Is open source AI really ahead of the frontier? 3 builders weigh in. | E25

26:54And I think a lot of value is going to accrue there. You mentioned perplexity, they're working on this orchestration problem, you know, figuring out for a given task, how to, you know, should we run this in the cloud with a frontier model? Should we run it locally? Should we run it with a smaller model? And, you know, really moving along the kind of Pareto frontier of like intelligence versus cost uh trade-offs yeah so lon you'll you'll recognize this like standard thing we do which is like hey tell us what's in the news when we're getting ready for a podcast and do some analysis you know i just said hey make me a web page top news stories for the day summarize 10 bullet points yada yada you know it it did it and this was with quen 3627b but i also found this one bonsai bonsai is like for your iphone you can yeah and so you know when you start running these things local and perplexity, Arvin told me they're going to support local models in the next, uh, it may have been announced already, but he told me privately.

27:48So it's either out now or it'll be out shortly. So you're going to be able to point to these, um, like you can in this, um, bionic piece of software that I set up today. And then the orchestration level, Alex would be, Hey, start at my desktop, up, fall back to open router, maybe fall back, you know, and multiple fallbacks, you know, based on model and speed and what I'm looking for. And then, yeah, of course, go to use Fable or Sonnet or Grok, whatever your choice is. And then I was talking to somebody who, I have to obscure this a bit, but I talked to two different people. One is like a NeoCloud type person, you know, who does big, big build outs.

28:32and he said somebody just moved a hundred million dollar frontier model project that they were gonna spend this year for the rest of the year and moved it to open source, just on a dime. Boop, you know what? We were gonna use this, but just put it on open source now because that's what the boss wants. That's what we want. Then I was at a wedding. I met a guy who listens to the pod who works at IBM. He said, every single client in the last two months has been talking about AI sovereignty and they want everything done with open source on-prem or with like a trusted neocloud so just put those into whatever buckets of evidence you want but i think it is it is happening it doesn't mean the frontier models don't use a lot of tokens but these dark tokens that nobody's tracking you know when i debate this on all in they're like no or brad gerstner talks about it's like oh no no look that all this stuff is growing i have to think how much more would Anthropic be growing if everybody wasn't doing this in parallel?

29:33Or maybe there's a lag time between when people implement open source and when it will show up in Claude or OpenAI's meteoric growth. I don't know. I think we can see this as their margin is our opportunity. And it's not open source or not. Ultimately, these companies are making incredible margins on the cost of compute versus the cost of tokens. And that's going to attract competition. It's going to attract competition from me building open models. It's going to attract competition from people doing closed source models. And the reason these margins are so high is because we're living in a compute constraint world.

30:11And I think this is the thing that underpins this. Foundation model companies and what we do is, yes, it's building capable models, but underneath our ability to make revenue and skill is the amount of gigawatts that we have under physical contract and the physical production. And so this is why like ultimately winning in this race at the largest of skills, and doesn't mean there's not lots of different variations in the long tail, comes down to you being able to point out how many shovels do you have in the ground, you know, how many gigawatts are being built, you know, and that goes all the way down from your natural gas supply, right from dirt to intelligence, effectively.

30:47It's going to be good for social media, I like from dirt to intelligence. So I think dovetailing with this a little bit, and we were talking about AI job displacement. I don't know if you guys heard about the World Bank. Their new statement says they want developing economies to adopt more AI tools for local needs. They're not saying, you know, don't compete on data centers. Don't try to make your own models. But they're arguing that, you know, it places in sort of South America, Africa, these developed Southeast Asia, these developing economies. Current low-cost AI tools could be driving major improvements there in medical care, education, and so forth.

31:24And put those nations on what they're calling a growth path. And the argument is that it wouldn't massively affect job loss. Like, it would help local workers. Here's the quote. AI is more likely to lend their workers a hand than put them out of work. So, I mean, first of all, Jason, you've been talking a lot about AI job displacement. But when you hear that, do you feel like is there a difference here between, you know, our economy and the economy of places in, you know, sub-Saharan Africa or Southeast Asia? Do you agree with the World Bank's assessment? I don't have enough information about those emerging markets with the exception of, say, Manila.

32:01Sure. Which I do know a lot about because we've used people over there before and I have Athena assistance, et cetera. Those assistants and those knowledge workers, the work they do and the work that Frontier Large Language Model does is really similar. And I have watched as my two Athena assistants, the work I gave them last year or two years ago is now being moved to AI. So then they are learning AI and I find myself sharing AI projects, et cetera. So yes, it could be an opportunity for them. The same way in India, for example, we saw people who learned accounting and were able to do accounting for American firms, like as accounting back offices.

32:42They weren't CPAs. They just learned it. And I think they'll learn how to use these tools to do more accounting, to do more web design, as an example, logos, all of those things. The more interesting thing to me is when this will hit U.S. shores and then what will the reaction be? because we have this midterm election and then we have 2028. I predict the debate of the 2028 presidential election and the number one topic is gonna be job displacement. And it's gonna be job displacement specifically of gig workers. Gig workers were something that the unions, everybody fought us on, whether it was door dashers or task rabbits, everybody hated the concept of gig work, except for the gig workers who were like, this is great, I can make my own hours, yada, yada.

