Eric Schmidt: Former CEO of Google – Gratitude, Human Values, AI, Hyper-Intelligence, & Throughput

0:00You're about to make a trade. Which you do you listen to? Is it get optioning those options? or let's do a little research. Learn more at finra.org slash trade smart. Well, Eric, thank you so much for being here on the Stad Guy podcast. This is a huge deal for me. Well, it's a huge deal for me too because I have a question for you. Please. You don't really live in Stad, do you? I don't. I've been wanting to ask you this ever since I started watching you on Instagram. Thank you so much. No, I do not live in Stad, although I think we met in Stad for the first time. We did. We met in Stad for the first time.

0:39And we've done a bunch of stuff together. We have done a bunch of stuff together. And I'm honored to call you a friend. And I do not live in Stad. I actually went to Stad for the first time nearly two years after making my page. So it is ironic for sure. But I'm based in London. Excellent. I'm based in London. Around the world with your host, the Stad Guy, We welcome you back to the Stad Guy podcast, sharing stories of excellence with those in the know for those who just know. Well, as our viewers very well know, you are the former CEO of Google. You've done tremendous things with your career.

1:24If people are as curious as I am about your career and all the incredible things you've done, I highly urge them to listen to Stephen Bartlett's latest podcast with you on Diary of the CEO. I think he's an incredible interviewer and it's a tremendous episode of his podcast. And I can't compete with that at all. I'd like to take a different path with this conversation and let the viewers see a side of you that I feel lucky to have seen. Whenever I'm with you, I feel like I have this clean slate of knowledge because I feel like you're so incredibly knowledgeable. You're by far my most knowledgeable friend and the smartest guy in definitely most rooms you find yourself in.

2:05I'm incredibly curious about how that feels on your side. When you wake up and start your day, do you feel a sense of responsibility to act on the knowledge and intellect you have? and do you feel guilty if you're just having a sort of lazy day around the house, which is incredibly human as well? I start every day with a feeling of gratitude for being alive in this period and having the resources and the friends and the world that is around me. And my advice to people is if you don't wake up feeling gratitude about that, then you need to change something. Because a life lived based on gratitude is a good way to start.

2:53the problem with my life is true of everyone's life is that it ends right and furthermore the date is not known certainly not known to me maybe god knows and hasn't described it to me yet so it seems to me that i have some amount of time to take the things that i've accumulated the knowledge and the resources and the relationships and the companies and so forth to put them to good use. One of the things to understand is that when you're a young person, you don't really understand all these people are helping you. You think they're just your friends. And life goes roughly as zero to 25, you're learning.

3:3025 to 50, you're essentially increasing power. Power in the sense of influence or role, impact on the world at some level. And somewhere around 50, you have to switch to both from a gratitude perspective, but also a leverage perspective, helping others. So one way to think about what I'm trying to do now is I'm trying to use the history that I have, which spans 50 years of all of this, to actually scale the next generation. That scaling, computer scaling, AI scaling, and so forth, is profound. We're going to witness in the next five to 10 years the arrival of first AI as human intelligence, but also super intelligence.

4:12No one is prepared for this, right? I'm not, you're not, no one understands this. But it's important to focus on the significant events that will affect you, in the same sense that if you were in World War II, that would dominate your discussion. Well, this is not a war. This is an opportunity. But you have to get it right. And you have to get it right with human values. I think one of the things that we, the technologists, certainly I'm guilty of this, is we forget that humans come first. we think in terms of the algorithm and the impact. And you can imagine a situation where both today and in the future, when the algorithm is controlling human behavior, humans will rebel.

4:50I believe very strongly in human freedom, right? That's why democracies are important. That's why you should fight for democracies and freedom. And freedom means allowing people to do things you don't like within reason, as long as they don't harm you. But human freedom needs to be fought for. And this next generation of computer systems and so forth could be implemented in such a way that they empower freemint or could be implemented in such a way that they restrict freedom. Absolutely. I love what you said about the transfer of knowledge that you have done in so many different ways throughout your career and your life.

