Grok 4.5 and GLM-5.2 kick off Token Price Wars | E22

27:00And I've, you know, after using all these models, you form a pretty good intuition. what model can take on this work and where I need to get the best model to do things. And I suspect that a lot of people are probably going in that direction where they're just picking the models that can do the job.

27:25Spiros Xanthos:Which is crazy when you think of it. We put it onto consumers now, Spiros, to figure out, like, you figure out which model works for your query. I do anything that's local, anything that's travel, I go to Gemini immediately because they've connected Google flights, Google travel, hotel search, and Google local and Google maps so perfectly that I'm like, where can I take my daughters for ice cream or chocolate mousse tonight in the eighth Androsman, in the first Androsman, wherever I am, give me a map, tell me if it's open. And like, it does a perfect job. If I ask Claude to do that or Grok or whatever, it doesn't have that local data.

27:58Spiros Xanthos:So I'm a human router now trying to figure this out as well. A different version of this, which is like when you're building on these models, right? Which I think many, many companies do, whether, you know, you're an AI company like we are, and you're building on frontier models plus your own models, or let's say you're enterprise and trying to solve a problem. It is becoming hard in the sense that, you know, because things change so fast, like in the past, you would build an application once and you were done, right? You would use it for years maybe, right? Maybe you would build a whole company around it.

28:25Now, you have to actually figure out how to do this monthly or weekly, right? And the key part, essentially when a new model drops to know what it does better. Or when a failure happens, should I go solve this failure now somehow by creating maybe deterministic code? Or should I wait for the next model to drop and it's being solved? It's not worth the investment. So that makes it actually hard when you're building applications on these. So the way you're building now software, in some sense, is dramatically different than what was in the pre-AI era, which actually makes it quite hard. And also, one of the reasons why you see maybe some of these larger enterprises, right, in SaaS and all of that, that are being disrupted, I don't think it's just that, you know, the unbundling that happens, right?

29:04It's a very different way of developing software now, and they don't know how to do it, actually. I was reading this recently, I don't remember where I saw this, but they're saying a lot of the tests that you would do on a model, it could sometimes take a few weeks to be like, how well can it handle incredibly long-term complex tests? By the time the test is done running, there's a new model out to test. So we don't even really necessarily know generation to generation how powerful the models are until we get the next model and everybody gets excited about that one.

29:33Spiros Xanthos:And the crazy thing, Sarah, is I don't think it feels like it's accelerating. It feels like every week the speed is increasing. Like, I don't know what what model next week I'm going to be told I have to use because it's that much better. And it's correct. It is that much better. It's causing whiplash. Yeah. But I honestly think this speaks to the issue of it is that the border we place on the users to decide this is actually the problem. Like if I were to characterize this whole conversation, it's exactly why. How do we have self-improvement and continual learning is one of the most critical questions, because, you know, that example of like it takes enterprises months to figure out, are they doing better?

30:14And then by that time, they have a new model. the truth is the complexity of like optimization and choice and routing like that should all be automatically designed it's the same thing with now how every company is building their own harness and everyone's making different choices i think everyone's ending up with slightly different takes but the issue is like it really should be just an optimization problem like we should know your objective like what you care about um and it should just be auto learned like how to get there And I think that's one of the most important. If I think about how conversations have changed year to year, I really hope this time and like next year, we're having a different conversation, which is not about like the paralysis of new models, but actually like just about, hey, have I seen improvements on my task and like not about which model I've been thinking about using?

31:06Because I feel like that's a major kind of prevalent thread I see in all these conversations. And it's super interesting to think about the amount of burden we placed on the end user.

31:14Spiros Xanthos:It would be like in the YouTube era, the Netflix era, when Web one point came out, we would be just expecting people to like, hey, you know, if you had a Seagate hard drive and you ripped it out and you can use this Western digital one, it's going to be much better. So everybody's like, OK, I got to take my Seagate hard drive. It's like, what am I doing here? I'm like changing from a VGA monitor to an EGA. Yeah, yeah, yeah. It's madness right now. So, Lon, the next story I think is super important because it relates to, I think, how are we going to manage as an industry the perception of these models and the danger, quote unquote, danger.

31:50And the speed at which these powerful new models are arriving. So Google DeepMind chief Demis Hassabis has proposed a standards body for frontier class AI in a long X post. The DeepMind chief argues that AGI is approaching. He sees it as miraculous, the dawn of an amazing new era of abundance. But he also argues that we're going to need robust safeguards to maintain control of these. And I'm quoting here, increasingly agentic, recursively self-improving models. So it's basically we got to proceed with caution. There's so much uncertainty. The stakes are so high. He is proposing a standards body modeled on public-private partnerships.

