20VC: OpenAI's Sam Altman and Brad Lightcap on The Future of Foundation Models: Will They Be Commoditised | How to Solve the Problem of Compute | Open vs Closed: Which Dominates and Why | Which Companies and Verticals Will Be Steamrolled by OpenAI

24:31And in some sense, one of the most important decisions we ever made was this one. And then includes things like deploying Chattupe T into the world and getting the world to take advanced AI seriously, which we tried to talk about for a long time and didn't really work, and deploying that really did. But as we think about future models, we underestimate it because we've lived with these models for so long and because we watched them get better and better little by little, we underestimate it how much even with our strategy of iterative deployment, lurch forward some of these things would be. So as we think about the next models, we're trying to find a way to make that even smoother so that it feels closer to the smoothness we feel internally to the external world.

25:10Do you think this your energy of iterative deployment will still be possible moving for what is you get bigger and bigger. You see obviously a fair and long released, some on like medical, a scientific writing and you got terrible blowback and heads pulled it away. But obviously it did there and it got an 8 % reduction in share price. As you get bigger and bigger and bigger, racing and imperfect product can have such ramifications. Is that iterative deployment still possible over time? I think expectation setting matters a lot, but with the rate expectation setting, I think it is possible. Yeah, I would agree with that.

25:39I think we learn a lot also. And so when we really Sora, for example, we get an incredible amount of feedback from the creative community, from media, from industry. And we actually started now to incorporate that feedback and how we think about our research roadmap for that specific modality. We kind of start with expectations really low. We just try and learn, and we really kind of just listen to the world, and then we try to incorporate that as best we can so that by the time we actually have something we want to share, it's something that really feels useful and people have natural familiarity with it.

26:08And it almost feels like it was kind of built more for them. And I think that's like the mode that we'll operate in somewhat here. It is really iterative and it really is this kind of more co -development with the world maybe more than the world appreciates. One final thing that I do want to go into GTM, but you mentioned it was the medical advisor earlier. I hate you going to passion for how on the AI can solve cancer and specifically I'm certain medical. Well it's more like I have a passion for how AI can almost they solve help like greatly increase the rate of scientific progress. And carrying cancer would be a great example of that.

26:37But I do generally believe there's definitely just a personal element of excitement. I think science is awesome, but I genuinely believe that scientific progress is like the highest order bit of progress for society, economic growth, quality of everyone's lives, all of that. And if AI can help people, meaningfully, increase the rate of scientific progress, which I believe it will, I think that will be a triumph. What do you think is the biggest barrier to that happening? Well, I think the models are just not smart enough, which sounds like a annoying, low information kind of cop out answer, but I think it's like deeply fundamentally true.

27:12The models just aren't smart enough. You fix that one thing, all these are things get better. There will be all these ways that we have to figure out integrate tools into people's workflow, and you know, modelability in different areas will matter a lot, but if you zoom out, doing scientific research with the help of GPT -2 would have seemed fairly laughable. Would GPT -4 people do use it just to help them do science just an extremely primitive and limited ways? And with GPT -6 I think people will say, hey, this is like helping me as a general purpose tool in all these ways. And then with GPT -8 maybe people are like, you know, this can do some limited, maybe not so limited tasks from me.

27:46Can I move to the company's scathing? Because I think it's really important to cover. I mean this is the most unprecedented company scathing really in history, especially when you look at speed of revenue growth. Brad, you've been at the forefront of that. How have you scaled so far so efficiently and what's the secret to that and things seemingly not breaking? Well, things always messed up behind the scenes, but I appreciate you saying that on the outside at least it doesn't seem like things are breaking We found a moment with Chachi BT that it was the first like really human experience people have had with the technology And we hear stories all the time of like where people use it and it continues to amaze us actually how diverse these stories are It's like, on the one second, you're hearing a research scientist at a company talk about how productive it's made them.