5:25And I think one incredible moment where that happened is when you joined Larry and Sergey at Google and you had already had tremendous experiences in your own career. And you must have seen something in them value-wise. You talk about these values that made them stand out having accomplished so little at the time. What were those values you were looking for in them? When you join a company with a founder, you have to make sure that their values are correct, you know, the things they care about. And over the years of working with Larry and Sergey every day, I saw that they were in alignment. A simple example is that we would, we always had a choice when we improved our algorithm to take the money to the shareholders, which would be good, or take it to quality.

6:09So we arbitrarily decided to do it half, right? We had another rule that whenever something bad happened when we showed up at work, but this was back when everyone was showing up at work at the same time, the old days, if you will. The moment something bad happened, we would get it resolved in the morning, right? especially if it was something that was harmful to people. And so building a shared agreement of where the boundaries of what you do are and what's acceptable or not is really important. When you look at many companies get confused over that and eventually some aspect of the company does something immoral or illegal.

6:46And I was always afraid that somehow we would trip over that, that we would harm someone. And I used to tell people, look, if we lose your information, we'll harm you, which would be terrible. but the press will pick it up and it'll harm everyone. So we won't do that. And I think establishing those values early in anything you do is important. And it's important to at least know what they are yourself. One of the principles of command in terms of leadership is to have an articulation of what you're doing and why you're doing it. When you're young and you're just doing stuff, you're kind of fitting into the framework, right?

7:22I certainly just fit into the framework, but eventually you figure out that you get a chance to set that agenda. Presumably, it's one of business success, learning, and invention, and helping people. And obviously, making money comes along. People get confused, and they think that the goal is to make money. I like to think of the money as the tail of the dog, right? If you get the dog right in the right direction, the tail wags and money shows up. And I think certainly in tech, that has been true. Is that also true about your own life and your personal life? Do you have such a clear decision-making process on where your priorities lie personally as well?

8:04Well, I think all of us are very bad at self-analysis and self-planning. I'm extremely good at giving you advice. It's very difficult for me to follow my own advice. And I think that's true of all of us. And I assume it's the same in reverse. And so in my case, I've gone through a series of sort of job transitions, life transitions. And what I now understand is that these are to be expected and that there's a section of your life doing one thing and then there's another. So in my case, I was CEO for Google for 10 years. That was enough, right? That was very intense. Then I spent a decade, slightly more than a decade, working on foreign policy, external relations, governance, all those kinds of things.

8:47Very interesting. I wrote five books during this period, including two with Kissinger. And now I'm going back to being a CEO again. Those are different chapters of a life. When somebody says, I'm bored, and they're in their 50s, I say, well, maybe you should change something. It's their choice. They have the freedom to do it. And if you go back to this freedom argument that I'm making, as adults, I'm not talking about kids here, as adults, we want that freedom, but you have to take the responsibility to actually manage your own time. I have gone through this cycle many, many times, and it's always the same.

9:18I miss whatever I was doing last so much that I can't imagine that something else will come along. And so I sit there and I go, oh, you know, woe is me and, you know, so forth. And then I have a conversation with somebody or I learn something, and then I get started and I try something that doesn't really pan out. Another trick with me I've learned is that I am very influenced by intelligent people who are experts and not me. So if you said, I'm an expert on A and B, I'd say, tell me more about it. And you say, well, there's a book I wrote. I say, well, you tell me. Some people learn verbally.

9:53Some people learn visually. Some people learn by reading. In my case, it's more conversation. So I've learned, in my case, I try to go to dinners and talk to people and just listen. And that's how I seem to learn. And I'm good enough that even though I don't really understand the subject, I can sound like an expert, which is enough to get through most dinner parties. I love that. I mean, is that what you like to do in your free time when you do find free time to just have conversations where you can learn? Yeah. So the first place I try to do is now I'm doing roughly three companies and we can depend on how you count everything.