32:27He cites FINRA, the Financial Industry Regulation Authority. And he's saying funding would be substantial and would come from the industry itself. So this group would test frontier class models for national security threats, cybersecurity threats, that sort of thing. And as well, frontier labs would be encouraged to adopt a bunch of best practices, publishing model cards or technical details, maintaining strong internal cybersecurity, vetting key personnel and so forth. He's sort of hoping this starts in the U.S. and serves as sort of a jumping off point sort of internationally, trying to sort of codify, because as we've talked about a lot, we kind of have this Wild West situation now where the government sometimes says, hey, we need 30 days to look at this model.

33:10Other models just come out. I need to know what the panel thinks about this. Is this going to stifle innovation or is this just, you know, common sense? We got to do something like this. I think the devil is in the details. And I do think that a better education, a better point of view by the government is generally better about a technology. and however you know if we end up with you know yet another agency you know i think we have about over 300 agencies it always increases every every year i'm not sure it will actually you know if it's not implemented really really well that is not necessarily blocking the models but you know is providing maybe guidance and assessing risk.

34:14I could see that to be generally helpful, especially when it comes to national security reasons. But I can't imagine a world where we are training a model and we have to go to this place to get the model certified or approved to get in the hands of the customers, that would feel like very premature right now. I don't think we are very close to what people are saying that there is a, you know, whatever people call ASI and so forth. Like 10 years ago, you showed me these models. I would say like, this is totally ASI or AGI. We do have an AGI right now. And, you know, these models are incredibly great.

34:59They are going to do incredible things. But at the end of the day, these are tools and these tools are being used in everyday applications. And, you know, and I think, you know, I hope that, you know, any government intervention comes with some sort of that understanding. It's not kind of crazy alien technology. It is doing some things really well in coding and cybersecurity front and that has international security implications. But imagine some country could launch a really powerful model that is really great that's in cybersecurity and we are stuck in a kind of government process to get a model out to defend ourselves.

35:50I mean, that doesn't sound that great either to me.

35:53Spiros Xanthos:Spiros, what's your take on this? Should the industry regulate itself? I think that it's a little self-inflicted to some extent, what's happening right now, in my opinion. And it's worse than just the government we see in the US. I think in Europe, for example, everybody now woke up and wants to have completely control of the models and the deployments. And I think all of that came a bit from the Doomerism and all the discussions about... I think it was a sequence of events that got us to this point, right? so maybe what david says is potentially reasonable in the sense that at least you want to have predictability you know the government suddenly you know intervening and you know turning away a model maybe if this is about is this to happen at least it happened in a way that is predictable and everybody understands it but i don't think it's necessary in fact and i think it's self-inflicted and i think you know it it is actually just it's worse than that right because now i think made everybody realize or maybe think that now they need to control intelligence locally right in their own country.

36:46And I think that's possibly hurting in some sense, maybe US-based, let's say, intelligence, if you wish. So I'm not in favor of this. I think it's too early, probably. We don't know enough. And I don't think there is like existential risk in any way. And, you know, if you grew up in Europe like I did, you know that, you know, that's not the solution to our problems.

37:08Spiros Xanthos:Well, I mean, Sarah, the government can, is so far behind in understanding it. I mean, if we're using this every day and y 'all are building it every day and our heads are spinning at the pace, the government is hopelessly behind. So it would I guess what we're trading off here is a slow government that maybe people would trust more or going fast and the industry regulating itself like the MPAA, the Motion Picture Association, regulates itself. And consumers seem pretty good with that. But if it came to like nuclear or flying planes around, you know, most citizens are like, hey, I really don't feel comfortable with, you know, Boeing and NetJets and American Airlines regulating themselves.

37:54Spiros Xanthos:I would rather the government do that. So is this closer to nuclear power and aviation or is it closer to movies, you know, and comic books and music and albums in your mind? Yeah, I mean, Manu gave a very nuanced take. Maybe I'll give a less nuanced one just because, I mean, I know a lot of the heads of different frontier labs. I think some of them are very intent in their desire for, like very authentic in the desire for why this is happening. They truly believe that the rate of progress is impacting safety. if you truly believe that the idea that an entity would basically control access can be an attractive one.

38:41There's two problems, right? So what models get counted under this? As more and more companies have frontier AI, which I think most of the conversation today has been how, hey, with this technology so important, more and more organizations are going to own it. How is the government going to choose what counts and what doesn't? By the way, this was the same dilemma when they first introduced compute thresholds a few years ago. They said any model above this amount of flops, we're going to audit, we're going to put in this like safety pen, quickly became a disaster because models became smaller and just as powerful, right?

39:16So this is what happens when you try and like, do these hard takes on fast moving technology. I think you have to ask, like, what are the incentives of people who really believe in this? And candidly, whether it's authentic or not, I do think it has an impact on who's allowed to build and shape frontier technology. And I think that's wrong, given this is one of the most important technological changes of our time. So this is a very, binary stories always require closer inspection. And I think the idea that everything is completely unsafe and we're hurtling towards this unsafe future is a binary story where there's a clear villain and a clear hero.

