Trump's plan to win the AI race

0:00Hello, hello, everybody. It's Tom Doton here bringing you their latest episode of the Newcomer podcast joined by Eric Newcomer of Newcomer and Madeline Renbarger of Newcomer. Welcome, everybody. How are you guys doing? You love that. I'll never stop. I asked Tom if he wanted to change the podcast name. He said no. It's a brand. It's a big giant. Well, I'm just a contractor, so I'm actually a free radical here. You guys are deep and deep in the swamp of Newcomer. Speaking of the swamp, Madeline, you just returned from the swamp. I was talking to you yesterday. You were at a defense tech conference hill and valley why is it called hill and valley so i actually let me clarify it was co-hosted with the hill and valley forum but it was actually called winning the ai race which was a new conference also co-hosted with the all-in podcast so i want to clarify for the brand's sake a different event but it's called hill and valley because it's you know the merger of you know dc the hill and the silicon valley coming together capital hill silicon valley oh see i was thinking right?

1:00No, I'm not smart in that way. And I actually, I was licking my brain because you know, there are some like Chinese based private equity firms called like Hill House Capital and stuff. And you never know what that means. I thought this was some weird permutation of that, but no. This podcast is supported by Google. Hi, folks. Paige Bailey here from the Google DeepMind DevRel team. For our developers out there, we know there's a constant tradeoff between model intelligence, speed and cost. Gemini 2.5 Flash aims right at that challenge. It's got the speed you expect from Flash, but with upgraded reasoning power.

1:32And crucially, we've added controls like setting thinking budgets so you can decide how much reasoning to apply, optimizing for latency and costs. So try out Gemini 2.5 Flash at Aistudio.Google.com and let us know what you built. Tell me, tell me. So and you just found out at some point as you were there, like, ah, shit, I'm at an all in conference. Yeah. So it was advertised as being co-hosted by All In. But what I did not realize getting into it is that the onstage programming was a five hour live All In podcast where the All In guys. Oh my God, I didn't even realize that. Yes, they all in guys were on stage with all of these tech leaders and Trump administration officials just kind of running through Trump's new AI policy and reacting to it and chumming it up and hanging out on a couch.

2:16That was the general vibe. There also was, you know, the classic networking section outside where you could talk with founders and investors that attended. Oh, my God. So we're going to have a whole future media segment of this show, I guess. Oh, man, I didn't realize that piece of it. Or I guess we have to make like Cerebral Valley alive. podcast like a five-hour podcast now like if that's the bar people just want like filibustering but um anyway well it's kind of funny to me that i mean you know not to start off with the all-in guys because really the less about them the better we say but like you know they played a huge part in you know the the trump the tech mega movement and obviously david sacks is part of the administration now but this seems to be like the full like the most fullest expression of like their Trump ties, right?

3:02This is like the full, the first time that they've done like a conference around the fact that they are like deeply embedded in the administration. I mean, David Sachs is working for them at this point. Like they've had conferences. I don't know if anything, I feel like some of the, like the sex appeal and freshness of it all is going away. It's like they've done conferences. Trump's there while the Epstein files are dropping. It's like, it feels a little bit like, I don't know, state TV to me where they're like on the team setting it up. Did they bring it? I assume Epstein did not come up at all on stage, right?

3:37You know, Eric Epstein did not come up on stage. And but their media figures on some level, like what media, even conservative media figures can't stop talking about Epstein because it's such a good story. And so I think the fact that all in would have a conference and not talk about like the biggest elephant in the room. We learned that day that the attorney general had told Trump that he was in the Epstein files and they don't bring it up. It's just that is the smoking gun that all in is in no sense media, but they're not just not media. They are not working on the behalf of their audience, right?

4:11If you're working on the behalf of your audience, forget, I don't even want to say I'm a journalist anymore. My whole thing has been like, I'm a creator that wants to exceed expectations, but at least I know that I am working for my audience and the readers. And if they had an obvious question, I had someone up on stage, I didn't answer it. They should make fun of us, you know, and all in is, is working for their subjects and not for their listeners, whether their listeners want to acknowledge that or not. And I think this event was sort of the capstone of that sort of, uh, capture. Well, I feel like their listeners and their audience and, you know, I feel like it's kind of merging into one, right?

4:53Like if this is the culmination of, you know, all in post having Trump on the podcast, they talked a lot about how, you know, they saw the light after he was such a great guest on the show to then, you know, be parts of the administration. Well, Trump, Trump literally thanked even Jason. Even as we know, Jason Calacanis. I say even. Thank you, Jason. All right. In classic fashion, we couldn't hold off on takes for long. So I've already given you a rant without even laying the groundwork. But Madeline, can you give it give us sort of a little bit of the overview of the day? Yes. So spearheaded by the all in guys.

