The Exchanges

Q that. But it's, it's fascinating to hear from you and others that he really does seem to believe in this socialism, which, which we kind of know doesn't really work. Like the only reason China has wealth is because it has this like free market side of it. But to him, it's almost like socialism is a form of power and government control. Is that, is that what it's about?

A It is. I think it's about total population control, keeping himself and obviously the CCP in power, making sure that no one arises that can potentially challenge the system. And this is what they've learned right from the Soviet Union, right? And he has studied the collapse of the Soviet Union, uh, extensively. And he has learned that the great mistake of Gorbachev was to go for political liberalization Um, and, and, uh, allowing freedom of speech, allowing other parties to compete, and that, he believes, is what led to the collapse of the Soviet Union, and he said, no, no, we're never going to let that happen. We're going to make sure that we control everything as tightly as possible, and no one, not Jack Ma, not anyone else, is going to challenge or hold on power. That's why you have so much penetration of the Chinese Communist Party within these companies, right, where they have offices inside these large organizations, even though They, they're completely private sector organizations, not even the state owned enterprises, because they want to make sure that they're aware of any potential, even future challenges to their, to their role in government.

AI assessment note: “It is. I think it's about total population control, keeping himself and obviously the CCP”

Q that. But it's, it's fascinating to hear from you and others that he really does seem to believe in this socialism, which, which we kind of know doesn't really work. Like the only reason China has wealth is because it has this like free market side of it. But to him, it's almost like socialism is a form of power and government control. Is that, is that what it's about?

A It is. I think it's about total population control, keeping himself and obviously the CCP in power, making sure that no one arises that can potentially challenge the system. And this is what they've learned right from the Soviet Union, right? And he has studied the collapse of the Soviet Union, uh, extensively. And he has learned that the great mistake of Gorbachev was to go for political liberalization Um, and, and, uh, allowing freedom of speech, allowing other parties to compete, and that, he believes, is what led to the collapse of the Soviet Union, and he said, no, no, we're never going to let that happen. We're going to make sure that we control everything as tightly as possible, and no one, not Jack Ma, not anyone else, is going to challenge or hold on power. That's why you have so much penetration of the Chinese Communist Party within these companies, right, where they have offices inside these large organizations, even though They, they're completely private sector organizations, not even the state owned enterprises, because they want to make sure that they're aware of any potential, even future challenges to their, to their role in government.

AI assessment note: “It is. I think it's about total population control, keeping himself and obviously the CCP”

Q you for being in DC fighting these battles. These are obviously really important, you know, just to, to end on optimism here on a couple of things, you know, you're immersed in the world of technology and policy. What are some of the most exciting breakthroughs that could give the U.S. advantages over China for decades to come, or what gives you the most hope right now for the future?

A Well, so I talk about the key to the winning this Cold War is really winning the technological race, first and foremost. Yes, you need to deter the invasion of Taiwan, make sure they never take it for just strategic reasons. But in the broader sense, it is really making sure that our economy wins over China's, right? And we're right now at 25% larger. There's a slowing down. If the trends continue, they'll never catch up with us. But if they manage to win the race in, in those four critical technologies, they might be able to. And those four critical technologies are AI and autonomy. I don't have to tell you about the importance of that. Second one, uh, that's closely related is biotech and synthetic biology, and not just in the area of medical sciences that people think about, but in the area of bioenergetics, by manufacturing, be able to produce new materials, uh, new energy sources in the lab. I think a lot of that innovation will be driven by AI and it's very, very exciting. Third one is space. You know, this area as well, uh, places like SpaceX and others that have Revolutionize spacelift, right, uh, democratize the cost of spacelift and, uh, the creation of these new modular satellites that you can put in low Earth orbit at a small price is helping us so much in resiliency, in, in intelligence, surveillance, and reconnaissance, and communication, navigation, really game c…

AI assessment note: “those four critical technologies are AI and autonomy... biotech and synthetic biology... space... green energy”

Q on the brink, especially as we await You know, everything going on right now. Let's go to your background first. Your family immigrated from Moscow to the U.S. after the fall of the Soviet Union, and your father was a nuclear physicist, an expert in applied mathematics. Like, tell us a little bit about your upbringing. You, you really got into the world of cryptography and encryption early on, right?

A Yeah, that's right. So we immigrated in the mid nineties. Um, and I ended up in Chattanooga, Tennessee of all places, going to high school there. And my dad, uh, he was working for TVA, Tennessee value authority, but I was kind of bored, even though he was working on some really cool stuff, which was the deregulation of the energy sector in the U S and the free flow of electricity, being able to trade it based on spot pricing across the country. And he built some of those systems for TVA. Very early on, but still not as intellectually interesting as designing simulators for nuclear power plants. So he got really interested in the mathematics behind the emerging field of elliptic curve, curve cryptography, public key encryption. And, uh, I started helping him out as a high school kid. And, uh, that's what really got me into this industry. Uh, and you know, 30 years later, I'm still doing, doing it in some ways.

