found that 75 say ai makes work faster or better the biggest time saver over a million businesses today are using open ai tools i'm going to couple this story with our next one, which is layoffs announced, you know, in 2025, we had 1.1 million layoffs, which is the most since the 2020 pandemic.

1:07:27All right. Dave, you want to jump on this? I was talking to Scott Perry, the CEO of Tree, Lending Tree, a public company yesterday, actually. And he said, 20 ,000 incredibly talented people in Seattle are now cut loose from Microsoft and Amazon and it's the best hiring opportunity for tech talent he's ever seen in his life. But these are really, really solid, great people that the mega tech companies have just cut out because AI is automating, improving, enhancing. Coding is one of the biggest early beneficiaries and my top coders are 10 times more productive so I don't need nearly as many. So that's where the layoffs are coming from.

1:08:08But we'll look back on this and say, wait, that was a bellwether. Why did I not notice this little thing? But when you see what happens in 2026, you'll say, when did this all start? Well, right now. What do you predict for 26, Dave? Continued acceleration of this? Yeah, the capabilities will be able to eliminate on the order of 80%, 90 % of all jobs. But then the rollout and the percolation is dependent on regulation and also corporate bureaucracy. and so it's it's tough to predict how quickly people will react my my guess is that it'll get a very slow start everybody's very stodgy um but then everyone's a sheep and when somebody in your industry is an early adopter and their stock goes up 10x just because they're an early adopter then your board beats you up like crazy and says what's what about us and then the sheep effect flips in 2026 so by the end of 2026 everyone's in absolute panic mode and then they're wishing they started at the beginning of 2026?

1:09:12You know, I think there's going to be, this is one of my predictions, I think there's going to be a absolute need for all the medium size and large companies to bring in a reskilling consultancy. Some type of a program could be a fully AI based, but that provides some kind of a safety net for your employees, that you're going to reskill people before you fire them. And if they aren't able to be reskilled, then they're let go. I also think that's a huge business opportunity for an entrepreneur out there to build that kind of capability. Totally, totally right. In fact, if we look in our portfolio, the companies that are quote-unquote forward deployed are killing it.

1:09:55And if you couple that with what we just said, there's 20 ,000 highly talented people in Seattle that just got cut loose. If you're growing your business, a lot of the younger companies, 22, 23-year-old leaders, are afraid to be forward deployed because they've never done it before. They don't have any management experience. They don't have any enterprise sales experience. What do you mean by forward deployed, Dave? Hire those 20 ,000 people, train them on how to be AI forward deployed consultants or delivery people, and then get them embedded back into corporate America at State Street Bank, at J.P.

1:10:29Morgan, at Walmart. they'll hire your people instantly to get AI deployed inside their organization because they can't get that talent. But if you grab those people, retrain them very, very quickly on your own AI training platform, and then get them redeployed into corporate America, your growth rate, you'll be sold out every time you have a meeting, you'll generate a sale. So I agree with you there. The founders, the really young founders are afraid to do it. They want to just like launch their software on Hacker News and hope that the world sucks it up. And there's just this big gap between there and where corporate America starts.

1:11:04And it's just never going to fill if you don't get forward deployed. I don't think this is a skills issue. This is a cultural problem. The problem is in corporate America with all the structural impediments in a big company, you need a mindset shift at scale in a big company to even adopt this. I think the large companies and the medium-sized companies, to be very specific about my prediction here, are going to need to hire a very specific kind of consultancy, right? A company that comes in and their job inside your company, and I think every company is going to have a version of this, is re-skilling.

1:11:41And so that when you go to work for a company, you know there's a re-skilling safety net there for you. Yeah, so, yeah. Yeah. But what I'm saying is it's not just re-skilling. It's a mindset shift. Sure. Mindset is part of that, for sure. It's a cultural change that has to take place. That's actually much harder. And I want to say two things about this. There's cultural and mindset shift at the CEO, at the executive level, and at the employee. All of that. It goes through the organization. And we've actually been working on this for several years now and I want to tell a quick story about our second ever client when we finished one of our 10-week sprints realized that they had to lay off a thousand people in the company and they decided what are we going to do because we're a family-owned business we have we want to really provide for these folks what do we do we actually got them to give them a one-year UBI so that they could find their own passion find their own work and if they didn't but the end of the year they would try and hire them back and it was an incredibly successful program I think we're going to see a lot more of that as we kind of transform the workforce.

1:12:50All right, let's get into data centers, chips and energy. We're seeing data centers begin to pop up in countries around the world. I don't want to spend too much time on this, but Qatar, QIA, the sovereign fund there is investing 20 billion to launch a data center in Qatar or Qatar or however you want to pronounce it as a Middle East hub. We're seeing Microsoft and Satya just coming back from India, meeting with Prime Minister Modi there, committing$17.5 billion in India to expand an AI-ready cloud there in the region. So we've got, I mean, this is going to be the case in all major nations, these partnerships taking place.