5:29Trump was obviously the draw. You did it. What the quick trip to D.C. from New York train their train back same day. What was what was on the ground? Who talked? Just give us a couple of bullet points on what it was like. For sure. It was definitely, I think, compared to past Hill and Valley forums, which I've covered, much more emphasis on government officials. There were, you know, Chris Power from Hadrian, who just raised a big amount of money, gave a presentation on stage about how they're going to, you know, build up AI factories. And Jensen, of course, was on stage with the All In guys talking, you know, thanking President Trump for accelerating AI and talking about all of the great jobs that AI buildup is going to create.

6:07However, most of the people on stage were predominantly administration officials. So it felt a lot more like here we are. It's DC. We're coming on tech friendly media to talk about all the great stuff we are doing for you, the tech audience. And this was literally like an announcement, right? I mean, they literally published winning the race, America's AI action plan, like right around this. It was the same day, about an hour before the event kicked off. And Davis acts as the AI czar bringing his in-house media and basically like... But that's just smart event planning. That's just called synergistic thinking.

6:40Democrats need to get their shit together, have friendly softball questions from in-house media. Oh, I just meant like having an announcement. You want news to break on the day of your conference. You get people talking. I mean, good on them. That actually sounds like a very traditional media playbook. And it seems to me like they're really in the pocket of traditional media now. Yeah. I heard Madeline was saying that all the reporters were cast off to the balcony, couldn't even hear the talks. As a member of the new media, Madeline, how are you treated? As a member of the new media, I felt like I should have been treated a little better since we're, you know, not the lamestream media over here at Newcomer.

7:16The press area was a little bit separated off from the main auditorium up on a second level. They didn't really want us coming down to the main level to, you know, mingle with people unless we were in the lobby, you know, grabbing coffee and stuff. So I do feel like the media was kind of in attendance, but not really participating in the same way as past events that I've attended. You should have you should have like a flat, you know, like the press, you know, flak jackets that they get, like when they're embedded people. I feel like you could get a separate one that says Substack on it and they just treat you a little different.

7:46I think I should have gotten special treatment because we're a Substack newsroom. I think we are the independent media that they want to have covering this. You know, we're breaking the mold. So a sub stack needs to have his own advocacy or, you know, just like there's like the White House Correspondents Association. The sub stack should have sort of a centralized like you can't treat our people like that. But OK, I know it's Trump and like it's mostly optics and says a bunch of insane shit. He talked about like maybe we should break up NVIDIA and then somebody explain why that would be a terrible idea, given NVIDIA is like the heart of everything we're doing.

8:19But so there was lots of insane Trump shit. And we can talk a little bit about like, you know, his demeanor, but the substance, please. Just what? What? Just just the substance. Just quickly. What? What actually happened? Like what? They wield all the levers of power, like all of them. Like what? What are they doing? Yeah. I mean, they had on stage the vice president and the president of the United States. What are they doing? Like what is what are they doing? Not saying like what is going to happen? The key thing that is going to happen per the executive orders is that environmental regulation is going to be pulled back so that this data center build up will be easier to do.

9:01Fuck the environment, build AI, get energy ready. Let's go. Yeah, it was very build baby builds. You know, instead of drill, baby drill, there was build, baby build. That was the vibe inside the room. Clear regulation, clear cut regulation. So AI can like dominate and we're going to have this energy crisis. So we need to light every like dead dinosaur that we got left on the planet. Sure. The abundance guys are shedding a tear of joy in the midst of all of that. So we can find some common ground. It's pretty abundant. We're going to have AI abundance. Step two, the second executive order really touched mostly on around exporting AI to make sure that American AI can be exported.

9:39So that's, you know, the plug to Jensen. We're not going to totally clamp you down with export controls. After all that China fear mongering, it's like, actually, after creating tariffs and saying isolationism is the path to American success on AI, somehow they've conned Trump into saying, actually, America's AI succeeds if we can sell it everywhere. So it's embedded even in China. We want NVIDIA chips in China because otherwise it's going to be Huawei. We are globalists and internationalists on AI and then randomly on like manufacturing cars and any industry that doesn't have a great lobbying firm where isolation is.