AI assessment note: “I started helping him out as a high school kid. And, uh, that's what really got me”

Q Neither of them went to high school. You started working at age 11 or 12. How'd your upbringing shape you and help you become a leader?

A I learned, for example, one of the things I won't take a backseat to is judgment of people. I got a pretty good nose for people. That talent or that ability became conscious to me when I was a caddy. Huh. And I'd caddy for people. There were two types. There were guys that if they had a bad shot, they didn't blame it on anybody else for themselves. And there were guys that if they had a bad shot, they're looking around, who's around that I can blame? And typically the guy that gets the punishment is the caddy. The caddy, yeah. But I learned close up, because these guys, don't forget, they think we're just mechanical. We, we don't, oh, we don't evaluate, we don't observe, we don't do the things. I made it a point to studying The men I was caddying for, and how they behaved, and how they treated each other, and how they talked to each other, and how they treated the caddies. To this day, Joe, one of the things I love to do, um, if I'm being asked to evaluate somebody for a job at one of the companies, I like to take them to a meal. I love to watch how they interact with a waiter or the busboy. How do they talk to them?

AI assessment note: “That talent or that ability became conscious to me when I was a caddy.”

Q What is this tied to? Where's that coming from?

A Well, presumably there has to be a kind of unified cause of it all. I think, I think Gene Twenge and Jonathan Haidt persuasively argue that it's social media and smartphones. Just the more time teens spend on those, um, products, the less, by default, the less time they spend doing everything else, uh, doing anything in person, including just hanging out with friends at the mall, like American teenagers used to do, um, going to parties and You know, by default, having sex, having relationships, just all of it, they're doing less of. So I think that the eighteen-year-olds of today are considerably less experienced and mature, frankly, than the eighteen-year-olds of a prior generation, because there's only, I mean, I think we all know this, like, there's only one way to really become an adult. Like, you have to do stupid stuff. You have to make mistakes, and that's how you learn about yourself.

AI assessment note: “persuasively argue that it's social media and smartphones”

Q So I enjoy the part of the book where you highlight some platitudes about race to permeate our society. And one of them is like diversity is our strength. Like, why is that a dumb thing to say? And how should we be talking about it instead?

A Yeah, I think this is something a lot of people say, a lot of people want to believe, though I'm not sure if they deeply believe it in every sense. So for example, I've never heard anyone say that Earth, Wind & Fire was great, but they really needed a white guy to round out their sound, or that like the Beatles were an excellent band. They would have been perfect if they had a Mexican guy. And so I don't think that, at the end of the day, I don't think diversity always makes everything stronger necessarily. Um, and I don't think other people believe that either. My view is that diversity inherently is neutral in most cases. It's neither good nor bad. Um, I know certainly, you know, for my podcast, if, if I'm looking to hire someone to do a task, I don't care what they look like. I want to see how good at the task they are and how much they charge. And so, um, I would make an exception, however, for certain professions where racial diversity might contribute to your ability to do the job. So for example, If the NYPD for some reason were 99% white.

AI assessment note: “My view is that diversity inherently is neutral in most cases.”

Q FBI was spying on you, you had, you had all, you had all sorts of this, like, really, you know, kind of tough time going on. What, what, what was that like living through that? Was it scary? Was it like you were in a battle together? Would you wake up kind of worried about something, but you keep fighting anyway? Like, how did it feel being in the middle?

A Well, there came a point, and I know we shared about Andy Young. Andy Young was saying the same thing, you know. Andy Young does it very humorously. You know, the way we, the way we dealt with the stress, we had to humorize it. And Martin King had a, uh, a kind of a strange, Sense of humor. He would say, now Andy, if something happens to you, don't worry. I'm gonna preach A sermon that you've never heard. And he says, now, Andy, I think I can preach him into heaven. Now, Clarence, I don't know about you, but I will do my best. If something happens to you, I will give, I will preach. I'll say, Lord, let him in. Let him in, Lord, let him in. So we used to, he used to, we used to externalize.

AI assessment note: “the way we dealt with the stress, we had to humorize it.”

Q You know, it's, it's wonderful to have you in Texas as well. I hear you're a big Dallas Cowboys fan and have a certain affinity for Texas. How did that come about?

A In the mid seventies in Iran, there was a third television station that was created for the consumption of English speaking community living in Iran, American and British and what have you. And it was only in English. And I remember on Fridays, which is equivalent of a Sunday here as a weekend, they used to, uh, uh, broadcast the NFL game of the week and the highlights. And back then it was the era of Tom Landry with his hat. And of course, Tony Dorsett, and then the, Then Redskins and what have you. And that star on the helmet somehow attracted me in the first place. And, you know, I said, why not? I'm gonna like this team. Of course, we had no clue what American football looks like. I learned that later. But still, it was interesting for me to see. That's an interesting sport. And that's how it started.

