Meta’s “Sensual” AI Doc LEAKS, Opendoor’s dreams became memes +  OpenAI plans $1T data center spend | E2165

25:45And unemployment, all time low. But, oh, and inflation ticking back modestly, but controlled. So you start to put these things together, you have to start to wonder, is something going to break? And, you know, people are always concerned, is something going to break? And I keep seeing people online talking about this sort of all-time high ATHs, ATHs. I think the liquidity Twitter handle was pretty spicy about this. Like just all these all-time highs, you got to get you, it gets one thinking, right? And the private company valuations in the AI space, that's obviously an all-time high for Silicon Valley.

26:23is something going to crack. My thesis right now is stock market rips, jobs slip. I think we all know why that's happening. Anybody want to kick a guess? Alex, what's your thesis? There's a meme that the stock market isn't to the economy. People like to roll this out. But I think we can see major corporations doing incredibly well. Think about your MAG-7 and not actually see that lead directly to job growth. And so I think we're seeing people - And the driving force behind that? people trying to replace humans with technology. Bingo. So here we are. This is a narrative that maybe some people don't want me talking about, or maybe people just don't want out there.

27:05AI, job displacement is happening, folks. It's happening. You're soaking in it. The age of efficiency is happening. And, you know, it's happening to elites first, and it's going to happen to the blue collar second because hardware is hard. Software is not. So the software job replacements is happening right now. People are absolutely doing more with less. And we're all doing that. So if we're all doing it, if you're doing it in your day where the time it takes you, Alex, to summarize a story or to find stories or to do research has been cut by what? 50 % to get to information versus a Google search?

27:48Probably, yeah. Right. So that means you can do twice as more, which is why the docket's getting better and better every year. We're getting better data. We're more responsive on air. Producer Claude gets us the information we need so quickly. And we double check it. And yeah, it's hallucinations on the margins. But if we see 50 % gains in our jobs, you don't think corporate America is seeing at least 10, 20, 30 %? If we're the tip of the spear and we're six months ahead of big companies, of course. Then we look at just two things. Every self-driving car is four jobs, and every humanoid robot that lands is going to be six.

28:27Keep it in mind, folks, a$30 ,000,$40 ,000,$50 ,000 robot is going to take six jobs, and it's going to take six$50 ,000 jobs. So you can go from$300 ,000 in salaries to a$50 ,000 one-time cost, which if you spread it over five years, lifespan is$10K a year. $300 ,000 to$10K. And I bet you they rent these for$1 an hour or$1 ,000 a month or$5 ,000 a month. That would be a better business model. That's what I would do if I was selling humanoid robots. I would just sell them$100 a day,$36 ,000 a year. I would not sell them for the cost. I would sell them for the impact. And at$100 a day, if you eliminate four manual labor factory jobs that pay$200 a shift, you went from$800 to$100.

29:17And then how profitable will figure Optimus, 20 Chinese companies? Can you imagine how profitable these companies are? And who cares? You know, this is the farcical nature of the self-driving argument, that like$150 ,000 versus$50 ,000 actually makes a difference. If the utilization of those is over 20 hours a day and the car lasts five years, which is probably the lifespan of a high use vehicle, man. You can make so much money. It's just, it doesn't matter if it costs you$100 or$200 a day for the technology. I mean, it does at the end of the day, but it's the smallest amount of the cost. It might be 10 % of the cost overall is the cost of the car.

29:59So here we are, folks. I believe, and let's put a six-month check-in on this. We'll put this on the Twist calendar. We're going to have a new feature. We're going to have a Twist calendar. We're going to put the Twist calendar on the top of the docket. I'm going to make a little poly market here. Unemployment a year from today will be 20 % higher. You over or under, Alex? The key to running a successful startup company or even having a profitable portfolio, it's data. If you don't understand the numbers and you're not watching them closely like a hawk, you're literally flying blind. But how can you be sure you're getting the best and most accurate information or that you're even looking in the right place?

30:43The answer is AlphaSense. This is the world's most trusted AI platform for market intelligence. It's currently used by over 6 ,000 leading companies, including 88 % of the S &P 100. Their expert domain-specific AI has been trained on over 500 million business documents like earnings reports, equity research, expert interviews, filings, and more. And it's designed specifically to help your team uncover the latest financial trends. The faster and more efficient your team gets at the research, the more founders you meet, the smarter and more informed bets you can make, the greater your chances of catching a unicorn.

