A.I. Is a Hyperobject

0:07Emily Peck: Hello and welcome to Sleep Money, your guide to the business and finance news of the week. I'm Felix Salmon of Bloomberg. I'm here with Elizabeth Spiers of New York Times.

0:19Felix Salmon: Hello.

0:20Emily Peck: With Emily Peck of Axios.

0:22Felix Salmon: Hello, hello.

0:23Emily Peck: And we have an AI extravaganza this week. We are finally doing it, people. And I can tell you the story, which is basically that Elizabeth went into the Slack one day and said, listen, we can't talk about AI unless we have someone who knows what they're talking about. And specifically gave the example of this one guy, Paul Ford. And I'm like, we love Paul on this show. And so, ladies and gentlemen, without further ado, the one and only Paul Ford. We have to stop meeting like this. You probably need no introduction. You've been on this show many times, but who are you and how do you know about this AI thing?

1:01Paul Ford: So I am the president and co-founder of an AI services and platform shop. We build things for clients using AI, but I also still sort of function as a journalist and a technologist. So I write and talk about it. And around the beginning last year, I brought myself sort of out of retirement as a programmer in order to really see if I, as a pretty mid-level programmer, could use these new tools to be productive and to really get my head around them. And so I've spent the last more than a year, but especially the last four or five months, just going super, super deep and trying to just get my bearings.

1:33Paul Ford: And so that's what I can share with you.

1:36Emily Peck: So this is amazing. We are going to talk to you about where we're at right now, what it means for us normal humans, what it means for the big great capitalists, what it means for the Pentagon, for Microsoft. It's a spectacular conversation, and I do believe the term human centipede appears at some point. You're going to want to stick around for that. It's all coming up on Sleep.

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2:51Felix Salmon: Mike and his guests offer their perspective on how policy changes could affect what you do with your portfolio. Download the latest episode and follow at schwab.com slash Washington Wise or wherever you listen.

3:03Emily Peck: This message is a paid partnership with Apple Card. My favorite travel hack? Easy. It's using Apple Card. It's great knowing that every time I dine out, buy souvenirs, or pay my hotel bill using my Apple Card, I'm actually earning up to 3 % daily cash back. So if you're like me and love to travel, then apply for Apple Card in the Wallet app today. Subject to credit approval, Apple Card issued by Goldman Sachs Bank USA, Salt Lake City branch terms and more at applecard.com. Paul, you wrote a fabulous column in I believe it was the New York Times. And this was your first mistake is you write in the New York Times, and then you get all the crazies like because you're setting the agenda.

3:48Emily Peck: But you were writing a column that correct me if I'm wrong, basically said, we live in a world where pretty soon it's going to be easier and cheaper to roll our own software than to buy it from people. And that's going to change a lot of things.

4:03Paul Ford: I mean, that's one of the things, right? You know what I'm saying really is that I was shocked like everybody else as a person who comes out of both the liberal arts and software development, things that used to take months and months don't take months. Sometimes they take minutes. Sometimes they're not as good, but it's so different. It's so different from how it used to be. That's textbook disruption, right?

4:26Emily Peck: Which is when something which is maybe not as good, but it's a lot more convenient and a lot quicker and cheaper, just completely takes over.

4:34Paul Ford: Yeah, but typically disruption shows up and everybody's been working on it for a while and they're like, okay, and this product will be better and everybody's got a couple years to deny that it's happening. And this was like one day in November. It was like, Anthropic was like, hey, we're going to give everybody a whole bunch of extra credits to play with Cloud Code, which had been like an assistant before. And then everyone realized over the course of a week that it was building whole apps and you could build things you could never build before. And there are all sorts of caveats and asterisks, but it's code.

5:07Paul Ford: It was real. It was working. So I think everyone just sort of went, what the hell? And now we're all metabolizing that change in various painful ways. So it is disruption. It's just at a scale and speed in sort of supposedly the king of industries, right? That no one's ever seen before.

5:22Emily Peck: And this is in the context, just to be clear, of the, well, let me ask you where you stand on this. The famous Marc Andreessen thesis that software is eating the world and that basically we are like every day in every way, we are becoming more and more software. Is that still true?

5:40Paul Ford: I'm a huge fan of our brilliant philosopher, Marc Andreessen. No, my joke for that, which is that software has eaten the world, then it digests the world, then it shat out the world. And now software is eating the shit. And that is what AI is, if we're truly honest about it. And that we've created this sort of human centipede cycle as a result of that genius idea. And no, I can't, I can't remember why we ever wanted to have you on this show, Paul. Yeah, I know. It's a terrible mistake. Look, I believe very, very firmly that the technology industry exists to be the servant of the other industries.

6:15Paul Ford: Like it's, we're supposed to be helping everyone do their work faster. And instead, it's a bunch of nerds going like, you work for me now, you know, as they're like oily fedoras. And it's really exhausting because I talk to people all day who just kind of want to get their thing to work. And so to me, the whole advantage of this is that your thing could work a lot faster. I used to run an agency and it was like every beautiful do-gooder organization would come in and then they would open their wallets and moths would fly out. And I was like, I just can't get you software that you really need. I kind of can't do it.

6:48Paul Ford: I can, we'll just be out of money. And now they can have it.

6:52Emily Peck: What is it that your clients were wanting? Like, I am not someone who wakes up in the morning and goes, I need a piece of software. Like, you deal with these people all the time, and I don't. And I, in my experience, the people who have their heads spinning fastest when it comes to AI are precisely the people who have built software or built websites or something like that in the past. And for those of us who haven't, we're like, what's all the fuss about? So who were these like impecunious nonprofits and why did they, why were they in the market for something that was software shaped? Sure.