AI assessment note: “And that star on the helmet somehow attracted me in the first place.”

Q So Freshworks is now, I don't know, it's about a ten billion dollar market cap company. It's one of the big SaaS wins in India. What does Freshworks do? And was that what they were doing when they bought you?

A So Freshworks was called Freshdesk when they bought us. It was, uh, they had two products, but the flagship product was Freshdesk. Uh, it was a help desk solution, not like business software. Um, today it's broadly business software because there's a CRM, help desk, ITSM, different kinds of tools. That's part of it. Um, but yeah, when they bought us, it was Main focus was the help desk product, and we were looked at as, like, the third product within Freshworks. There was ITSM help desk, and then the chat product, right? So we launched that in, um, relaunched inside Freshworks in 2017. Um, when we got in end of 20 15, the company was, I think, eighteen million ARR. So, Much smaller than today's, I don't know, it's six hundred million plus, I guess. Uh, and, uh, yeah, we were there for four and a half years, um, seeing it all the way through to mid two hundred millions. So it was a very, I would say, educative journey for us. It felt like going to a SAS school. Um, lot of learning every day, and, uh, I think when we did the startup on our own, we had, um, we were learning, but, you know, we didn't really know how to run a SaaS business. We were doing our best, but inside Freshworks, we got a ringside view to how a world-class company would do it.

AI assessment note: “today it's broadly business software because there's a CRM, help desk, ITSM”

Q from, from, you know, parts of the U S and our parts of the world. And I, I feel like that was probably where a lot of the money was originally spent there. And we've gone through a few different waves of software development in India now, Can you give us a bit of historical context on how the ecosystem got started and how it started shifting to building companies?

A Yeah, I think the first piece of context, I think India has always been very big on education and a lot of people taking that engineering track from academic perspective and then going on to become software developers in IT services companies, right? Uh, those who move from India to US typically, um, to do their, um, post-grad, like MS or, um, you know, PhD would end up joining the product companies in the US, but in India, it was largely still IT services, which was happening. Uh, of course, um, I think that was the first wave where the likes of Infosys and Wipro and TCS, all of these large, you know, technology consulting and, um, tech services companies essentially brought together so much of, um, software development talent. I think the wave around products started maybe In the early 2000, you had some B to C, uh, product companies emerge in India. A lot of them would be, um, I would say, if there's a successful, um, dot com in the US, maybe there was gonna be a parallel in India. Yeah. Yeah. Um, but I think it's, it's in the 2010 to 2020 that you could see a lot of different kinds of product startups emerge in India. Um, Zoho, um, which, you know, the Freshworks founder used to work there for 10 years, was one of the very early B to B product companies from India though. So I think they, even as early as early 2000 had their cloud-based SaaS products coming to market, and …

AI assessment note: “I think that was the first wave where the likes of Infosys and Wipro”

Q you guys have a pretty good track record in terms of like helping run Silicon Valley. It's, it's, it's, it's extraordinary. And, uh, you know, it makes sense that India itself should be able to do this too, if people can come from India and do this here. Uh, you know, how do you, how do you see India's role evolving in the global software and the global tech ecosystem?

A Yeah, I think we're probably in generation three or four of, like, this, this set of product companies emerging out of India now. Uh, I'm sure a lot of people don't know that companies like Postman, or Chargebee, or Atlan, et cetera, were started in India, and, and then came to the US. So, now I think there's learnings that are getting passed on from, you know, companies that saw a journey before, uh, we have a Whole network, um, of, of founders, like this paid forward community called SaaS Boomi, which essentially is built by founders to help other founders who are up and coming today in the ecosystem. So I think that's really helping create, move India from being an IT services nation to being a product nation, right? So I think that, that movement is real. And, uh, it's not just SaaS. Even on the product side, I would say, while in the past, The Google of India is Google. The Facebook of India is Facebook, etc. But then the DoorDash of India is Swiggy. The, you know, Uber of India is Ola. So we have a different set of companies now which have scaled massively. Uh, and, and so I think there is this B to C and B to B tech tech ecosystem now in India that's fairly mature. Early on, it used to be only engineering talent that would be available in India, but now I think we have great product design, great product, Slowly product marketing. Every function is.

AI assessment note: “move India from being an IT services nation to being a product nation”

Q And so Orca's novel therapy, it's designed to replace conventional bone marrow transplant. Bone marrow transplant is, I guess it's one of the oldest cell therapies in a sense, but, but you're doing it in a totally different way. You know, every year right now, I think it's what, 20,000 Americans or so receive a bone marrow transplant. Why did you start there?