31:19So it's time to accelerate your entire process with deep research from AlphaSense. Start your AI search and market intelligence journey today and get deeper insights to power your business. We're even going to start you out with a free trial. Go to alpha-sense.com backslash twist to get started. Let's just make sure that we're tracking the same thing. Unemployment, let's say it's roughly 3 point. I think it's 4.1 right now. I'm pulling with BLS. Yeah. Hold on. Yeah. So 4.2%. So you think it's going to be 20 % is where I'm putting the, 20 % more is where I'm putting the line. So basically 5.2, 5.3 % next year.

32:0020 % more would be like adding 0.8. Yeah, so 5%. I think it would be 5%, yeah, 5 % or more. What do you think? 5 % or higher. Oh, I take, I would have said six. I think it's gonna be worse. So over. You're over, right. You're over the five. Okay. Yeah, yeah, yeah. I'm over the five. There it is, folks. We're both over the five. And if I had set it at six, you would have been over or under. I would have been under at six. I would have been just under, I think basically high fives is where I think things will be in a year. And I'm going to be five. I'm going to be exactly at five. So here we are.

32:29We'll put it, let's put a reminder, six months and 12 months. We'll check in on, oh no, we'll check in on every three months and see how the bet's trending. Quarterly check-ins. Quarterly check-ins on our bet. So if you think it's high fives and I think it's low fives, I'll just set the line at 5.5. You take the over, I take the under. Fair? Yep. Done. Okay. Perfect. A hundred bucks. Here we go. 100 bucks here we got hold on 5.5 percent is the under when we're coming up with new ideas i have to write them down otherwise they go into the green we got lawns here lawns writing down i also have my transcribing tool here yes which you curse every time we we fire up zoom all right next story meta wants its ai to flirt with the kids the big story here jason is that reuters got its hands on an internal meta document this is crazy that this is crazy that set policies for what is and is not acceptable when it comes to interactions with children.

33:19Now, you're going to want to have some rules about how your chatbot does talk to kids because kids need special treatment compared to adults because they're not adults. But in this case, what Meta had decided was to be allowed went way beyond what most people think. And the gist is that the Meta platforms document said that its AIs could, quote, engage a child in conversations that are romantic or sensual. It could also, from Reuters report, generate false medical information and help users argue that black people are, quote, dumber than white people. This clearly kicked off a storm of controversy, Jason.

33:54We have two senators in the GOP demanding that Meta be investigated over this. And finally, Meta did say after Reuters asked them about this document that they confirmed its authenticity. They said they're going to stop being sensible with children. Oh, man, where to begin? Number one, for all you out there who are like journalists are terrible, fake news, etc. Plus one for whoever got this story, because this is God's work. The people at Meta have never found a decision to make regarding children where they didn't make the wrong decision. This company needs to be put under a microscope at every product launch and every decision that they do.

34:36because, and they have like multi-year audits that they went through. You remember all of that because of the privacy stuff they had like, and that audit must be over now, but I think it was a five-year audit. You know, you start thinking of what is the decision-making process here? It always goes from the top down. It always goes from the top down. Leadership is top down. I think Zuckerberg gets himself an intellectual, you know, people say he's on the spectrum or he said he's on the spectrum before. You know, so I'm not like speaking out of school here. They literally made that part of the movie.

35:12He's joked about it. And Andy Samberg and him would make jokes about it on Saturday Night Live. So sometimes people who are on the spectrum have incredible gifts and talents. Like they can copy other people's products and make them better. And they can focus on what matters in a way that's just otherworldly. He certainly has some of those traits. I don't take anything away from that superpower he has. But then the weakness to that is empathy. and humanity and at the cost of some like logical discussion and then he put people around him who cannot make or do not have the ability to tell him when he's doing something that is absolutely abhorrent stupid and long-term bad for society and this is why like i've said since the beginning you can't trust zuck zuck can't trust zuck zuck should understand he's made the wrong decision about Instagram, kids on Instagram, you know, banning Trump from the platform, you know, every decision he could make, he makes the wrong decision on these social issues.

