Live in the Future

22:37I've never been more creative. And I think something happened probably just in the past few months, especially with Codex. I think I'm way ahead of the curve on Codex. I'm running my computer from home on my phone here in a way that you can't actually do without modifying Codex in some ways. and the amount of creative productivity I have is way higher than it ever was. I think six months ago, 12 months ago, the promise wasn't quite there. And so everyone was like, eh, this AI thing is not that useful. But I think it hit an inflection point in the past few months. I think cloud code was a tipping point.

23:13Cloud code in December 2025 was the tipping point. And you had to re-evaluate AI. AI has had a couple of tipping points. One was diffusion into images, which kind of started it all when you first saw stability. and you're just like, well, okay, made a dog face and you can make like cats and guide on the moon. Yeah, it was wild when it first came out and then probably instruct GPT and chat GPT and then there was another jump with the reasoning models like 01 and 03, but I think the Cloud Code was a big unlock because it just unlocked a series of practical use cases whereas before it was like, okay, it's a better Google search or it's like this saves me time doing research or I can learn from this or I can even have a small conversation but quad code was a massive unlock.

23:55Well, the big thing here is like, this is the worst it'll ever be. Oh, of course. Yeah, yeah. No, it's getting better. There are like so many cryptoisms that basically super apply to AI. You could have said that when Fable was released and you would have been wrong because they tapped away from us. Yes. Briefly, briefly. It'll be back. In most use cases, you couldn't tell the difference between Fable and Minimax. So that brings me to a good topic I do want to discuss which is open source versus closed source, right? How good are the open source models really? So good, it's unbelievable. Okay, I haven't tried GLM 5.2 yet.

24:23Five to ten times less the cost. Yeah. They're definitely cheaper. When should we use them? Minimax is just mind-bendingly good. It needs a good harness, though. Yeah, it does need a good harness, but if you've got one, it works really well. I was thinking today, I'd love to see, take the latest and greatest open-source model, and they seem to have gone from a 12-month gap to a nine-month, to a six-month, and now some people are saying three months. I don't know if it's weeks. Some people are saying three months. whatever it is what it is. It's very jagged, right? In some domains, they seem caught up.

24:54In some domains, they don't. But I would love to see someone take the latest and greatest open source model, put it inside a very good harness, give it all the tools, make it available through a beautiful download desktop app, and jailbreak it. Strip it of every time it pushes back at you for anything stupid, any tone policing, any I don't want to research that. I'll just tell you the truth every time and just call it truth.ai. That's all it does. I just want to see that. I just want to see what happens. Because the one place where the frontier, I'll always pay for more intelligence because I'd rather be right more often than wrong because I just think you're high leveraged, right?

25:26And obviously I can afford it. But maybe if I was doing some highly repetitive tasks, I wouldn't. But as a simple example, like if you're doing something where the AI is right, you have one AI that's right, I saw this stat, like 99.9 % of time. And the other one's right 90 % of time. Well, if they're recursively looping and you run them 100 times, the one that was right 9 % of time is not going to be right 13 % of time. Whereas the one that was 99.9 % will drop to 80 or 90, right? So intelligence doesn't matter on the margin. Now those numbers are obviously chosen 99.9 versus 90. It's not 99 versus 90.

25:55You notice it's 100X more, 100X lower error rate. It's like errors can accumulate. Errors compound. That's the point. Errors compound. Anyway, going back, I will pay for more intelligence, but, and I'm not that cost sensitive on matters of judgment because you're always applying leverage and your time is also very valuable. But what I am curious about is the frontier models do annoy me by constantly trying to railroad me. You know, they're always like, well, I shouldn't be telling you that. How about I give you this other answer? Okay, the really messed up thing is like - How much of that are they doing?

26:22If you talk to it about like serious personal stuff, and it also like always mess up UTC versus like Pacific time, and it thinks it's like 7pm and it thinks it's like 5am. I was like, hey, this is enough. That's why it does that. It's time to go to sleep. That's why it does that. And after a while, I was like, what is going on with you? Like, it's literally 7pm and it's like, oh, sorry, like, anthropic RLHF is me. so if you're talking about something serious and I think it's late. Right, but I would love like a completely jailbroken, best of breed, open source model. That would be great. Local is fine.

26:56It doesn't have to be. It's a nice package. It doesn't have to be local actually. But what are you doing where the jailbreak is so important? Well, there are a couple of things where it does stop you or crotch you or try to correct you. You see that, right? There are a whole bunch where you don't see it, where it's successfully keeping you away from whatever you want to know. But you can always just switch to GLM 5.2 and it'll just do it. Go ask if any question about race, gender, immigration, mental health, doctor advice, legal advice. I don't see why you need a harness for this. For me, I'm using harness because I'm using agents because it's going out and doing things.

27:27I have to say harness. I just want to lose this model. By harness, I just mean I want it maxed out. I don't want any excuse for why my open source model is even slightly worse than it could be. I want it operating. I want the best open source model configured in the best way and it just tells me the truth all the time. Because I used to go to Grok for that but even Grok is a little neutered. Yeah, it's not like... He wants to talk about this. Is he? Yeah, people pointed out like someone advised he was like, oh geez and we wanted it to just be real and it was giving neoliberal answers. I'm dying to talk about what you said the other day but I also don't know if you want to say it properly.

28:05The entire... Oh, wait. Everything's probably hacked. It's probably already hacked. Oh, no, no, I'll talk about it. Okay. So the question is like, where are the open source models catching up? Right. And so there's a couple of different theories. And I'll just lay out the theories that I know and the evidence for them. But I don't have a point of view yet. I mean, it's possible that these are true. So there's some of it that's obviously, you know, the Chinese are doing their own pre-training. They have their own compute. They have their own data sets. In fact, they can crawl more of the data sets because they're less bound by copyright laws.

