The Exchanges

Q Yeah. And it's his fight to, to basically get that access and also get that access for other people. And I think he basically ends up breaking the law, getting in trouble because he's getting these drugs to himself and other people. Uh, he ends up dying, I think, but sorry, another spoiler. Um, but am I remembering that correctly?

A That's right. But basically the primary agency preventing him from getting the drugs is the FDA, right? And this is based on the true story of like ACT UP where, um, you know, people would do die-ins Uh, where the FDA was preventing them from getting access to these. I mean, these people were, you know, had this life threatening condition, obviously. Fundamentally, they're miscalibrated on terms of risk, right? They want to minimize PR risk for themselves, the agency, as opposed to allowing people to take a risk on their own, right? And why is that? It's because media Only covers it when a drug doesn't work and doesn't cover it when, um, a drug does work, but it's been delayed. Calculations of so-called drug lag, um, depending, you know, like Alex Tabarrok and, you know, others have pulled things together on this, right? You know, Daniel Henninger has written about this. Depending on how you calculate it, the number of lives that's been caused by the FDA. Basically, if you have a drug and it was held up by 10 years, and then once it was approved, it reduced morbidity and mortality by X percentage. That means FDA's delay of 10 years multiplied by that is how many lives it cost. Relative to just taking the risk at the beginning and shipping it. Right now there is risk.

AI assessment note: “That's right. But basically the primary agency preventing him from getting the drugs is”

Q currencies as well, right? The network has changed that. And your book discusses how technology can actually potentially create new states. Very interesting concept. Um, and in order for us to dive into that, why don't we start off with what we have today, which are nation states. So how would you define a nation? And how would you define a state and how do those kind of interplay together?

A I actually have this at the beginning of chapter five in the book. And the thing is we hear the term nation state as a compound, you know, like a, you know, the phrase really, And we don't really give too much thought as to what it means, but, um, it's useful to think about the distinction between those two words because they're actually very different. The nation, that's like, that comes from the same root as natality, like the Latin, like Nazis, and so it's like common birth, common descent. So like the Japanese nation, they have shared ancestry, shared culture, going back hundreds, you know, of years and, you know, shared language, all that type of stuff. And then separate from that is the state, which is the administrative unit that Thin layer that sits over the nation, okay? And the state could be of, you know, the Japanese people themselves, or it could be, you know, for example, in the, after World War II, the American government was basically the state over the Japanese nation, right? And so, once you think of this distinction between the nation and the state above it, the cons of the nation state was every, you know, ethnic group Has the right to have its own government. Now, the thing about this, of course, is, um, that's like an abstraction, but in con, in concrete terms, um, many of the ethnic groups on the planet do not have their own government and or they do not …

AI assessment note: “state, which is the administrative unit that Thin layer that sits over the nation”

Q Yeah. And it's his fight to, to basically get that access and also get that access for other people. And I think he basically ends up breaking the law, getting in trouble because he's getting these drugs to himself and other people. Uh, he ends up dying, I think, but sorry, another spoiler. Um, but am I remembering that correctly?

A That's right. But basically the primary agency preventing him from getting the drugs is the FDA, right? And this is based on the true story of like ACT UP where, um, you know, people would do die-ins Uh, where the FDA was preventing them from getting access to these. I mean, these people were, you know, had this life threatening condition, obviously. Fundamentally, they're miscalibrated on terms of risk, right? They want to minimize PR risk for themselves, the agency, as opposed to allowing people to take a risk on their own, right? And why is that? It's because media Only covers it when a drug doesn't work and doesn't cover it when, um, a drug does work, but it's been delayed. Calculations of so-called drug lag, um, depending, you know, like Alex Tabarrok and, you know, others have pulled things together on this, right? You know, Daniel Henninger has written about this. Depending on how you calculate it, the number of lives that's been caused by the FDA. Basically, if you have a drug and it was held up by 10 years, and then once it was approved, it reduced morbidity and mortality by X percentage. That means FDA's delay of 10 years multiplied by that is how many lives it cost. Relative to just taking the risk at the beginning and shipping it. Right now there is risk.

AI assessment note: “That's right. But basically the primary agency preventing him from getting the drugs is”

Q continue to innovate. Some people say, hey, is there a role for a designer in the same way that there used to be? Now it fundamentally changes. And, you know, what does that do to cooperation tools like that? What is your, your thought on, on the SaaS apocalypse? Is everybody on the conveyor belt on the, on the way to the guillotine? Um, how do you think about that?

A I don't think so, because I think if they're smart, then the thing that AI can't do is distribution, right? So if you have Notion, you have Figma, you have, you know, Replit and so on and so forth, you've got all these people and Boom. You can ship with AI faster, you know, features to them, right? And, um, So in that sense, I don't believe in the SaaS-pocalypse. I think you might still see SaaS under pressure from people who can clone the interface quickly. That is true. I think people will build local versions. That is true. I think people may not want their data on remote servers. They might want desktop versions with local data so they can, like, for example, uh, Obsidian is gonna become more of a contender versus Notion because the markdown files, there's a network effect on data. When it's local and you can analyze the whole thing, like local data, you get compounding data, right? So, but so, so in a, in the naive sense that, oh, anyone can clone anything. And so therefore, you know, it, it just doesn't work like that. Like if you set up, if you cloned all of Facebook's code and you set up Facebook two.com, right. Or Instagram two.com. Who's going to log into that?