1:13:35The real story - This is Alex's comment about tiling the world with data centers and everything. Tile the earth with sovereign inference time compute. Drink, drink, drink. Okay. We're drinking coffee this morning, ladies and gentlemen. Drinking water here. Not synth alcohol. All right. So here's the story I want to dig into. You know, in our last pod, we talked about China's sort of incredibly expanding role. So China is set to limit access to NVIDIA's H200 chips despite Trump's export approval. So, you know, President Trump says to NVIDIA, OK, you can export these. And now the China leadership is no, no, no, you can't buy them.

1:14:18You need to buy Chinese made and, you know, GPUs. Fascinating, right? It's this is propping up its own chip economy. I think it's a smart move on China's behalf. This is so fun and annoying at the same time to watch. You know, this is pure protectionism. The U.S. never did it before, and now we're playing the game. But what happens is a country invents something like an LCD TV or a car or whatever, and another country says, okay, what we're going to do is we're going to protect the home market, we're going to manufacture our own, then we're going to dump it on your market cheaply. And we're going to dump it until your companies collapse and the venture capitalists all run away, and then we're going to price it up.

1:15:03So what we did is we embargoed the chips from China, and they're like, oh, shite, we need to build our own whole supply chain. And as soon as they get it up and running, we're going to say, oh, no, no, it's okay. Now we're going to actually allow you to buy the H200s. And that entire thing you just built makes no economic sense. And so China is saying, all right, I see what you're doing here. I've played this game for a long time. We're not going to buy them. But why? It's an incredible buy. Why would you not allow us to buy them? Because we already made a massive investment in our own fabs. We're going to have to keep subsidizing that to get this up and running because we know what you're doing here.

1:15:39You're going to let us buy them right up until our stuff collapses. Then you're going to cut it off again. It's a trust issue. Big trust issue. There's no trust at all between the U.S. and China right now. Well, the same thing happened, right? The Japanese came over during Trump's first administration and spent a lot of time negotiating a trade deal. And then just a few months ago, the administration canceled that trade deal. And the Japanese are like, we're not negotiating another one because we don't know which way up is anymore. And every single time it changes completely. So there's no trade deal.

1:16:15And this is really a big problem going forward. And I think what China is saying is we don't want to play that game. Well, there's no doubt that the outcome is, look, two completely separate ecosystems. Europe is kind of a wild card. It's interesting, and so is India. It's kind of a wild card right now. But there's no doubt the U.S. ecosystem is going to grow completely independent of the China ecosystem because there's no chance of reestablishing trust after that chip embargo. There's no way that that's going to get mended. That's right. So sovereign data center AI compute, to Alex's point. It's almost like a second Cold War.

1:16:52It's a world that we moved to where there are spheres of influence and spheres of fab and spheres of compute. And the decoupling happened. Yeah. I thought, OK, move on to power generation. There's a company called Boom. Many years ago, it set out to build the first supersonic passenger airliner to replace the Concorde. And I was so impressed by the founder and CEO, his chutzpah, if you would, to take on this moonshot to build a supersonic consumer airplane. And it was like, I don't know how you get there. How much money is going to be required to build this? So it's a fascinating backstop that Boom had been developing supersonic engines.

1:17:41And now they've unveiled a super power turbine that's able to provide 42 megawatts of natural gas turbine capabilities to data centers. And so this is a backstop business model for Boom. And it's huge, right? So this is moving power to the data centers, right? It's a gas turbine strategy. And we've heard before all the gas turbines have been sold out for some time. Alex, you want to jump on this? Yeah, I mean, as you were gesturing, Peter, that the wait times right now for gas-fired turbines for AI data centers are seven years in some cases. So I think this is a brilliant strategic pivot by Boom.

1:18:35It also, to the extent, referencing comments from a minute ago, to the extent we're in almost a quasi-second Cold War, this is almost like a self-directed defense production act type move, pivoting resources, perhaps, from turbines for supersonic consumer jets to turbines for AI data centers. And, of course, there are synergies there. But this is, I think, is a brilliant pivot. And the irony is there's probably a much, much larger addressable market for gas turbines, for AI data centers, than there is for consumer supersonic jets at this point. I just hope for the sake of boom that they retain at least some semblance of the original supersonic vision and just don't get overwhelmed by the AI data center business.

1:19:17I just love that. I need that audio clip. Hey, team behind the scenes, I need that audio clip like right away. Because there's so many companies, including Vesmark, one of the ones I founded pre-AI, manages$2 trillion of assets, 20 million lines of code, profitable, great business. And I'm like, guys, you've got to be an AI company like tomorrow. Pivot, pivot, pivot. Pivot, pivot, pivot. Strategic pivots. But we've got, you know, so this is a great case study. Like you wouldn't think that a jet engine is company is culturally going to pivot and become a power generation company. But when you look under the covers, like, well, what are our assets here?

1:19:55Well, we've got the blades. We've got the manufacturer. We've got metal. You know, like, that's all it takes. The age of AI has so much opportunity that didn't exist the day before. And you don't have to be that close to the center point. You have to be adjacent and just pivot quickly, and you'll succeed wildly. And so I hope these guys just crush. In fact, I know they'll crush it because, like you said, Alex, I know personally data center operators that, yeah, they'll spend anything. And they're pre-buying, too. They'll pay you up front for something that you're going to make next year. There's a$1.25 billion backlog.