10:18It makes zero sense. Oh, that's totally the policy. Well, I was going to say, too, I think what was really just, you know, the tell of all of this was that during Trump's speech, you know, he bragged about all of the tariffs, making jokes like there's too many countries. I have to do deals with all these countries and, you know, touted his recent Japan deal. But then, of course, with AI, it's like cut it loose, let it go, because that's, you know, American soft power ruling the world or else China AI will take over. So I feel like there were the inconsistencies in the policy really kind of popped off throughout the day.

10:50Have you just paid a little bit of attention? I obviously believe in some environmental regulation, but I think clear cutting regulation to build AI is good. I think for the if you're if you buy into the like the, you know, super growth mindset that we need to do this in the China race, it certainly is good. I do think that the extent that they want to cut it is definitely, you know, no gloves at all. Just build drill. But we're going to be helping China now. We're selling them NVIDIA chips. Like, I don't think it's about like the war with China. Like, I don't buy it at all. But we're also beating them.

11:24Sure. We're beating them. we're giving them the tools to undercut us and steal yeah i want to cooperate with china so i i have no problem with it godspeed but the idea that it's going to help us beat china by giving them the chips that they need to deliver the stuff doesn't make sense to me but also the export ban wasn't working like the the whole thing ended up being right they were getting in there through like indonesia and like various southeast asian countries like you saw with DeepSeek that they were plenty capable of building like competent, high quality models, largely on chips that had been smuggled into the country.

11:58So all it was really doing was hurting American chip manufacturers, which is why Jensen was kind of pushing them to, you know, hey, don't don't lock this in this way. Can I ask quickly, because I saw the tweet, I didn't dig more into it. Why did he want to break up Nvidia? What was the argument there? Why were they scary to him? I might be misremembering, but it felt like it was like nvidia who are those guys what are they doing oh no they're american asian guy that runs it that's that's no good break that thing up it's like you can't tell me that there wasn't at least an initial thought by trump that like they're a chinese company right no literally he kind of joked about it on stage he more or less implied that in his little nvidia riff he was doing in the speech like so there there's this ai action plan but then there were also executive orders about ai The most disturbing of which to me was this order that says if you're a government contractor, you have to have unbiased AI.

12:54And they specifically talk about DEI and transgenderism. And it's just like, yeah, I mean, the idea of unbiased is incoherent. And then in the same executive order, you're basically saying what you can't talk about. So it's like inserting bias. I don't know. I find that deeply troubling. The last thing I'll say on this, one of my more viral tweets, I said, no atheists in a foxhole, no libertarians in a bank run when David Sachs was begging for SVB to get a bailout. And now it's like there are no free marketers in government. It's like as soon as David Sachs touches the government, they're putting out executive orders saying, let's regulate AI so that you can't explain transgenderism to people.

13:41Well, it's always just the point of, you know, the free speech for me and not for the we saw this with the social media wars, right? Like this felt like kind of social media part two, where Zuckerberg caved and, you know, got rid of community notes and meta and all of this stuff to, you know, get these get close to Trump and buddy buddy with the administration. And so by just declaring that for AI companies to work with the government in any way, especially with all these DoD contracts on the line, they have to remove bias. That just means that they have to censor certain topics because the training data is already in there.

14:11What do they want to do? And of course, which AI company has seen the most biased so far? You're talking about the one that has written into its prompts that like, what would Elon say on this topic? right the one that literally talks in first person sometimes as the owner and searches like what's the guy who owns me think before i answer this well i also love the idea of like you know a contractor having to explain to whatever the dod or any other organization that's going to sign a huge you know trying to get like a huge rfp for the different language models like sir we have found the most unbiased of all of the chatbots that are out there side point it is mecha hitler so you will have to work through that but yes as we ran through it the most unbiased one happens to also give specific instructions on how to attack will stancil in the night but it is the least woke so that is the one we're going to have to choose based on the eo yeah it is just the hypocrisy of you know bias just meaning different from trump's positions on issues like that is it we're just classically going back to that it's just the greatest hits of that again we're just putting that in executive order.

15:18And I just am curious to see how companies respond to it. Because I mean, working with the federal government has proven to be very lucrative for a lot of these companies so far. So I don't know what's going to happen. Well, we also saw like in Trump one, like vendettas being used as a way to hand out contracts or stop other companies from getting contracts was like fairly standard procedure. Like Amazon AWS lost their shit after the Pentagon gave a contract to Azure and to Google over AWS because of, you know, Trump's anger at Bezos and Amazon and the Washington Post. And so, yeah, no, I'm just saying like, there's real reason for these people to like play up, you know, curry favor and like be as sycophantic as possible to Trump.