28:26And the next is like, this thing is writing code for me, MSO for engineer at XYZ Startup. And the next is like, I'm a new parent. And I don't know how to take care of a baby. But I ask this thing 80 questions a day. And it helps me understand how to navigate life as a new mom. And the same tool can power each one of those experiences. And when you have something that's that fundamentally diverse, and I think that kind of fundamentally accessible. It's just bound to have a really important impact in adoption and how people use it. And I think that obviously translates to a business impact, but our focus is just continuing to push on that front.

29:01The B2B business is obviously different. Cadence to that business, there's more of an adoption cycle in the enterprise. We've had amazing success on the developer side, so we've always been a company that has really prided itself. I think we kind of build for who we know. And so we've tried to build the best developer platform in the world for AI. Enterprise is a new focus for us. And so there'll be more of a process to building for the Enterprise, but it's one that we're excited to take on and a lot more come. Can I ask on talent? Is it bad if talent wants to join because open AI is the oldest company, it's the fastest -growing company?

29:31Probably. So everyone has to join for the mission, because I'm always like, does it actually, we always say mission mission mission? I mean, I think it's bad just because it makes us like harder to filter. But yeah, like I do kind of want people to think that they're doing something that's really important. I watched what has happened to other tech companies when they just become the place you want to work because it's a good resume item. You can like filter against that to varying degrees. As you said, it doesn't literally need to be told a 100 % true 100 % of cases. But I think companies that lose their mission orientation and get taken over by mercenaries usually come to regret that.

30:06even invest in some of the best founders. Are there any of that stand out as ones that you've learned from even invest in and are shaped how you think about building? A lot, yeah. I have been extremely fortunate to work and like be along for a small part of the ride. I think with like many of the best founders of my generation. And I'm also happy that they have been willing to like spend so much time now helping me. Can I push you? Are there one or two that stand out and has there been a less naughty from them? Chesky has been incredibly hands -on and helpful to me over the last year. and a half and is really good at a lot of things that I am not good at and have had to like come up to speed quickly on how to think about how we talk about our products, how to think about how to build great products.

30:47He is really a special person. The Collison brothers are incredible and like every time I talk to them I am like that is a new deep insight that I just never would have thought of. It's like a totally nonlinear thing. But I would like I invested in a lot of companies for a long time. So I have like a long list of incredible founders and I'm very grateful to have been very willing to help out in different areas. I think in the same way that I tried to learn a little bit each from a lot of different investors, trying to learn a little bit each from a lot of different founders has been a great strategy.

31:17Can I go back to usage? You mentioned that divergences in usage from consumers every day may be at parents, may be at scientific researchers, you've also built an incredible go -to -market with some of the large enterprises in the world. One of the biggest lessons on enterprise adoption and how large enterprises are thinking about it, approaching it, adopting it. That you think can make worthy. The biggest one is enterprises have a very natural desire, I think, to want to throw the technology into a business process with the pure intent of driving a very quantifiable ROI. I know what none of those words mean.

31:50And it sounds great. I mean, I mean, this is my joke about can't do. I couldn't. There's three strategic levers. I manage my supply chain and it costs me X per year. and I want to take AI and throw it at a specific process in supply chain management and cut 20 % of my spend out of this specific area that I spend money on. That type of thing. And that's great. We are here and happy to help you think through that problem. I think people, though, criminally underrate how important it is actually and how much like return you really get on just giving people access to the technology. You can't quite quantify exactly how it works, but like someone that used to spend two days doing something that now spends two minutes doing something and is freed up to do like 85 other things in their daily life.

32:31That doesn't really show up in how you would think about ROI as an enterprise. But imagine doing that now 10 ,000 times over, 100 ,000 times over. How do we explain that to enterprise? Because you're right, it's not like a budget line way. Oh, we got rid of X. Yeah, it's difficult to show that supply of time shift. Part of it is just having time to show it. Cheshire BT is business products, it's still so new. We released enterprise back basically in late August, September last year. And team is a self -sold product. We released earlier this year. So the time in market has been virtually zero and enterprise adoption cycles are slower.