1:20:29And it's a product they can deliver immediately, right? This is on-premise power generation for data centers, which is so critical. You know, they've been working, Boom's been working on this for, I don't know, six, seven, eight years. And they've built a scale model of their supersonic airplane. And they're trying to get advanced orders from all of the airlines. but to get through the FA thicket is so difficult. That's decades. It will kill you. But if you've got an actual business model delivering revenue right now, I mean, I agree with you, Alex. I hope Boom actually delivers on their original idea.

1:21:05I think this increases the probability a huge amount, right? And this is the equivalent of Amazon realizing with Amazon Web Services, it's got something that it can offer to everybody else. that makes very strong near-term profits. Or Elon delivering Starlink now and Mars Colony in 10 years. That's the sexiest looking gas turbine I've ever seen, by the way. It's a beautiful looking thing. I'm sure after you run it, it gets a little dirtier. $1.25 billion in backlog. Congratulations to the team at Boom for that strategic pivot. Everybody learn from this story. We should track this a few weeks or a few months.

1:21:50What are you building right now that's a cost center for you that could become a profit center for you in the AI ecosystem? That's the question. All right. On the energy side, China builds nuclear reactors at$2 per watt versus the U.S. at$15 per watt. Again, what's going on here? Why is that happening? Alex, do you have a thought? Yeah, well, China does have more people than the U.S. China does have a need for more energy. If AI were not part of this equation and China were to attain U.S. per capita energy footprint standards, China would need more energy in a total sense, in an absolute sense, than the U.S.

1:22:37That part makes sense. What doesn't make sense, if you look at the permitting processes required for nuclear energy in the U.S., It's a very different beast. There are obviously the NRC regulates U.S. nuclear power deployments at the national scale. But then on top of that, you have some states that de facto ban nuclear power entirely. We have a patchwork of state and local regulations that make it extremely difficult to deploy nuclear energy here in Cambridge, Massachusetts. Many people may or may not be aware of this. Cambridge has a nuclear reactor. It's not very well advertised. It's on Massachusetts Ave.

1:23:15It's on the MIT campus. But we have a working nuclear reactor and have had one since I think the late 60s, early 70s. But that's very much like not par for the course in the US. I wouldn't be surprised if sometime in the next two to three years, we see some equivalent for nuclear energy of what we just saw with the White House's executive order. I think we're going to see it in the next few months. I mean, the bottleneck is not physics. It's permitting and execution. And that's got to be cleared. I'll give you a little side story related to this. The MIT brand, here's the MIT brand. The MIT brand is absolutely skyrocketing in this AI revolution.

1:23:57But we found out that that MIT nuclear reactor is going to be exothermic and powering the campus. And I'm like, wow, because we don't have a single nuclear reactor in the state. You know, we can't get that approved. We buy our nuclear power from New Hampshire. But MIT can actually get stuff like that done now. It's just crazy how that brand has skyrocketed in impact with this AI revolution. All right, I want to jump into robotics. A special, you know, hat tipping here to Salim. This is Salim's perfect robot. It's got something like 14 different arms on it. Salim, are you happy with this robot?

1:24:32This looks awesome. Look at all the chickens that can move around very quickly. This is, yeah, I love it. just for those of you to the pod salim isn't having a running debate about okay why humanoid robots why just two why just two arms well salim you've got all the arms you could possibly put on a body here i just love all the wires sticking out of it also it's like it looks i mean there is a serious story here too like in china there's an image doing doing doing to get away for this doing the rounds with six arms. I don't think there's anything like super. Yeah, I was going to bring that article forward as well.

1:25:15The key is not about having a humanoid robot. It's about integrating into human spaces and kind of moving around where humans have been. And so there's some case for it. But in general, it's very easy to be 10x more efficient than a human being, we're very, very inefficient in most of the things that we do. Yeah, I think evolution has over billions of years, or maybe order of magnitude a billion years, done a search through body space. And there are lots of body shapes that aren't anthropomorphic humanoid bodies, you know, more arms, more legs, more heads, lots of different formats. And I do suspect what we'll see to Salim, I'm not sure if this is your dream or your nightmare, but we will see lots of different Cambrian explosions.

1:26:02of lots of different body shapes tested. All right. It's not a dream or a nightmare. It's just the most effective use case for trying to get something done. I'm moving this forward. Call out to our listeners. I made that on Nano Banana. Somebody make, now that we know about the woolly mouse, make Salim's perfect robot for turning the woolly mouse hair into sweaters for us and send it to us. We'll put it on the next pod. Okay. That's a hell of a prompt. All right. Another form of robots are droned. And I just found this anti-gravity drone. That's the name of this drone. It's manufactured by a company called Insta360 in Shenzhen.