10:31So I try every day to do something important for each of the companies, right? Like I need to prioritize my time. And then when I've done that, right, that's professional, then you have time to reflect. Another rule that I established a long time ago for myself, which is in the Trillion Dollar Coach book, which is about my coach, Bill Campbell, who really saved me from utter destitution and helped me become a proper CEO, is you work really hard during the week, as hard as you can, 12 hours, 14 hour days, whatever. and on the weekends when you're at home or with your family or whatever, carve out a few hours to think, which means turn off the phone.

11:11You're not texting. You're not looking at Instagram and so forth and think and write down your assessment of what you did last week and then what you need to do next week to address the things you forgot to do last week. I know that that sounds kind of obvious, but it's a good trick because it forces you to take charge of your next week. Like, oh i forgot that i have a sales problem over there or i forgot i was supposed to call this person oh i didn't have this proposal and i had this idea but i didn't get to it and then that analysis and usually then that works pretty well i eventually calculated that i work optimally 63 hours a week okay to be clear the legal limit is 40 but what i eventually for a while because i was so intense when I was younger, I would work like 80 hours a week.

12:00And then one day for various reasons, I was forced into a 63 hour outcome and I was just as productive. So you hit declining marginal productivity, a certain amount of slaving away. You see this with young people, they'll waste and waste and waste and fiddle and so forth. They should just get it done. So I learned to be more disciplined with my time. Another thing I do, which nobody in your generation does, is I use email. Why? Because email is a precise and well-written record, right, of what I want. So I send email after email after email. Your generation, which is obsessed with texting and WhatsApp and so forth, those tools aren't as efficient for organizing the world.

12:39They may be fine for personal interaction, and they're certainly convenient. But I was trained and I helped invent pieces of the email systems way back when. And I believe that you can run at least your professional life through a commitment to detailed planning, detailed thinking, this sort of introspection, and then command by email of one kind or another. I know that sounds boring, but it's worth saying because your generation doesn't seem to know this. And I say, like, why don't you send me an email? Because then you have it in your email and you can actually refer to it and you can forward it to other people and you can say, did you do this?

13:16and you can follow up and all the things that come with management.

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14:02So although using Gmail, like you say, to send an email to someone may seem like an added point of friction in my day, it actually ends up reducing 10 steps down the line. how do you reduce friction in your incredibly busy life today well one thing that i try to use is i try to be connected all the time like everybody and in my case i live a life in motion and so i'm a big fan of starlink simply because you can have these 200 megabit connection all the time i know that sounds you know like a vanity thing but if you can basically when you're in motion behave as though you're the same as when you're not in motion, your productivity is enhanced.

14:44When I was your age, the notion of having a driver to drive you to work was insane. There was one executive that hired one because he had like a 75-minute drive and everyone was complaining about him, that it was overreach and so forth. But now with, obviously with Uber and Lyft and the others, people think of it as it's become acceptable to do that. Why do people, young people sit in Ubers all day? Because they're texting. It increases their productivity. Again, that's a generational shift that I think people will forget. If you think about the information world that I had when I was in my 20s and 30s, we had very few television stations, satellite had just happened.

15:26The internet was just getting invented. We were sort of beginning to be to be able to use internet connectivity. We had none of the knowledge bases. I'm so jealous of young people now, because basically, if you have a question, you can type into Gemini, Claude, or ChatGPT, the question, and it will give you this extraordinary answer. So if you live a life of curiosity, and you have a set of things you're trying to do, and you organize your life around them, this works. Yeah. And so if you think about it, it's a series of platforms, right? So you go from, I used to have a pager. I had a boss who would call me every morning at 10, 15, and it would annoy me no end.

16:04And so I got a pager, I named the pager after him, and I gave him the phone number, and he would page me, and then I would organize my thoughts and call him where he would yell at me over something, right? Think about the difference now in terms of connectivity. And latency is the enemy of productivity, right? What's happening now in national security, for example, is all the governments are putting latency in. They're adding tariffs and they're making it harder to get in and out of the countries and so forth. In our world, our mutual world of success, the ability for people to move back and forth from Europe to the US and so forth and in the Western world for sure is a fundamental aspect of productivity.