7:26Paul Ford: So you're totally right. Most of the world does not see the, see problems in a software shape. They see problems in business shapes. I'll give you some examples without naming names, but like the leader of a large healthcare for children organization got in touch with us and they were like, we want to take advantage of all this stuff in order to do better assessments. A lot of it is really simple stuff. Let me take a step back. If you go to a job, you have a thing you log into and it has dashboards and it might send you emails and you might solve tickets, right? That's pretty normal stuff. That in the world of software is like CRM and help desk.

8:07Paul Ford: And some of it, if you're doing logistics is ERP. It's all those ugly acronyms. And so that's because that's so expensive and difficult to make. Like very large companies have bundled up all kinds of technology. And then you end up with an ad on the Super Bowl where like Matthew McConaughey's in a hot air balloon for Salesforce, right? Like why? Because they can move a box from left to right on a screen. And that is like so hard to do sometimes that we just give them a trillion dollars culturally. So now all of those things got easier. Like I can make you a little Salesforce clone just for your organization.

8:39Paul Ford: Most people don't need that. But places that run clinics, food banks, medical clinics, etc., they have a huge logistics problem, all of them. And they really need help with the scheduling and the calendaring. And they need help. And they also tend to have like some guy was there five years ago and he set up a system and then he went and worked somewhere else. And so they're just kind of limping. And so they all have this pile of what we call technical debt, which is all the software that sucks in the organization. And so now they're very curious out of nowhere. They're like, wait a minute, could this make it suck less?

9:14Paul Ford: And could I have nice things even though I don't have a lot of money? And increasingly, it looks like the answer is yes.

9:21Felix Salmon: I just spoke to a guy who owns an ice cream shop, a scoop shop. And it's really small. I think he said he had five employees or something. And he's been playing around with AI and has discovered all these different ways to save money. like he's figured out how to use AI to time ordering supplies that he might need instead of just ordering when they need to order or on a monthly cadence. He's been able to figure out a way to determine when prices are most optimal for ordering and do it and has thus saved money. And I was saying that actually doesn't sound like innovative. It sounds like something that like big companies do all the time.

10:00Felix Salmon: And he was like, yeah, but they spend all this money to a company like an SAP or whatever to build them the software or to get the software to figure out all that stuff. And we would never be able to afford that. But now we pay a little bit of money to Chachi PT or whatever he was using. And it's super easy. And we're saving money in all kinds of little ways like that. I thought that was really interesting. Putting my economist hat on here.

10:25Paul Ford: Do you ever take that off? You take it off?

10:27Emily Peck: Most of the time, Paul.

10:29Paul Ford: I think you wear it in the shower.

10:32Emily Peck: I only put it on for like, I don't know, five minutes a day because otherwise it gets uncomfortable. But Josh Barrow made this point, which is that this is really good for the economy. If every little ice cream mom and pop store is becoming more efficient and making more money, that makes money for the owners, that gives more money to pay the workers. That's great. and the sort of AI apocalypse story of AI is going to eat a whole bunch of profits. Well, it might eat some profits at Salesforce, but it's going to create so much wealth and so much cash flow, like new ways of making money across normal companies in the normal economy, in the real economy.

11:14Emily Peck: And I will take that bargain any day of the week.

11:17Elizabeth Spiers: I feel like that's the techno-optimist view of things. Paul, I'd be curious to hear what you think about that.

11:23Paul Ford: You know, the answer is yes, everything Felix said or not. Like that's that. Right. Like, so this is real. Now, first of all, I know this exact ice cream vendor. I know this person. And they are an absolute freakazoid when it comes to this technology. Your average ice cream store person is just like, is really not thinking in terms of this kind of logistics. But there is a reality. And this is a very real thing. So there's a couple of different ways this could go. It could mean that in the future, Anthropic owns all ice cream because that's just how the society we build, right? These things gather all the power and they build all the products because they can move faster.

12:02Paul Ford: And they just kind of become the new Amazon, new goal, Anthropic, open AI mega thing because they know everything and they can see everything. That's the sort of high dystopian. And it seems to be many of the worst people in the world are running these companies. So that's tricky. On the other side, there is a tremendous narrative of empowerment where your nephew, instead of like helping you get set up on seamless for your restaurant, is like, no, we'll make our own website. I'll make my own ordering system, et cetera, et cetera. That's tricky because DoorDash has a lot locked in already, right?

12:33Paul Ford: Like it's just like that's actually that kind of disruption I think will take a really long time. Because when you really play out how that lock-in works and how much time it would change, it would be years before there would be this like natural sense of like I'll build my own ordering tool. Sure.

12:48Emily Peck: But Paul, like right now we're in a world where software companies lock you in and then they can raise their prices as much as they like and you're locked in. And at the margin, even if people don't code their own restaurant website, the fact that they could, in theory, should stop Seamless and DoorDash from raising their prices as much as they might otherwise have done and therefore increase the profits to the restaurants.

13:16Paul Ford: That just sounds like capitalism to me. Yeah, but I'm pro-capitalist. I'm in the air liberal show. You forget it. I get it. I'm the president of a firm. Like, I understand.

13:25Elizabeth Spiers: Yeah, but I think, you know, that sort of precludes the idea that these big companies that do already have customers locked in are somehow not taking advantage of AI themselves and not pricing that into their business strategy. So the idea that I think somebody, let's say, spins up a small system for a small business that replicates Salesforce, that's not going to take Salesforce out of business because Salesforce, big enterprise customers need something far more complicated.

