Who’s Liable for Deepfakes? Why the Alcohol Industry Should Worry, and When (And How) to Fire an Employee

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1:21Welcome to the Prof G Pod's Office Hours. This is the part of the show where we answer your questions about business, big tech, entrepreneurship, and whatever else is on your mind. If you'd like to submit a question, please email a voice recording to officehours at profgmedia.com. Again, that's officehours at profgmedia.com. First question. Hey, Prof G. This is Will from New York. My question is about AI deepfakes. A recent New York Times article hit close to home when a former high school teacher of mine was targeted with an AI deepfake audio clip that caused outrage in the local community. Despite the police finding clear evidence that the audio was a deepfake, I can't help but imagine the teacher's reputation may still be tarnished by the saga.

1:59Given its increasing availability and decreasing identifiability, who should bear the liability, if any, for any damages done by AI deepfakes. Thanks a lot. Yeah, there's going to be a series of ethical questions around how we handle deepfakes and shallowfakes. So a bit of context from the New York Times who reported on this. A high school athletic director in the Baltimore area was arrested for using AI software to create a racist and anti-Semitic audio clip that mimicked the school's principal. The recording was posted on Instagram and quickly spread around Baltimore public schools. Now, the athletic director faces offenses including disruption of school operations and stalking the principal.

2:37The Baltimore case just highlights a growing trend of AI misuse in schools. So you're right. If you're accused of something, that's going on the principal's Wikipedia page. And regardless of the lack of veracity, once you're sort of accused of something or those words are just used enough times with your brand, some of it sticks, even if you're totally exonerated. And that's the problem here. So what do you do? You have to have the algebra of deterrence in place. The algebra of deterrence is pretty simple. The likelihood of you getting caught times the punishment if you get caught has to be greater than the potential upside.

3:14And the problem is the algebra of deterrence isn't in place around technology. Why? Because of Section 230 and this notion that these tech platforms need to run free and have fucking no regulation whatsoever. 40, 40 congressional hearings on child safety and social media. And how many laws have been passed? Zero. Zero. Why? Because they deploy an army of lobbyists to basically get in the way of any legislation. And two, we have this idolatry of innovators where we think, oh, these guys are great and I own their stock and they're so smart and we shouldn't do anything. And Congress people who are about 80 fucking years old, want to seem younger and want to be kind of pro Google or Facebook or Amazon, and they just don't have the skills to really understand much less like right legislation that can get through or even understands or reflects the nuance here.

4:02But we do need that algebra of deterrence. How would you do it? What would I do? Any content that is algorithmically elevated is no longer subject to 230 protection. Why? Big tech will argue that, look, this is the world's biggest bulletin board and we can't monitor who puts what and the content that's put up on this bulletin board. We'll do our best, big fucking air quotes, best. But we don't control that. Well, okay, I sort of get that. But when you program algorithms that take certain flyers posted on the bulletin board that might enrage people or they might find it cute or it might create tons of discussion because it's a piece of misinformation saying that mRNA vaccines alter your DNA, then you have made a conscious decision to elevate some content over other content, which means you are a media company.

4:51These guys all have their own LLMs and they could watermark AI content. And I think in early, really early, we want to say, if you're elevating AI altered content, you better be very careful. I mean, that also goes to, I think, whether it should be anything that's AI edited and they can figure it out. They have their own AI that could watermark anything that is AI edited. So why wouldn't you at least have a logo or some sort of watermark that says this has been AI altered? Because this principal's reputation, he's now a name. He's now a known entity in his community for exactly the wrong reason, despite I bet more people know him than the person who actually did this.

5:33This individual should be hit really fucking hard. But more than that, I think the platform that decided to elevate this content, despite having the tools to know it was AI edited, they should be liable. Specifically, Meta should be liable and remove 230 protection for A, algorithmically elevating this content and also not recognizing and identifying and warning people that it had been AI edited. Thanks for the question. Question number two.

6:27weigh on the decline. So I'm curious what your thoughts are on the industry as a whole and where it's going to go and where you'd be placing your bets if you were working in the industry. Thanks for your thoughts. All the best and take care. Anonymous from Vancouver. So I get a lot of feedback from parents saying I should stop romanticizing alcohol. And so let me give you a history of my alcohol consumption. I did not drink in high school. My two best friends were a Mormon kid, Brett Jarvis and a kid named Ronnie Drake, a black kid who was only going to college if he got a football scholarship.