16:44Now, why does productivity matter? Well, productivity is reflected in stock prices. Okay, that's an obvious one. All you shouldn't seek it, but we benefit from it. Productivity also just affects innovation. right look at the speed that the technology industry now moving in i think it's a speed much faster than i've ever seen and again there's lots of danger with that speed and a normal person and neither of us is particularly normal would say well why can't you slow it down there's no examples in history of people on the cusp of a great invention stopping right the the notion of inventing something new, making things better is so profound in our culture.

17:25You can't stop it. You just try to manage it. I love that. I speak on behalf of my generation that loves to complain about their desire for productivity and their idea that they're victims of distraction. But I find that the first 10 or 15 years of me being exposed to the internet and being a part of it i was actually pulling for the distraction and requesting the distraction because my experiences online would start at search either on google or on youtube i would actually pull for something now it comes to you now it hits me in the face and you know why because the algorithms are too strong we've shifted the economics from economics of scarcity to an economic economics is all fundamentally about scarcity to a scarcity of attention one paper i read said that we have now figured out a way to monetize all human attention if you actually look at how many minutes people have during the day we take all of those minutes and we bombard you with things which will distract you entertain you make you more productive you know whatever make you i'm part of that i try to take people's attention as a career well in your case you do it well but the important but the important point is that that monetization drives in economics.

18:44Now, the evil part about this is, if you look at social media, we're human. And as humans, we tend to react emotionally to things which are essentially outrageous, typically negative. Typical number is that an outrageous thing is retweeted or forwarded seven times more than a thoughtful piece. And I grew up in the, that you have to write paragraphs and paragraphs. Now people can just use outrage. And if you look at the ecosystems that have now appeared in all different, I'm not making a political statement, that's true in many countries in many different ways, they're driven by outrage because outrage sells.

19:22So what typically happens is somebody makes a statement and then they, oh my God, oh my God. And then they immediately forward it and the algorithm sees that and monetizes it. So you have a misalignment of truth and rationality in favor of economics, that is profit and outrage. So why are we so upset? It's an easy answer. Now, AI is going to make this, unfortunately, much worse because the systems, to the degree that they're targeted at revenue, which they are, these are for-profit businesses, they will figure out your trigger points. So let's say that you are particularly upset about damaged animals, right?

20:01Let's say, I don't know if that's true, but you probably are sensitive, but let's say you're super sensitive to this. You just can't take it. It will learn to give you those things because it knows you will react. And you're sitting there going like, I didn't know as many cats and dogs were being violated. I'm outraged. And indeed, it's just an algorithmic change. And because we live, the distinction we have between the physical world and the digital world are essentially merging. The two are, I think, fair to say they're actually separate. but our ability to discern the differences seems to be narrowing.

20:39And when I've talked to faculty members in colleges, they say, we have a simple answer. And I said, what? They said, get off your phone. And so I said, what do you mean? I said, when the students walk in, these are college students in their early 20s, they say, turn off your phone and pay attention, right? And encounter each other in the real world, not the digital world. And I think that's good advice. I like what you said about the AI making the problem worse, but I know that you're inherently an optimist and you'd like to see the best in things and in growth. And I would like to put my optimistic hat on as a consumer here and say that if we were at dinner together and you brought up a topic I didn't necessarily like, even though it would trigger me to be more curious about it, I would kindly ask you as a friend, can we actually switch lanes here?

21:34And I wish I could have that conversation with my algorithms. But instead of just saying switch lanes, I'd rather be surveyed on the things that I want to be fed and the things I don't want to be fed so I can actually grow from those things. This is definitely not a lack of technology in place for any of these massive algorithm operators and social media business operators to implement. Why was there never an in-between of the search, which you asked to be fed something, and the algorithm, which you directly fed something, where questions were asked? Is it a friction issue? It's a friction issue, and consumers typically don't like it.

22:19And so one of the things that happened in the last decade is that we ended up with one international fame market. Everybody wants to be famous, so everyone understands the most famous people around the world. That's not how society used to work. You were famous in the local context, in the city and town. And because of the nature of networks, we've largely lost local and, let's call it local and state kind of governance. The press isn't covering it. that sort of that whole community has gotten wiped out because of the, if you will, the flatness. The flatness means that you have, they're called network effect businesses, where you have a very small number of people, literally the curve is exponential, it's very steep, who get most of the attention, most of the money, and they become the famous ones.