13:52Emily Peck: Absolutely. There's not going to be a mass extinction event among the mega tech companies. I completely agree on that.

13:59Paul Ford: Guys, I've been talking to lots of people about this recently. And I got to tell you, the only thing that lands is no answers. Everyone knows that we're in the middle of something. And culturally and in the media, like we have no ability to really process this level of ambiguity because we're on the hook to kind of give some sort of forward motion. I don't know. I mean, the way the tech industry has been going, it's all at once. You'll have incredibly empowered small businesses, giant mega businesses that find new lines of business that sort of eat and gobble the small businesses. Like it will all happen at once because it's the whole economy.

14:31Paul Ford: I mean, you think about sort of vectors like healthcare, right? Like, AI is all over healthcare, and healthcare is real excited to meet it. And some applications are like, I can serve more patients. And some are the insurers saying, hey, we can reject more claims. And so, like, it's not going to play out in a linear way. And it's just, I don't know if you know the concept of the hyperobject. 2013, look it up. Climate change is a hyperobject. It sort of, it touches everything. It's viscous. It gets into everywhere. But you can't really see it. It doesn't work on a schedule. It's, you know, like, oh, it's kind of warm this winter.

15:03Paul Ford: We're not. It's this sort of nice postmodern idea explaining the enormous things that we need to talk about, but we don't really know how to talk about. And AI is like this incredibly rapidly developing hyperobject that touches absolutely everything in our universe in lots of different ways that you can only see in how it affects other things.

15:21Emily Peck: It's more like weather than it is technology. I wrote a book, Paul, about COVID. And in a weird way, COVID was a hyperobject as well. Well, one of the things that I wrote about was this sort of radical epistemic uncertainty that we were facing, especially in 2020. And the way that the whole world had to get used to a sudden switch from, I used to live in a world of, I have Google on my phone and anything I want to know that's a fact in the world, I can call up on my phone in five seconds. to a world of there's a whole bunch of really big questions I have about the world and no one knows the answers.

16:00Emily Peck: And just not knowing the answers was a strange and unsettling place to be. And I feel like what you're saying is that we are now back in that strange and unsettling place, which totally, by the way, aligns with what I said in the book, which is that we have now entered this place and we're not leaving it.

16:17Paul Ford: I mean, I really came in here just to promote your book. That's the only

16:23Elizabeth Spiers: This kind of raises a question for you, though, Paul. Your company is literally building enterprise products now using AI. And you're saying, I don't know where this is going. None of us do. How do you think about running your business when something cataclysmic happens? Maybe this isn't that cataclysmic, but I'm thinking about there's an ex-Google engineer named Steve Yeggi who came up with this framework for running a bunch of autonomous agents at once. and then the developer community lost its mind for a few days. How do you react to stuff like that?

16:55Paul Ford: You know, that's called Gastown, if somebody wants to look it up. It's kind of like this weird mashup of Mad Max mythos and sort of big nerd thinking. It's really, really hard. It's really hard and sometimes very difficult and painful, and you don't know if you're building the right thing. And the more I talk to other leaders and the more I talk to orgs and big orgs and small orgs, frankly, everyone is covering up and nobody really knows what's coming. And so I just, I'm too old. I'm just like, let's rip the Band-Aid off. What are we going to do to build a nice society that we like, as opposed to the Palantir shit world that is kind of getting thrown to us?

17:30Paul Ford: Going back to Gastown and stuff, there's a real fantasy that you'll be able to type everything into a prompt and you will get everything as a result. And they're trying to build that. They're going to have lots of agents take over and build big platforms. What I'm finding, because I decided to go in and really, really learn this tech as much as I could is that fundamental questions of software as a cultural object are really hard to solve still. Like I have things I've been working on in Vibe Coding and I sort of do them for a half hour a day and I'm like three, four months in now. And it's not because of the technical parts.

18:02Paul Ford: I've solved a lot of the technical parts. It's really good at that. It can build you your APIs and your front ends and, you know, it can really scaffold your database and you can say, go make that faster. And it'll do it for most cases because a lot of stuff is just a lot of abstract knowledge, but it's known. So if something is pretty well known, it can solve it. But the experience of using a tool and the strategies of getting the content into it and sort of the aspects of making stuff, they didn't get easier. Aspects of sort of quickly building and assembling are really easy, but like making something good remains pretty brutal.

18:38Paul Ford: Like you could use this as a really good research assistant under a lot of constraints, but I doubt that if you talk to editors, they're finding that writers are turning things in on time. Like, I don't I don't think we change.

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22:42Emily Peck: Paul, I want to switch gears here for a minute and do a little throwback to my favorite ever Slate Money episode, which was one that featured you coming on the show to talk about Microsoft buying LinkedIn. It was like another era. And we had a lot of fun laughing about like, what the fuck? And since then, a couple of things have happened. One is that LinkedIn hasn't changed all that much, but it has become like more ubiquitous and much more valuable. And people are like, this is a major asset for Microsoft and that was a great acquisition. A second thing is that it has not, contrary to what a lot of people expected, really been incorporated into sort of the Microsoft suite, the core Microsoft product offering.