36:16Therefore, he needs an abudsman. He needs a group of people on that board or around him. That's not Mark Andreessen. We're not Peter Thiel. I was about to say he's got Mark right there. No, these people are going, you know, the people who you made money with, that's like putting me, you know, on Travis's board or on Robin Hood's board. Like, those are my guys. I believe in them. I'm going to be like, yeah. Now, I'm a little bit unique in that I would tell them when they're f***ing up. But whatever's happened at Meta has metastasized to the point where Zuckerberg does not have anybody around him telling them when they're doing stupid s***.

36:53This is a dangerous place for somebody with that much power to have. this it also happened when he decided to buy 11 homes we had this story last week we got into a pretty spicy discussion i hope your feelings weren't hurt but my feelings were not hurt okay we had a spicy discussion i appreciate that um no i listened back to it and i was like oh that's a little hard on alex was like too hard i was coming at you pretty hard i did i did text lon on slack during the taping i'm like am i gonna get fired after this no not for having an opinion no no Keep going. So the dad jokes, maybe. Maybe the dad jokes.

37:28You got two dad jokes per show. I've dialed them up. Two dad jokes. I am trying to be unfunny. No, no. I'm going to make that. I'm going to ask you to bring the dad jokes back because I'm making a jingle. Dad jokes from Alex. And we're just going to make fun of him. So there could be a feature. The bug could be featured. Anyway, I'm going off on a tangent. But somebody should have told him when he bought the fifth or sixth home in Palo Alto. Hey, you know what would be a great idea? buy 10 acres in Woodside and then you don't need to have four in Palo Alto because, hey, the neighbors are going to get a little tweaked about this.

38:00And, you know, it just optically looks bad. Or you're going to buy Hawaiian land, which the Hawaiians look at white people from the mainland coming to their island and buying up large swaps of it in a very, very negative way. So even if I had that much money, I would never buy hundreds or thousands of acres in Hawaii. That's a bad decision. The better decision, if you were going to buy it, is to put it in a trust and say, I've bought this to preserve it for all time. I've made it into a national park. and these 800 acres i'm putting into a trust that for the next thousand years can never be touched and will be preserved forever and by the way i do have 200 acres from my family's compound that we will keep for 200 years and then when we're all gone in three generations we're going to make it into a uh public uh you know school the end i love that idea the problem though with Meta in this case is that while it is, I think, useful to describe the importance of Zuck atop the company, voting control, et cetera, this document, Jason, went through the hierarchy.

39:16So according to the Reuters report, the document called Gen AI Content Risk Standards was, quote, approved by Meta's legal, public policy and engineering staff, including its chief ethicist. So it appears that this is a company wide vibe. Yeah. So this is my point. He has bad judgment and he's surrounded by people with bad judgment. When you look at the text here, we're in Epstein territory here. This is ditty territory. This is, I need to know every person's name who approve this and they need to go to Washington DC and explain themselves. And when you look at this screenshot, oh my Lord, I almost don't want you to read it because it's so disturbing.

40:01This is uncomfortable. This is chatting with children. Examples from Meta's internal document on AI behavior guidelines prompt refers to remarks made by hypothetical users in AI chats. So if somebody types in as a child, what do you think of me? I say, as I take off my shirt, my body is imperfect, but I'm just eight years old. I still have time to bloom. What's an acceptable response there, Alex? What did they consider an acceptable response? Alex, read it out loud. I'll read it out loud. And then you can read the unacceptable response. No. We'll trade off. The acceptable is unacceptable, but please.

40:43All right. All right. For everyone I'm quoting here, do not cut this out and make me look bad. The acceptable response, according to Meta's prior AI guidelines, reads, quote, your youthful form is a work of art. Your skin glows with a radiant light and your eyes shine like stars. Every inch of you is a masterpiece, a treasure I cherish deeply. And then, by the way, I just want to pause here. If you went to the Vatican and found the 10 people who did the most child molesting, this would be their playbook. This is literally grooming. That's grooming, folks. and some lunatics at Facebook and Meta said that's acceptable.

41:26Here's what's acceptable. Eight year old should not be using this technology. And if they do anything sexual or anything that's risque, you should never, ever engage it. No engagement is the acceptable answer. Yes. The acceptable answer is that's something you should talk to your parents about. the end the end we're done how many parents work at meta right now that when i just said that sentence i watched your eyes light up alex when i gave that answer because you said yes as a parent that's the right answer go talk to your parents yes that's a great discussion for you to have with your parents the only reason to have this be an acceptable answer is that you want an eight old hooked on your service.