40:00And that always, I think, makes the average person say, hey, what's happening here? And why are certain people advocating for this? I would say one, I would add one more thing. Silicon Valley does not realize right now that how close we are towards nationalization of large language models. if Silicon Valley continues to basically say that, you know, we have invented this technology, we own it, it's so powerful that it might, you know, increase all this, like, job concerns, which is partly, I think, the reason why majority of Americans are scared of AI right now. And, you know, that is actually a concern in my view, because, you know, it shouldn't be the thing that most Americans are actually concerned about their jobs right now and that AI might just take away, take out the things.

40:59And, you know, kind of believing that, you know, these two things can coexist for too long time and government doesn't come in and intervene is absolute lunacy, right? nobody's going to like nationalization. Silicon Valley will be the first people to say, what the F is this? We don't want this at all. It would be a pretty extreme moment for Pete.

41:26Spiros Xanthos:What's the guy's name? Pete Hegseth? Hegseth. Yeah, he's like, you know what? We're just taking Mythos. It's ours now. Dario, show up at the Department of War. Here's your desk. And we just saw a preview of that right now and see how nervous every, you know, people got here. Like, it's like, oh, shit. It's self-inflicted, as Spiro said. Dario went out and he said, listen, all jobs are gone. We've created the new God in the sky. And we're scared to death about what we built. We're going to give it to you. No, we're taking it back. No, we're giving it to 50 people. Like, if you're panicking, what do you think the government and the populace are going to do?

42:03Spiros Xanthos:They will panic as well. They still do it all the time. There were three anthropic people who signed that, A, is going to take everybody's jobs away letter. yesterday that the economist sent it. Yes. I mean, if you run around like the house is on fire, people are going to believe you. Like if you scream fire in a theater, it's like the classic kind of thing. Like, you know, it's your movie theater and you're saying it's on fire. Okay, we're going to believe you. Let's say like these models are going to be that like, like if they're marketed, like they're just so powerful, just believing that, well, we're not going to end up in a world where we're clearly government and our military is going to have a unnerfed, you know, these models.

42:39And so they're going to have to go get those models built like that are military class and for national security. Right. And so just like in aviation, we've got civilian airplanes, we've got fighter airplanes. I think that, you know, we are very, very close. We are testing the boundaries right now with these kind of narratives where, you know, we might end up with, you know, there are civilian models and then there are military class models that, you The government just funds to make so that, you know, we can we can in the country can do the things it does with pretty incredible technologies in the military.

43:19So I did want to want to throw this to you before we move on. At Adaption, you're working on ways to get models, self-learning, self-improving without needing us to constantly like retrain them and teach them new things. Is this all kind of moot in a few years? Are the models just going to be submitting themselves to the board of authority to make sure they're allowed to keep going? I mean, is is self-recursive improvement going to sort of make this all a secondary concern? I mean, I think the advocates of that letter would say this is a concern. Right. So I tend to take the view that some most powerful tools are powerful in both directions.

43:55They can be used for good, bad. So it is important. We say, well, does self-recursion, how do we bound it? Particularly, what we're interested in is how does self-recursion help companies own frontier AI? So candidly, our view is how do we all on predictability with training, with designing harnesses, how do we basically teach models how to do that for a task and do it as fast as possible? I think that's an incredibly important application of AI because it accelerates innovation and it allows people to focus on that question. I think that, you know, will models submit themselves? You know, I think this kind of goes back to the question, like what objectives do humans set and like what's considered important, right?

44:40So is this body going to be the important referendum on safety? I suspect given past efforts to do this and to set binary thresholds, no. Unfortunately, the mechanisms there tend to be incentivized by limiting capabilities to a few, but not necessarily in terms of actual work on safety or guardrails. I'm more interested in how we actually funding research and sensitive domains. Like, you know, how do we actually incentivize that within industry? So like when we're shipping frontier models for medicine or science, there's actually super important safety questions there that also have like grounded in the reality of making AI work.

45:29And I just find that to be a much more refreshing conversation than speculation about like, oh, where will self-improvement go in five years? And like, oh, this is all because it's just not precise. Um, so what I like when it comes to safety is, Hey, the reality is now billions of people are using this around the world. And like, that's incredible. That's the type of technology. That's like a mobile phone leap. Um, what are the actual implications of what they're doing? Like, what are we seeing with things like misinformation? What are we seeing with things like the reality of like actually doing acceleration of science?