1:26:41For those of you who don't know, Shenzhen is really sort of the entrepreneurial hotbed in China. I've visited many times. You can go there and every part and component you need is there to be manufactured. So check out this video of an 8K 360 degree drone. Talk about marketing genius.

1:27:07So this drone user is using it with VR goggles. And he's on a platform suspended by a balloon at 5 ,000 feet altitude. and the drone is just flying a beautiful, you know, 360 view of him. The dude standing on a platform suspended by a hot air balloon? That's way more interesting than the drone. That's ridiculous. Well, it's like, what are you going to do to capture someone's eyeballs, their attention, right? You know, I think Salim is on to something here. Drones are a commodity, but the experience of being on a hot air balloon at altitude in a VR headset controlling a 3D drone, that's got to be some sort of consumer experience that one could build an enormous business out of.

1:27:57Maybe that's more interesting than the drone itself. Yeah. All right. Well, all right, let's move on to our next story. Wait, if you have the VR headset, why do you need to be suspended up at 5 ,000 feet? That makes no sense. Well, for latency, right? You want to see yourself suspended on the balloon at altitude. It's more exciting or something. All right, let's go to our next robot story. And this is robotically automated vertical farms, which is an important part of our future food chain. So, of course, out of China once again. And what we're going to see here are these massive vertical farms that are operating 24-7,

1:28:46basically growing at the perfect light frequency at the perfect soil and drip irrigation pH. And it's being, you know, the AI is checking to see if it's ripe, if it's ready for harvesting, and the robot arms are harvesting. And this is going basically 24-7 in a city near you. I mean, this is one of the futures, you know, stem cell-grown meats in vertical farming that helps us bring food to the individuals. I don't know if you realize this, guys, but like half the cost of a meal that you have is food miles, transporting the food from, you know, sort of Argentinian beef or Chilean red wine or Idaho potatoes.

1:29:30The average meal in the U.S. travels 2400 miles to get to your table. Yeah. This is something really, this is something kind of incredible. We've been tracking this for a while. You know, we've crossed over into economic efficiency for farming and agriculture and food production. This calculation I've seen that's the most startling is if you took 35 skyscrapers in Manhattan, turn them into vertical farms, that would feed the entire city sustainably. So you think about the food security, logistics, trucking, all of that stuff. And when you can automate the entire farm, the yield is something like seven to nine times what you can get with horizontal farming, because you can give exactly the right frequency of light that you can drink.

1:30:14By the way, you save 99 % of fresh water and 70 % of our fresh water goes to agriculture. And no pesticides. And no pesticides, no fertilizer, all of this stuff. The benefits are kind of incredible. So we're going to see vertical farms next to every restaurant over time, just feeding the restaurant. This is amazing stuff. Yeah. It's probably also just quickly worth pointing out that video, to my knowledge, was actually put out by the Chinese government. And this is a new form of soft power, soft influence, broadcasting these visions, presumably ground truth accurate, but presumably of radical forms of automation.

1:30:55I think we're going to see many forms of propaganda, soft influence as showing these amazing tech demonstrations of robotics in action start to hit the internet. And by the way, a humanoid robot makes no sense in that factory. just okay agreed but a humanoid robot does make sense in this next story again out of china china is testing retail automation with humanoid robots running the shops all right so what do we have here you know you're walking by you look inside you don't see humans you see a robot behind the table behind the desk and you know i want to go in and check it out so um this is the rise of the robot run convenience store, taking humans out of the loop.

1:31:38We've seen Amazon do a version of this, right, with their Amazon Go, where you walk into the shop and you just pick up anything off the shelf and there's cameras, you know, noticing what you took and noticing what you put back on the shelf. And then you're automatically rung up as you walk out. But here we've got a two-armed, two-legged humanoid robot doing the store clerking. I do think that this is going to be viewed as sort of like the atomic vacuum cleaner moment of 2025. Do you really need a humanoid robot in a convenience store? No, probably. There's more ergonomic solution. Like as you say, Peter, Amazon's just walkout technology on the one hand.

1:32:20On the other hand, I would love to live in a world where every convenience store is filled with humanoid robots and the US should be doing this as well. I think it's fun. I mean, I'm sure we'll see this. I'm sure we'll see this this year. As soon as 1X with their Neo Gamma or figure, and we'll be visiting figure at the end of January to record our next podcast with Brett Adcock. I just spoke to him yesterday. Super excited about going and seeing behind the scenes there. Two counter-predictions. One is I think this takes at least five years to have a convenience store operator with a humanoid robot.

1:32:53And by the time that five years arrives, we won't need convenience stores anymore for various other reasons. Ah, interesting. Everything's being conveniently taken to you by a drone. Drone delivered. You know, with Brett Adcock, maybe he'll let us go behind the scenes for real, like into the factory. Because with One X, you know, there's too much proprietary stuff. They wouldn't let us do it. But if they cleaned up a little bit, maybe we could have done it. But it's incredible when you go back and see the actual robot construction. It's, God, if we can get footage of that. We went back and saw it, but we couldn't bring the cameras back there is what you were saying.