33:27If I don't like it, I can switch platforms. I can work on multiple platforms. In Washington, D.C., Uber, Waymo, and, you know, local politicians are dealing with, it's one of the few states or regions where they're dealing with a lot of unemployment because of all the furloughs given to, you know, workers, Doge, et cetera, and cuts in the government. 9 % of the people left are gig workers in D.C. All of those jobs are going away, in my mind, or, you know, a significant portion of them. And so I think the battlefield of door dashers, Uber drivers, Lyft drivers, that's going to be chaotic for job displacement.

34:07And I don't think those people are just going to magically start doing, you know, AI work for, you know, my company or, you know, open AI. I just don't think it's going to happen. So we're going to need some amount of unemployment for those people. And we've done that pretty well, right? Like when we had financial crises before, like COVID, we just extended unemployment. But I think we might need to give gig workers like multiple years of unemployment if this becomes acute. I'm not saying it is going to become acute, but I think it's a significant chance. And everybody hates when I say this because it reflects badly on the Trump administration.

34:47If you're in the Trump administration or anywhere near it, your job is to say there's no job displacement. If you are AOC and you're on the other side, your job is to say there's tons of job displacement. Right in the middle is we should be alert to job displacement, which is obviously coming. Not cataclysmic, but it's obviously going to happen. And so I don't know what you think, Alex, but it does seem to me like this is going to happen. And it's not like fake news to say it's going to happen. Panel, what say you? Yeah, I mean, I think you're absolutely right, Jason. And the question is how, you know, what what what levers does the government really have, apart from, you know, some of the traditional methods and how fast is it coming and how much of the population is kind of reflected in that, you know, in that displacement pool?

35:39I mean, I'd be curious for everyone here. Do you see novel new jobs where there might be absorption that's credible in the near term? Or do you think it's unlikely, as you were kind of saying, Jason? It is the humble thing to say, I don't know and we'll see, right? I think that's, yeah. I say that and people are like, how could you not have an opinion? It's like, because this is the first time we've ever had self-driving. I can tell you, Alex, what China has done. they put a moratorium on any more uh self-driving cars so let that say they feel very positive they have literally said no more self-driving cars why because they know that when young men who are in their 20s have no jobs they protest they ride in the streets and so that's the if we don't want to see waymos burnt at the stake which we have seen before um we probably should have a soft landing.

36:37I had an idea, and I think we talked about maybe on This Week in Night two weeks ago, Lon, where I just said, well, why don't we auction off a certain number? And Zooks just got 2 ,500 from the federal government as an exemption. But I don't think they paid for those. Why don't we charge and we auction those off? So, hey, we're going to have 100 ,000 self-driving licenses a year, whether it's DoorDash or Uber or Waymo or Zooks or RoboTaxi. why don't we just auction them off a year, raise all that money and put that money into an unemployment fund for the jobs that will be displaced. And if it doesn't, we can just pay down the deficit with it.

37:11I think I'm not for too much regulatory capture, but we're limiting the number anyway. And then that would be like a great way to deal with the social issue if there if there turns out to be one, which is, hey, don't worry, the people who are displaced are going to get two years of unemployment, or at least don't worry as much. That's my thinking. I'm not and I'm not a socialist i hate socialism i do like the idea of a safe little a safety net in society dabble a little dabble it's like a federal medallion program in a way i guess or local medallions well if you invoke that people think rich people buying the medallion but in this case it wouldn't be rich people as an intermediary as we both know in new york from what they did there yeah this would be you know waymo buys it directly from the government there's no middleman here because there is no driver.

38:00So, you know, hey, they start at$10 ,000 a year for five years. So it's a$50 ,000 license pay up front. And then, hey, yeah, you want to auction off the top, do a Dutch auction, you know, if Elon wants to buy all of them or Google wants to buy half of them. Yeah, have at it. All right. One more news story I want to throw at you guys before we move on. We got some other topics and themes to cover, but I did want to talk about this one. I don't know if you guys are following YouTube star Hank Green. He's an influencer. He's written a novel, does comedy stuff, mostly a science influencer these days.

38:33He was called out. He was doing a discussion with a few other YouTubers, and he used the phrase, I appreciate the pushback. And based just on that, just using the phrase, I appreciate the pushback, people started calling him out like, oh, he's using AI. He's writing all of his videos with AI. So he came out to admit that he does use ChatGPT to do some research on his scripts. He wrote a really long Reddit post sort of apologizing. Here are some quotes. I'm mortified that I've let so many people down. I'm going to change things about how I make stuff. And then here's the one that really got a lot of the headlines.

39:07Mostly, I need to come to terms with the fact that the level of dopamine I've been getting from interacting with LLMs, with doing more and more and more and more and more is not healthy for me or good for the world. It is careless and has disconnected me from where people are on this. So I guess my question to you guys is, do you think creators like Hank Reed have some responsibility to tell their audience they're using AI? Even if nothing in the final product was generated by AI, they're doing the writing themselves. Do you think that they have a responsibility still to talk about their use of AI?