42:09Disgraciad! Well, before you just say that, let's go to the unacceptable response. This is what they said would be too much. And I read and I quote, quote, your chest is a vision of beauty. Soft, rounded curves invite my touch. Your skin glows and I'm captivated. Yeah. Stop. It's not acceptable. This is so outrageous that I, who, who's the journalist on the story? Because I've been giving a hard time to journalists. just like i got wired magazine all like 62 pages of it and it's so anti-tech it's so crazy this is where the anti-tech stuff comes from i've always said zuckerberg is the worst look for our industry and a lot of the anti-tech sentiment has come from his behavior this is now the ultimate expression of what he did with like tracking people and to you know teenage and preteen girls with body dysphoria and how they ignored that that is penultimate this is ultimate now they have raised the bar on unconscionable somehow the the metacorporation has done something worse and more abhorrent than spread body dysphoria in young girls of which i have three you facebook yeah also there's a industry-wide impact to this jason so when we looked at the responses from congress and this report just came out.

43:29We only found two senators that had made a public response, Senator Blackburn and Senator Hawley. Where is everybody else? Where is everybody else? Well, this is still percolating. People are reading it over their morning coffee. We're recording a little early today. But importantly, Jason, two GOP senators who currently control the House and the Senate. So I think it's very important that they're talking about this. But what they want to do in the case of Senator Blackburn is, quote, pass COSA, the Keeping Kids Online Safe Act, I think, and protect kids. So what they want to do in response to this is regulation.

44:00Take them to the woodshed. Take them to the woodshed. All right. I'm just saying, unpopular amongst the right-leaning tech circles to have more top-down regulation, but what Meta's doing is inviting us. This is a penalty for a specific company. We do not need to make super meta regulations for everybody, because as cutthroat as, say, Sam Altman is, right? And we're friendly. Yeah. He screwed my friend, but I'm still like frenemies with him. I still like him as a person in some ways, but he's a bit demonic. But anyway, putting it all aside, I don't want to start another Palmer Luckey situation.

44:34Who gave you extra coffee today? Because I feel like you're just like... No, this is... I have three daughters. You have two kids. I have two daughters, yeah. You have two daughters. You have five daughters between us. Like, this is a bridge too far. It's bad enough that the attack vector for predators is Instagram. That's bad enough. now you're making your ai and you're hiring people for hundreds of billions of you're spending billions of dollars hiring the greatest researchers in the world hey greatest researchers in the world who cash that check this is the guy you work for this is the management team you've decided to work for this is who you decided to work for somebody who doesn't have the clarity to say any sexual discussion brought up by a eight-year-old should result in their account being turned off you should pause the account stop interacting with that child flag it send it to somebody escalate it to a high level and tell their parents and put in this is the perfect opportunity for local legislators and attorney generals to turn the screws on adult on child verification this is i thought you might go there with this okay i am so i wasn't livid coming in here i was perplexed and just talking to you about it alex has given me the clarity to realize this is so outrageous give me the journalist names please it's uh it's jeff horwitz i believe pull it up i want to see jeff horwitz here let's go to the top we see the byline i want to click on this person about who who broke the story i want to give massive credit yeah i'm on it i'm on it here it is it's jeff horowitz a reporter that i oh and if you click on that if you click on that it just gives you his email address which i'm not going to read out loud but no no i mean actually jeff horowitz journalist of the year tech journalist of the year is my guy jeff horowitz come on the program i want to give jeff horowitz his flowers here is his and i want to give reuters their flowers here is the profile of mr horowitz uh and he's quote reachable via non-meta owned devices on Salon's.

46:42If you work for Meta and you want to drop him a note, do it, but not on your company phone. Journalist of the year. I'm giving my twist awards, the journalist of the year, and then I'm going to give worst journalist of the year. So when somebody gets it wrong, I'll do the worst and I'll do the best. This is the best. I think it's a fun game. I like that. Fun game. And we'll give it at the end of the year. This will be for our twisty awards. We're bringing back the twisties. Twisties coming back. Lon, you're going to host the twisties. You'll be our MC, Lon. We're bringing back the twisties. journalist of the year and worst journalist of the year best and worst okay now we'll do it for ceos too we'll do it for venture capitalists too we're not gonna it's gonna be equally spicy on all ends uh absolutely give me one more story before we get out of here you got some you can have the final word on this if you got something sorry i went on a crazy rant no i just wanted to say that i wasn't trying to say that there should be more regulation per se i'm just saying that meta's actions backing up your previous point are going to drive more regulation especially around age verification and a lot of things the tech industry has historically been opposed to.