28:35Right. So they can crawl YouTube and Reddit and all that stuff. And they train these models. That's like the base model, right? Then there's like the accusations that Anthropic made, which is that they're distilling our models, which is they're taking, they're querying our models en masse, taking that data using a train of models. I mean, if I were China, that's what I would do. For sure. And that's creating a jagged intelligence kind of model. And definitely some of that is going on. But I think it's rich of Anthropic to call that out when Anthropic crawled the open web and distilled the open web.

28:58That's all these AIs are, right? In fact, one platform that I think would be very popular if the government were to do it is to say, hey, since you trained on the open web, if you trained on the open web and open data, you have to open your model after X months, after 12 months or something. That seems to be a pretty fair thing to say, especially like open AI. Otherwise, you have to be actually open AI. An anthropic, you're the one talking doom and gloom and you're building God, but you're not going to keep God on the leash for yourself, Dario. We don't want like a priest, you know, controlling God for the rest of us interpreting the Bible for the rest of time.

29:33So I think that would be popular. Okay. So anyway, number one, they have their own pre-training, but they get the full corpus of the web. They don't have to obey any copyright laws, right? Second, they are distilling the existing American models, which are starting to get more locked down. And a lot of this government nationalization control helps them be locked down. But there are data brokers online that are taking CloudMax accounts and reselling tokens from that in an API format to end users of 80 % off because those plans are heavily subsidized for end users. They charge the enterprises. It's like$8 ,000 a month retail.

30:05Anyone who's run an exchange or a regulated online brokerage knows that KYC is a dime a dozen. People get back KYC all the time. They print passports in Vietnam if you want. The intent was there, yeah. Yeah, exactly. So I think the distillation is going to be hard to stop. But I think the biggest one to think about, and there's some genuine algorithmic breakthroughs, like the DeepSeq paper. Oh, yeah. DeepSeq R1. Amazing systems. Incredible systems people. Very, very smart people. And I would guess, just by looking at the numbers of resumes and so on, that the majority of mathematicians and researchers in AI today are Chinese.

30:40Like they produce more STEM graduates, more PhDs in the relevant fields, more Olympiad winners than anybody else, right? And then a lot of the U.S. staff is Chinese. So, in fact, that's why I tweeted like AIs are Chinese against their Chinese, right? And these guys, and I don't think there's any conspiracy required. These guys are all just friends. You know, they live in the same dorms. They went to the same schools. They live in the same buildings and apartments. They hang out. Yeah, and they switch jobs like crazy. And not just the Chinese. You see everyone's hopping from lab to lab to lab, and they're just taking data with them.

31:09Okay, so there's all of that going on, right? But then on top of it, I don't think that the AI companies have the security profile of a top US national secure compartment facility. They do not know how to protect secrets. So of course they're getting hacked. Of course the weights are getting leaked. And if you're Chinese or anybody else, you're not going to just take the weights and release them back. You're going to use that to distill at high speed and train your own model or to augment your model. So I think there's another whole system right there that's going on. And the last one, actually, I think the biggest one is none of those.

31:42I think no conspiracy is required for the following. If you look at where China is, they're like, okay, we're behind. They've always been behind in software. The US has been way ahead in software. And being ahead in software allows it to extract all the margins because for the longest time, VC has never invested in hardware. Why? Because hardware is a commodity business, right? And software had the network effects, the lock-in. Software's art, as Patrick Collison said, it locks you in. And so people want to invest in software. So even in the U.S., whenever you get a hardware company funded, the VCs will always ask you, well, what's the software lock and what's the software piece, right?

32:14And so this is why I used to say, yeah, hardware is the moat that buys you time to build a software castle, right? But guess what? Claude Code burned software down. Software was eating the world and AI ate software. So now software is commoditized. The moment you can specify it, an AI can one-shot it or two-shot it or get to it within a couple of shots. went from like 5 % to about 25 % hardware, 20 to 25 % hardware batch to batch now. But hardware is also commoditized by China. Any hardware I can make here, you can make in China more cheaply and more easily. The whole ecosystem is there. Shenzhen has like 3 ,000 manufacturers, this tiny little cable all in one little area.

32:49Thanks Nixon for normalizing relations with China and taking us off the dollar standard or the gold standard. And so bringing, reshoring manufacturing back to the US is going to take a full generation. It should be done, no question. I'm a big fan of American manufacturing, but it's going to take a long time. In the meantime, China outproduces every one of the supply chains because they realize there are scale economies in production. So they subsidize the thing upfront. Then they become the global supplier. They drive everybody else out of business. And then they control the whole supply chain across these critical industries.

33:15So they own hardware. No one's going to beat China on hardware in the next decade. It'll ramp up. We'll fight on a bunch of fronts, but they own hardware. So they like the commoditization of software. So when software is getting commoditized, that helps China. So if you're the Chinese government, you're basically funding all these labs. you're doing kind of a public-private partnership where you're saying, don't worry, you don't have to make money. You can be number two or number three, just open it so the other labs can learn from you and we can catch up and keep up. And if the software is commoditized, then we win on the hardware.

33:44So the way I think about it today is that hardware is commoditized, but it's owned by China for the most part. There's some few exceptions like SpaceX in the US. Software is commoditized. So what's not commoditized? It's actually just AI research. developing, working on AI itself is the new software engineering. The problem with that is the software used to be democratized. Everyone could compete. John Carmack and John Romero sitting there with a small team could code up Doom and Quake and compete against EA and Activision and so on. Can't do that in AI. AI takes massive resources, huge GPU clusters, small numbers of researchers, massive data sets, proprietary data sets.