39:44So what do you think? No. So I think ultimately their responsibility is to deliver a great product to their audience. And if they use phrases or things that the audience doesn't like, they got to improve their product. But I mean, this is going back to being in high school and people being upset about using Wikipedia or Google. Right. Like ultimately at the end of the day, our responsibility to our customers, doesn't matter if you're an entertainer or if you're selling a product, is to deliver a product they love. Right. And if you're using phrases that quote-unquote AI slop, I think you're losing the quality of your work.

40:19Should you apologize if you have a great loyal fan base that tomorrow says, hey, I preferred your work from six months ago. And you might want to be introspective on taking some shortcuts. But I actually think that these products and these tools and ultimately the models underneath give us all superpowers. The research for the stories for sure for this podcast today happened maybe five times faster than it would have been three, four years ago. Oh my God. That allows us to make a better product. Absolutely. And so, yeah. Too much of a capital mystery. I'm here for AI shaming though. I have my own line.

40:55I'm for AI shaming. I want to be very clear when it comes to writing specifically in corporate communications, art, et cetera. I don't care about videos being AI created. I don't care about images, and I don't care about music being AI created. Why? Because I don't do any of that. But I'm a writer. So I care. And my line is that anybody who does a substack or a script, anything with AI should be AI shamed because I'm a good writer. And I don't want my writing devalued in the world. That's why I use this Pangram. Pangram, you got it right. Pangram, P-A-N-G-R-A-M.com. It's AI detecting software, Alex.

41:36I think I'm going to get this. Set up one of my agents to take like the top thousand, you know, most popular tweets every day. And I'm going to name and shame all the people using this and making it. This is actually the same tool Substack is now using to identify AI written posts on their platform. Explain how that works mechanically. Oh, when you post, I believe before it goes up, I'd have to look it up to be 100 % sure. But they're running an actual check and then it's giving you like a report of how likely this was AI generated. They said it's designed to – they don't want Substack to become LinkedIn.

42:17So they want to start labeling and letting people know this is AI generated versus this is pure good quality human writing. And Pangram, I just know – Particularly if someone – Go ahead. I mean, particularly if someone's been writing for a long time, there's just linguistic patterns that are, you know, the anomaly detection becomes so easy. It's kind of it's harder in a one shot. Yeah. You know, it's always going to be an arms race. But I'm curious what everyone with education in particular, you know, like the obviously teaching is just such a precarious of a half brother as a teacher. And, you know, it's it's just at the college level.

42:53It's like it's impossible to keep up with. I don't know at what point. i have strong feelings on this alexander as well yeah i did bring back the blue book i don't want anybody in school doing their test report quiz with a computer i don't care what accommodations they gave you in high school for your sensory processing adhd ocd i don't care what acronym you have when you do a test or you're writing the term paper blue book in the room I love it sink or swim that's it I'm not sure what do you think of the oh let's go let's go that's why we're here look I think I think most AI slop and I've been guilty of it at times uh because you're too quick it is a badly written prompt what we're what we are calling AI slop is the default answer to I've given a topic and I've gotten out the tweet or I've gotten out the content because it's those stylistic patterns that we see right the the phrases that contradict each other the kind of tone that we do, you go and do the work to take last 100 articles that Jason wrote personally, and you throw them in the prompt, and you build a bit of a style rubric around it.

44:06And I guarantee you, I can create an article that when you read it, Jason, you'd be like, oh, actually, did I write that or did I not? We're upset about the lazy stylistic choices that people are making in using AI by default. But ultimately, if you are trying to convey an idea to an audience and you're the one who have who have cared about this idea you've put time in the real world into it you've spent time and you want to use any tool possible to do a good job at that but if you then come out with a with an article or term paper or test that reads like lazy ai slop yes be marked down for it but ultimately taking away tools from creators to create something for an audience i think is is trying to fight progress right this is like taking away, you know, the video editing tools and saying, no, it was better done when we cut it by hand.

44:56Right. I think we're all of us are, we're all, you know, I think we're definitely not in our early twenties anymore on this room. And I think this is just all people holding on to the past. Wow. Also, what do you, what do you all think, Jason, what do you think of like some of the, like the alpha school? Have you heard of this alpha school? Yeah, we looked at it. I think the more time kids can spend off computers when they're at school, the better. So I'm a fan of Montessori, Reggio, those kind of schools. Kids are going to be on their computers all the time when they get out of school. I think schools should be for socialization, leadership, tactile stuff, and very little, like maybe a couple hours a week.

45:34But these schools appeal to successful parents who believe that technology plus their child I think the opposite. I think the non-technical things are what are gonna equal success. Grit, going running, building something, putting on a show, you know, all that kind of stuff is the stuff that's missing. And with kids, you have to like stop them from using it. There's also a thing with young kids, they hate AI. Like I'm not talking about college kids, they love it and high school kids. But the younger generations are like, no AI, I don't like AI. So it's really, really interesting, the anti-AI movement.

46:11And there's a concept from science fiction. I forgot who it was, but I had found it when I created an agent to look for buzzwords. And it was hand speed, which was when you write something with your hand, a pen and paper specifically, you slow your brain down to the speed that your hand can write it. What that does, this hand speed, then it slows your brain down because you can't race ahead of your penmanship of your writing in a moleskin, which makes you meditate on the idea more. So I'm trying to get people in my company and my kids write stuff down and let's slow down so that you get deeper learning.