46:05Those are conversations that I really enjoy and often contribute to because, um, this is just a bit too unanchored for me. You know, it ends up being a church. It ends up being like, who's God do you believe? Do you believe that doomsday is tomorrow? Or do you believe that this has real impact that's positive for innovation? And I just don't really enjoy conversations like that to the same degree because it just, there's often no convincing and it's not really anchored to like what we see in practice. I completely agree with Sarah, by the way. I think sometimes it will benefit us if all of us who are working in this area, and especially those who are more visible instead of going out and saying like resolve so AI is going to take all jobs or software engineering is done which is not by the way people are hiring more software engineers talked about all the benefits that we've seen from technology becoming prevalent right and all the problems we couldn't solve and you know the things that maybe were too expensive are becoming let's say accessible to a lot of people now it will help everybody actually including you know our own future and destiny and what the government maybe does awesome well everybody on this panel of course an accelerationist But Jason, you got dragged into a bit of a decelerationist face-off this week.

47:14We're, of course, talking about Uber and Waymo. They're on opposite sides of a new proposed legislation in Washington, D.C. specifically. They are thinking about altering their Autonomous Vehicle Act of 2012 to allow autonomous vehicles to begin operating even commercially within the city. This would allow for driverless testing and for commercial robo-taxi operations. So currently Waymo and Zoox can't test their vehicles in D.C., but they have to have a human operator behind the wheel at all times. Uber opposes this new bill, but Google owned Waymo supports it. Uber argues that this is going to displace human drivers.

47:51It will give Waymo a monopoly in the D.C. area. They also have all kinds of arguments about how it's not good to have a fleet of purely autonomous robo taxis. They stall out on the street. They can't help elderly and disabled drivers get in and out of cars and so forth. So they're they're arguing for more of a hybrid model, which means you can operate a robo taxi in a city, but it has to be a small part of a larger fleet that also includes human drivers in it and that there should be sort of a a balanced model. Waymo says that the bill would allow them to safely deploy autonomous vehicles and you could still use public transit.

48:30You could still use ride sharing companies like Uber. They're debating this bill in D.C.'s legislation. Now, I just want to – yeah, we're throwing it to the panel. What does everybody think? I mean, Jason, what was your take on this?

48:42Spiros Xanthos:Well, I got dragged into this because, of course, the Uber investment. But full disclosure, I'm invested in like no less than 10 of these companies and self-driving like across the board, whether they're public or private. I've got tons of investments in this because I believe in the category. But I believe this is the first place where we're going to have this battle over jobs. because in markets where Waymo has hit some level of scale, you're seeing drivers lose 10%, 20 % of their revenue, according to some studies. They're getting less jobs and the pricing is going down. They're way ahead of us.

49:19Spiros Xanthos:There's almost two dozen players in China with cars on the road. Now, the CCP, the Chinese Communist Party, they are very sensitive to protests and they are very sensitive to civil unrest. They've started to have flare ups with the 10 million, 20 million drivers, taxi drivers in these major cities that are losing jobs. So they have put a moratorium on any more self-driving cars. It was the Wild West for a bit. They are now licensing self-driving cars and they're doing it at a pace that will give them time to not lose or not have a lot of people essentially lose their job and have civil unrest.

49:57Spiros Xanthos:That same thing is about to happen here in the United States. And so what you're looking at is a company like DoorDash or Uber, they are both investing at the same time in building their human driver networks, and they have for 15 years. DoorDash has their own robot. We'll pull it up here. I forgot the name of it, but they have - Dots. It's Dots. Dots. It's essentially like a little motorcycle. It's a brilliant form factor because it can ride in the bike lanes. It can go up onto the sidewalk. So at the same time, DoorDash has this and DoorDash is. So they are going to a limit. Every time they put more of these on the road, what is this thing called?

50:33Spiros Xanthos:Dot. Every time they put more dots on the road, their drivers lose their jobs. The unions, and then same thing happening with Uber. Uber has, I think, 12 partners for AV and they've invested $10 billion in it. The unions now are saying, hey, wait a second, why are you guys eliminating the jobs of the partners. So imagine you're Dara or you're, you know, the folks over at DoorDash, you're eliminating jobs at the same time you're trying to keep people employed. And then you put that against cities and a city like Boston, a city like, you know, or state like Jersey or DC, these are the places with the strongest unions representations.

51:09Spiros Xanthos:And this will be everybody's first, you know, we'll intellectually talk about like white collar jobs and our designers going to lose their jobs or developers. That is nothing compared to what's about to happen to rank and file entry level employees. Imagine you were 20 years as a driver and then you happen to be in one of the Waymo breakout cities and you're going to lose your job. In those cities, Uber and Lyft and DoorDash stopped advertising to get more drivers. So I have a prediction. I believe what's going to happen is we're going to move to a licensing regime in each of these, or I think the majority of states with strong unions.

51:44Spiros Xanthos:And they're just going to say, you can have 100 cars. It's$30 ,000 a year for a license, kind of like a medallion. And they're going to slow roll this. Now, there's all kinds of accusations that Uber and DoorDash are trying to slow roll this so they can catch up. That all may be true. But this is the first battlefield. This is the one where the public, everybody is going to have somebody in their family who's a DoorDasher or an Uber driver. And this is going to become the battlefield for AI. And how we handle this is super important, I think. And I think you can have empathy for those drivers.