16:01Oh my God. Yeah. Didn't Jensen literally say America is going to win an AI because of Trump or something? America's unique advantage that no country possibly have is President Trump. there are a lot of compromises i wouldn't want to make as a public company ceo like i don't know but like the oh yeah trump you're a genius like everything through you it's like it's such a low hanging way to curry favor that i can see why it's so tempting and jensen smartly you know got his export controls overturned so it was a good play his approval ratings and tom you're making this point before the show they are bad like somehow like until we have the midterms i feel like the culture, you know, if this were like a normal president with approval ratings this bad, people would like start to not taking him seriously.

16:50But I think it's because the Republicans would get primaried anyway that they have to be so lockstep. I don't know. Yeah. Tom, what's your observation on the approval rating situation? We've talked about this a couple of times on the show, like, you know, the bald face sycophancy of the tech, you know, MAGA right, whatever you want to call it toward Trump at one point seemed fairly prescient, right? If you were, I don't want to talk about Sean McGuire, again. But if you were one of those people that were backing Trump during the 2024 election, you looked really smart. Like you looked way ahead.

17:20Well, I would say to this point, Tom, the all the Hill and Valley forum leaders who, you know, put on this summit in the first place with Jacob Helberg, you know, kind of spearheading this with Delia and Christian Garrett. They have, you know, hold the anchors of powers in some way. And, you know, Helberg is going to be appointed in the administration. Republicans, if you're willing to be the one smart person around a republican you could like fucking ascend to the top immediately it's like it's a vacuum it's the easiest hack it's like so many fucking lawyers do that but that's under the assumption that being smart helps you as a republican which i don't really think it does i mean but they always want it and i don't think to dominate i mean you see uh yeah you can you can still lose i think i can tell you the story that being quote-unquote smart doesn't necessarily make you like the popular guy or the most powerful person in the party but you know like sam altman is an interesting case with that because he, lifelong Democrat, is as public about hating Trump as almost anyone in tech after he gets elected.

18:15I mean, he makes, as a source told me not too long ago, he made a determination midway through the campaign, 24, Trump's going to win. I need to start getting closer to him. And he starts doing that. And then he treats out, oh, I misunderstood you, Trump. Everything I thought was intermediated by a biased media and all this bullshit that everyone has to say in order to make themselves feel close to Trump. But that all seemed very smart. And now, I was talking about 37 % approval rating, so it's as low as it's ever been for him. It's not as low as it got during Trump one, but he is not a popular president.

18:47And so when you see, and it's not, I don't know if it's going to get better or not, but it's unlikely to turn around in a major way. And so when you see the same rhetoric from the tech crowd supporting him, like Jensen saying, we couldn't have done without you, Trump, The big advantage that we have is that we have Trump, but no one else does. It's so blatant as to what's going on here. You're not tapping into a zeitgeist. You're just trying to get the best possible deal for your company. You're trying to line your pockets. And that's fine. That's business. It's gone like that forever. They want to get rich.

19:16They want the companies to do well. And that's their job. But I do think they also want to see... They think AI is like a bigger force than honestly, like the US government. And like the US government has a lot of power. But it's like we need to suck up to Trump and he's going to like clear cut the government and say we can do whatever we want to power the data centers we need to build God. Like that's that's what they want. And Eric, to your point, I think that is what they want. And I feel like they've really got it. Like, you know, I was, you know, commenting like all this point about, you know, Trump being low energy and like, you know, the Epstein story breaking while he's on stage.

19:52Like none of that seems to really matter. They got the order, you know, like it's it's been the path has been. cleared will matter electorally but like they're willing to just like oh yeah we won't talk about any of that just like we'll we'll say you're awesome like give us our clear cutting and like let's go forward um right the action plan is already out the orders are already signed like you know they're good to go yeah and they don't really need a congress to support any of these things anyway so they might as well build as quickly as they can until trump you know completely loses his ability to do any of the things that they want uh because i i guess you can always sign EOs.

20:25No one's really going to stop you from that. And I don't even know how. I mean, is it clear, actually, as you're talking to people there, whether or not these executive orders were going to do all that much? I mean, there's a lot of posturing with these things. You're not actually changing that many rules. You're not signing things into law. You're not getting rid of active restrictions. Well, I mean, you know this. We're poking around. A theme of this administration is like, who cares what appropriators said this money was for? We'll do whatever we want. So there is a degree to which if the administration is willing to say they want something and they're willing to bend all the rules about using money appropriated by Congress, however they want, this is a time where executive orders are more powerful than ever if they can navigate the bureaucracy.