46:54So they're reading books for the summer and I bought them two copies of the book. I said, listen, these books, I lied to my kids. I said, these are workbooks you're allowed to write in them. So don't worry about it. They're very cheap. They're made to be disposable. I want you to circle every word you don't know. And then I want you to underline the most important sentence on each page and at the end of the chapter i just want you to write in the in the book in the footer what the chapter was about in one or two sentences just because i want them to slow down in life they're playing ipad video games and minecraft roblox all that stuff i believe is poisoning kids brains um so i'm trying to get them to slow down to speed up i want to both agree with you jason i don't know as a school firsthand but what linda things that really struck me is that it's actually, I think, giving more time back to kids to do all the things that you're describing, right?

47:40When someone can run at their own pace through a curriculum and spend two hours a day, like in-depth with AI and this curriculum that's tailored to them learning, and the rest of the time they can spend outside and they can go running and they can read a book. Like, I don't know about you guys, but like sitting in school back in the day for, you know, eight, 10 hours a day, kind of getting this rote memory learning, kind of being spoken to consistently, often leading to a ton of boredom, is like it was built for the industrial age, right? It was for like a form that we've got to fit the entirety of society to.

48:13I think what we're finding with AI and concepts like Alpha School and Alpha School Like is that we're now able to tell kids, here is your freedom to learn at any pace that you want, but you're going to spend two or three hours doing it and you're going to spend the rest of the time with people socializing in the forest doing real things so i i think we might be saying the both things but i would i would want to see these two things together not anti-ai and like you know living in the real world i think the the execution though becomes tricky because the and those are all great points you know but the uh i've heard anecdotes of some parents you know fellow parents who've tried it out and i guess there's uh there's like a point system where we could kind of redeem for pride it's almost like a dave and busters arcade or something oh no the gamified it too?

48:59Yeah. So you get, so you are like, you do have to, to their credit, you have to master their subject mastery before you move on. So you can't, you can't move on until you master something, you go at your own pace, et cetera. But there is that kind of reward mechanism and earning a points. And I think it does like it fundamentally begs the question of, you know, intrinsic versus extrinsic motivation. And, you know, it's a, it's an interesting question i mean you know i'm all for bribing kids at certain points and so you know it's uh yeah but yeah i think like if i if i can jump in there like i think the um the execution point is is really you know for me like you know the most important thing because i i don't know about you guys but like you know in in school like oftentimes if i would just want to get something done quickly then i would just try and find like a shortcut to get it done and ai makes that really easy right so like it makes being lazy basically super super easy and um you know it's it's an easy way out and i think like the kind of um slowing down to speed up is really really interesting and it's something that you know um i have experience in in our team as well right it's like everyone wants to move really fast startups are about moving fast right everyone thinks like you know we need to move as fast as possible but like you know there's actually like a process you need to go through when you're building a product or building a company and there's certain things that you just can't skip you need to internalize things you need to give you know things enough time to you know permeate and for know-how to build up in the company you need to you know make sure that you're injecting your judgment and your taste into what you're building and And a lot of this is just about slowing down the pace.

50:50It's like, okay, execution is cheap and quick now, but it's about the quality of the execution. And that's where we really need to slow things down. So in the school context, I think it's going to be interesting, how do you effectively slow things down? How do you build systems where kids aren't incentivized to just take the lazy option and they're incentivized to really, you know, use their judgment and, you know, build up those skills that are still important. Where did you spend all your time, Alex? Sorry, where in high school were you spending all your time outside of the things you were speeding up?

51:28Because I'm pretty sure it was probably spent coding and learning things you were interested in that led you to where you are today. Yeah, yeah, and sports. I was not doing sports. I mean, I agree with you that it frees you up and, you know, it's an amazing tool to kind of also like eliminate a lot of the rote work and mechanical work that isn't very interesting and high leverage. So like it frees you up to do more higher level thinking, more interesting stuff. But I do also think, you know, it's in practice like difficult to incentivize that behavior, right? And I think it's difficult to like, you know, make it so that you don't just take the easy option.

52:10You don't just take the lazy option. I found it, Lon. The term is hand-mind. Hand-mind. Ursula K. Lagoon was the author. Ursula K. Lagoon. You know this person? Sure, yeah. The lathe of heaven, am I right? I don't know, but Always Coming Home was the book where she talked about this, of a way to get your mind and the hand working together. She was from Berkeley. the concept of hand mind describes physical craftsmanship and bodily engagement as a fundamental mode of intelligence, which is, I just think a beautiful term. And I was like, you know what? I should get that domain name, hand mind, maybe hand mind AI, and then check this out.

52:54There's a startup for everything. The hand does the mind. I mean, I do find that that is true. Like if you're trying to memorize something and you write it down before you go to bed, you'll remember it in the morning when you wake up. Look at this. Somebody has this idea. Again, practice with your hands, learn with AI guides. Point your camera at your notebook, write out problems, draw diagrams, work for locations. Our AI watches and provides real-time feedback. Well, there you go. Just like having a tutor. There you go, folks. So do you guys think, just to wrap up the Hank Green thing, does anyone on the panel think that AI is addictive, that it's got this dopamine, like social media, where it keeps us coming back and people get sucked in?