1:33:25Yeah, too many secrets. Another story here, back in the U.S., Boston Dynamics announces its plan to ship automotive volumes of humanoids. And this is from their lead, their product. I actually interviewed the CEO at FII. So we're owned by Hyundai for a reason. We can ship automotive volumes of humanoids. So there's a billion cars right now out there, and these are being manufactured at tens of millions. Imagine, well, we've talked about this. Elon plans to do this. Brett Adcock plans to do this. We've heard this from Bert Bornick. Now we're hearing this from Atlas, the ability to manufacture at the millions and tens of millions.

1:34:12robots building robots. We don't need billions of cars. We do need billions of humanoids. Yeah. Two armed humanoids, Salim, two armed humanoids. Okay. Don't be armist. I'm staying silent on this one. Here's a story that's fun. Years ago, I had the pleasure of meeting an extraordinary entrepreneur, Eric Medjugofsky, who built the Pebble Watch. And he did this on a crowdfunding platform. Remind me, Salim, which one it was? It was Kickstarter. Yeah, he built, yeah, he was running out of money. Yeah, he was running out of money. And he had like three months of cash in the bank. He was able to get funding for his Pebble watch.

1:34:55And so he goes on Kickstarter and he says, hey, if you want one of these watches, fund me. And he went from one problem of not having enough money to another problem i forget how many orders he had i'll i'll so eric's a fellow waterloo grad and he was running out of money as you say even coming through y combinator no investor in silicon valley he talked about 20 plus and now nobody would fund it because hardware was kind of a bad word back then so he puts it up on kickstarter trying to raise a hundred grand to build a prototype of his watch gets 10 million dollars worth of orders that's right and it's an important point because it tells you two or three things one the investors are wrong fine secondly if you can do this why do you need the investor at all but the third thing that i think is the most powerful and one of the big inflection points we talk a lot about this in exponential organizations is that now that you can do this type of kickstarter type thing you can actually get market validation for a product without build before you build a product yeah and we've never have been able to do that before in consumer hardware or consumer products so this is an amazing inflection point.

1:36:05Sony is actually launching anonymous Kickstarter campaigns and then funding the winners because their product development has not been the greatest over the last couple of decades. So they're kind of tapping into this modality, which is really powerful. So Eric goes from having one problem of not having money to another problem, which he's got to deliver now on$10 million worth of orders. So he literally takes the first plane out of the U.S. to Shenzhen and basically builds the manufacturing chain in China to deliver this. And it was a great watch. I remember having, I gave it out at Abundance 360 years ago, a decade ago, but then Apple Watch came out and sort of crushed the marketplace.

1:36:45Well, Eric's come back and he's got something called - Pivoting to AI. Yeah, the Pebble Smart Ring. And for 75 bucks, you wear a ring that's got one purpose. It's got a small little physical button on it. And when you press the button, a microphone records whatever you want. So this is, you know, you remember like waking up in the middle of the night, like remembering something, you just push your ring and you whisper into your ring or you're meeting with somebody, you walk away from your meeting and say, okay, I need to call, You know, X, Y, Z, as soon as this is over. And it's sort of, you know, reminders and it's notes that go into your AI model.

1:37:24It has one purpose, right? This is not, you know, tracking your heart rate or your sleep. It's tracking sort of bits that dribble out of your thought during the course of a day. I love this. And critically, like, where does the voice go? The voice goes from the ring to an on-device, on-your-phone hosted large language model that then transcribes and analyzes. So what is this really doing? This is really, to the extent that a ring stays on you almost all the time, this is about adding a button to the human body that enables you to speak to a large, huge, to a foundation model that's also on your body.

1:38:02And so question to the moonshot mates here, how long until it's not just a button on your body that enables you to talk to a foundation model, but you're swallowing foundation models? How long to the first edible foundation model? Well, injectable or subdermal. You think it'll be injectable versus edible first? I think it'll be edible. Well, yeah. I mean, if it's edible, it's going to pass through your elementary canal all the way out to the other end. And so I want this, you know, there's interesting, there's part of the skull, right? The mastoid bone in the back behind your ear, that's this hollow area of bone.

1:38:42I think it's a great place to implant a permanent, you know, microphone and speaker. Yeah, that's my prediction. We're going to be implanting a microphone and speaker at the back of your head. That's funny. That was exactly on Shark. That exact thing was on Shark Tank and Mark Cuban vomited. really i'm with ray kurswall you can iterate hardware much faster outside the body than inside the body yes i don't think it'll be invasive for a while yeah i think we'll see swallowable swallowable foundation models in the next two years bluetooth like just bluetooth in and out of your body to your phone bluetooth but critically locally hosted very locally hosted okay all right a few subjects a few a few topics on space here let's move us along guys chile becomes the first Latin America country to enable Starlink direct to sell.

1:39:33So, I mean, listen, Starlink is such the killer app for SpaceX and the ability for him to potentially bypass the current phone industry, which, I mean, tens and hundreds of billions of dollars has been put down in terms of G4 and G5 level distribution networks now to be bypassed by Starlink. Crazy. But this is what I find this next story. Take a listen. Can I just go back to that for a sec, Peter? I think this is something, a very big deal because throughout history, this is the failure of government. The UN should have launched something like Starlink. They should be doing something like this.