23:27Emily Peck: And the third is that Microsoft has become this like multi-trillion dollar behemoth. It's so much bigger and so much more valuable than it used to be, partly because of AI something something. thing and microsoft is now you know the largest shareholder in open ai and i just wanted to sort of come back and ask you because linkedin in particular feels like so old school software old school technology company getting bought for a lot of money and then it's still a good acquisition somehow how like now with hindsight how do you think about that whole thing oh well

23:59Paul Ford: obviously i had a complete answer ready for this um he's just completely listeners he's thrown us

24:05Felix Salmon: this curveball. No one was prepared to talk about LinkedIn. And here he blew the whole thing up.

24:12Paul Ford: I am ready to talk about LinkedIn.

24:14Felix Salmon: I would love to talk about LinkedIn. I'm LinkedIn's biggest fan.

24:17Paul Ford: Yeah. Let's talk about this. Finally. Finally, people are talking about LinkedIn. So, okay. LinkedIn is an enormous network of what everybody's working on. I'm in there. It's very bot vulnerable, frankly. And there's a lot of AI-generated nonsense on LinkedIn. I'm in there. I post links about AI three times a day. That is my job as a thought leader. And I've decided to take that job seriously.

24:43Felix Salmon: Wait, for real? I'm going to follow you right now.

24:45Paul Ford: Oh, yeah, yeah. No, I'm user F-Train. I was like user 5 ,000 on LinkedIn. Just a little something. It's just, you know. Yeah. Like a little flex there from before.

24:54Elizabeth Spiers: I feel like you're user 5 ,000 of everything, though. No, not at all.

24:58Paul Ford: I'm usually kind of a surprisingly late adopter for a big nerd because I hate everything. So I'm like, ah, man, Twitter, that's going to ruin the cool world of blogging. And it did.

25:08Felix Salmon: Yeah. You were right.

25:09Paul Ford: Yeah. No, I'm right. I think of myself, I like to think of myself as like the fun Cassandra. Like I'm just sort of like, it's all really going to be bad. Everybody's like, that's funny. And then.

25:22Emily Peck: But you are, I mean, you were right in a way that like LinkedIn. and we've said this many times on the show, is the only good social network and possibly the only surviving social network.

25:34Paul Ford: Well, it depends, right? So the Ethan Mollick, who I don't know if you follow, but he's like a professor, I think at Wharton, who talks a lot about sort of is trying to just kind of make this make sense for business. And he was like, look, man, it's coming. Like the bots, how can you stop an army of bots posting on LinkedIn? They're just going to kind of beat you. And I don't know if that's true or not, or where we're going to end up. But I do think we're ending up, it's fascinating, right? Because I know a lot of people who were doing kind of work on the ground around immigration rights and stuff like that.

26:03Paul Ford: And when Minneapolis happened, so many people were like, how is this happening? Where are these people coming from? But if you were following, they were all on signal. Like everybody was just kind of talking. People go and create their own networks to get away from this stuff. And the cultural implications are real, but they're not visible. They're especially not visible to people on social media, and they're not visible always to the media proper. And so I think there's all these sort of new networks showing up. And I think that they're being built almost with an immune system so that they're not going to be easy to track people.

26:34Paul Ford: They're sort of anti-regulation and they're very anti-AI. They're also happening in places like Discord that are both kind of open and closed. So I think there's a whole new set of networks showing up. But I also think that like, you know, LinkedIn just lodged in as the world's resume. You still need that function. It works okay. I did think Microsoft would do more with it. I think what's fascinating now though is every time you open up a product like Keynote on the Mac or PowerPoint, it is just that little diamond for AI. It's just kind of spackled over everything, right? And so, so annoying.

27:05Paul Ford: Yeah, but the cost of integrating LinkedIn to absolutely everything is approaching zero for Microsoft.

27:10Elizabeth Spiers: I recently reread a Microsoft by Douglas Copeland for a project. And it's a satire about Microsoft culture. And I realize this is not the Microsoft of the late 90s and early aughts. But one of the things that comes up over and over again in that novel is that it's a very siloed place. And they don't do well when they try to work across groups. And I get the impression that that's still kind of the case, which would explain the lack of integration of LinkedIn.

27:37Paul Ford: I mean, every large org is completely siloed at that level. You just can't be that big without being an enormous political superstructure. I think it's better than it used to be. But yeah, it used to be just pure pain, like just levels of punishment across groups as to who can put an icon in the ribbon or whatever, right? There was all this drama. But I think that that's what's happening, right? We had all this natural friction in the industry of it's hard to build an API. It's hard to build a good API. It's hard to build a good front end. It's hard to build a good website, et cetera. And so we have to have discipline and practice.

28:10Paul Ford: And every two weeks, we have an agile meeting. We do scrum. And there was sort of all this ceremony and process because it was so expensive and it still often didn't work out. That's still true in a lot of cases. It's still really hard to make good stuff. But elements of that friction and that culture are no longer as valid because certain things can happen really quickly. And if you want to take a very conservative path, it would just be like everybody knows now it can stand up a prototype. You may never put that code out into the world, but you can really look and feel and understand how a piece of software could work.

28:38Paul Ford: And what used to take six months now might take a week or two max, right? And so that alone is a really, really disruptive change, and there's tons of them. So the friction has gone out of a lot of this stuff. And friction and bureaucracy are handmaidens, and they all work together to keep things moving along slowly in a way so that people can predict their lives and have a sense of control while they do the big thing that makes money. And it's, I mean, it's just eroding. I don't even have to learn about LinkedIn. I can just say, hey, Claude, if LinkedIn has an API, tell me what it costs. And if it doesn't cost too much, let's go ahead and start doing things with it.

29:12Paul Ford: And so if I'm inside of Microsoft and I want to hack LinkedIn and it has an API, I can just kind of go to town now.