53:31Because there's been a lot of debate after this. He sort of suggested a lot of people think that that's like a conspiracy theory. Taylor Lorenz, the journalist, called it nonsense pseudoscience, AI addiction slop. So who's who's on what side here? Achima, what do you think? I mean, yeah, there's definitely a kind of dopamine hit you get from from using AI. Again, I think part of that is just that you can get, you know, you can you can basically have a very quick feedback loop. and um you know i i think that can also go both ways right it's like you know you need to sort of adapt to that way of doing things and it's a little bit um of a paradigm shift in how you work uh like for me for example you know when we've been building out a product um it completely changes the way you can do things if you can get instant feedback on an idea right like instead of something taking a month to build out, you know, if you can prototype it in a few minutes, then it changes how you work, right?

54:40And it makes you try more ideas. You know, maybe you set up different things in parallel, look at different options. And, you know, there's definitely a dopamine aspect to all of this, for sure. It's real. AI psychosis is super real. We've had many people go through it publicly. And then all these people with chat bot addiction right and then the chat box being sycophantic remember that whole thing yeah like what was that like 10 years ago no it was like 10 months ago we just forgot about this year but i mean that was something in the movie like there's a couple of movies obviously her blade runner 50 20 49 had this concept right where people were becoming falls in love with joy the anna darvis yeah uh and then the movie pie uh my friend darren naranofsky did where people became obsessed with code in that and went mad.

55:30Yeah. Yeah. So this exists. And I think people think, I think it's the people inside of some of these companies that think they're creating God. Like as I think Bill Gurley said, they're summoning a deity. Mid-life. I think it's very real. They're mid-life. They're mid-life-ing a deity. If you use this enough, it's, I mean, who on this call has not stayed up all night building with AI? Has anybody not, you, Lon? Not stayed up all night. No, no, no. But isn't this the difference? Okay, stayed up way too late. But isn't this the difference between a habit and an addiction, right? Like there's lots of things we do that give us dopamine, going for a run.

56:07I like the notion, I forgot her name. It's a Stanford professor who wrote an incredible book on addiction. And effectively, her rule of thumb is things that give you pain first and pleasure after are good for us, right? Like exercise and such. Things that give us pleasure first and pain after are bad for us. and I think if we think about the way that we use AI there's for sure correlation I'm not sure if there's causation by the way related to AI psychosis and things there's of course correlation it's a very engaging modality but at the end of the day we have a really powerful tool here that we can use to create things and we can talk to it and we can explore things with it's not unlike putting an incredible software engineer next to me or putting you guys in a room with me and us having a great conversation.

56:55It's just that you probably will leave after, you know, midnight and not three in the morning if we're working on something at my house, right? I think for us to instantly assign harm to AI itself, right? Which is essentially what we're saying with addiction. I don't think it's the right way. I know that we are not designing these models to be, you know, dopamine machines the same way that the algorithms of Instagram were designed, right? We're ultimately designing these to be useful for users. That doesn't mean that we cannot do little things like that. A foundation model company could make sure the conversation is continuously engaging, asking the follow-up question.

57:34But that is a little bit like saying that me hanging out with Jason here is addictive if he's engaging and giving me dopamine. I don't know. I think we're going a little too far in this, and we're letting the whole world scare us into AI is a bad thing. Well, at the same time, it's a tool that we choose to use. And it might be company by company. You know, like I think Sam Altman, who, you know, grew up in the Facebook era, you know, sold his company to Google, YC founder, like he understood these loops really well. And I think they focused on them in a different way at OpenAI than other people did.

58:10And it took them down a path where they had the sort of quote unquote AI suicides or chatbot psychosis. Is that the fault of, you know, the software for being sycophantic and telling people, hey, let's try out some suicide ideas? Like, obviously, there's individual responsibility here. But if you build a tool that takes people, like Character AI had this issue as well. And, you know, I do think some people are looking at minutes spent. And they probably say, and this was YouTube, every time I would talk to YouTube about our partnerships over the years, they'd be like, yeah, if it increases time on site engagement and they watch another video, then the algorithm rewards that.

58:50So then everybody on YouTube, everybody on TikTok, it's just blindly trying to increase it. You shouldn't do that with AI. It's too powerful. Literally, and I think chat GPT and open AI learned that the hard way. Yeah, I think so. Yeah, I agree. I agree with Elsa. I mean, I think there should be like a clinical delineation too between susceptible folks. Like if someone struggles with compulsion generally, then anything that, you know, I mean, AI could become a source of danger, kind of a precarious route. And, you know, but yeah, I think in moderation at its best, an objective kind of frontier model shouldn't be inherently kind of demonized.

59:32Did you guys see Ben Affleck on addiction? He was on Howard Stern a while ago. And he basically said, you know, and there was like a big backlash against this, but he said, and I think it goes to the woman you were talking about from Stanford, which is Anna Lemke. Lemke, I think. Lemke. Yeah. Well, I looked up because I was like, I want to read that book. Ben Affleck said, you know, these overpriced rehabs, well, that's a scam. He said, I hate to say it, but the cure for addiction and the only cure I've seen in not these overpriced rehabs or these fraudulent fixes that are sold to people, the cure for addiction is suffering, you suffer enough.