AI assessment note: “I don't think so, because I think if they're smart, then the thing”

Q currencies as well, right? The network has changed that. And your book discusses how technology can actually potentially create new states. Very interesting concept. Um, and in order for us to dive into that, why don't we start off with what we have today, which are nation states. So how would you define a nation? And how would you define a state and how do those kind of interplay together?

A I actually have this at the beginning of chapter five in the book. And the thing is we hear the term nation state as a compound, you know, like a, you know, the phrase really, And we don't really give too much thought as to what it means, but, um, it's useful to think about the distinction between those two words because they're actually very different. The nation, that's like, that comes from the same root as natality, like the Latin, like Nazis, and so it's like common birth, common descent. So like the Japanese nation, they have shared ancestry, shared culture, going back hundreds, you know, of years and, you know, shared language, all that type of stuff. And then separate from that is the state, which is the administrative unit that Thin layer that sits over the nation, okay? And the state could be of, you know, the Japanese people themselves, or it could be, you know, for example, in the, after World War II, the American government was basically the state over the Japanese nation, right? And so, once you think of this distinction between the nation and the state above it, the cons of the nation state was every, you know, ethnic group Has the right to have its own government. Now, the thing about this, of course, is, um, that's like an abstraction, but in con, in concrete terms, um, many of the ethnic groups on the planet do not have their own government and or they do not …

AI assessment note: “separate from that is the state, which is the administrative unit”

Q because they have all the capital, they have the compute, they've vertically, vertically integrated, but there's also an argument that, hey, um, maybe they won't, because, you know, distillation Is like, 98% cheaper than, than it is to, to build a model. You know, open source catches up and, and apps, you know, maybe control the, the user relationship. How do you think this economy is going to play out?

A Great question. So I do think that at least a very large percentage of the future is going to be distillation and decentralization, uh, because, you know, as Anthropic said, Distillation attacks work on their thing, right? And so a relatively small number of API queries helps to kind of distill a large model into something small. And it's very hard to stop that, right? Because you're stopping queries from coming back. You'd have to somehow detect that or what have you, right? And it's also, it's hard to morally stop it because what do they do? They copy the whole internet and put it into their thing, right? So talking about stopping the copying, it's like Facebook or LinkedIn stopping someone from scraping what they scraped, you know, right? Like, uh, Facebook scraped all these Harvard social networks or Google, Google scraped the entire internet, built a Google index. I get why they want to do it, but it's hard to, hard to support that. Okay. So the other thing is, I think the future is personal private programmable because AI is so powerful that you want to use it within the trusted tribe. For variety of reasons. First is it doesn't miss, okay, or rather it doesn't miss small things in large data sets and things that were effectively secure through obscurity. A small example, but an important one is the Gmail thing, right? Like the Jeffrey Epstein thing, you can query, like t…

AI assessment note: “a very large percentage of the future is going to be distillation and decentralization”

Q I, I recognize it, but I actually don't know. Why don't you explain what it is?

A San Marino is this tiny little patch. It's in what we think of as Italy. That is like a sovereign thing in the UN. It's got a flag. It's like 30,000 people. It's like this weird thing. What, what? A country of 30,000 people in like, it's an enclave also. It's like in the middle of, of Italy. And so what it is, is basically before the unification of Italy, um, Garibaldi sought refuge, like basically San Marino, it's a whole complicated story about how it got unified. But Garibaldi was able to seek refuge in San Marino at one point, and in gratitude, he's like, okay, we'll just do a contract with you guys. We won't fold you into the full Italy.

AI assessment note: “Garibaldi was able to seek refuge in San Marino at one point, and in gratitude”

Q I, I recognize it, but I actually don't know. Why don't you explain what it is?

A San Marino is this tiny little patch. It's in what we think of as Italy. That is like a sovereign thing in the UN. It's got a flag. It's like 30,000 people. It's like this weird thing. What, what? A country of 30,000 people in like, it's an enclave also. It's like in the middle of, of Italy. And so what it is, is basically before the unification of Italy, um, Garibaldi sought refuge, like basically San Marino, it's a whole complicated story about how it got unified. But Garibaldi was able to seek refuge in San Marino at one point, and in gratitude, he's like, okay, we'll just do a contract with you guys. We won't fold you into the full Italy.

AI assessment note: “San Marino is this tiny little patch. It's in what we think of as Italy.”

Q Actual creativity and invention. Um, you know, we talked about bio earlier, like, will we have, you know, novel, you know, math, science, you know, uh, scientific research, um, or do we need new architecture for that? Or are you dubious of just the idea in general that, that AI can, can, uh, you know, re re replace or substitute for human labor in a, you know, mass scale there?