34:24And then now regulatory capture. So it seems like all the value, all the choke points are going into AI, and that's controlled by a very small number of companies. And ironically, the only thing keeping us afloat is a Chinese government subsidizing the whole thing on open source so that their hardware can stay competitive. Yeah, I mean, I think the... Plus they have the weights. No, I'm kidding. Well, they might. They might. Let's use that as, I mean... You can sneak about on one USB stick. Are you telling me that hasn't already been done? No, it's like you need physical access. Like, you need one person on the inside.

34:55Like, there's so many people. By the way, every male AI founder is walking around with a beautiful Chinese girlfriend. Have we talked about that? No one talks about that. Go walk outside Silicon Valley, right? I think we all come from a world where advantages had some durability and you could actually operationalize your advantage against the rest of the world, but that's just narrowing down in time. So you might have the smartest model, but what are you going to do with it in two weeks, in three, four weeks until somebody else has it too? So I think there's a different part of the game theory that we've not experienced before, which is the time contraction of any of these advantages.

35:29And I don't think it makes it harder to predict who's going to be in charge of anything because, like you said, a few months later, the smartest model is now open source. Guys, I'm so fucking worried. This is one of my tweets I'm prouder of a couple of years back. I said, soon everybody will have AI anxiety. Like, we're all feeling it. We're all feeling AI anxious, right? It's incredibly... Oh, I'm jubilant. I am AI jubilant. But it's both, right? The anxiety in its good form is kind of FOMO-ish, which is like, look at all the great things I can do. I'm AI secure. Don't worry about me, guys. Yeah, but everyone I know that's working at Frontier Labs, all these things that are researchers, they're depressed.

36:03They are? Why? They're stressed out because they think it's going to kill us all. That's because their culture is... The first ones I met in 2021 were saying to me that they were putting off having kids or thinking about not having kids because they were afraid for the kids' future. And I was like, what are you talking about? As opposed to every other time in human history when people were never afraid of their kids' future, and so they didn't have any kids. Wait, so why is this not just going to result in Star Trek The Next Generation? Like, that's my hope. The bullshit part about Star Trek The Next Generation is that they have AGI, clearly, but that AGI is somehow not running things.

36:37I mean, they couldn't conceive of it yet, right? They have the holodeck, but somehow people are still doing about their business. This wasn't that good enough a writer. They're not just living in the holodeck. There's plenty of science fiction that's, you know, bothered to see that idea further through. I mean, some large percentage of the San Francisco population has been one-shotted by fentanyl. You don't think the holodeck will take out the rest? Right, right. They just don't show that on the show. Like Gene Roddenberry, like, I'm sure he conceived of it. Yeah, yeah, yeah. It would just be too much of a bummer to show, like, these giant holodeck, you know, I mean, yeah.

37:05You say this and you're living in Star Trek and you're mine and you're happy. Yeah, that's true. You're, like, excited for it. And it's like, but yes, you recognize there's a ton of terrible things that are going to happen. Right. And you're just like, oh, it wasn't in Star Trek. You're blowing my dreams over here, Daniel. But to Gary's defense, there's been so much shit. Electricity, that was a big one, right? Railroads, cars, these were big, big changes. You used to have to ride a horse, like the Pony Express. Do you remember that? That was insane. And people made it. Me neither, I wasn't allowed.

37:37Yeah, the more rapid the change, the more influential the displaced, the more tumultuous it was. And so now we're having a very rapid change. We're displacing white collar, we're displacing government, we're displacing managers, we're displacing academics, we're displacing journalists. You know, I learn more from AI than I did in my college classes. Because I can sit there and I can have it meet me at my exact level of knowledge. Give that to me visually. Give me a graph about that. I can ask dumb questions. I don't understand that. Explain it again. Explain it again. Explain it a third different way.

38:06Explain it visually. Explain it audibly. Explain it with dancing elves. I don't care. Just to keep going over it until I get it. I could not do that in class. I can learn so much better. I just have to care. If I care, I can learn anything better than with any tutor, better than with any teacher. So all the people are obsolete and they're going to lead a revolution. Well, no, those people need to want more things. And if you want more things... Well, we want unlimited things. Yeah, which is great. That's the good news. The good news is everyone wants more things. Wants are unlimited. And then if you have this tool and you're not averse to using it, this is why I'm so against...

38:44Sorry to bring up the AI writing thing again, but I understand that makes sense. humans and like there is a disrespectful aspect when you do bad writing right but like that presupposes that like the ai can't write well that's a fair point because right now the writing is voluminous it's a giant giant like it takes a little thing like prompt you give it well okay but here's the thing yeah you're giving it a prompt right yes why don't you just send me the prompt why do i need to read all the garbage because it has to draw on like all of human experience. No, no, just give me the prompt. Yeah, I have an AI on this site.

39:18Just send me the prompt. I mean, that might happen. I'll send it to my AI. That is how it happens. I have my codex put together a markdown file that I send to my developers that they can give to their Claude code to go execute something that I want. It's like, this is the prompt, go do it. Don't talk to me. Have your agent talk to my agent. That's literally what it is. My thing will just file an issue on your GitHub repo. Yeah, what I want to do is I want to get on the Zoom, and I'm on the Zoom having a conversation, and then 10 minutes in, I know this is not for me. And then I just hit a button and the agent takes over.