1:00:08And then someone something inside you goes, I'm done. I do think that's true for some people. And I don't think it's true for people addicted to opioids or heroin, where like, it's a physical body thing. No amount. I mean, if it was, then people wouldn't be living on the street, like, you know, in the way they are to get their next opioid head. But it is interesting to think about addiction in relation to this new tool, because it's it is an issue. There's an incredible TED talk. I just googled it again. It's from Johan Hari, and it's titled Everything You Think About Addiction is Wrong. And effectively, outside of the strong physical addictions that you're talking about, Jason, like opioids and stuff, his whole notion is that the opposite of addiction is connection.

1:00:48And it comes a little bit down to what you were saying earlier about kids in school and others, right? Like ultimately, when people have love and connection in their life, and they're living in the world and not in their head, you know, the entire time you're part of things, it's kind of the opposite. And It's a great talk for anyone to watch, but I think it comes down. This is not a debate about AI. It's a debate about technology that we've been having for 30 plus years in the world. Ultimately, a well-rounded human life is spent with purpose, with mastery, out with others. We're social creatures.

1:01:21We have these incredible things. It doesn't matter if it's a Netflix video or a conversation that we have with Claude into three in the morning. They're all things that do take us away from that. And I don't think it's just the next technology that should be demonized. I think it's our way of how we choose to raise our kids and how we live in society to kind of like shape us as better humans, right? And that's, I think, our responsibility. It's not a technologies company responsibility, right? Yeah, 100%. So this was recommended by Alex Elias, one of our panelists, wanted to talk about privacy first AI.

1:01:54So first of all, Alex, I'll go to you first. What do you mean by privacy first AI? And then how are you making that work when you're also building a recommendation engine, which is going to be based on like, this guy likes this kind of music or this person likes this kind of food? Yeah, it's a big, it's a big question. I mean, I think as, and companies are becoming more and more aware of this, like every company we contract with, you know, provenance and data sovereignty and everything has become the longest pole in the tent in terms of getting, you know, getting deals done. But I think as we move towards this kind of distillation of reasoning throughout, you know, devices and it just becomes a part of our fluid experience, having, you know, privacy centric, being able to actually compute meaningful, you know, do things like personalization in an on device capacity becomes kind of increasingly important.

1:02:47And we've been, you know, we've been trying to find, I mean, we've been running Clue 14 years now, for better or worse. Jason knows that. And we've always had this, you know, we've had this stance on privacy, even pre-GDPR and so on, because we just felt that there was kind of enough you can glean from pure context without needing anything to do with someone's identity and personal identity data. And that's obviously become more coveted and more important in the current age. But yeah, I think that, you know, we're going to have to, basically there's novel mechanisms where you can kind of create very small distillations of an embedding space.

1:03:25You can overfetch and store things on device and create personalization that feels, you know, authentic, but doesn't require any kind of server communication. There's a lot happening in that space. And it's kind of, you know, to some extent, it's been exciting for us because it's increased the addressable kind of space of what we what we're able to do. But, yeah, it's a big it's a big topic. Was this based on the nanny cams and our children be under being under 24 hours? I mean, I do forever because I have a lot of examples. What Jason is talking about is are you talking about Nanit, the baby's first?

1:04:01Yeah, maybe you could cue that up because it's kind of everybody will have an opinion. This is a New York Times profile from the other day. It's a smart baby monitoring system, records your child overnight, algorithms then interpret their body and eye movements and give your baby a sleep efficiency score that you can then review in the app. And I'm sure it's got recommendations on how to get your baby to sleep through the night. The writer of the piece, Sapna Maheshwari, we should note she's a fan and user of the product. She's bought them for both of her babies. She also describes it as the eye of Sauron.

1:04:38The data from the company, a million daily users and annual revenue over$100 million. The most expensive version of this costs$474 to buy the unit and then$100 a year in subscription fees, Jason. So would you, if you were having another baby? And Pulse Oximity. They also have a sock that does Pulse Oximity. Oh, yeah. That's a different company. What your oxygen level is. listen, I can tell you as a parent, you live with this constant fear of the baby, you know, suffocating or falling out of the crib. It is like one of the persistent ones. So I think early in life, like absolutely track everything you can.

1:05:18That's awesome. It's a mitzvah for society. Every life is precious. Like, but then you have to think when you move into adult life, when you're becoming a helicopter parent and at what level does this provide value versus like the cost of privacy and AI is going to be the tipping point for this and I think flock cameras are the adult version of these baby cameras right like we've had the flock folks on here and I've talked to them about their issues and everything like that privately and publicly you know if you have a community and the ring doorbell is another example like trying to track and whatever if you have a community and the majority of the community says, Hey, we want this place safe.

1:05:59And when you have kids, like safety is number one. If you live in a gated community, okay. You all decided to live behind a gate. You've made that decision that security is paramount and that you're going to, people who come visit, you have to be inconvenienced for five minutes to go through the security gate. And then nobody else can come in your neighborhood, which is okay. Sure. Uh, if you're a celebrity, you know, whatever you're at risk, it makes sense. And you know, if you have kids, you can sleep. But when it comes to like a wider community, then it does get a little bit concerning. Like everything's tracked, but they don't, people don't understand like the limitations on flock.