33:01So I think part of it will just come with time and part of it just comes with expectations of your workforce will want these tools and also like you're gonna start to hire people who will have come from a world where they could only ever use these tools and they can use as much as they'd like and they will expect to be able to use them in the workplace over time we will start to see that shift. Right now I think that's there's this kind of weird miscalibration of of where people think they should be deploying AI that's gonna have high impact with where I would say they should be deploying AI. What questions do you think the biggest companies don't ask that they should ask?

33:33A lot of companies think it's static, so a lot of companies think GPT -4 is the best the models will ever get. That's understandable. Every technology they've ever had to adopt has been relatively static. If you think about what the iPhone looked like, what mobile looked like in 2009 versus today, it kind of is the same thing. Like the form factor change a little bit, they're faster, they're like higher resolution, but like the technology is pretty much the same. Application developments pretty much the same. Same thing with Cloud. Here they've been handed this new technology, and I think their expectation is like, well, this is it.

34:01And I think they don't ask enough about really how steep that rate of change is. And like, how to think about like what the next wave of the technology will be in the way after that. And how to think through implementing it. I think they're set up for that rate of change. Like, you know, we're of the in London now, European corporates are not that fast moving. When you change as fast as you are changing, It's almost very difficult because they get used to their workflows and processes and then you change and you update and it's like, oh fuck They're all gone. They're out the window. Do you see what I mean?

34:29It's a little hard Yeah, no, it's it is hard and that's what makes our job hard right is I think companies have a desire to want to move that fast But when you're operating at 100 ,000 person or 200 ,000 person scale, it can be really really hard And so I think that'll be the big question over the next few years for us It's time you mentioned either research, shiven, and culture and the importance to retain that When you bring in a go -to -market function and sales leaders and wholesale teams, it's very difficult to blend product and sales functions or cultures so efficiently. How do you think about the challenges that one faith has?

35:00I think this is where Brad and I have a great partnership in that we have different opinions about how to balance any particular decision and we're, I think, very good at deferring to the other based off -awareness, like more context or feels it will have a more important impact. But we have really deep agreement, I think, in a way that many people in Brad's role wouldn't about the critical focus of making sure that we let research drive product and product drive sales. Now that doesn't exclusively mean that, of course, there's got to be feedback the other direction. And one of the reasons that we love having users now is this is like the most important reward signal you can get for if the model's good or not.

35:37It's like how useful is it really to people like that? That's what matters. But we also know that the best thing we can do to sell more product is to make the product better And the best thing we can do to make the product better is to have better research There's like zero disagreement between us ever on that and that is really important It's funny you mentioned the uses that are trying to add a shorts from massive before he said I'll Sam about growth and asking how his mindset has been changed on growth post open AI because it is such a a different story. I think Alex Schultz is a legitimate growth genius.

36:10He'll be there, I'm not talking about this retention curve and the 30D here and the that and this acronym. And I mean, he really understands the dials of things. I think you usually don't learn that much from failure, you learn more from success. But I think you also don't learn that much from like extreme break all the rules, unrepeatable success either. And what we had with TanGPT, I would be hesitant to say I've learned anything at all about growth. like have a once in a generation technological revolution that's not really like actionable advice. If I wanted to learn about growth, which I do, I'm now very interested in it.

36:39Alex probably can't advise me on it at this point, but that's why I was normally asked. Why didn't you not learn from failure? So I always disagree. You learned something from failure for sure. You learn some things to exclude, but at least in my own experience, having failed at many, many things and succeeded at some, I have learned much more from the successes. What has been your biggest learning from this success? I mean, so many. Like, what to look for when hiring people? I don't hire externally that often. I'm like a big believer, for like my direct reports. I'm like a big believer and try to like, promote into that one you can.

37:09But certainly, what to look for when promoting someone. What to look for in a founder? I would say like, yeah, I can like point to my extremely long track record of failed investments and say, I made this mistake here. I made this mistake there. I made, you know, this one over there. Well, all of the obvious things, and then some, I think some of the things that I look for more than other people are founders that are going after something that seems big if it works. I think that is way more important than people realize to like the really outlier returns. So I'm happy to like lose 9 times out of 10 and like really 16 on the 10th company rather than kind of like do okay 7 times out of 10.