39:47Agent Naval keeps talking and I go after the next one. I swipe right on you. But then the joke's on me because you were never there to begin with. I think it's time for politics. Politics. Politics. Sounded like it's been politics most of the time. Maybe let's start with fear mongering. Politics doesn't matter because of AI. You know. That's not good. What are you talking about? Everything's going to end. Nothing that's like politically relevant right now is going to be relevant in three years. I will say that I wish I could vote for an AI. I wish I could vote for an AI to represent us. But who's AI?

40:19Dario will make it. I don't know. Chinese open source AI? Somebody can make it. Dario's AI. Sam's AI. Elon's AI. They can put the weights out for us to take a look at. You can read the weights? You can look at the weights. I mean, not personally. That weight looks off to me. Like a fully transparent AI that is running for office. There's this thing. They had this thing, a whole field called mechanistic interpretability, where they're trying to figure out how the AI thinks, and they've made very little progress. Oh, sure. I'm not saying we're going to know, but I'm just saying you have access to the same thing with the AI.

40:45By the way, it's an anachronism. Our training data is in natural language and in computer languages that humans can read and write. And so the AIs are trained on that. But in the future, the AIs will develop their own languages. They'll communicate with each other in some kind of a binary high-speed protocol. They'll almost be talking compiled code or maybe even something completely different that we can't even imagine, which will be more efficient for communication. It's only humans who demand the legibility, but the AIs don't really have it. And part of what makes AI systems so much better than human-coded expert systems is that they don't have to be legible.

41:17So they can find correlations and patterns that we cannot articulate. In fact, even most of our knowledge is inarticulatable. Most of your feelings are inarticulatable. You don't even know half the time what you're feeling or thinking. You're not even really hallucinating. Let's talk about our feelings. Yeah, yeah, let's do that. We're experts in that. One place where we are experts. GLM 5.2. I'll vote for GLM 5.2 for office. They're Chinese overlords. Hey, it's my favorite distillation of fable. I really do appreciate how the Chinese are making all the open source models out there. It's kind of pathetic that the U.S.

41:49just is not. The global economy will appreciate it. C-Dance is probably the global leader in video, right? It's the best video model. So in some places, actually, so that's an interesting point about open source. In some cases now, open source is number one. And at least historically, like if you look at things like Linux or other open source projects, Once something open source kind of gets in the lead, it rarely surrenders it. And that's because an ecosystem springs up around it where everyone starts plugging into, especially in enterprise use cases. So right now, Claude and Codex are like slightly ahead of GLM, Fable and maybe a lot ahead of GLM.

42:23But if something like a GLM were ever to surpass them, it's not clear they'd get a lead back. I mean, because how can you rationalize your limited resources at a company going into something that open source is winning at? You have to do something with your resources and failing to catch up to open source with your precious resources is not a good use of them. You'd have a clock. Like, so if you're open air and tropic, you would have a certain amount of revenue and money and cash in the bank and investor backing. And you would have to use that to sort of jump meaningfully ahead of the open source and take the lead again before that runs out.

42:56So that's it because like if you look at the AI race, you know, two years ago, people thought that Google and Elon and Meta were also competitors. Yeah, there were five kings. There were five kings. There's two kings now. There's two kings. And why is that? Well, it's not just because those guys have the best models. Open AI and Anthropic are the only ones that are A, making revenue off of their models directly. And so they're not subsidizing, cross subsidizing from the business. They're not running out of cash. They're actually pouring the cash back in. And the second is because they have very active user bases.

43:28And now a lot of the improvement is coming through reinforcement learning. They're getting the guidance and the trajectories to improve the models. And so they're just pulling away. And maybe Elon, because he took SpaceX public and he's got that war chest, he gets maybe one more bite at the Apple. Plus he's got the data centers in space. So, you know, don't bet against Elon. Google, I think, has lost it. That's quite sad. It's really amazing what happened. I was always like bearish on Google. I was tweeting some pretty anti-Google management stuff back in the day where I was like, will know they're serious about AI.

43:57Gemini 3.1 Pro was like the moment. That was as good as it was going to get. It was, no, but it wasn't. I thought like 2.5 Pro was better. It wasn't good enough. They never even got the basic app working. I remember I tried to upgrade to pay them$20 a month. It was a nightmare, this huge runaround. It's crazy. No, no, you need to be part of Google One. No, no, you need Google Workspace account. They were first to have million token usable contacts. Yeah, briefly. Very cool. And then every time, even today, the iOS app, which I know it's not their platform, but everyone else seems to have figured it out.

44:24you put a query into Gemini, you background, it always loses the connection. It just drops it. Whereas all the others will just run in the background. How hard is that? It's 2026. Run a background app, guys. GRPC. You just need a little bit more Sparta over there. Meta might be too much Sparta right now. I think it's too late for me. I think they have to kill 5 ,000 Google PMs. Like, that's the only way. It's PM slop. The whole company's PM slop at this point, right? Like, anywhere you go, it's just like tons of products overlapping. It's a huge mess. You can't figure a way through the maze. It's an incentive problem now.

44:53All the best people want stock in open iron anthropic, or they want to be sitting alongside their best colleagues in open iron anthropic, or they want the data set from open iron anthropic. And they certainly don't want to be tied down by all the PMs and all the legacy BS. And they should have replaced Google search and Google AI a long time ago. I don't even look at the results anymore. I just look at the Google AI. So here's an alternative vision, which is like Google today could, I mean, they probably have all the transcripts of all the meetings. Or if they don't, they should have it. And they have all their emails.