7:02And both of them didn't really drink. And so I didn't drink. And things could be much different for me. My two closest friends, Adam and David, immediately got pulled out of Emerson Junior High School when they started integration and busing. Their parents didn't want them to be there. And they went to a school called Windward, which was chock full of drugs and alcohol. And I I would have absolutely done it. Anyways, I didn't drink till I got to college. Some of that was bad because I didn't ease into drinking and I drank too much my freshman year. I didn't know how to handle it. Nothing terrible happened, but I showed up to UCLA at the age of 17 having never really had a beer.

7:35For example, occasionally when we're on vacation, I'll have my 16-year-old, I'll order him a beer. I want him to understand what it's like to feel a little bit drunk and what his limits are. When I got out of college, I got very serious about working and drinking and Morgan Stanley just didn't really mix. Business school, not a lot of drinking. I started drinking in the services industry because I was traveling a lot. And I'm an introvert. And if I take a client out, I just start drinking because I'm going to have a difficult time just tolerating any of it or being charming or being likable unless I have a couple of drinks.

8:10I think there's a term for that alcoholic, guilty, fine. I don't have an addictive personality though. I don't drink at home. I've never really craved it. Also, to be blunt, I used it as a social lubricant to meet women. And I don't think there's anything wrong with that. I actually think young people should probably drink a little bit more such that they're not afraid to go up to each other. I think more young people need to be out more and bumping into each other more. Anyways, I said today at my talk at OMR that my advice to young people is to get out more and drink more and make a series of bad decisions that might pay off.

8:40But there is something afoot here. Young adults, specifically Gen Z and millennials, are drinking less. According to Gallup, 62 % of adults under 35 say they drink. That's down from 72 % compared to two decades ago. And when young adults do drink, they do so less excessively, which is probably a good thing. They're not binge drinking. According to a report published by Berenberg Research, Gen Z drinks 20 % less than millennials. Think about that, a drop-off. As we're growing younger, less and less consumption. On the other hand, alcohol consumption has risen among adults age 55 and older. A couple of things are going on here.

9:15So Peter Atia and Andrew Huberman, which have two of the most influential podcasts around health, have basically declared war on alcohol. I mean, Peter fesses up to occasionally having a glass of wine, but Huberman is basically like, this shit is poison. It is old technology and there's just no getting around it. It's really bad for you. Remember that myth that one glass of wine a day is good for you? It ends up that that's not true, that any alcohol is bad for you. And as I have gotten older and recognize that my 49-year-old liver, 59, is not the same as a 29-year-old liver, I have tried to scale down my alcohol.

9:47At the same time, I got to be honest, I love being a little fucked up. I enjoy being high. And so once or twice a week, I will take half an edible, five milligrams, and I'll have maybe one drink or no drinks at all. And when I go out and I know I'm going to be drinking, I now sometimes take an edible such that I can have two drinks instead of six or eight. I'm embarrassed to say it, but I am a real lightweight with THC. Like any amount of THC makes me feel high or fucked up, so to speak. High is probably a better word. Whereas alcohol, I'm a heavyweight. I'm 190 pounds and I've drank a lot of alcohol through my life.

10:20So I can drink six or eight drinks and I'm fine. I'm a good drunk. I never get sloppy. I'm not one of these people that gets mean or weird. I'm a better version of me, which is sort of pathetic. So I am trying to massively reduce just the volume of alcohol and I'm replacing it a little bit with THC. Now, why do I say that? The alcohol industry, let me put it pretty straightforward. I think it's fucked. So advice, if you're already rounding third and you're doing really well and you work for a great company, they're great companies, Pernod, Ricard, Diageo. These are amazing companies. My favorite brand's Acopa.

10:54I think that's Diageo. They do, I mean, there's just so many, they do such a great job of branding. It's an addictive substance. I mean, who wouldn't want to invest in it? You don't want it. Why? GLP-1 drugs. At some point, governments are going to recognize that obesity and addiction are huge scourges in our society, and they're going to get GLP-1 drugs to them, even if they need to pay for them. And these people, by the way, on GLP-1, they're losing weight. And guess what? 60 % of them, 60 % say they drink less. 20 % say they give up drinking. I had a bit of an experience with this with ketamine.

11:29I don't know if it has a similar compound or effect as GLP-1, but I have substantially decreased my drinking since ketamine. For the first couple of weeks, I didn't even like the smell of alcohol and I've toddled back. I'm drinking again, but I'm not drinking as much. So between the kind of replacement effect and the aspirational effect of designer drugs, specifically psychedelics being substituted or substantially reducing the volume of intake between the recognition that this is old technology and really bad for you. And then boom, the chaser here, GLP-1 drugs, which is going to turn off a lot of people's brain signals that they don't eat alcohol.

