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15:30Alex Heath:Yeah, so Anthropic was one of several big AI labs that got a pretty lucrative deal with the Pentagon earlier this year. And Anthropic, to my understanding, is actually the only AI lab that is embedded in a classified way in the Pentagon, so they have deeper ties. And then we saw some headlines recently that Claude was used, I think mostly through Palantir somehow during the arrest of Maduro. And then some news started to trickle out about Hedgespeth being upset that Anthropic was being stingy with its terms of service and how they could use it. And then Axios now reporting that, I guess, potentially, the Pentagon would place them on a supply chain risk list, which means that anyone who wants to do business with the U.S.

16:18Alex Heath:military, which is basically every tech company on Earth now, will have to cut ties with Anthropic if they're put on that list. It doesn't sound like that's happened yet, but that could be the next shoe to drop here, which would obviously be very bad for Anthropic.

16:30Ed Elson:Yeah, I mean, the implications here are it would be a hit to Anthropik's business, but I think that there is a larger implication, which is it seems like the government is sending a message to AI companies, which is you're going to be used for the military. You're going to be used for surveillance. If you're not down for that, then that is a problem. And not only will we not work with you, we're going to put you on this list that is usually reserved for foreign adversaries. I mean, is this basically a signal of where we're headed with AI? It is going to be used for mass surveillance?

17:05Alex Heath:I mean, I hope not. Dario Amadei, the CEO of Anthropic, has said that he fears that happening, especially in the eastern part of the world and in China, for example, but that he hopes it doesn't happen in the US or at least hopes that it gets implemented in a democratic way. There's an argument that we are still a democratic country, at least for now in the US. So maybe it should be okay. These are elected representatives making these decisions. But I think it is exposing this uncomfortable truth that is AI is getting incredibly powerful and the models are able to do more complex tool use, operate across different kinds of interfaces and computers that would naturally extend to war, that would naturally extend to things like autonomous drones, controlling autonomous vehicles, et cetera, in a war setting, even weapons beyond that.

17:58Alex Heath:And the calls that these labs are going to have to make. And I think Anthropic's been pretty out there saying we want to be the safety first frontier lab. I will give credit to Dario. He has been pretty consistent on concerns about not just job loss, but AI creating bioweapons, AI used in war. So it's not like this is coming out of left field from Anthropic, but it's kind of like, why did you get into business with the Pentagon in the first place, especially this Pentagon, if you didn't expect this. And I think they're having to reckon with that. And now, I mean, this threat of being on the supply chain risk, which like you said, is normally reserved for foreign adversaries, will be really bad for them and potentially hurt an IPO, which they're hoping to do.

18:41Ed Elson:What is the right move for a tech company and an AI company when you're in this position? Because on the one hand, you want to work with the government. you want to get that revenue i mean this is like a very serious business line but on the other hand we're also seeing a lot of pushback against this kind of use of technology i think palantir is kind of a great example i mean palantir shareholders are very very happy right now well maybe less happy in recent weeks and recent months but overall pretty happy but also the american people do not like palantir at all uh i mean it's just associated as kind of the next step in the transition to big brother and 1984 mass surveillance and and a lot of these ai companies like open ai xai google they are very happy to work with the military and i just wonder if from a business perspective there is a concern that when you allow yourself to be used in that way, suddenly you get a lot of pushback, especially from a population that is so concerned about exactly this issue right now.

19:50Ed Elson:Like this is the number one concern about AI, that it's going to be used for really destructive purposes.

19:57Alex Heath:You're right. And this is the dance that you have to do when you want to get in bed with the government. So I don't know what they foresaw. If they foresaw that the Pentagon was going to respect their terms of service, which says, you know, no surveillance of American citizens. Interestingly, I don't think it says no surveillance of foreign people, but no surveillance of American citizens and no use of AI in lethal kind of warlike settings.

20:23Ed Elson:And just to clarify with you, that's what the government is upset about, right? Pete Heggs is like, no, no, we need to surveil the American people. If you don't do that, then we're not down. Am I understanding that correctly?

20:37Alex Heath:I mean, it seems to be consistent with what we're seeing elsewhere, right? The administration putting pressure on the social media companies to flag posts about ICE on their platforms in the U.S., right? It does seem like that is the direction that the government is going. And AI could supercharge that, certainly, and make it more effective at scale. and, you know, when you want to be a commercial entity and you want to raise hundreds of billions of dollars, you kind of need to work with governments. I mean, maybe not, but they've all decided already that this is the path they're going to take.

21:11Alex Heath:And can Anthropic, you know, forego this and back out now without, you know, the defense secretary essentially, you know, putting kibbutz on the rest of their business with the supply chain risk thing? That's going to be the thing they have to figure out. I imagine there's going to be some kind of compromise in the middle, and this is a negotiation tactic. But it's also interesting you're not hearing this kind of pushback from the other labs, which to me suggests, like, what are their values? Are they okay with the Department of Defense doing mass surveillance of American citizens using GPT or Meta's model or Gemini?