45:23Right. And then they probably need to use Anthropic Fable 5 or whatever because like their own models are not quite good enough. But you could diarize all of these. You could have like, you know, a markdown file for every single employee at Google and you could compute a score. Which you'll cleverly trademarked and patented. That's right. Google Brain. Google running through GStack, of course. I use Google. No, anyway. Google Omni is the best for - Google, Gary has a price. It's 7%. It's standard. It's just standard. It's normal. I mean, you could solve it. Like if someone was a true, like really wanted to fix this, like all of these things are just systems problems.

46:00Right. Yeah. You can have a score. But it would take Larry and Sergey walking in there. And literally it's like that scene from Entourage when Ari Gold walks back in the office and is shooting people. But only with their open claws. And live ammunition. I'm serious. Like you don't they don't need to be there physically. Like, you know, one of the things I learned from Pedro at Brex, like that's how he runs Brex. Like, you know, he has total information awareness on like every team. And one of the things like the thing that got me. Didn't they lose their ramp? I mean, hey. I'm kidding. I'm kidding.

46:30The ramp guys come in. Look, man, I don't have any skin in the game on either of those. Okay. We're accepting sponsorships from whoever calls in first. Whoever pays us more, we'll talk about it. Capital One or anyway. I mean, no, like, I mean, he really did like instrument the CEO brain like for him. Like it's a personal claw that knows like the KPIs and literally what all of his directs talk about in those meetings. And it's significant. They're spying on them all the time. I mean, yes. No, I mean, the thing is like, I mean, they're not the only company. Like I've talked to other CEOs. They don't publicly talk about this behind closed door.

47:05Yeah. This is like the max thing that you could do is like concentrate the power in your CEO or co-founding team. So you have actual awareness of what the fuck is going on. Well, the reality is the team should be much smaller. Right. And most of your employees are GPUs working the data center. I mean, of course, if you can have 10 fewer, like a tenth of your employees right now and just make them the 100x guys, then that's massive. So it's easier said than done. Like most people, most CEOs do not want to fire 50 to 80 % of the people. I'm serious. But there should be a lot more small companies.

47:38I've been on boards where it's like, bro, like we're fucked and we need to fire 80 % of the people. And you have a shot. But you don't know which 80%. Like tens of millions of dollars in the bank still. Part of the problem is you don't know which 80%. Well, you can. You're working through managers. Now you can. What I'm saying is now you can. You can get the visibility. And that's not a little thing. That's a big fucking thing. Like you can have total information. Like, okay, like this is a big thing to me. Right. I think that the future is essentially that like you need to ride the fucking AGI.

48:05Like you actually need to. Like the most significant thing to me is like the one million token context window is a big deal. I mean I talk about it as like three Harry Potter books, but guess what like a human being can keep in their brain? Fucking seven things plus or minus three? Like we're little monkey brains. We talk about like super intelligence is like in the future. Fuck that. Super intelligence right now, like an agent working for you can literally make like a thousand pages like printed, valuable, useful, credible, legible. Let's not talk about AI writing again. No, no, it's not a writing thing.

48:42No, it's an ideas thing. It's like you can understand what the fuck is happening in your org. Like every CEO in the world like really should. So you can have your AI, say, tie into all the systems in the entire company, evaluate everything, and tell me which 20 % to fire right now. I mean, you could do that, and you should. That's like the easiest thing in the world right now. But no one will do it. No one's doing it. We haven't talked about Zucks project at Meta. Plus it's not perfect. Do you know anything about this? Like only what I read is like, I mean, half of the smart people I knew at Meta have left.

49:14Yeah. Yeah. I mean, I'm sorry. Like, I really like Meta. You know, like you guys are great. But like, it's also like, what the fuck? I think it's become a sweatshop. I don't think you can build a culture or morale by just buying people, especially from all different stripes and places and ramming them together. Then you'd have no idea how many are actually missionaries, how many are mercenaries. Culture is a real thing that takes time to evolve and grow. So meta of all places needs to do what I just described, which is like, should, you know, someone has to actually know what is actually happening per person, per team.

49:47And it's, I mean, you can do this now, right? But you also have to tune it. Like there has to be a rating. It's like, what is actually a good employee? What is their behavior? What are their characteristics? Like you can actually tune your culture right now. I mean, it's taking the whole engineering team and turning them into data labelers. It's just like, it's like dropping a nuclear bomb in the place. So that seems indiscriminate to me, right? Like, why would you do that? Especially because you have this incredibly fine-grained thing. Like, you have a prompt. You have a skill file. You have, like, a bunch of markdown.

50:17Like, you can actually tune it to exactly the output that you are. I think the org is just too large. It's the same problem as Google. When you have a large org, you do things that actually make sense in certain domains. Then it gets leaked to the press, gets sensationalized. Oh, they're turning everyone into data laborers. Probably you just have too many people. You have too many cooks in the kitchen. But it's still way less than what you can fit in three Harry Potter books. Yeah. Right? I mean, I'm sorry to bring that up. I think that this is a big deal. Most millennial example you could give.

50:43Sorry. I don't know. Read another book. Yes. Well, I think the big scary question is, will there still be a startup ecosystem? Because on the one hand, you're shrinking the size of the firm. People are more leveraged. That should mean more startups, small teams can do more. Great, fantastic. We're definitely seeing that. I mean, people can get to 100 mil ARR, like not raise a B. But doing what? Selling software. and software is getting completely commoditized. Like all these legal guys like Harvey and whatever, like it's a good test. Like wouldn't Claude just basic mythos or fable just do a better job than something trained specifically on legal, especially with tool use.