A No, well, so I'm not, well, look, Waymo exists, right? So obviously you have full replacement of human drivers there, just like you have full replacement of elevator operators, just like you have full replacement for the most part of artisan old chair manufacturers. So it is certainly possible for a given job that it gets fully automated, right? And, but I think physical role jobs, because of the verifiability, are easier to potentially automate. That said, I think that, um, let's take each of the things, actually said a few different things. First is physical world jobs, if you automate them. Well, we went from artisanal work with chairs to a chair factory. It's not like you didn't know, need to know how to make a chair to set up a chair factory. You still need to have somebody there who's like an expert in chairs, and you can just do a lot more varieties of chairs, a lot more cheaply. You have to verify the result. You're cranking out a thousand of them. You start doing math on them. The scale goes up, but And, and the artisan gets factored out into the manager and the technician.

AI assessment note: “So it is certainly possible for a given job that it gets fully automated”

Q Actual creativity and invention. Um, you know, we talked about bio earlier, like, will we have, you know, novel, you know, math, science, you know, uh, scientific research, um, or do we need new architecture for that? Or are you dubious of just the idea in general that, that AI can, can, uh, you know, re re replace or substitute for human labor in a, you know, mass scale there?

A No, well, so I'm not, well, look, Waymo exists, right? So obviously you have full replacement of human drivers there, just like you have full replacement of elevator operators, just like you have full replacement for the most part of artisan old chair manufacturers. So it is certainly possible for a given job that it gets fully automated, right? And, but I think physical role jobs, because of the verifiability, are easier to potentially automate. That said, I think that, um, let's take each of the things, actually said a few different things. First is physical world jobs, if you automate them. Well, we went from artisanal work with chairs to a chair factory. It's not like you didn't know, need to know how to make a chair to set up a chair factory. You still need to have somebody there who's like an expert in chairs, and you can just do a lot more varieties of chairs, a lot more cheaply. You have to verify the result. You're cranking out a thousand of them. You start doing math on them. The scale goes up, but And, and the artisan gets factored out into the manager and the technician.

AI assessment note: “obviously you have full replacement of human drivers there, just like you have full replacement”

Q company, right? Um, like how much leverage do they have, or just even private companies in general over, what is the relationship between them and governments? Are they like hiring their own militaries at some point? What does it look like when these companies become, uh, you know, 10 X bigger? You know, when AI really achieves its, its potential, and these companies are bigger than, than the biggest countries.

A So I think that at least that specific company, while it executes very well, um, I am skeptical as to whether they're executing well, let's call it politically. Um, and so because of that, if they, like, ultimately at the very largest scale, Markets are political. Like, for example, there's an entrepreneur, and they're raised from a VC, who raised from LP, who's often a sovereign fund or a pension fund, and they're under a state, and they're under the rules-based order, right? So, like, there's certain things that are at the macro level that you don't perceive because one thinks of them as constants, but they become variables. I think that unless one is very, very Savvy that those things could change. Like, one thing I think about, ah, the Silicon Valley AI companies is they're actually scalar rather than vector thinkers. They're only modeling AI disruption And they're not modeling all the other simultaneous singularities, all the political singularities that are happening, all things like, you know, solar mooning and stuff like that, right? And why are those things important? Because they change the leverage of political factions, which in turn means their world model is incorrect because they're only, if you're only extrapolating out AI and you're not extrapolating out all the other things that are, you're going vertical or going down like this, then, uh, they don't have a pr…

AI assessment note: “that's as vague as I, I'll be much more precise on my own blog.”

Q company, right? Um, like how much leverage do they have, or just even private companies in general over, what is the relationship between them and governments? Are they like hiring their own militaries at some point? What does it look like when these companies become, uh, you know, 10 X bigger? You know, when AI really achieves its, its potential, and these companies are bigger than, than the biggest countries.

A So I think that at least that specific company, while it executes very well, um, I am skeptical as to whether they're executing well, let's call it politically. Um, and so because of that, if they, like, ultimately at the very largest scale, Markets are political. Like, for example, there's an entrepreneur, and they're raised from a VC, who raised from LP, who's often a sovereign fund or a pension fund, and they're under a state, and they're under the rules-based order, right? So, like, there's certain things that are at the macro level that you don't perceive because one thinks of them as constants, but they become variables. I think that unless one is very, very Savvy that those things could change. Like, one thing I think about, ah, the Silicon Valley AI companies is they're actually scalar rather than vector thinkers. They're only modeling AI disruption And they're not modeling all the other simultaneous singularities, all the political singularities that are happening, all things like, you know, solar mooning and stuff like that, right? And why are those things important? Because they change the leverage of political factions, which in turn means their world model is incorrect because they're only, if you're only extrapolating out AI and you're not extrapolating out all the other things that are, you're going vertical or going down like this, then, uh, they don't have a pr…

AI assessment note: “ultimately at the very largest scale, Markets are political”