29:18Felix Salmon: Wait, what? You're saying I can hack into LinkedIn and mess around with it or that I can put LinkedIn into other stuff that I'm using?

29:24Paul Ford: Sure. It's not hacked in. LinkedIn has all these ways to kind of use it, both externally and internally, right? Like they're all documented. And it's just kind of, you had to have a lot of meetings. You just don't have to have as many meetings now.

29:35Emily Peck: You mean if you're hiring people and you can sort through people who you might want to hire or something like that?

29:41Paul Ford: Oh, yeah. You can get all kinds of data and insights out of LinkedIn if you pay. But if you're Microsoft, you can really get access to all the good stuff. And now there are fewer barriers. Like everyone can just kind of go to town on everybody else's platform. There's sort of always this promise. I remember once I was working at a company and they were like, we are so open. and everything we do talks to everything else. And you just ask us and we'll give you access to that system. And I asked them and then they gave me access and I hit like one piece of data, like a tiny request. And my phone rang literally 30 seconds later.

30:15Paul Ford: Like, hey, what are you doing? What are you doing? Like, these are very territorial environments. And this is a de-territorializing technology, which is rough because we're territorial animals that like to, you know, we're primates. We like to kind of protect our tribes.

30:28Felix Salmon: So now everyone can make their own software stuff. And I see everyone's posts on the social networks being like, I just made a thing that does this and I made this app. Has anyone monetized anything that they've vibe coded yet or using it on a large scale in a company? Are there examples we can point to of real world vibe coded things?

30:51Paul Ford: There's a lot. There's a ton of little stuff. There's people who've been sending me stuff, but a lot of people don't want it to be known. The easiest indicators here are like Claude commits code for your behalf on GitHub. So like people are releasing all kinds of open source tools that have commits by Claude. And you can see the effects there. You can see it in the sort of way that certain things are accelerating. And if you go to Reddit, there are just lots of people. I mean, there's a ton of internal projects, right? People are shipping apps. Like it's one of these things where there's no one distinct story where I can point to and be like, oh, yeah.

31:25Paul Ford: I mean, I've got a couple of websites I've launched. So does everybody, right? It's a lot of slightly blurry, indistinct stuff as people are just figuring out what it can do. So I think what's really interesting about your question is that it points to a world in which things are discrete and large and take energy to launch. And now instead, you're just seeing thousands and thousands of things that are kind of cool, you know, experiments, apps. I built a piano practice manager simply because I'm trying to learn piano. And I called it, I came up with the name to-do lists, but it's spelled L-I-S-Z-T dot com.

32:01Paul Ford: And I was like, that's a good name. I know. And I was like, all right, well, maybe I got to build it. I took a swing. Once you come up with a good name, you have to build the app. That's the thing. No, no. I built the app because of the pun, and then it kind of worked. And I'm like, I really should just go ahead and just kind of practice piano every morning instead of – like it's just another way to procrastinate.

32:21Emily Peck: Let me answer Emily's question because I think I have a good – I have another question now. Well, can we answer your first question first? We all remember when Wordle launched, right? There was this guy called Chris Wardle in England, and he coded this cute little web page called Wordle, and it became viral and eventually wound up getting bought by the New York Times. But you could see it was simple and you could see how one person could make it and then it could go viral because it was simple and lovely and then the rest is history. Chris Wardle has now released a new game called Password, which is wonderful as well and I like it just as much.

32:59But if you go to Password, you can see it's just so much more complex

33:04Emily Peck: as a sort of coding issue. there's a lot more sort of intelligence and gnarliness built into it and i can easily believe the password took him no longer to build than wordle did just because there's so much more

33:18Elizabeth Spiers: power at the fingertips now i have an example that actually literally answers your question three tries now there was a vibe coder whose company is called base 44 that sold to wix for 80 million dollars in cash and it's just one israeli developer who vibe coded his entire product so it can happen.

33:35Felix Salmon: Okay. So everyone is saying that because it's so easy now to code, everyone's going to do it. And that's going to destroy all these software companies in the so-called cesspocalypse. But what I'm hearing from the three of you who tried to answer my question is there's a new, much more productive and simple way to code. And it's creating more complex products, more products, more interesting products. And it just seems to me like it's unleashing more interesting things that could potentially, like I guess what Felix was saying before, unleash more productivity into the economy. It may be different, not saying it's not going to destroy people's jobs, but it does sound like it's going to make people more productive and do new and interesting things.

34:18Emily Peck: And there is still value to this. Like to Elizabeth's point, you know, Base44 sold for large amounts of money. We just had Ben Affleck's 16-person AI company sell for 600 million or something. You can, just because it's easy to replicate in theory, doesn't mean that these things can't be worth real cash.

34:35Felix Salmon: Like when blogs happened and everyone had a blog, it did do a lot of damage to some traditional journalism, obviously. But then it like made the new careers of the guy with the economist hat in the corner there and the lady up there. And I mean, and, you know, changed everything. You know, it wasn't good or bad. It was destroying and creating. And isn't that what AI is?

34:58Elizabeth Spiers: It's Jeevan's paradox. It's where, you know, it's something that becomes more cost effective actually increases demand instead of lowering it. Right. I've heard that too, yeah.

35:07Paul Ford: I'm going to throw just a little bit of cold water in, but then probably agree, because that's just my personality. That's a nice guy, Paul. I don't think the new Wordle game actually, I think there actually are a number of people involved. Like, I think it is pretty complicated. And I don't think that Base 44 was probably that easy. Like, he couldn't vibe code the whole thing, but he could code a lot of it. And then he could call out to LLMs and move along. Like we're not totally at this tipping point yet where the really good products that you use can just be built with this stuff. That said, an internal business application can probably be built in a couple weeks.