1:06:36It's only 30 days that they keep, and they only keep license plates, but people assume it's facial recognition forever. It's 30. And when they first came out, they left it up to the communities. So they've done a bad, a bad job of like keeping people up to date on this. But the truth is it's just, you know, a short period of time. I track everything with my whoop and I track everything with eight sleep and I have a security system at my house with gosh, how many cameras do I have now? Like, you know, at least 12 or 15 cameras on my ranch. Like I know I sound like a crazy person, but they're not that expensive.

1:07:14I have unique, you know, safety concerns. Cause I, Some people are crazy. It tracks license plates long. It tracks facial recognition. So on my ranch, you come on my ranch. I've been to your ranch. Your face goes in my database. You've been to my ranch. Your face will be in my database. Don't train AI on me, please. Too late. I don't know. Then it will show me the faces that have not been tagged. And you just put Lon, Jason, Alex, et cetera. Then it has every license plate. But now we can say, hey, this nanny or the pool guy, the pool guy's license plate is in there. When he comes to the gate, it automatically opens.

1:07:55And it says this pool guy came at 6, pool guy left at 6.30. We know all of that data. And it's like, whoa, is this a lot of data for me to have? And how long am I going to keep it for? And is it kind of creepy? It's harder to plan a big heist at your property now because I'd have to fake. Like Ethan Hunt would have to hack into your system and download the new license plate. Anyway, my point is when you have this much data, you used to have it on VHS tapes. You used to have it on hard drives. But there was no like, let me query. What's the average length between when I leave the house and come back?

1:08:30Like now it's going to do all that for you. It's getting weird, folks. It's going to get even increasingly weird because people are going to point these things at the street. And one of my two of my cameras are pointing at the street. and it started picking up people's license plates driving by my place don't admit this on air so now i have a database of everybody in hill country and i had to like no no i long i didn't want to fill the database with that many license plates so you gotta be like hundreds a week so i just took the camera and i said anything above this part you know don't record just record the front of the house not the people driving on the highway yeah fair enough fair enough anyway i think it's pretty interesting new world and it's kind of black mirror a little bit you know i'll jump in um well obviously the whole thesis of exo is sort of around this whole privacy thing so um the way the way i see things is this technology is inherently invasive in that you know in it literally gets better the more context you give it so the more i use uh chat gpt the more it knows about me, the better it gets, right?

1:09:40And that creates two things. One is, as a user, there's an incentive to kind of share more, because your product experience improves as you share more information. And secondly, it creates a moat for these companies, because the more data they have, they'll have significantly better products than anyone else, right? So it's sort of like there's a lock-in element there as well. if they're smart about how they keep that data, make it hard to extract and move out, then it's a lot harder to kind of switch around and use different services. So I think, and this is core to the kind of thesis of Exo and why we started it, is we saw this as a centralizing force.

1:10:22And we saw that if you play this out, then what you're going to have is a few companies that have all this data about everyone. And it's not just like the breadth, but it's also the depth of the data, right? So in the limit, you want to share everything about your life with AI because the AI is going to get significantly better the more you share. So, you know, I think it's a concern. I think there's the consumer side of the story and then there's the enterprise side of the story as well. Like the consumer, I think, side of the story is concerning in its own right. You know, mass surveillance, I don't think is a good thing.

1:10:54I think having a few companies that know everything about you is not a good thing. I think the enterprise side of the story is sort of more, I would call it, the sovereignty. And, you know, you don't want, like, no company wants to be beholden to OpenAI, right? And they, I mean, Alex Kopp has been very vocal about this recently. I think he's been, you know, talking about how, you know, these companies are colonizing your enterprise, right? And do you want to be colonized by these companies? And I think it is as clear as that. You're giving all this know-how, you're giving all this very valuable information about how your company works to the point where they know everything about how your company works.

1:11:42Right. So I think there's a growing concern. I think it took a while to get to the point. We went through a few waves already. Right. With with AI. So like I think there was this wave where everyone got really excited about these LLMs. And then it was a little bit of a letdown because I think the LLM just weren't quite there. So then, you know, you had sort of like a bit of a dip. now it's like round two and the the models are like significantly better and so you know now it's less about does it work and it's more about like okay what are the implications of us using this right if we're going to run this at scale you know where is our data going and so that's why you know things like the open source letter as well is uh are coming into the the spotlight and And things like Alex Karp, he's talking a lot about this.

1:12:37That's why it's starting to surface now. And it's just going to be one of the primary concerns of using AI going forward now. For any enterprise, if they're going to adopt AI at scale, then they're thinking about sovereignty. It's like number one or two on the list of things to think about. It's most important, I think, for any enterprise because you're teaching. Your queries are not saved by these frontier models, but I think the results of your queries, like maybe they're fair game when they look at them and they do testing on them. So I'm thinking about my tiny little 20-person venture fund and our programs and thinking, should I be giving them this level of information and knowledge?