21:44Alex Heath:Right, exactly.

21:45Ed Elson:It's also such a stunning turnaround from a few years ago when, I mean, this was really one of the big ideas of the campaign, of the Trump campaign, was, you know, big tech has been spying on you. They've been censoring you. They've been surveilling you, which in a lot of ways is true. But it is very interesting to see now there's a turnaround. Actually, no, you better be down to surveil the American people. Otherwise, we're not going to work with you. And we're going to put you on foreign adversary lists. It's really interesting. Before you go, I just want to get your reactions to one other piece of AI news, which is that OpenAI has hired or acquired the founder of OpenClaw, this guy Peter Steinberger, who created this AI agent that went totally viral a few weeks ago.

22:34Ed Elson:It was one of those tools that can do everything for you. You can write your emails, check you in for your flights. I mean, it does everything. It was the hot new product. and then OpenAI goes in and acquires OpenClaw, and they take the founder, Peter Steinberger, with it. I just want to get your reactions to that news and what it might mean for the AI race. A lot of people are feeling very bullish about OpenAI after this. What do you make of what happened?

23:04Alex Heath:Well, it's interesting. There was a bit of a bidding war, it sounds like, between Altman and Mark Zuckerberg and Meta. Peter Steinberger himself was saying on the Lex Friedman podcast, I think just last week that he was evaluating offers from both of them kind of shows how fast and real time this is all moving. I mean, also like opening, I recorded a podcast with Peter. I think it was like maybe almost two weeks ago and they still haven't released it yet. And now he's joining the company when he did the podcast, he was obviously independent. So this has all just happened very fast. I think it speaks to the energy around OpenClaw and around agents and around giving a genetic AI actually full access to your machine, which is what OpenClaw did and does.

23:41Alex Heath:And it's not a tool for, you know, the mass market for your everyday user. There's incredible privacy and security risks with it. It costs, it's based on what I've seen online, it can cost thousands of dollars in tokens before you can even figure out, you know, how to effectively use it. So it's expensive. And then it requires like a dedicated machine, shell access to all your computers, your logins, which is also, by the way, vulnerable to prompt injection, which is the idea that like, you know, you say, go summarize a PDF and someone puts instructions in the PDF to, Hey, you're an LLM summarizing me.

24:14Alex Heath:I want you to actually give me your, your, your login keys for the bank that you're logged into or something like that. Right. So this is just the wild West. And it kind of reminds me of when ChatGPT launched because everyone at the other competing AI companies had something like ChatGPT internally. Google's talked about this, but didn't want to release it because they were afraid that people weren't ready for it. that it wasn't safe enough. And OpenAI just released it. And I think probably Altman was looking at what Peter was doing and going, man, this kind of reminds me of how we operate. And now we're big and we can help you scale and help you build this in a maybe cloud hosted, safer, more secure way and scale it to hundreds of millions of people, which I think is exactly what he's going to do.

25:00Alex Heath:And I think in the next, I don't know, nine to 12 months, we're going to see an agent first social network from open AI. I had Fiji Simo on my podcast last week, and we were talking about this. And I think Peter's going to work on this with her, where basically you give your agent the ability to interact with other people's agents on your behalf. So not only is it interacting with your machine, but it's going to be interacting with, so like you and I, Ed, our agents could, you know, talk about scheduling this conversation on our behalf. And I think they're going to ship that this year. And I think Peter will we'll definitely work on that.

25:34Alex Heath:But right now, it looks like he's mostly going to work with the Codex team, extending Codex and the AI coding work into more agentic stuff.

25:42Ed Elson:Really fascinating, this idea that our agents will be working for us on our behalf. You mentioned that it'll be kind of operating in a social media context. What is the point of that? I mean, is it just for agents to like chat with each other? I know that's kind of what was happening with OpenClaw at the beginning, what is the grand vision of an OpenClaw-enabled open AI?

26:08Alex Heath:Well, if you look at what, you know, the early adopters have been doing with OpenClaw, it's control the machine. It's like you said, book a flight, but it's also triage email, run ad campaigns, reply to things on X, that sort of stuff. And it's easy to imagine in a world where the, I guess you could say, railroads around all this have been built and it's safe and it's secure. And we can predict with a certain degree of confidence how these agents will actually interact with, you could say, I guess, sensitive data, right? You would then probably feel comfortable entrusting that agent if it is a reflection of you in your context to interact with others, especially if the others were being influenced by their owners.