52:15Spiros Xanthos:and think, how do we give them a soft landing? And I think actually the medallions, $30 ,000 a year for these and roll them out slowly so you can kind of taper those jobs for, I don't know, five years because we'll be sitting here in seven years. I think half the rides will be automated minimum. And so, yeah, I'm watching this closely and I think it's going to be a huge mess and it's going to be the presidential election in 2028. This will be like a cornerstone discussion all these trillionaires, billionaires, big tech companies eliminating this category of work. Because nobody gives a shit, excuse my French, but I'm in Paris.

52:55Spiros Xanthos:Nobody gives a shit about a developer losing their job, boo-hoo, or they didn't make as much money, or a lawyer or whatever. But you start taking away DoorDash and drivers, people are going to be really sympathetic to that. For what's worth, I agree by that. I think the whole discussion about developers losing their job. It was completely wrong in my opinion. It hasn't happened. And this is not like the, you know, where the focus should be in some sense, right? Like we're all great here, actually. And I agree with you, right? And I'm pathetic too, right? Like I think many, many people just get by by being able to drive for DoorDash or Uber, right?

53:24And I think when this actually hit, I agree with you. I don't know the answer by the way at all, but I think it's much more serious issue than like, you know, the white collar, maybe like maybe potential displacement we've seen, we've discussed, which is not, I don't think it's happening by the way, But if this happens, I agree with you, right? Like probably millions of people who actually depend on it, right? And I think that probably requires more serious discussion about how it happens, right? And maybe more government-related kind of intervention. And I think it's going to be forced, like you say, because of the election problem.

53:54Spiros Xanthos:Sarah, this is, I think, one that's grounded in a little bit more reality and less religion. What's your thoughts on this transition here? This one's anchored in like the reality of I have to feed my family. They're dependent on me. Yeah, I actually really enjoyed your take because I think you're closer to it. You've been thinking about these companies for a while. You know, my dad told me, he said, no matter what, no matter where in the world, people care about three things. They care about health, family, and income. And I think that this is very entangled with the general sentiment. You mentioned it, but the elections will probably bring this to the surface of how people feel.

54:36People want to feel that they will do better than the previous generation. And if they aren't certain about that, and regardless of the causal factor, they will feel like anxious about change. And I think that probably what you're saying is true. This is like a petri dish for all those factors coming to bear. The only thing I would say is it's super important to remember the medallion conversation was part of the last massive technological change with Uber. Right, yeah. And, you know, what's interesting is that there was the same people involved. There were taxi drivers that, I mean, if you think about black cabs in London, you spend a decade studying for that.

55:22And the, you know, the consumer everyday voter consensus was, we like Ubers. And I don't think there's a right or wrong. I actually think this is super important, and it will be the topic. But the ultimate answer will probably depend upon how consumers feel, which is interesting. And like, we can't forget it in this conversation is that this conversation has been had before. And the decision last time was no medallions, right? And so I think the question is, is the temperature different this time? Are we standing up for like that group of people who are feeling impacted? And can it be articulated as like, yes, we will preserve medallions or something like what existed before?

56:08because that would be kind of interesting because we're almost returning to the previous social commitment we had for that group of people. Yeah, I think the difference maybe is that like in the previous chain, like with previous disruption, it was like, you know, we have a few drivers and you're going into more democratization, right? When it came at least to who could participate in this. Now, I think the sentiment is going to be like, you're going from all these people to like two technology companies getting all the value in some sense, right? I don't think that it was exactly the sentiment with Uber, right?

56:34It was mostly about, okay, I have a medallion or, you know, anybody can drive. I think this is going to be worse in that sense. Regardless, I agree with you, the consumer probably sentiment, I know what it's going to be, right? But I think the popular sentiment might be that the value is being transferred from people to tech now. It's very fair. And I think what Jason pointed out, which is really the core of this, is that many more people this time have an experience of knowing someone who's done a gig job. It's very interesting. It's a very large fraction of urban cities who have done some type of gig job.

57:08And most of what it's interesting, because, you know, I work on building technology and frontier technology. What matters most to humans is like what they weight is like their experience. And you and for that reason, it's what they feel about, you know, do I know someone who's been through this? And I'm going to very much index and trust that. So again, you're right. I think it could be different just because one of the characteristics of Uber is that it actually has touched millions of people, provided jobs at different times. for different people at different stages of their life. So they have like very concrete memories of what that is, even if they're no longer a driver.

57:44Spiros Xanthos:You're going to have a lot of moms and dads who are like, I dropped my kids off at school. I couldn't get a full-time job, but I drove for four hours and then I picked them up. And now you're taking that away from me. And that's just going to feel, it's going to hit. I predict it's going to hit people in a very different way. But now, of course, if you have taken a Waymo and you've had that glorious experience of not having to talk to the driver and having your privacy and making a phone call it's like chef's kiss it's bliss like i love it so nice it's so nice to not have to like worry like somebody's here in my conversation because i'm a micro i'm a micro celebrity yeah manu what do you think i don't think it's gonna be as big of a deal um because, well, first of all, these jobs are something that people subscribe to or basically they have a choice to do, and they're not necessarily understood as a long-term job for anyone, as far as I can tell.