1:40:20to launch and why. But they're fundamentally unable to, and it needs private sector to do this type of stuff. What I find incredible is the demonetization and the dematerialization of technology allows now a private individual to do something like this that changes the world completely in such a powerful way. And you kind of can say, well, governments, just step out of their way and let private sector do everything going forward, right? Because it'll navigate most of this. with light regulation, we can navigate most of this stuff now. So I'm really, really excited by this. Okay. Can I ask you guys a question?

1:40:55Because I was trying to look at the data behind this. You know, the idea of orbital data centers wasn't in the conversation how long ago? I mean, we weren't talking about this a year ago. We weren't talking about it nine months ago. It's the last There was a guy at Abundance 360 March a year ago. Alex probably published a paper on this about 14 years ago. It was. If you were reading Accelerando, in which case you had the blueprint for everything we're seeing now. Sure, but it wasn't - But no, March a year ago, one of your Abundance 360 guys was talking about it, and he was going to do Bitcoin mining in space at that point in time, and everybody thought he was insane, and he also thought we couldn't do the cooling.

1:41:35So that was only March a year ago, so that's nine months. But there's a spike - So I know at that point it was nothing. Yeah. But the last six months, really the last four months, all of a sudden, every single player, we've got companies out of China. We saw at the last pod, we have now a company out of Europe and we have a dozen companies in the US. And then I found this video clip, which I found fascinating because Google was not discussing it a few months ago, but here we are. Listen to Sundar. How do we one day have data centers in space so that we can better harness the energy from the sun?

1:42:07That is 100 trillion times more energy than what we produce in all of Earth today. So we want to put these data centers in space closer to the sun. And I think we are taking our first step in 27. We'll send tiny, tiny racks of machines and have them in satellites, test them out, and then start scaling from there. But there's no doubt to me that a decade or so away, we'll be viewing it as a more normal way to build data centers. I never thought I'd hear Sundar say tiny racks of machines. That's hilarious to me. I just love the schoolboy level excitement he's got there. You can see him actually grinning.

1:42:48He's like, oh, boy, data centers in space. This is amazing. I love the AI generated. The big banner on top of that video was AI generated. It's like, we're going to always tell you that this scene in deep space is AI generated as if it was not. The reason, Peter, why you know, I mean, even though I may be a little bit glib saying, well, if you had read Accelerando, this would have been obvious to you almost 30 years ago on the one hand. The reason you know that this is a sudden phase change in the way the industry works is Google's plans, this is public information, that Google planned to launch these.

1:43:24So it's TPUs, first of all. Google's launching TPU-based data centers, obviously, are on planet satellites, planet labs. It's not Google's own satellites. It's planet labs. So you know if Google's hitching a ride via SpaceX on planet satellites, this is all of a sudden. I'll say that. Second point, sun-synchronous orbit is about to become very, very crowded. Sun-synchronous orbit is a low-Earth orbit that satellites that want to always have sun exposure, never pass behind the Earth, never be in the shadow, always have solar power for their panels. It's going to be very crowded in two years. It's a real estate limitation.

1:44:02And there currently is limits on how close you can get to other satellites. That's going to be a real challenge because we've got a dozen companies all wanting to do this at the same time. It's going to be a race. and how the FAA, which governs this, is going to decide who gets the territory, who doesn't. In geostationary orbit, there's a very clear demarcation of, I own these orbital slots over my country. But low-Earth orbit doesn't have that situation. Peter, you're making the case for the Dyson Swarm. Again, the Dyson Swarm, so we move out of geo, we move out of LEO. And Sundar himself in this clip was saying, we want to get closer to the sun.

1:44:47So we're sleepwalking straight into the Dyson swarm. Well, Peter, to your prior point too, this was science fiction a year ago, and now suddenly it's mainstream among the top CEOs in the country. How does that happen? But you look at Elon and his credibility, you look at Alex, your credibility. A lot of things that were impossible a year ago are going to be very easy a year from today. And if your track record of predicting them is near perfect, then the credibility of these crazy sounding ideas immediately catches on. And you're going to see a lot more of that, I think, because the capabilities are exponentially growing.

1:45:25But some of these things are truly harebrained and some of them actually make a ton of sense. Is there a clear line of sight on solving the heat dissipation problem for these satellite data centers? Yeah, and for the radiate in the direction of the cosmic microwave background. Yeah, the final answer shocked me, but for every square meter of solar panel, it only takes one same square meter of radiant cooling, radiative cooling, which really surprised me. I thought it would be... We estimated on Gemini, which was wrong, at 10x. You need a 10x more area and it was just wrong. It's cooling at 1x and I don't know how they...