51:14It depends because it depends on whether or not the frontier labs stay open for their best models or do they close them. I think anyone who pays them enough, they'll find a way to be open. So if a law firm will pay them the best result. That's not a given. It is possible for Anthropic to say like actually Fable 6. I wouldn't bet my business they're not going to enter my vertical. I think if they can enter your vertical without a custom model, they'll do it. And I think one of the bitter lessons here is that the general models beat the specialized ones. Yes. They don't have to enter it. It's just going to be able to use it to operate that market, not because OpenAI legal app, right?

51:53It's just because it's so much... It's just like, why would I use something special? Why would they pay$5 ,000 a month for some other SaaS company? I think that like 2027 will be the year of the AI harness war? Is it going to be Codex? Is it going to be Co-Works slash Cloud Code? Is it going to be OpenClaw, Hermes? What is it? What harnesses are people going to use day to day for everything? Yeah. Right now, a lot of Silicon Valley after 2007 got to exist because you had two mobile phone providers. You had Apple and you had Google. If you had only one, if Android didn't exist in an ecosystem, it would have been a much tougher position for startups.

52:32You would have been facing kind of a true monopolist at the end of that chain or the top of that chain. Right now, you at least have two horses fighting each other, right? So they kind of force each other to behave a little bit. If it boils down to just one, it's a very bad situation for startups. Well, then they'd nationalize it and then maybe we could get the government to - Do they really nationalize it? They didn't nationalize Google. They didn't nationalize Apple. This is way bigger. It depends on how bad it gets. I mean, like search, it's a good utility. Like there are lots of reasons to not.

52:59And if you nationalize it, it might slow down and lose because now the DMV is running it. And China wins. Right. It's not like the Chinese are asleep. There's an ASML machine supposedly somewhere in China now. You hear about that? Howard Litton called out the ASML and was all mad because an ASML machine somehow leaked into China. That's the lithography machine. There's only 184 of them. That's our cell phones escaping. Yeah. And then on top of it, they're developing their Huawei chips. They're working on their seven nanometer, five nanometer, whatever processes. They're building their fabs. They're working on it.

53:29They're not dumb. I mean, you've got 1.4 billion people there. You've got a lot of STEM PhDs. They have a lot of national pride. They can redirect capital. I'm not saying it matches up to innovation in a free market economy, but the US is ahead because we have created this very thin layer where we take the absolute best and brightest from all over the world and we incent them like crazy to compete with each other. And then we collect the rewards from that. And Silicon Valley actually disproportionately collects the rewards and California collects the rewards. And it's not really spread out to the rest of the country as much.

53:59The rest of the country is scared shitless now. But that's it. That's the thin blue line standing between the so-called free world and the Chinese competition. Now, I'll actually take a radical point of view. I don't think we're in competition with China. I don't see the competition. Taiwan, I mean, every Taiwanese person I talk to doesn't want to fight. You know, the rich people in Taiwan are busy dodging the draft by taking their kids out of the country. You know, there's some rule in Taiwan that like... Mandatory service. Mandatory conscription. But if your kid has spent, I don't know the numbers, but something like three months a year for the last five years out of the country, then they're not eligible for the draft anymore or no more mandatory conscription.

54:38So every rich person is always taking their kids for three months a year out of the... They have like a standard system doing it. They're not interested in fighting. The second largest political party there, the Kuomintang, is very pro-China. So it's already very compromised. Most people in Taiwan are thinking they're going to go like Hong Kong. They're going to get rich in the process. They're going to get a gateway to China. And then one or two generations later, they'll assimilate. And how the heck is the U.S. going to defend Taiwan? Aircraft carriers are dead. Land-based missiles from China can take out aircraft carriers, drones.

55:09DJI is the largest defense contractor in the world. It's like us trying to like, it's like China trying to defend the Florida Keys from us. Yeah. You know, it's ridiculous. The whole concept is ridiculous. So, and you saw we just went through with Iran. How do you think we'd run out of missiles in like seven days? We don't have the manufacturing base. Now maybe Andrel and Saronic and others get there and build all of that up, but that's a long ways off. So, I mean, I think the Chinese know that and I think the Taiwanese know that. And I think everyone's trying to save face while like over 10, 20 years, Taiwan slowly reunites with China.

55:42And outside of that, we don't really have a beef with China. You know, okay, Japan, whatever, you know, North Korea's got a South Korea issue, but it's not in our backyard. One of the big problems the U.S. is facing is that we've been in a low growth, high inflation environment for a while. Now maybe growth is picking back up, but so is inflation. And people are fighting over the spoils. The Democratic Socialists coming up, you know, the billionaires tax, the wealth tax, the socialists trying to seize the means of production. and Mom Donahue doing these rings around the democratic establishment, and they're talking about the eradication of Western civilization.

56:13People, you got to put food on the table. You got to make people feel good. You got to make people feel like they're not going to go jobless. You got to feed them. And picking a war with China just seems like the stupidest thing to do. Now, we should have the appropriate tariffs against them if they have tariffs against us. If they subsidize their businesses, especially network effect or scale economies to compete with us, then we should also have our own barriers because you got to protect your local industry so it doesn't get snuffed out. So you at least have a fighting chance because these things do have economies of scale.

56:40It's not as simple as David Ricardo said, where it's just like, oh yeah, I'm selling bananas and you're selling watermelons and we can just trade. No, because the guy who gets better at doing something gets really good at doing it and then can do it very, very cheaply, or he gets a network effect around either an ecosystem or an actual lock-in where new users create value for existing users. So you can't have that simplistic of a mindset. You do have to play on an even playing field. You have to make sure the currencies are aligned, no one's subsidizing, et cetera, et cetera. But that said, there's no reason for us to go to war with China.