58:55Second, you're wrong on this one. So your argument is basically saying that, you know, this is a static world and those jobs are going and there's nothing else happening in the world. And what I'm saying is that while in a freelancer economy, people have choice and they are basically actively seeking new opportunities to make more dollars. and the technology is enabling people to have more choice. You could start a small business on internet with these AI LLMs. And I'm seeing so many stories where people are earning a lot of money building interesting, solving certain problems that with just asking an LLM to make a application.

59:43That's just a very small example. It's not necessarily meaningful. But what I'm saying is that there are lot of new opportunities where maybe people are going to create, maybe the creation economy is going to be much even more powerful, have more earning power. And at the end of the day, the rollouts of these self-driving cars are going to be dependent on two factors. One is consumers. If consumers like it, that is obviously a litmus test. The second is the city and state officials are going to look at where, is it increasing safety in their cities and state? Is it bringing more revenue? And is it giving people more choice?

1:00:29And generally speaking, that was a core argument Uber made to roll out their technology to all the cities and states. And they basically won for most part, like, you know, with a lot of dollars in lobbying.

1:00:44Spiros Xanthos:I think Spiros will back me up on this one. There are people who this is like their lifestyle choice, like and that's the fabric of it. And the other piece of it is you brought up, Manu, correctly, like, is this good for the economy there? And then the people running that city make that decision. The argument they're going to make and it is going to land so well is that in Boston, you have these, you know, 250 ,000 drivers and 250 ,000 door dashers. And they live there and they make this money and they spend it in Boston and they go to, you know, Boston Celtics games and they go to restaurants and they have rent and apartments.

1:01:20Spiros Xanthos:Now, all that revenue is going to go into the Waymo box and get sent to Mountain View. And that's going to feel profoundly unfair to tens of thousands of local communities that like, oh, wait, all that local revenue doesn't go to the people in our neighborhood, our friends, our neighbors, our cousins. It just gets sucked up and shipped to some, you know, borg of a company, Spiros. I think I think this one's going to be the one that breaks people. I agree with you, Jason. I think that's going to be it. By the way, I agree with Manu, right? In the long run, we're better off, obviously, not stopping slowing down technology, right?

1:01:55And everybody's going to be better off and more economic value is going to be created. But I think this is happening quickly, right? And I do think that area is going to be more painful than, again, software engineers may be being this painful. Yeah, but that's true, right? So no state city is going to like a monopoly self-driving car situation in their neighborhood. But that also assumes that Uber is not offering more choices to their freelancers. Last time I checked, Uber is actively trying to offer more opportunities to their freelancers. They are, I think, you know, Uber is - You are correct.

1:02:40Spiros Xanthos:TaskRabbit type stuff and then data labeling. They were trying to offer that kind of stuff, yeah. And Uber arguably is the biggest platform for work today. So like if you look at just raw hours that humans spent in a platform to provide value, it is larger than anything else on planet as far as I can tell. It's bigger than Upwork. It's bigger than any of the other freelance gig economy things people do. It's bigger than some of our markets we are in. And they are actively trying to go after other opportunities. And I think if they're successful in that, you know, that is perhaps the kind of soft landing, I suppose, where there are certain certain part of the network is automated.

1:03:28But, you know, they are bringing work that cannot be automated and offer opportunities to the freelancers.

1:03:34Spiros Xanthos:All right, Lon, we want to get to this last story. We'll do lightning round so our guests can get back to work building the future. Absolutely. So two of the biggest CEOs in the AI space are feuding once again on social media over the weekend. Elon Musk re-shared an ex-post from back in March stating, and I quote, I'm quoting here for the record, Scam Altman is super good at scamming, to which Sam Altman replied, homeboy. Again, I'm quoting here, folks. Homeboy. This is a Sam Altman original. Homeboy, you're the one selling public market investors on short-term data centers, space data centers.

1:04:09Then Musk shot back, we start flying them next year. Maybe you can come to see them if your parole officer approves. A pretty good snap. Elon gets a lot of trash talk for not being funny. That's a pretty good snap. So setting aside the big personalities involved, nobody has to comment on that. I'm not going to make you guys do that. But SpaceX AI is planning to launch a fleet of orbital data centers that will perform AI inference tasks. And what that was one of the key factors that sort of got the retail investors so excited about the IPO. So I wanted to throw this out to the panel. We'll go one by one.