12:08Oh my God. It is going to be, I just think it's going to be an awful, awful decade for the drinks business. Bit of a word salad, but I'm eating more salad. I'm eating more salad and I'm drinking less. Daddy loves his outlet. His favorite beer, Rotter Burger. I found that beer out of actually my father-in-law introduced me to Rottelberger. I absolutely love it. Oh, God. I could have a drink right now. I could have a drink right now. Anyways, do as I say, not as I do. Kids, study hard. Study hard. Don't do drugs. Anyways, thanks for the question. We have one quick break before our final question.

12:41Stay with us.

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13:46When did making plans get this complicated? It's time to streamline with WhatsApp, the secure messaging app that brings the whole group together. Use polls to settle dinner plans. Send event invites and pin messages so no one forgets mom's 60th. And never miss a meme or milestone. All protected with end-to-end encryption. It's time for WhatsApp. Message privately with everyone. Learn more at whatsapp.com. Welcome back. Question number three. Hi, Prof G. Long-time listener of the show. This is Matt from Manhattan. I am a fairly long-time business owner, about five years, but I've only been running my business fully with no W-2 income for about nine months now.

14:37I know this isn't an easy cut-and-dry question, but how do you determine when it's time to fire somebody and move on from them versus seeing the opportunity to kind of work with somebody and develop them when they've made a handful of mistakes. Look forward to your response. Great work on the show. I listen three times every single week. Matt, thanks for the question. Yeah, this is a tough one. And I generally find that there's this kind of hallmark channel version of HR. And that is people always want to believe that when someone's not working out, that it's the organization's fault or if they just found the right role or if we got them the right mentor.

15:21But a small company can't wait. A small company can't make those investments in trying to figure out the right role for someone. In a small company, and this is not aspirational, I think you're sort of, you know, the term is slow to hire, quick to fire. Every time someone I thought wasn't working out and I got talked into kind of keeping them around, I would say 70 or 80 percent of the time we ultimately just ended up letting them go. And here's the bottom line. The first few years in a startup are just Vietnam. It's hand-to-hand combat. So on the supply side, you have to, as a CEO, be constantly out finding people who might want to work part-time at your firm.

16:00If you're a small firm, it's going to be very difficult to get top, top people full-time. So I was offered flexibility, but I was constantly out talking to people, meeting with people, trying to fill the top of the funnel. Because if you just let people go, well, someone's got to do the work. And there's also this kind of myth that you're going to build a firm of all A players. No, you're not. True A players want a lot of equity or they want to start the firm or they want to be a senior level person. And you can't scale a firm when everybody wants 5 % or 10 % of the company. What I've generally found is that we can either fire them in three months, which I think we're going to end up doing, and give them three months of severance.

16:39So we can fire them now and give them six months of severance and help them get on to the next thing. My attitude was be fairly rapacious or unemotional or Darwinian about the decision to let them go, but then become very generous. This isn't working out. How can I help you? I'll use my contacts. What do you think you want to do? And you should be. You can be upset. You can be angry, but you shouldn't be afraid because we're going to make sure that you have enough money and health benefits to get to the other side of this. That's always been my approach. But I have been quick to fire. And people talk about strategic hires.

17:14I think it's important to have strategic firing. I think everyone at a firm needs to understand, maybe I don't like this person, but I get why they're here. And when you allow people to fester and problems to fester and people just aren't very good and they continue on, it's kind of demotivating for everybody else. Why am I working so goddamn hard in a company where the people are mediocre? and still survive and get their check and get their healthcare. You know the people that are owners, that act like owners and are driving a ton of value. And then there's people who are individual contributors that are good.

17:42Maybe they're not great, but they're good. You need that. That's called scale. You need good, maybe not great, but good. Have a role, do their work, fine. But the people who are requiring a lot of management attention and we're constantly trying to find new roles for them, I don't know, you're a small company. You're a small company. Thanks for the question.

18:29Thank you for listening to the Prop G pod from the Vox Media Podcast Network. We will catch you on Saturday for No Mercy, No Malice, as read by George Hahn, and on Monday with our weekly market show. Hear that? The next chapter of Audi performance is here. The all-new Audi Q5, the all-new A5, and Q7. Each one a statement. Performance never goes out of style.