23:04So an alternative would be to say, why can't the computer, I'll say it as a normal human, why can't the computer figure all this out about me before I have to tell it. So let's imagine that the computer has, and I give it access to my searches and it develops a theory of me. And it starts with a theory that I'm fundamentally good. I don't particularly want to be evil and so forth. And it stays within that boundary. And it becomes both an entertainment, but also a learning mechanism. I think that's the correct outcome. The incorrect outcome is that these systems are used to absolutely drive monetization, which means that they will drive the worst aspects of human behavior.

23:48By the way, if you go back to broadsheets, right, more than 100 years ago, they were all about outrage. You know, there was a fire here and the so-and-so was shot and so forth and so on. This is not a new problem. It's just a new medium with existing human problems. Editorial content, for example, newspapers had all sorts of standards of what they would discuss what they're not. They would have multiple sources, all of that. We seem to have given all that up in pursuit of, I'll just say, attention and money. And so once you understand that you're in an attention economy, you can make it better or worse.

24:25There's an old rule called Gresham's law, which is that bad speech drives out good speech, right? So how do we balance that? So if I tell you something that's gossip, you say, oh, that's interesting. But then all of a sudden, if I discover that gossip makes more money than fact, I'm just going to gossip all day to you and I'll ultimately ruin your mind because you take me as the computer as your alter ego. And the reason this is going to get much worse is that over the next few years, you're going to see personal assistants and agents that you empower to do things on your behalf. So this will be your most intimate partner in that it knows everything you do, where you are, who you're with, and so forth obviously there'll be privacy protections and so forth but fundamentally it'll know you better than you do and if it is organized in to drive you crazy right as opposed to increasing your curiosity increasing your independence empowering your freedom that's a problem it's effectively like having the wrong best friend the wrong partner and the person who's next to you 24 7 wanting the worst for you versus the best well you know parents of teenagers always worried that the teenager's best friend needs to be a good person as opposed to a bad person.

25:40And what will happen is occasionally the boy or girl will meet somebody and the parent will, oh my God, stay away from him, warning the child, the teenager, to stay away from somebody who they perceive as a threat. It's the same argument. I was thinking about what makes me a difficult partner. And I listed off a few things. And of course, they were slightly misaligned to the things I've heard about myself. And then I asked ChatGPT, would the shtad guy be a good boyfriend? And I'm sure some of the viewers are going to do the same thing. And the answer is? The answer is, for the most part, yes, but here are the reasons why not.

26:19The most part, yes, I kind of skimmed over because it's like kind of generic, nice things that just inflate my ego, which is nice to read every once in a while, I guess. but the reasons why not were so incredibly accurate and it's things that my friends can't even say about me and it only reinforces that trust i have so one of the questions is how does this happen remember that this thing has read all the romance novels and all the relationships advice and to me one way to understand the large language model movement which is we've been in in the last five years, which is powering everything, is this is a genuine historic invention.

26:57The way they technically work is you train it to, you take a word out of a sentence and you train it to put the right word back in. So literally, next word prediction is sufficient to produce these things. It's extraordinary. It's amazing. And that is the basis. It covers, just for everybody to know, we're not done yet. even for the even though we've run out of data to train on we can generate more data the algorithms are getting better the training is getting deeper and so forth we're not done yet with those so imagine these things as the perfect partner that well understood you gives you advice says what should i do in this situation very impressive what happens after that is even more profound the systems can now you can watch them reason and it'll give it a math problem and it'll try something and it'll try something else like a college student well i tried that it didn't work tried that didn't work and so forth many people believe that within a year my profession which is programming where i started will largely be replaced by computers doing the programming while people paying attention this is annoying to me as a person who loves programming but nevertheless it's the fate of life and the more interesting thing is that once you have the system able to replace humans by essentially AI programmers, you can apply it on itself.