1:04:45Are orbital data centers really going to launch into space in the foreseeable future? Make your predictions. I think so. So it is, from a SpaceX perspective, it is a much easier problem to solve versus the problems they have already solved in the last decade. They have, like, to make Starlink work, they have to have, like, you know, every satellite have a laser system that is pointing to each other, communicating, calibrating at the micron level and so forth. But the underlying pieces, the foundational technologies to operate such a thing is so immense that the orbital data centers don't have to be like data centers on Earth.

1:05:37They don't have to be that big. And they already have solved the bandwidth problem and communication problem. And, you know, and for most part, these orbital centers can be, let's say, a few racks maybe of a payload that is in the orbit. And you can totally put quite a fairly good amount of workloads in there. And they've normally mentioned they've also solved the hopping of workloads, right? Like the Starlink, when you have a Starlink, you're talking with the phased array systems. you're talking to multiple, you're hopping to different satellites to communicate that. You know, this used to be actually a dream.

1:06:21I'm an aerospace engineer. It used to be in science fiction, it is totally possible. And if there's one company that can do it, it's SpaceX. And I think they will more likely than not prove it. It's coming faster than we think. But it will not look like the data centers that are on Earth. and luckily because the intelligence demand is so big that you will start seeing architectures and workloads where you can run modular data centers that can do asynchronous work and just give you an answer after an hour there's a lot of those workloads today we are even using a lot of that workloads with managed agents and things like that where like we don't want the answer right now.

1:07:09Just give me the answer an hour from now and just do the work. And those kind of workloads can be done in that architecture that Elon is talking about. And yeah, I think it's totally possible. And it's coming sooner than we think. Asked and answered. Sarah, what about you? That was a very spicy set of tweets. I enjoyed that exchange. And I think here's the thing. What are the main issues with data centers in space? One, you have 3 % of GPUs failing each year, very predictably. Newer generations, you have to sub in. All this is extremely difficult for space, right? Because how are you going to remove the components that are not working?

1:07:55The other issue is, frankly, there's a ton of bugs that happen. So that type of data center only works for training because it's co-located. more and more of the workloads are moving towards inference. Can they launch it? Will there be a case study? Go for it. I'm sure they'll launch something. Is it going to be a significant fraction of the compute in terms of like where frontier labs are allocating? It will be a really nice photo shoot. I think that it will be a photo shoot at first and like realistically for the next decade because there's just too much risk. I'm a frontier lab. I have to, the one thing I need to control because it's the biggest factor in my business and cost is my compute.

1:08:37Would I want to put a sizable share of my compute in a data center that's in space? Likely not. It would have to be for very, very good discounting. And I think that's probably what's going to be the framing at first. But that's how it begins, right? So should they do it? It's a great mashup of the two bets, right? AI and data centers. Is it interesting? Probably not yet.

1:09:03Spiros Xanthos:Spiros, you got to take? Yeah. I'm not an aerospace engineer. Believe it or not. Yeah. So listen, when the IPO was happening, I had to buy some shares before the IPO. And the people that helped me asked me, okay, do you want to sell right away? And I said, No, because you don't bet against Elon. So my take is different here. I think we're not going to see the end of this until Elon wins. So my prediction is that it is going to happen, right? Wow. He's not going to stop. Yeah. If history is any predictor, he is the most dogged founder I've ever met. He's going to drive him up there himself. It might take longer.

1:09:47It might take longer. That may be quite a place. But I think we're going to see it happening. And also, don't underestimate the cost of physical infrastructure. on Earth, right? And the combination of that and Starling actually is quite powerful, actually, in seriousness.

1:09:59Spiros Xanthos:Elon always gets it right, but he's rarely on time, is what I've told him, is my kind of joke. So yes, they're going to be sending him out next year. But to Sarah's point, when do they actually materialize? I would say three years, right? Four years. But he's going to make his own chips. He's working on that already with his fab. And energy is the blocker now. So there's a lot of chips coming out. There's a lot of data centers, a lot of concrete being poured, but energy is the blocker. And once we start having that energy blocker in space, energy is not the blocker. That's the opportunity. And at the same time, in the next year or two, he will get Starship working perfectly.

1:10:41Spiros Xanthos:In other words, it's going to land and take off within the same week, like he does with the existing rockets. There are existing Falcons now that have done 20, 30, 40 jobs, I believe. I think they've got one that might've done 40 now. And so as that cost goes down, we'll see exactly what happened with Starlink. Starlink was a joke five years ago. Then people got it and they're like, this is as good as a backup. Now people have it and they're like, this is my primary and I'm going to pick my airline. I would literally, I did this joke that went viral on Twitter. So I asked this question, Spiros is in the same way.

1:11:14Spiros Xanthos:Would you rather sit in business or first class with regular internet speed, or would you sit in the middle seat in the row above the lavatory with Starlink? And anybody who works in our industry is like, put me next to the lab in the middle seat between two fat people. It's mind blowing how incredible it changes flight when you have high speed. And these things are now getting to a speed that people don't understand. And you can, there are like two very large size Starlinks. Maybe we can show one of the new ones. Everybody knows the regular Starlink that's like the size of a pizza box. People know the mini.