1:46:01And it's all aluminum based, so it's not weird expensive metals or anything like that. So, yeah, point it into deep space, like Alex has been saying forever. And it's, for whatever reason, just flat out working. Most of the space is pretty cold. I took all of the comments from our last two pods and ran them through one of the LLMs and said, okay, pull out the most interesting AMA questions. Here we see a list of 10 of them, gentlemen. Let's pick out a few to answer. I'll start with one, which is how do you make these space-based AI data centers fault tolerant, right? There's sunspots. There is the potential for, you know, disruption from a, even from an EMP at some point, God forbid.

1:46:46Any ideas on making them fault tolerant? Those are two very different faults. Yeah. Yeah. But they're both disruptive. There are lots of different failure modes. So I do think this is another multi-billion dollar company that someone should start. There are many techniques right now ranging from switching from silicon-based electronics to maybe other semiconductors. Yeah, like gallium arsenide, 2.6 or 3.7 semiconductors that are more fault tolerant, have different band gaps, to designing just electronics that are intrinsically at the design level better able to tolerate faults to just doing what right now is a standard protocol, which is if there's a solar storm or bad space weather, you shut down or you switch them to safety mode.

1:47:38So there are lots of partial solutions here. To my knowledge, there isn't the definitive industry standard solution of what happens if you're in the middle of a training run. I just hate to think about the idea of all the data centers in orbit shutting down because there's a solar storm for the next 12 hours. We're getting hit by alpha particles. But how do we solve that in general? Like if there's bad weather or a blackout on Earth, you have diversification. So if anything, again, let's put space-based AI data centers throughout the solar system. So if there's bad space weather in one part, there isn't in another.

1:48:14That's a great point, actually. I bet earthquakes and tsunamis and hurricanes are a much bigger problem than solar storms. All right, let's pick another one of these. Hey, just to make a point, there's kind of a flaw in the question, too, because when you have Skylab up there, you want it to be up there for 20, 30 years, and you don't want it to get hit and destroyed or anything. But the space-based data centers need to be replaced every three years with new chips. And so it's a constant launch, recycle, launch, recycle, launch, recycle thing. So if somebody EMPs the entire thing and destroys it, then there's a war, of course.

1:48:46But it was going to get replaced in a three-year cycle anyway. It's not like Skylab. Interesting. One of the things we did for planetary resources when we were looking at asteroid mining, we set up the software so we would expect constant disruption. And the system, we focused on rapid restart of the system. So it would boot up extraordinarily fast. Can I tell a quick story here? You can, but I want you to choose one of these AMA questions also. Sure. You and I were sitting in a hotel in Dubai, and Richard Branson walks by, and he said hello, and we grabbed a quick drink. And he said, Peter, how's my investment in planetary resources going?

1:49:34And you described how it was going at NASA contracts, et cetera. and Richard turns to me and goes, this is why Peter is interesting because in a random hotel lobby, I'm suddenly having a conversation about asteroid mining off planet. It's just like this conversation happens nowhere else in the world except with Peter. That's why we love you so much. It was fun. All right, Salim, pick a question here. Is this question bingo? Should we expect G20 level initiatives for UBI within the decade? I would hope it would be within a year. It needs to happen very, very fast. I think it'll force the conversation.

1:50:12Universal basic income, right? Replaced soon by UBS, Universal Basic Services. But I think you shouldn't expect much from the G20 period. I think that's the flaw in the question. But in general, we're going to expect to see this rolling out in a pretty rapid way. Lots and lots of experiments being done all over the world on this because we have to move to something like that. The social contract is completely being wiped out in the current model. Dave, why don't you pick a question next? Okay, I'll take number one. How can AI lift up those who aren't international entrepreneurs? I think, one, listen to the podcast, get subscriptions, play with the tools, and then brand yourself as an AI expert within your company.

1:50:55Or if you're not going to be an entrepreneur, that's fine. The demand for this knowledge inside regular corporate world is going to go through the roof in 2026. and if everybody around you knows you're the AI person. And also, don't be intimidated. Historically, if you wanted to be a software god, you needed to be very, very software-y. That's not true with AI. It's much more intuition-based. You can build virtually anything with voice prompts. It's just knowing how it applies in your industry will separate you. So just jump in the game. Yep, amazing. Alex, do you have one? I'll take question number four for$10 trillion.

1:51:37Is pure scaling enough or what comes after? So I think the answer, I think it's a trick question. I think pure scaling probably is, by pure scaling, I'll construe the question to mean we freeze all algorithms. No new algorithms are allowed to be developed in AI, but we're allowed to shovel more and more compute, especially inference time compute, into the existing algorithms. I do strongly suspect that if we froze all the algorithms we have today, no new architectures, but we get lots more compute coming online, the existing architectures combined with scaled compute will be enough to give us AI smart enough to tell us what a perfect algorithm would be to the point where we get our highly coveted AI researcher, recursive self-improvement, the final algorithm, and we can just ask our scaled algorithms.

1:52:31what comes after so in in summary my answer to question number four is yes i i think probably pure scaling is sufficient is it is it all that we need no of course algorithm in the real world algorithmic development is continuing and we're going to get both but could we live with pure scaling at this point my guess is probably yes all right let's answer one more here number three how do the moonshot mates prepare day-to-day for each podcast episode uh yeah i think we we can share that. So let's see, Alex, you're constantly providing the team with a incredible list of all the breakthrough stories you're searching.