21:10What stood out to you among the EOs that you think is going to be the most important? Because I have some thoughts, but I'm curious as you were there, like what, what mattered to you? What stood out to me, there's something that stood out from, you know, us as reporters standpoint, that could shape the form of AI, which I do think the, you know, removing government contracts, unless your AI isn't woke or whatever point will have impacts on how this AI forms in the future. But I think from the business standpoint, you know, streamlining regulations and gutting climate rules to, you know, do this massive buildup, I think will be the most consequential for the AI industry.

21:44What do you think, Tom? Yeah. Sorry, just back on the government contracts for AI. We've seen a bunch of the big companies, the big labs and model makers sign multi-hundred million dollar deals with the government recently. I saw XAI got a big contract, which is interesting. OpenAI got one as well. So we're at the beginning stages of actual tangible contracts between these companies and the government. I do want to say as a point, it does often get misreported that OpenAI signed a$200 million contract with the DOD. That's not quite right. They signed a$5 million basically exploratory contract with the potential of it getting up to$200 million.

22:25So people should not report it as$200 million is going directly into OpenAI as some sort of government enterprise contract deal. It's a little different than these things typically get reported. But the one part that stuck out to me, and again, I don't know how much this is going to matter in the large scheme of things, is the fact that, and I think Trump mentioned this in his speech, that AI models should be given clearance to train on copyrighted materials. And it's a huge issue right now that's playing out really literally in the courts over when all of these models were built, chat GPT's models, GPT-4, whatever.

23:03anthropics models, they basically ingested the entire web and published materials in order to train on these things. And as the New York Times is currently suing right now, the New York Times, because it was trained on their content, should be compensated for the information that they created that was later used to create these models, which are obviously now hyper-competitive with traffic to all of these news sites. And I also saw there was, was it like a gallery, It was like a Pew poll or a Pew study today that showed that traffic has declined substantially to a lot of news sites based on the AI overviews that Google does.

23:39And so kind of like the doomsday scenario that every news organization was thinking about with the rise of AI and like summarization of articles may be upon us because people are more willing to read an AI summary of copyrighted material than go to the article. but I got super into this topic like over the last couple days and was talking to people about it because if you talk to you know journalists or certainly the lawyers who are representing the New York Times they believe like a grave injustice is being is been done here right now that that the fact that you know these models were trained on New York Times copyrighted materials like fucked everything up for everyone and they deserve money for it and so far most of these lawsuits have lost like Meta recently just won you know a case against this and it's a really fascinating conversation and like discussion about what does it mean to consume and create material and you know the the the history of the copyright and you know like when google created its algorithm for its search engine it was also ingesting the entirety of the web uh creating cached pages of of the internet and creating some sort of content if you want to call a search result content on top of that that had specific effects on the websites.

24:55And we are seeing now basically, again, this doomsday scenario play out where it is competitive to a degree with the original content, whether or not they were legally allowed to do it. And I mean, if we want to get into a debate about it, I'm down to, but like my stance as I spend more time on it is like, yeah, I do believe they are legally allowed to do it. And it comes down to this question. And I think Trump kind of touched on it. Well, yeah, I was going to say, can I say, yeah, when he was on stage, Trump kind of did a little, when he went off script, he did a little riff about this. You can't be expected to have a successful AI program when every single article, book or anything else that you've read or studied, you're supposed to pay for.

25:38Gee, I read a book, I'm supposed to pay somebody. And, you know, we we appreciate that, but you just can't do it because it's not doable. And if you're going to try and do that, you're not going to have a successful program. I think most of the people in the room know what I mean. When a person reads a book or an article, you've gained great knowledge. That does not mean that you're violating copyright laws or have to make deals with every content provider. And that's a big thing that you're working on right now, I know, but you just can't do it. China's not doing it. And if you're going to be beating China, and right now we're leading China very substantially in AI, very, very substantially, and nobody's seen the amount of work that's going to be bursting upon the scene, but you have to be able to play by the same set of rules.

26:27So when you have something, when you read something, and when it goes into this vast intelligence machine, we'll call it, you cannot expect to every time, every single time, say, oh, let's pay this one that much, let's pay this one. It just doesn't work that way. Of course, you can't copy or plagiarize an article. But if you read an article and learn from it, we have to allow AI to use that pool of knowledge without going through the complexity of contract negotiations of which there would be thousands for every time we use AI. He kind of touched on the point, you know, himself in a way that I felt like was honestly kind of hard to go up against.