35:40Paul Ford: Like really the drier stuff, the database-backed stuff, the web-based stuff that just kind of needs to look okay and work pretty well is going to be better than a lot of what people are using today. And so that stuff might move along very quickly. the really experience-based stuff where you're just kind of need to to get a feeling and it's going to have lots of users it's still going to have a lot of humans involved but their jobs might be very different i want to switch gears again because

36:17Emily Peck: you've been talking a bunch about the way that large organizations work and the way that AI has really changed the ability of large organizations to see into other parts of the enterprise and to operate. And we were using the example of Microsoft, but I feel like the really germane and interesting example is the Pentagon. And Claude managed to sort of take over the Pentagon in record time and everyone loves it. the business of warfare, like the number one thing that large armies and defense departments do is deal with making sure that information gets to where it needs to be at the right time.

36:57Emily Peck: It's the core problem that they've been solving for millennia. AI seems to have really upended the way that the Pentagon works. Palantir is all up in there and is making huge amounts of money. And there does seem to be a vibe in the air that AI is truly transforming the way that modern warfare works, not only in terms of like it can control autonomous drones and that kind of thing, but really up there at the sort of org chart level. And I'd love to know how you're seeing that and what you make of this like beef between Pete Hegseth and Anthropic.

37:36Paul Ford: Oh, well, you know, I'm always over there at the Pentagon talking to those guys. I'll tell you what I, there's a wonderful formulation that your listeners might find useful. There's a sort of programmer, developer, a person named Lori Voss, works at AI companies. And they wrote about something that actually sounded very reductive, but I come back to it all the time, which is that the really good usage of these tools is to take lots of text and turn it into less text. They're just good at summarizing. And actually, when you look at how things are built on top of LLMs, it tends to be that they spin up a lot of text and they summarize it.

38:11Paul Ford: That's what deep research is. It goes out to the web, gets a lot of text, summarizes it. We've all seen it make bullet points, right? Now let me take you back to— Oh, God, that's my job. I'm screwed. Well, maybe you can make them faster, like John Henry. We'll figure that out right after the podcast.

38:27Elizabeth Spiers: Okay. Emily Bott is now writing six newsletters instead of one.

38:30Paul Ford: I mean, the thing is you can anyway, but you probably shouldn't. Everybody remembers World War II. It was a bad one. What was the Winston Churchill famous dictum about how he needed to get information every day? It was that he wanted one piece of paper, right? And he begged for it because everybody kept giving him these big briefs. So LLMs are good at that, right? So everybody can have their one piece of paper summary that is probably can be as good as a human. God knows how you validate that. Like, is that the whole process?

39:01Felix Salmon: No. It cannot be as good at summarizing as I am. No.

39:05Emily Peck: But it can definitely be better at summarizing than Pete Hegseth is.

39:09Paul Ford: Well, and Emily, it can be better at summarizing like 10 ,000 pages of CIA briefings, right? No, fair enough. I think that's true. And so like, that's, I think, probably the most exciting thing. Also, Palantir is funny because they've got this core technology and they wave their hands around it. But it's like kind of databases that are kind of cool with funny names like Foundry and Gotham. And people like working in it. I hope those are typefaces. No, no. I know. I get it all mixed up. Anyway, and they have like 100 clients. They're not that big in terms of like their world, but they just make a ton of money.

39:43Paul Ford: And they ship software. They go in where a big consulting firm had been for a year and a half and delivered nothing. And Palantra is like, I'm going to get you these things in four months. I have this starting point. And so you combine these worlds, right? You've got accelerated software delivery. They like AI. I think they're called forward engineers or sort of forward deploy engineers are in there kind of helping you at the medium-sized city police department that got a grant to do something and get a drone monitoring system set up. And they're like all in it. They're just going to get it for you.

40:15Paul Ford: And over on the other side, you have the ability to finally summarize when everybody else was refusing to give you the short bullet points because they wanted to show their value. you, now you have this sort of pipeline of information coming through. So you feel really empowered and you feel that you don't have to be as beholden to your team. And so it's just a lot of those dynamics playing out. It's just a bunch of people, right? It's like the Pentagon is not a thing. It's humans in a shape. A pentagonal shape. It is exactly right. And so the information flows through that, but it's used to make life or death decisions.

40:46Paul Ford: And so we focus on it in a different way, but the core technologies are still the same.

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43:42Felix Salmon: I don't know. I've lost track of time. This is what AI does. I had a thing today. Well, Harvard had a thing about how it fries people's brains.

43:50Paul Ford: I like how you mix yourself up with Harvard. You're like, you know me. Me, Harvard.

43:54Felix Salmon: Well, I wrote about it. I summarized it and put bullet points on it. So I feel ownership.

43:59Emily Peck: Oh, absolutely.

44:00Felix Salmon: You know how it is.

44:01Emily Peck: I think it's time to do some numbers. Elizabeth, do you have a number?

44:04Elizabeth Spiers: Yeah, my number is four. And that's the number of minutes it took me using Claude to Vibecode, an app I'm calling Wrongabot. and all it has, it has two fields. One says Elizabeth says, and the other says Felix says, and then you click a button that says who is wrong. So initially I programmed it so that the function completely ignored anything that you put in the field and said Felix is wrong no matter what. But then somebody pointed out that it says Felix is wrong if you put in Felix says I am wrong. So I had to then put in an exception so that now if Felix says I am wrong in the field, which is an unlikely use case, but it returns for once.