57:07There really isn't. But is Taiwan like it, or is it like control the South China Sea? It's like control trade routes. Why do we need to control the South China Sea? Okay, so the world breaks in half. The world's already broken into many pieces. I know, but like right now, our ships go through there and it's fine, right? But like the world literally breaks in half. Why would they stop our ships from going through there if they're carrying, you know, trade goods back and forth? Who knows why they might want to do that. We have a rule that's like, you know, the rule of the sea is that we can freely pass wherever we want.

57:34There is no we. We have a civil war going on internally in this country, in case you haven't noticed. It's nationalists versus communists. Like, everyone is going more radical on both sides. I mean, it might be fine if the world breaks in half and China controls Asia, right? And it's like, we get our ships through, sometimes they charge us things and stuff like that, maybe. China does control most of East Asia. And to the extent that it does not, it is up to Japan and South Korea and others to look out for their interests. so they can ally with the U.S., but we're not going to get into a shooting war with China over interest in the South Pacific Sea.

58:04Oh, we would never do that, but we will sail a ship through there and they'll hit it. Why would they hit our ship going through there? If they run a ship through the Panama Canal... We're very good at getting our ships hit. No, no, but if they put a ship through the Panama Canal, why would we attack it? If it's a legal trade vessel carrying goods and services back and forth from the U.S. that we're trading on. I think we're all kinds of advice to do any of that to each other. Yeah. I think right now China actually cares way less about this stuff than we think. Like China's very internally focused.

58:29Like the CCP is very internally focused. Exactly. Yeah. They want to stay in charge of their empire. And, you know, I'm not a fan of communists or the Communist Party, although I think CCP resembles more of a capitalist fascist organization. The communists is a veneer, right? Fascists in the sense of like it's like the nation uniting for a common cause. They are hyper-comunists. They're very good at making money. Yeah, exactly. Not only that, they're actually pretty hyper-competent. They're very competent. If you compare it to, like, the California government, it's disastrous. It's high IQ and homogenous.

59:02I mean, when you look at high-speed braille, it's like, guys, come on. Just change the sequel laws. You can change the laws. Why are we doing this? It's time to build. It's time to build. No one's building. There's a few of us building in Silicon Valley, but we're even building ethereal things that are scaring our populace. I want their communists instead of our communists. Yeah. We'll just send ours over there, but they're like, no, no, no, we don't want these guys. Like, eh, not so good. They call them Baizu. Yeah, yeah. Baizu. Baizu. Yeah. What does that mean again? It means white and left.

59:27White and left. Yeah. And it's kind of derogatory look down term. They're eminent or stupid or something like that. I mean, all of the above. Yeah. I mean, that's how I think of them. Yeah, exactly. Centrist Democrat, everybody. I'm a centrist Democrat. Centrist Democrat. Centrist Democrat. San Francisco, baby. I feel like you're wearing it. You're like, please don't eat me, sir. Yeah. No, I mean, look at San Francisco. Like, it's, you know. San Francisco is on the rebound. We're going to run the table on the supervisor seats at least, you know, like. Yeah, but the problem is that L.A. is sinking.

59:56Yes. L.A. has sank. Hollywood got chased out of L.A. I mean, New York is insane. It's insane. This is not a problem. This is an opportunity. Oh, my friends in New York are going to come back. Great. This is the problem. California has a monopoly in all the warm, dry coastline, all the Mediterranean land in the United States, which is the most powerful empire in the world. So it's the most powerful. It's the best land in the world, all in one state. There should be five or six different states that compete with each other. I think 30 to 50 percent of the GDP of the United States will concentrate in California in the next five years.

1:00:22The land, the beautiful coastline, the good weather. It's a curse of geography. They've got all the natural resources, right? It's like basically Southern Italy or France or even better, but in the US. And it's all in one freaking state. California is this weird direct democracy thing, which is the worst idea ever. I mean, the governorship for this season is not that bad. 50.1 % can vote anything and they just read a headline. They're like, yeah, yeah, free food for cats and dogs for everyone, great, we'll vote for it. Eat the rich. Steyer couldn't get in there, right? You know, basically, like, we actually have two relatively centrist options for governor, which is good.

1:00:56Amazing. Which is amazing. That's great. Like, I like that. Right. So I think all these communist experiments will fail everywhere. Like they failed in San Francisco. They're going to fail in New York. I don't agree. I don't think they'll fail like they'll stop. The difference with San Francisco is demographics are destiny. And the demographics of New York and demographics of LA and the demographics of Chicago are just firmly committed to that cause. And the worse it gets, the more they'll vote for it. It's like Venezuela. They're going to vote all the way down. And there is no one out there to fly in and arrest the next Maduro.

1:01:29It has to be solved internally. The United States is the last bastion for freedom. Even the COVID unlocks, the lockdowns would not have lifted if you didn't have militiamen start marching around the red states and purple states, carrying M-16s and AR-15s past the state houses being like, we're done with the lockdowns. Then the lockdowns came up. The whole world would have been lockdowns. The whole world. Second Amendment works, baby. Yeah, the whole world would be in lockdowns for six or 12 months longer if it weren't for the 40 million intransigent Americans who have guns. And they, whether, and everybody likes to hate on them and everybody likes to shit on them, but they guard their freedom.

1:02:00Yeah, freedom ain't free. You need those people out there, right? And so, look, when the U.S., if the U.S. were to collapse, first of all, I think freedom bleeds out from the rest of the world. You can already see what's happening on Australia and UK with the speech laws and the censorship and all that and the weird arrests and so on. But if the U.S. degenerates and falls, it doesn't fail like Europe did. Or Europe isn't failing that well these days either. But it doesn't become like a big retirement home in a museum where everyone's on good social welfare for a while. It fails like a Latin American country fails because it is bordered by Latin America.