37:47I think founders that are like very good at generating lots of new ideas, founders that have like a very fast iteration cycle. Obviously like like, you know, smart and determined and all of those things matter. Oh, great communication skills are something that I really look for. Do you? I keep, I fucked up so many, I mean I've missed so many great companies, but I've fucked up because you get an engineering that's CEO, and respectfully, especially at seed, or sort of say where I tend to invest, they're not so honed, and so they don't have that communication. Yeah, polished, I don't worry about, but like, as that great CEO used to, like, I don't mean communication, like, can someone sit in an interview and be super charismatic and hit the talking points and like, no, it could clearly not me either.

38:30But I do think a lot of the job is communications driven. You have to be able to explain to the company what we're going to do and why and you have to be able to hire people and get them to want to work with you and you have to be able to sell things to customers and get people to try your product at some point you may have to talk to wider audiences. So I don't mean it literally is, you know, can the person give a polished interview? Because I may make it my whole life without being able to do that. We'll see. But in the day to day, you know, able to clearly explain what you're doing, why people should care about it, what you'd like them to do to help you.

39:05That's super important. So I don't want me to do a quick fight. Do you have to ask, on the people that you hire, don't you, I? One thing that's quite striking is they're a little bit older, or it certainly appears that way. How do you feel about hiring for experience versus is hiring people who would be new to a job, but may have that hustle and hunger. And am I wrong to say that you hire for experience in that little bit older? I think at least in my works where I've set hiring policy and whatnot, there's a different scene kind of what the composition of your hires are and kind of what the composition of responsibility is in the team.

39:36I try and keep this kind of team where like great ideas can are like kind of always elevated. By and large actually I would say like the really really good ideas come from unexpected places on the team, not from the most experience and of the team always. And that's kind of my advice, is find a way to make sure that there's this very, very flat, kind of very, very even playing field when it comes to how you kind of look to the team for perspective, for decision making, for judgment, and for creativity. You do need experienced hires, I think, in that they bring a little bit of more perspective, obviously.

40:07But I tend to think that really the company changing ideas actually by and large come from places that are not not those hires. Do you agree? I think there's like some roles where experience really matters and somewhere it either doesn't matter as a slight negative or it could be a big negative. I think like our leadership team is probably more like 30s and 40s than the 20s and 30s you would see it. Other startups and I think are technical people skew like slightly older. I don't have numbers but you know maybe I would guess that like the average age of the technical team is like early 30s instead of the average being like late 20s at some other tech companies.

40:45I think part of that is just the sort of like path to becoming a great researcher. There's huge exceptions in both sides and I don't want to say I don't care about experience on the whole but I think there's like amazing people with tons of experience. There's amazing people with like almost no experience at all. Like whatever we're doing seems to be working but I don't think about it as like like, do we want more or less experience? I think it's very much like, who is the person? Like, is this the person? I'll add one thing, which is there's a lot of various explicitly where people coming in with experience, I think what we do is so categorically different.

41:18It is an entirely new category, the way that people kind of engage with, consume, use, talk about, put your verb in there. This technology is different. So the playbooks for how you actually like bring into the world are really different. There aren't playbooks for a lot of these things. And so like the approach you take to solving problems doesn't necessarily benefit in always at least in my world from People who have done it for 20 years before yeah, one of the joys and new industries is that levels of planning failed It does and you used to listen crypto to in particular It's on the 19 rows with justice impact for the 45 row because it doesn't matter I think in general if you could like sample someone in open AI and look at the role they're doing in the level of responsibility They have and the impact they have and say you know what I have expected this person to be more experienced or less experienced given that You would say on the whole I would have expected slash maybe even hoped that this person was more experienced.