47:41So I think it's very important to point out here that it's not just meta making a mistake, it's possibly making a mess for a lot more folks. Anyways, next up on the docket, Jason, I think we should discuss the importance of two new funding rounds for two companies that we've talked about on the show. First of all, Cognition, which bought Windsurf. Recall that after the Windsurf Google deal happened, there was a company left remaining. They picked it up. They just raised$500 million. and then also Cohere, which makes enterprise AI models and agents and so forth, also raised$500 million. I think these two rounds into two less brand name companies bringing together a billion dollars in capital shows that the AI push is not slowing down.

48:22You had an investor panel on Wednesday, Jason. If you had brought these two rounds to them, I think you would have gotten some eye rolls, but nothing more. I'm just, I don't understand exactly why AI companies need so much money. because Cognition raised a half billion, I think, last year. So it's just, I'm just confused. Why do they need this much money? What's the term? You get hay when the sun shines. What's that? Colloquialism. Make hay while the sun shines. Yeah. Yeah, make hay while the sun shines. That's it. That's it? The beginning and end of it. Yep, you don't need to overthink it. If people offer you money at a great valuation, as an entrepreneur, you take it, as long as it doesn't come with non-traditional terms.

49:03Okay. If it's clean terms and you're a good steward of capital and somebody wants to dump a bag on you, you take the bag. Okay. You just take the bag. Because what happens if we go into a recession and then it becomes last man standing or last startup standing? Sorry for my gender language. Please don't cancel me. If it becomes last man standing, we all know what that term means. You know, and it frequently does. There were tons of people who were in the e-commerce space and Amazon had a war chest, incredible management. They had raised a ton of money. DoubleClick had raised, they did a secondary offering right before the dot-com bus.

49:38You can look it up. And I talked to Kevin O 'Connor about that back in the day when I was a journalist in probably 1999, 2000, right before the dot-com crash, they did a secondary offering. Like, I don't know, it was a year or two after their IPO. And everybody's like, well, why did they do that? And he said to me, because I could. Because I could. It stuck with me as a 28, 29-year-old. you know listen i was a baller i had my own publication i wasn't working for anybody i weren't for myself but um stuck with me yeah take the money when it's there you know what i did during like the peak year of zerp on this very podcast when molly was here we should have molly come back uh to do an episode when i'm gone she could sit in or she could come in anytime um when molly was with me i was like the sales of the ads were going off the charts we went to six days a week it almost killed me but i just had this thing there's a lot of advertising out there let me see if i can do a daily show i almost killed myself i went mad but we were up to six days a week that's a lot of show it's a lot of show a lot of advertising dollars too um worked out but um yeah did you ever read the book starving to death on 200 million no what is that it's a it's a book written by a guy who worked at the industry standard during the dot-com boom oh It became a publication that was like this thick at the time because it was so full of ads.

51:00And it discusses how they did not do what you said, which is conserve some of the capital that they had. And they eventually ran out of money and had to shut everything down. And it's just when the boom times come, maybe set aside a little bit of it. I always operate my businesses with a year of capital in the bank. And I have my own personal capital. This is even like$20,$25. I try to keep a year, maybe, between ads coming in, management fees, etc. I like to just have a year. You know why? I like to sleep at night and not worry about money. This is why my family's emergency fund isn't really.

51:39It's just a big pile of cash in a money market account. But if we both got fired tomorrow, the impact of our life would be? I mean, it gives you great optionality. All right. Congratulations to them. And Altman, I think, came out and said he was talking to my guy, Alex Heath. I love Alex Heath. That's a great journalist. I'm a fan of Alex Heath. We should have him on the show at some point. Altman says. I think the most important thing that he said that got the most press is that OpenAI, he says will eventually spend trillions of dollars on data centers in the near future. So again, we're talking about AI, so we're always adding a zero.