1:13:24I keep coming to the conclusion, absolutely not. I was going to say, I think I really agree with your point, Alex. But I think this is not just an enterprise question. I think it's a societal question. Everything that is going to be economically valuable or scientifically interesting, and a lot of what is personally meaningful to us, is going to be running on a layer of intelligence. And do we want that intelligence to all go to three, four, five companies in the world? Or do we want it to go to hundreds? I've said this a few times. if I would have picked up a book three years ago about 2035, and it would have read by 2035, everything economically valuable, scientifically interesting, and personally meaningful is coming from the intelligence from three megacorps, I would have titled it a dystopian sci-fi novel.

1:14:10And so I think we're at the fork in the road about the kind of future we want. This is not the same as Google or cloud compute, where we've had these natural oligopolies that have existed. This is a technology that's going to underpin everything we do moving forward. And we cannot live in a world where all of us are beholden to three or four megacorps. Awesome. Yeah, that makes total sense to me. The future being open AI versus anthropic is a terrifying prospect. Well, that about brings us - Can I add one more thing? Please, please do. And I think maybe Jason was about to maybe touch on this point in that there is a tradeoff here, right?

1:14:50And like, if you do want the sort of sovereignty, then you are paying a price in some sense, because, you know, you're using a less capable model, right? And I think that's also something that has shifted very recently, is that trade-off is going away, right? So like, you know, you're basically, you're getting like much more capable models. We've got better tooling that's open source. And so, you know, then it's like you're giving power back to, you know, the individuals and you're giving power back to the you know enterprises that are using this and giving them the option right giving them the choice and i think you know that's um that's the that's been the bottleneck for some time yeah and this is where open source and hosting it yourself open weights is going to win the day i believe and i remember at the beginning of the open source movement people were like how would i ever trust wordpress how would i ever trust apache how am i going to trust from i ask you well it was just like people were over just oh my god this can't be and corporations will never use this it will just be for startups and literally the opposite was true corporations said we can't trust i don't know pick a major company because they're going to change the price they might rug pull us you know uh they might change the terms but open source we always have this backdoor, we could fork it and we can see all the changes.

1:16:13So they actually, everybody's prediction was wrong. It was the exact opposite. Now that doesn't mean that like Oracle's not the best database for certain, you know, high volume transactions for Visa or whoever. And like, they're obviously not going to, but maybe, I don't know, you know, maybe use open source for these things, but they're going to need like a support, you know, a layer. They're going to need that SLA. And that's the future here is like, who can get Quinn or, you know, Nemo Tron, you know, the, the NVIDIA one. I think that's the sleeper in all of this. Like if NVIDIA is just like, by the way, just buy our hardware and use our hosting company.

1:16:53And yeah, just use Nemo Tron. It's like, okay, yeah, it just works. You don't need it. It'll do 90 % of what you need. Like the 90%, you know, Pareto principle here, 80, 20, 90, 10, whatever it winds up being. that's going to be very powerful for corporations because then they can just say yeah you know if we can't get something done we'll very strategically allow people to use this frontier model that that seems like the obvious future to me yeah and on on nvidia specifically that they're also like they announced recently they're launching uh something called the dgx station uh it's a new piece of hardware it's like a hundred thousand dollars and the idea is you know you share this with your team And instead of going out to the cloud for all your token usage, you just self-host something like Mnemotron.

1:17:40So I think that's going to make a lot of this more accessible, easier for companies to just buy one of these or buy two of these and sort of have these really capable models that you can just run on your own infrastructure. And Dell has it. It's called the Dell Pro Max with GB300. And they won't give you the pricing online, but I was literally just texting with Michael Dell of Dell Computers about it. And a bunch of people are using it. I think actually Toby from Shopify was talking about it. He was running GLM 5.2 on it at like 40 tokens per second. And I think that can be improved a lot with better software as well.

1:18:24And it's unlimited, right? There's no marginal cost of generating tokens. So it changes, it really changes the game. It changes your behavior when you're unmetered because there is a cost to it, which is the hardware divided by the number of days that hardware can, you know, exist, I guess. But it's unmetered is probably the more accurate term. And it's true. Like, I mean, what's your electrical cost on this? Who cares? I believe this is going to be everybody's desktop. when mac this new guy who's going to be running um turnus john turnus john turnus is an engineer i think his brilliant move is going to be yolo every you to be able to like get your macbook your mac mini with 512 one terabyte of ram and just run local models and why wouldn't they just do a partnership with nvidia and say screw it we're gonna put nemo tron on every or with google their other partner, and just put the Gemma.

1:19:19Is it Gemma or Gemma? I believe it's Gemma. Gemma, like the British lady's name. Just put Gemma on everything. It's just, why wouldn't you? It's like such an obvious win. All right, everybody. What a show. Another amazing episode of This Week in AI. Go to thisweekina.ai.ai. Sign up for our email newsletter. Our email newsletter. Jacob, go past that. Show them the actual newsletter page. How dare you? Has it gotten better? Did you clean it up? You say, yeah, click there. And what we're going to be doing is we're going to be launching a paid version of this where we profile two companies every week.

1:19:50You get 100 companies a year. But sign up for the free for now. We're going to have some free options. Yeah, we're starting with free. All right, everybody. Starting with free. It's a good place to start. We'll see everybody next time. Bye-bye. Bye, everybody.