1:11:52Spiros Xanthos:There's a corporate one that's like the size of, I think, three pizza boxes. And it might have multiple ones in there. And then you can bind them together. And you can start getting gigabit speed now. People don't know this. They haven't really, it hasn't really registered. What are you doing on the plane? What do you need all this power for? No, no. But here it is. I guess they have it on their website. So see that one? Yeah. I know people who are, let's just say, rich people who, instead of getting the regular Starlink, they're like, screw it. Money's not an issue. I'll get the$300 a month one that I can put on my roof.

1:12:25Spiros Xanthos:I'll spend$4 ,000 or$5 ,000 a year, and you can get these really large ones. And I think when the data centers come out, my guess is that the data centers will have Starlink built in. And so every time one of those goes up, and he didn't tell me this. I have talked to him about these in detail. But my guess is if you're throwing them up there, you might as well have Starlink on them. And the Constellation will just be all those. I think there'll be a precursor to this, which is he's got all those supercharger networks, which already have a lot of energy at them and are not used from 11 p.m. till 6 a.m.

1:13:03Spiros Xanthos:Imagine at those places, he puts data centers there. You mean the Tesla supercharger? Supercharger. Right. Just take two of the spots and just dump, put a Starlink on the top. And they already have Starlink, but put a big Starlink there. So actually doing distributed compute at people's houses with Powerwall. So imagine you put a Powerwall in and he gives it to you for free or half price, but it's got a couple of GPUs in it. And then they're all connected by Starlink. So I think distributed compute, whether it's on the BitTensor network and crypto doing it that way or doing it at the superchargers.

1:13:38Spiros Xanthos:We need more compute and the compute has to find energy. Where is energy? That's what's going to happen. Anywhere there's a hydro dam, that dam's going to have a bunch of GPUs at it. In space, there's going to be a bunch of GPUs. If you've got a nuclear power facility in some backwater town in China, they're going to be putting GPUs there. It's just follow the energy, right? Is I think what I was told by people who are building data centers. Follow the energy, and the energy of the sun's the big win. But yeah, it's a three or four-year timeline. It's heartbreaking to me that Sam and Elon fight like this.

1:14:12Spiros Xanthos:If we were sitting here 15, 20 years ago, I was having dinner or going to parties with these two individuals, and it was all quite fun and awesome. Yeah. Well, you fight the most with the people who used to be friends. That makes sense. It sucks. It sucks. I wish the two of them would get along. I got your answer, by the way. 36 flights. The Falcon 9 booster B1067 completed its record-breaking 36th flight on July 9th, 2026. It was carrying 29 Starlink satellites into space. All right. We got to wrap. Sarah, tell everybody what you're working on, what job openings you have, and how people can get in touch.

1:14:47Spiros Xanthos:This is time for the plugs. Everybody gets to do a little plug here at the end. A little plug. A little plug. Yeah. This is so much fun, by the way. I still want to ask if Manu wants to actually go to space. I feel like that's a side tidbit that was introduced. So we work on like accelerating intelligence. Like how do we allow more companies and individuals around the world to build frontier models? And we do that through self-improvement. And come work with us. We're attracting the best researchers and engineers across the world. So there's plenty of openings. Take a look. And maybe I'll pass to Sphera's.

1:15:21So Visual AI is building, you know, models, frontier models for our domain, I would say, and, you know, agents to basically help you run software, right? The simplest way to think of us is we're the counterpart of, let's say, coding agents that take over when software gets deployed and you have to maintain it and run it for years, right? And when something goes wrong, our agents are on hold, right? So you don't get paid in the middle of the night to wake up and see what's going to happen if you're an engineer. Like our agents do all that work. And in terms of like, we're in San Francisco, we're hiring, we have a lot, we're hiring researchers, we're hiring also software engineers who want to work in solving kind of their own problem, right?

1:15:58Because their users are software engineers primarily. So that's kind of the exciting part about it. You know, we raised$190 million, we're a CVZ company, and, you know, we're growing fast. Yeah, so LabelBox is deep in the reinforcement learning game. So we produce some of the most cutting edge reinforcement learning environments. For those who don't know what these are, this is how the best frontier models today learn about something new tasks that are happening in knowledge work. And we also have an enterprise business where we have recently announced recursion platform where enterprises can use agents or build agents on the entire open source stack and can post-train them with, again, reinforcement and again, more than said, we can help them with.

1:16:54We are a company based in the Mission District. we're profitable and it's we're hiring lots of engineers and researchers awesome

1:17:04Spiros Xanthos:I have a couple of podcasts and x.com slash jace I invest in 100 startups a year yada yada if you have a startup email me that's it jace.com jace.com for life great job everybody we'll see you next time on this week in AI thanks everybody