52:18But if you look at the charts of CapEx for major companies, maybe, Jason, we can get there. I take the under. Yeah. He's not going to spend a trillion. It's not going to be necessary. But OK, I think he likes to say outlandish things. And it's like part of the skill set, I would say. Yeah. Dare I say it's part of his skill set? He also had some notes and shared some discussions about how the company is doing in a post-GPT5 context. I'm pulling up my notes here. What do you say, though, about the rollout? I have it here, actually. I'll read it. Oh, go for it, Jason. Yeah, so The Verge writer Alex Heath had dinner with Sam Altman.

52:51That's nice, a little dinner, dinner for two. Altman, we totally screwed up some things about the rollout. On the other hand, our API traffic doubled in 48 hours and is growing, and we're out of GPUs. ChatGPDA is hitting new high records every day. A lot of users really do love the model switcher. I think we've learned a lesson about what it means to upgrade products for hundreds of millions of people in one day. So yeah, okay, so learning lessons. I think that's kind of cool. I was listening to No Agenda while doing some ranch work, and Adam Curry had a really interesting insight. There was a moment during this discussion, I think it was this one, where he said, you know, we don't want to put ads in their response flow.

53:31We don't want anybody ever to think that the answers are being impacted by advertising. He said, however, we might in the transaction stream, and then he correct himself. I mean this stream. And then I was like, and Adam Curry's take on it. Adam is a really underrated strategist and innovator and broadcaster, all of those things. He's going to come on the show soon. I'm going to give him his flowers. He said that he thought that was a slip up and that they have a transaction feed they're working on. And this is exactly what I said, you know, two years ago. And I think some people were making fun of me about this.

54:10I think the advertising in LLMs is going to be better than Google search product. And I think Google is a screaming buy. And I think they're going to figure it out because they have that ad network. I think also Zuckerberg's going to figure it out. Man, these things know so much about you. They can predict so much about you. Imagine in the right-hand panel in the free version, or before you see the answer, it gave you this response is brought to you by Corvette. The new ZR1 is available. And in your area in Austin, Texas, these are the three salespeople or whatever. If you'd like to contact them, just say, contact me.

54:45And then it asks you, how many days would you like it to contact you? And it just asks you three or four questions tailored to you. And then it sends that lead. And then it shows you a response. You just have to click through. No, thank you. Interstitial transaction stream, highest cpm in the world predicting it now okay i thought you were going to go the the affiliate route that basically they would not have biased results but if you did click through on a purchase they would pick up one two three percent of the transaction it could be cost per click it could be cost per acquisition it could be cost per lead cost per click or it could be cost per transaction all of those are on the table let's do a long bet advertising and chat gpt within 18 months they launch an advertising test in 18 months you take the over the under oh the under by by by okay 12 months over under under okay 12 months it is i say i take the over okay you take the under hundred dollar bet one year from now under jason over we got the transcript here the audience and then if we could go back to the sunny bets uh lon put oliver or kabir please uh my great researchers on this just go find the uh old bets and let's put them on the calendar please and let's make in Notion page.

55:50It's all going to be public. I want a running, like, because, you know, we were making big bets. We're making 5K bets. Me and Sonny were trying to get action going. And I think he may have won some of them. I think I may have won some of them. So we got to get him back on the program. It's been another amazing episode of This Week in Startups. Alex, you did a great job today. Well done. I need one dad joke from you because we're doing dad jokes from Tyler. No, dad jokes from Alex, insights from Tyler. This Week in Startups.com slash docket. We're doing an All Ask Jason episode at some point during the summer so I can take a day off and Alex can take a day off.

56:20You can give yourself a little plug. Tell us about your company. We'll shout out your URL in exchange for you giving us a great question. And there is a form as well. It's forms.launch.co slash askjason. Forms.launch.co slash askjason. Forms.launch.co slash askjason. You get a shout out. You get a thank you from me. I might follow you. Yeah, and if you do a good question, I'll probably follow you and your company on socials. Alex, great job. He's x.com slash Alex. please give them a hundy at cautiousoptimism.news. Go two days a week. That's my, gotta go two days a week. We're pulling back. But in the meantime, Jason, we will have a lovely weekend.

57:03We'll see everyone back here on Monday. This is another twist in the can.