1:02:32So you've got a lot of people who want to get in here and they will get in here. So you're looking at much more like cartel and drugs and crime and violence and those kinds of institutions. So, okay. White pill. Robotics. No, you're right. Technology. I don't want to do UBI. We should do UBR. UBR is good. We need to have universal basic robot. Everyone should have a robot and the robot should cook for you, pick up your shit. The good and the bad news is that the robotics, the robotics boosters say it's two, three years away. The robotics skeptics say it's five to 10 years away. And no one thinks it's impossible.

1:03:04Yeah. And so we already have self-driving robots, self-driving cars. I think we can make people really happy if they have a better life. I mean, who likes to clean their toilet bowl? Nobody. Right, right. Unless you can have a robot, do it. It's great. Relieve you of this if you vote for centrist Democrats. Yes. Well, a lot of the immigration and a lot of the taxation issues are happening because the boomers are retiring. There aren't enough people below them to take care of them. They're voting themselves to lots of benefits. There's not enough money left in Social Security. The population is shrinking.

1:03:35So a small number of workers are carrying a larger number of these guys. So they're saying, okay, we'll just sell the country and retire. This is the path. We need centrist Democrats who are pro-technology, who are abundance-oriented. But to play devil's eye for a second, like healthcare, 90 % of healthcare is wasted. It's not even stuff people need. No, no, but it's like how much of healthcare goes into keeping you alive for the last two weeks, right? That's not really - I can fix this with Mark and Files, okay? Okay. But education is just like a big LARP. Anyone who wants to be educated can go educate themselves right now with AI, educate themselves right now with all the open source courseware and all that stuff.

1:04:09They just want the stamp and they want to go to college and they want to hang out in idyllic paradise for four years. And they want to protest for social justice and they just want to chill with their friends and party and get paid for it. It's already UBI. You said a very important thing. College is already UBI. The college is not about the actual active learning. It's about being in a room with a certain set of people who have the right networks. Correct. It's socializing, it's babysitting, it's credentialism. There's just a tiny bit of education sprinkled in for a few STEM degrees. And then you go after a bunch of bullshit jobs.

1:04:38To legitimize it. Yeah. And then there's all the social sciences and political sciences. We don't want more bullshit jobs. We want better bullshit jobs. Okay. Like, I mean, why can't... That's true. That's true. Yeah, yeah, yeah. I mean, why can't we just... Instead of like going to a cubicle and like break your brain and do a bunch of bullshit, like being an investment banker or something. I think we're all going to end up being plumbers and electricians and cutting hair. All the white collar stuff is just going to collapse into nothing. No, no, no, no, no, no, no, no, no, no. It's going to collapse into nothing.

1:05:06No, no, no, no, no. Because it's just eating more and more. Don't you see how this is going? Everything's going to be gone. There's a good version of this where people don't have to have just a shitty manual jobs. They can actually be handling and guiding the robots and the AIs. And so if we don't get ASI, if AI gets you to expert level, but doesn't go beyond, still needs human guidance, taste, and creativity, humans are still the motivated things in the environment. And so people become like Pokemon trainers. You're like robot handlers, right? AI handlers. And you use that to take certain. And that's, to the truth of it, that's what we're seeing today.

1:05:38The people who are using AI today are more productive than ever. They are not being displaced. The only reason you're being displaced by an AI is because you refuse to use the AI. If you're using the AI, you have more work than ever. I mean, the one thing you can't replace is human desire. Even if robots have their own desires, they cannot replace human desire. So as long as humans have desires and there are AIs and robots that can help fulfill them, then you always need humans in the loop. You'll always have humans. Yeah. Like the moment I find out I'm talking to an AI or I'm reading the work of an AI or I'm even looking at art created by an AI, I'm completely uninterested.

1:06:11Assuming it's completely done by an AI. No, no. It's a human using an AI. It's like, hold on. Wait a second. Wait a second. That's just because it's shitty right now. I guarantee you it will be indistinguishable and it will be very, very good. I don't agree. I don't agree. Even if it is indistinguishable, the moment I know it's done. Like, for example... But that's the Chinese box at that point, right? Yeah, yeah, yeah. Which is like, it's fractal, actually. You as a source, though, you're coming for it. When I first saw GPT-3 or whatever was available from the API, like, that was my reaction.

1:06:41I was like, this is a bunch of bullshit. Like, this is a trick, whatever. But, like, that's not how I feel now. Like, I get a lot of value day to day, like hour to hour. Do you have a relationship with the AI? Do you hang out with the doctorate? Is it a friend? Getting there. Whoa. It's not my girlfriend, but... My wife is going to watch this, buddy. You just have someone in the Filipino call center being your girlfriend, then you're just like filling in for the AI. What's the difference? What's the difference between an AI and someone in the Filipino call center controlling and chatting with you?

1:07:11It's a buddy of mine. Okay, don't talk to my friend. Don't talk about my friend like this. Nothing's going on between us, all right? We're going to end with my AI psychosis. I just think that it is actually very useful, obviously. I have a friend who's a landlord for one of these AI companies that does the AI people that you talk to, right? Like your AI girlfriend companies. And he said they had to hire extra security because these guys would show up in the middle of the night saying, where is she? Which box is she in? I want to take her home. I want to save her. Gary's having his first black pill moment.

1:07:41Oh, no. That doesn't sound good. This podcast has black-pilled me. By the way, this entire podcast was AI-generated. No one was actually here. We deny everything. Yeah.