44:42Elizabeth Spiers: Felix is right. That's the promise of Vibe coding. You can antagonize your colleagues.

44:48Emily Peck: So if I put in like Felix says that Elizabeth is always incredibly insightful and always right, that is still wrong.

44:54Elizabeth Spiers: Yeah, I was a little lazy. I didn't put in an exception for that.

44:58Paul Ford: I mean, you can't put this on the web because it would get exploited, but you could actually put a Felix simulator into that app and it could just. That's true. Oh my God.

45:07Felix Salmon: I miss Felix at work, so I could do that. I could just put it into Slack and then.

45:11Emily Peck: Yeah, you can have a Felix bot in your Slack and then you can ask it questions and it'll be like, but where's the time series?

45:18Paul Ford: But four minutes to have a piece of software that was live on the web, right? Incredible. Yeah. And look, there were ways to do that kind of before, but not like that. That is new. Why don't you go, Emily?

45:30Felix Salmon: Well, I have two and I can't decide. So you decide for me. Is my number nine or is my number 145? let's do nine nine okay nine nine is the number of windows that donna kelsey is replacing on her modest two-bedroom two-bathroom home in orlando florida the donna kelsey is as felix i'm sure knows the mother of travis kelsey and has a podcast and is marrying taylor swift yes correct and tmz had a story earlier where they were like exclusive donna kelsey is remodeling her modest two-bedroom home in Orlando, Florida. And because the internet is still fun, they ran with it and they were like, breaking, there is a war going on.

46:15Felix Salmon: And Donna Kelsey is remodeling her modest

46:18Elizabeth Spiers: two-bedroom home. For energy efficiency.

46:21Felix Salmon: Yeah, just because there was some seepage from the air conditioning. So she's doing the windows and the doors.

46:27Emily Peck: Well done, Donna. I like you.

46:29Felix Salmon: Yay, internet. You can write to me and guess what the 145 is because you might be able to.

46:34Emily Peck: Is that the time I'm going to clock off this afternoon and just go?

46:38Felix Salmon: Probably because you're so much more efficient now because AI. Exactly.

46:41Emily Peck: I'm much more efficient. My number is$14.5 million, which is the number of dollars that a guitar sold for at auction this week. This is a guitar called the Black Strat, which used to belong to David Gilmour. This is now the most expensive guitar ever. It was owned by the late Indianapolis Colts owner, Jim Ursay, who put three of his guitars up for auction. And all three of them, three of his guitars sold for more than the previous record, which was a Kurt Cobain guitar that had sold for$6 million. So there was one went for$6.9 million and one went for$11 million and one went for $14 million. Like suddenly guitars are an asset class.

47:23Emily Peck: This comes in the wake of the Pokemon card that went for$20 million that was bought by Anthony Scaramucci's son. And I feel like just crazy expensive collectibles now have suddenly become a thing. They're the new meme stocks or NFTs.

47:41Paul Ford: One of the first things I vibe-coded was a Pokemon card trading game for my 14-year-old son. And I was like, this will be a fun way for us to interact. Essentially, you had to build your Pokemon trading empire. And I got real Pokemon pictures. And I put a little work into it. We were on vacation. This is how I interact with my family. and I was like, check this out. And he just smashed the phone for two hours refusing to make eye contact until he cornered the entire Pokemon card market. So can you give me that game? My 10 year old would lose his mind. I mean, I will, I absolutely will. It was funny because I thought I was breaking us out of the cycle.

48:19Paul Ford: But I'm sure.

48:21Emily Peck: Do you think he's gonna become a Pokemon trader in IRL?

48:25Paul Ford: He's really interested in it, right? Like he's a little bit of a math kid. And so I'm not surprised that Pokemon is simultaneously about economics and building databases. So, you know, which is why it's so fun. Is this true, Elizabeth?

48:39Elizabeth Spiers: I thought it was about little yellow creatures. It is kind of true. My kid was in a Pokemon club for a bit where they were supposed to actually play the game. And then none of the kids were interested in playing the game. So they just traded. Like, I think they're all just going to grow up to be little private equity people.

48:55Paul Ford: No, it's real. It's, you know, why is poker? It's something like that. It's just little tiny children exchanging currency in the form of tiny animals.

49:05Emily Peck: Amazing. All right, Paul, come up with a number off the top of your head.

49:09Paul Ford: Oh, well, no, actually, you know, it's funny. I'll get you one. I get an automated mail every day from a Claude bot that reads something like 500 different news sources summarizing the AI news of the world. Then I go and read the pieces, and I pick good paragraphs from them and put those on LinkedIn. But it's my feeder source. So hold on just a second. Let me find it. It's called Daily Briefing. And it gives me top stories, and it gives me top numbers every day because everybody likes numbers. Yeah.

49:38Emily Peck: Wait, so this is Slate Money's first AI-generated number. I like this.

49:42Paul Ford: Boy, I got a bunch of good ones. I got a little AMD, a little cursor, some real nonsense. I mean, the one that leads, which is probably the one that makes the most sense, is that it's$26 billion. Is that a number of dollars? Yes. And that is NVIDIA's planned investment in building open-weight AI models because it wants to directly compete with the Claude codes and the Claudes and the open AIs of the world or whatever compete means when they're all together. So it's a big number. They're going to double down. They also, the thing with NVIDIA, though, is they're also very invested in things like world models, meaning like, you know, more about making the robot behave than making language get emitted.