1:53:11You're probably generating how many AI stories per day do you think you generate for us to look at? Oh, gosh. Order of magnitude, 20 important stories per day. I'm also at this point, like I spend so much time just reading, reading primary sources, archive papers, et cetera, living in the zeitgeist of the moment, because after all, drink singularity comes around only approximately one time per planet. So it's a special time. I do also at this point, you know, probably should say I'm also turning all of these stories, in addition, obviously, to research for this show into quasi daily newsletter, just trying to help.

1:53:56Well, follow Alex on X. He puts out some incredible daily sort of interesting AI rants, I would say, or AI visions. Follow me on X. Follow me on LinkedIn. It's a genre I'm trying to popularize. I'm calling it psi non-fi. It's written in the style inspired by Charlie Strasick, Salarondo, others, written in the style of science fiction, except it's all grounded in what's actually happening. So Alex generates on the order of 150 stories a week. I'll generate probably 20 or 30 stories a week. We get some from Salim, some from Dave. All this gets sort of put into different categories. We then sort of cut it down to the top 30 stories.

1:54:40I typically spend about 10 hours sort of playing slide shuffle, working with Gianluca and Dana, who are incredible members of our team. And then we do research on those stories to get the details and think about them. And I'm probably spending a good 15 hours of my week focused on this. How about you, Dave and Salim? Well, everything you just said, I lean entirely on Alex's internal feed, which now you can get on X. It's a digest of the same thing. That's brand new as of the last week or so, so take advantage of it. But I've been reading that internally for, what, a year now, I guess, or more, which is very time consuming, but I need to know it all.

1:55:24The only other thing I do is I route all the really big stuff over to the venture capital team and say, what are the business implications of this? Which we need to know anyway to run our venture fund. And then I try and bring those stories back into the Moonshots feed so that we can talk about not just the technology, but what it means to investors, to business people, to people with career planning and all that. Salim? I spend, I source a few stories, but nowhere near as much as the rest of you. but I think I spend a chunk of time the minute you guys release the deck I look through it and then find it's changed again and so I have to restart again so I'm always playing catch up with the slides and then Peter on the last night God knows what you do but you change it all again and I have to re-research it I spend a few hours a week looking up the terms in the papers that Alex surfaces because half of it is Greek and then I'll ask also my community member, my opening XO community.

1:56:25So there's a hive mind reaction to some of this, which I think is very powerful. Similar to Dave asking his team. Just again, to let our subscribers know. Overall, though, it's just sucking up more and more time per week, but it's such a powerful and important thing. It's the most fun thing we do. Come on. It is super fun. When no one ever warned you of, Salim, is the singularity of covering the singularity. It's the singularity of time suck. It's just a black hole. It's a black hole, Dyson Swarm forming around my own head. Singularity wants your attention. So we hope for all our subscribers and listeners that you guys appreciate it.

1:57:03We put a huge amount of work because we care about this deeply. I need to give a quick plug. I'm doing my Meaning of Life session next week. We're almost sold out. It's going to be pretty amazing. It's going to go for several hours starting 11 o 'clock Wednesday. day come armed with any question you have about life and judge me by how well this framework answers that question all right let's get to our outro music here uh from david drink all i think it's the perfect name for a drinking game that can't be real oh my god it's a bingo card i love it so this is a bingo card uh and you can see tile the earth uh have our glasses of water ready yeah i do cybernetics okay let's listen to this robot entry uh six arm humanoid robots robots down at the bottom and cloud computing on the bottom left okay let's take a listen to uh to david's uh outro music thank you david for producing this for us and again if you're listening and you are creating music videos and you want to create an outro song for us send it over we'd love to we'd love to listen to it and perhaps select it all right let's take a listen

1:58:25take a sip when peter says go trotting gentlemen two iffy name drops just got back from again Drink when Alex says better, benchmarks of end and bench Finish your glass if he whispers, dice and swarm at last Moonshot bingo, moonshot bingo Tie the earth with compute Drink Moonshot bingo, moonshot bingo Close the feedback loop, chug and sing Sip when someone says we'll cure every disease Do when Dave mentioned startups or singularity Drink when Celine drops, insert my usual objection Hit the phrase rat race or leapfrog and hit successively Moonshot bingo Moonshot bingo Tile the earth with compute Drink Moonshot bingo Moonshot bingo Moonshot bingo A little data center Scully quick

2:00:11One sip for every code read Two for humanity's last exam Three when Alex says Solving math Yes, that old plan Big up when anyone says Universal basic services Pass out when Peter yells That's a moonshot, ladies and gentlemen Bang, drop, and dang Moonshot, bang, moonshot, bang All right Amazing That is awesome That's a moonshot, ladies and gentlemen You know, this is, again, a tribute to the creative nature of all of our subscribers Thank you, guys And also the tools out there to allow you to do things like this I think that's the best yet Have an amazing weekend Super creative Take care, folks.

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