42:06Are you ready for a quick fight? Sure. Okay, so 60 seconds will last. Let's start Sam. What's the single biggest challenge to open AI over the next 12 months and then five years 30 seconds each? Doing the best research and the best productization of like the best innovation on that stuff over the next 12 months. Am I set five years for the second there? sufficient supply chain and compute. Brad, if you change your mind almost at the last 12 months, I think the rate of adoption in the enterprise is actually going to be way faster than people realize. I think we will buck convention on that. Enterprises have a reputation as being slow adopters of technology.

42:43I think that will not be true here. Does that differ by geography? No. Do we have loads of experimental budgets? Do we have loads of experimental budgets? Well, we have real budgets and that will help. Sam, what are you most concerned about in the world today? The whole thing just feels like way more on the whole situation of the world, the geopolitical thing, the sort of socioeconomic stuff, politics. It feels more unstable to me than it has felt since I've been paying attention. And there's no like one thing I would say that I couldn't with confidence tell you like, here's the crux of it or here's the root cause.

43:17But the general macro instability feels high. Brad, what's been the most unexpected thing in the scaling of OpenAi? I think it's how consistently the scaling of models has worked. It still breaks my brain. Like I don't, maybe I've been, we've watched the same trend line for six years now, but I still find it incredible that you can make these models bigger and they get predictably better. And that is a tremendous gift. Sam, what do you not do much, old, that you'd like to do more of? If time is not particularly friendly. I don't really read anymore. I used to read a lot. That's a sort of sad change.

43:54Would you like to make more room for it? It's probably not in the cards in the short term, but someday you don't know read Slack and Google Docs. What do you wish you had more time for the E -Done today, Sam? I'm okay with this trade for now because I know it's not a for everything, but I have basically like run out of time for real life. I don't want to get to hang out with friends that much. I don't get to like do the normal like life stuff. It is both totally a trade. I'm willing to make and then again it helps to know that it won't be a forever thing, but it is still just sad. Are you happy?

44:22I am really happy. I wouldn't say I'm having fun, but I am really like deeply happy. I have fun. That's great. Good for you. I mean, you both also got married in the last year, which is very exciting. That is very exciting. Can you impart some wisdom on how do you retain a romantic relationship apart and a happiness there where you're also, I mean, traveling all over the world, literally every day? Communication, I'm still learning it, overcommunicate, be empathetic and appreciate that like this job is as taxing as probably anything on Earth. And the person though that is really paying the price for that is not you, it's your significant other.

44:58Look, I just got 10 off, 10 lucky. Breaded to Christy is really great, but I think having a partner who is just sort of like, this is like not what I always sign up for, we used to have this like nice quiet life. And having a partner who is just like supportive of it, who gets it, who's like, you know what, you go deal with that, I'll like hang out, We'll have like a lot of time. It's the kind of the one other thing I make time for but having a supportive partner Not I mean, that's just supportive having like an enthusiastic partner, which is like this is really important You go do this like I'll make it work I'll try to like be flexible around it.

45:28I am extremely extremely grateful. Did you know straight away with both your respective partners that they were the ones? V pretty early. Yeah, yeah when you look forward 10 years How do you see the state of the world then and are you excited for that future state? That's for both of you. Yes, we wouldn't be doing this work if we weren't excited or at least I wouldn't. Tremendously, I hope that people look back and say we cannot believe how barbaric they had it in 2024, in the same way that we could look back a few hundred years or many hundreds of years and say that same thing. It's like not that we're not all appreciative and grateful for life today, but people get sick and die prematurely of disease, not everybody has access to a great education, not everybody kind of gets to do and spend their time the way they want, to say nothing of like like the unimaginable new things that we'll have in this future.

46:14Again, it won't be all good. I think there will be like real things that we lose. But on the whole, I am tremendously excited for what a world with genuine abundance looks like. I want to say a huge thank you for doing this. I want to say it's been so nice doing it in person. I so loved doing it with both of you. So thank you both for joining me. Thank you very much. This is great. I have to say, I really feel so grateful and lucky to be able to have done that show. I think it's one that we will look back on for a long time. And I once say, thank you to Brad and to Sam for being such fantastic guests.

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