50:20Paul Ford: So, like, they're kind of all over everything and they're so giant.

50:23Emily Peck: But NVIDIA, but this is super interesting. If NVIDIA is spending$26 billion, which is, I'm just looking up on my notepad here. Bloomberg Terminal? Actually quite a large amount of money. Oh, we forgot.

50:35Elizabeth Spiers: Wow.

50:35Emily Peck: Even by AI standards, that's like quite a lot of money. They are doing the thing that OpenAI does, that Anthropic does. They are building their own AI model. And on some level, I guess they're competing with those companies?

50:49Paul Ford: They are, even though they're some of their major buyers, they also have, obviously, some of the cheapest access to NVIDIA chips of anybody. Probably more directly, they're competing with Google, who have their own TPU chip, which is like the NVIDIA chip, that you need to do this kind of AI model building. These are all the things that use up all the water and burn up all the energy. And so Google is able to do more and more with its own hardware. And I'm guessing NVIDIA is just like, no, we would also like to be a super mega growth, unbelievably large meta company as well. And so that's.

51:22Emily Peck: So let me ask you that, because obviously building AI models is ludicrously expensive. And in a capital-intensive industry like AI, the returns intuitively accrue to the places where the costs in the capital is cheapest. And that would be Google, Microsoft, Amazon, NVIDIA, rather than equity-funded startups like Anthropic and OpenAI.

51:49Paul Ford: Yeah, but at this scale, do you really count them? I mean, they're on their like series double queue at this point, right? Do you really count them as equity-started funding? They're about to go public. They're going to be sloshing in money.

51:58Emily Peck: Well, I do because, I mean, yes, they can raise a lot of equity, but it's still equity and equity is still expensive. But more to the point, what they don't have is the hundreds of billions of dollars of cash flow that Google and Microsoft and NVIDIA have. Right. NVIDIA can just sell chips and Microsoft can sell Microsoft Office and Amazon can sell junk on the Internet. And that will give them cash that they can use to fund these things. whereas they are making a certain amount of money, OpenAI and Antwerp, but they're not making that kind of money in terms of revenues.

52:33Paul Ford: There's a strong case to be made that of everyone, especially now that they're really catching up, Google is the one that can win this. Apple can't quite get it together on AI. Like Google sort of slopped it all over the page results, but the Gemini product is good. And it's not quite as good at coding as cloud code, but it could get there.

52:50Felix Salmon: Today, we're talking on Friday, there was news that Meta is slowing or delaying or postponing whatever it's doing with its attempt at an AI model, and it is using Gemini. So I kind of feel like we're going to see more of that.

53:05Paul Ford: I mean, I think Apple is too. I don't know if I didn't know that about meta, but I think Apple is as well. And so they're incredibly expensive. They're prohibitive to build. I think, look, where does this go? There's a couple different places. One is there is some evidence, just if you look at the scale of things, we're not going to get another exponential leap in LLM technology. They're going to get iteratively smarter, which is why Cloud Code was such a compelling product because it was a true product built up from that stuff as opposed to just sort of like another bunch of magic tricks that happen when you type in the prompt.

53:35Paul Ford: Like it has a discrete way of working that you can understand as a human being as opposed to just coming out of nowhere, right? So it could be that like we're kind of getting close to an end with this stuff and they'll get better, but then we'll have to build up from them and integrate that with the way the computers used to work. That could be exciting because they could clean up all the mess that computers made before instead of just making mess of their own. Then there is the like, no, we need a whole lot of new models. And we're going to need to double down because there could be a lot of exponential growth here.

54:03Paul Ford: We need to get some more nuclear reactors. We need to get more GPUs. And this is kind of where the market seems to want to go, right? Like, because there's so much growth left. We haven't figured out even the fundamentals. Let's go. And so the huge incumbents have a lot of advantages there. And then there is sort of the deep seek wildcard, which is actually, no, hold on. We found some ways to do this a lot cheaper and a lot faster. We were able to build our own models much less expensively, but they do pretty well and they use less energy and it used less energy to build them. So that part of the cost went away.

54:34Paul Ford: So you actually don't need quite as much revenue to incrementally make improvements or even maybe exponentially. You can use good old fashioned know-how to do that. So there are all these different possible paths forward and everyone can vociferously argue that one is correct. We've all been slapped across the face by this industry so much recently that I'm loathe to predict anything.

54:58Emily Peck: On which note, I want to flag that we have a Slate Plus segment where I'm going to ask you about that big debate that people either love it or hate it. And I want to talk to you a little bit about who loves it and who hates it. But for the time being, I think that is it for Slate Money this week. Thank you very much, Paul Ford, for coming on. This is always amazing when you're on the show. It's nice to see you, my friends. Thanks to Jessamyn Molly and Merritt Jacob. Me, I love. But mostly thanks to you guys, you lovely listeners. We love you, especially when you send us emails on SlateMoney at Slate.com.

55:35Emily Peck: So keep on doing that and we'll be back next week with more Slate Money.

56:05Felix Salmon: mentors, educators, and parents to keep kids happy. Learn more about our commitment to finding lasting solutions at empowerourfuturecoalition.com slash solutions. Paid for by the coalition to empower our future. Shipping, billing, admin, payroll, marketing. You're managing all the things. So why waste time sending important documents the old-fashioned way? Mail and ship when you want, how you want with stamps.com. Print postage on demand 24-7 and schedule pickups from your office or home. Save up to 90 % with automated rate shopping. That's why over 1 million small businesses trust Stamps.com.

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