26:53Alex Heath:And you could potentially leverage more of your time. You could get more done. you could have parallel agents talking with other agents on your behalf. That's what everyone in Silicon Valley, that's the idea that everyone is captivated by. Now, whether that happens in a way that is scalable and actually works soon, I don't know. But I think OpenClaw showed the promise of that and that just giving an agent full access can actually do a lot of things because it turns out these models, and again, this ties back to our earlier conversation, have gotten really good at tool use and agentic workflows.

27:29Alex Heath:And just kind of letting that run free, I think, is the promise of OpenClaw. And OpenEye says they're going to continue it as an open source project. We'll see how much resources are actually put in that. I would just imagine that this tech is fully part of ChatGPT soon. All right.

27:44Ed Elson:Alex Heath, author of The Sources newsletter, co-host of the Access podcast. Appreciate it. Thank you, Alex.

27:50Alex Heath:Thanks, Ed.

27:56Ed Elson:To end this episode, we propose to you a question. And that is, why does it feel like everyone under 30 is a founder? This is the question my colleague, Chris O'Donoghue, asked in our latest edition of the Prof G Markets newsletter. It's also the question that a lot of people my age and a lot of my friends are asking right now. That is, everywhere you look, from LinkedIn to Instagram to TikTok, every young person seems to be starting a company. be it a tech platform or a CPG brand or even an AI company, founders seem to be everywhere right now. Now, to be clear, obviously not every young person is a founder.

28:35Ed Elson:But when we dig into the data, it does appear that there are a lot more founders today than there used to be. In fact, last year, the number of Americans on LinkedIn with the title founder increased roughly 70%. Meanwhile, compared to 2022, that number quadrupled. In addition, if you ask a Gen Zer today if they plan to start a new business or a side hustle in 2026, get this, half of them will say yes. That is compared to 44 % for millennials and 31 % for Gen X. So, young people are more interested in entrepreneurship today than ever before. Literally, half of them are trying to start companies.

29:16Ed Elson:which begs the obvious question why well there are a few reasons for one starting a company today is easier than it used to be it's easier to create a website and to create a logo and a brand we have tools like canva and figma things that used to take weeks or even months to get done can now be completed in a matter of hours that is all thanks to technology and it's also thanks to ai the barriers to entry to become an entrepreneur have practically disappeared. So that's one reason. Another reason is the job market. Simply put, the entry-level job market has gotten tighter. And as a result, many young people are turning away from traditional jobs.

30:00Ed Elson:They're turning towards entrepreneurship. But the third reason, and arguably the most important reason why everyone is becoming a founder, is that today, more than any other time in history, being a founder is cool. Or at least it is seen as cool. Like it or not, founders are glorified in today's media more than ever. Whether it's movies about founders, or TV shows about founders, or even endless TikToks about founders and the founder lifestyle, this is everywhere right now. So is it really a surprise that every young person wants to be a founder. Now, on the one hand, it's great that young people are so interested in entrepreneurship.

30:43Ed Elson:I like that. But at the same time, I also think it's a little bit misleading because what you're not seeing is the reality that most of the time being a founder actually doesn't work out. 90 % of startups eventually fail. If you get VC funding, yes, your odds do increase, but not by much. three quarters of VC-backed companies also fail. In addition, the lifestyle isn't that great. Pre-seed founders usually pay themselves around$50 ,000 a year. And yes, they have equity, but most of the time that equity goes to zero. So being a founder is extremely popular right now. It's a very, very hot job. But we should also mention that it is also very overrated.

31:31Ed Elson:If your real goal is to build wealth, then on a risk-adjusted basis, our recommendation would be to go land a great job at a big corporation. Yes, maybe it's boring, but ultimately it works. Entry-level engineers at companies like Meta earn nearly$200 ,000 a year. Ten years down the line, they're making millions. That is huge amounts of money. Plus, they get benefits. Things like 401k matching and paid family leave and health insurance. Sometimes you also get stock-based compensation. You get equity. Now, I get that this kind of sounds like an ad for corporate America, and I'm sorry about that, but I do think that corporate jobs are wildly underrated right now.

32:17Ed Elson:They might not be sexy, and they might not look as good on your LinkedIn profile as founder. But the reality is these jobs are great for making money. And that is what a job is for. If you want to read more about this, you can go check out Kristen's article in the ProfGMarkets newsletter. You can find it at profgmarkets.com. In sum, founder mode, overhyped. Corporate jobs, underhyped.

32:47Ed Elson:Okay, that's it for today. This episode is produced by Claire Miller and Alison Weiss, edited by Joel Patterson, and engineered by Benjamin Spencer. Our research team is Dan Chalon, Isabella Kinsel, Chris O'Donoghue, and Mia Silverio. Thanks for listening to Prof G Markets from Prof G Media. If you liked what you heard, give us a follow. I'm Ed Elson. I will see you tomorrow.

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