A I mean, you almost mentioned it in your, in your answer. It's one of the most well-established, oldest, most impactful cell therapies. Um, it's an impressive cell therapy because it ends up, Treating patients who have failed all other treatments, patients with really terminal blood cancer, and have no other option, and it actually does so trying to cure them. So the fact that you can cure patients at this late stage is really a miracle. There are very few, um, cancer treatments out there that are done with curative intent, and, and so it's incredible, and the folks who developed it got the Nobel Prize for it. Um, but it's also carries a lot of risk, just like other cell therapies. Maybe 20, 30% of people will die from the medicine itself.

AI assessment note: “It's one of the most well-established, oldest, most impactful cell therapies.”

Q the immune system is what you're doing. And then when you reboot the immune system, it turns out it can kill cancers. Uh, what other diseases could it possibly treat, right? There's, there's all sorts of Americans who have autoimmune diseases. Like, like what's, what's next here? Let's say that you get this approved and you're saving, you're helping with all these cancers. Like what else can you help with?

A Right, right. So, um, I think like you mentioned it earlier, um, The big challenge has always been when you reboot the immune system, how can you do that safely? Because otherwise, if you don't do it safely, you're sort of renegated to really the terminal end stage, most sick and ill patients out there, but there's way more people who aren't at that stage who could really benefit, and there are sort of serendipitous situations where people have had, for example, really severe autoimmune diseases like multiple sclerosis, happen to also have leukemia on the side. For the leukemia, they get an immune system reset, and, and then they, you know, magically see the Disease vanish, right? That also happened with HIV, which is pretty incredible.

AI assessment note: “severe autoimmune diseases like multiple sclerosis... That also happened with HIV”

Q very large amount of money. So a lot of people think that investing is random or luck or doesn't make any sense. Like here's a guy who's a legend who just did this consistently without losing money for 30 years. So clearly it can be done. Are there, are there, are there people like that you've interacted with that you really admire in the macro world who shaped your thinking?

A Yeah, I mean, well, I, the, the most important, the most formative were my CIOs at Soros, Scott Besant, um, who's worked under Stan for a long time, and, um, and Greg Jensen as co-CIO at Bridgewater. And, um, you know, like I say, they're, they were instrumental in different ways, and I think to some degree, I always wonder if I just happened to land in the right place to learn from those two guys, or whether, Uh, there was something sort of pulling me in that direction in the sense that we think about things a similar way and have similar frameworks for investing. And so when you have a similar sort of base level of parameter, you can then learn a lot and interface really well on all the particulars and, and refine your expertise that way. But those two guys, uh, in, in my career have been, you know, huge, hugely impactful mentors and, uh, and teachers for me.

AI assessment note: “the most important, the most formative were my CIOs at Soros, Scott Besant”

Q And what's true glory? What would you buy?

A It's certainly not the most exciting business in the world. That story is quite interesting, but it is a, um, it is a retailer of, uh, uh, hair care products, uh, and wigs in the US. Uh, it is, you know, the, um, uh, largest, uh, brand in the Southeast. And, you know, but here's a story of that, of, of how that occurred, which I think is quite, quite interesting. Um, in the context of the plight of small businesses, this company was started by a gentleman named Kevin And Kevin, uh, grew up in, uh, rural Southern Georgia, poor. Uh, he moved to Atlanta. Uh, he has, uh, you know, a, um, you know, deeply held, um, uh, love of entrepreneurship and had tried many, many, Uh, under resourced and ultimately failed endeavors, uh, you know, up until the point he started this company. And one day in 2012, he had this, this, this realization that he could build a business around this product and, um, started from the trunk of his car, uh, in Southwest Atlanta, which is, you know, not the best part of Atlanta. And, uh, he ended up Uh, over the course of four years, growing that business to nearly eighteen million dollars in revenue. Uh, and, um, uh, and, and one of the things that I learned, uh, in the course of, of acquiring the business was that he had been, um, uh, blackballed from virtually every major bank in the United States. And, uh, the reason for this, Was because they all, uh, pre…

AI assessment note: “it is a retailer of, uh, uh, hair care products, uh, and wigs”

Q I love it. Well, well, you know how to win, and I'm going to get into that. You've been instrumental, first of all, Leonard, obviously, in myriad judicial nominations and elections at the highest levels. A lot of people, uh, credit, uh, your work with, uh, a lot of these amazing judges that were appointed by the last administration. Uh, you know, what, what makes a good judge?

A Oh, I think, I think it's really just three ingredients. One is smarts. And I learned this actually from Justice Scalia, who told me once, you always want a really smart judge, and the reason why you want a really smart judge is because they can't get snookered by the left. Alright, so that was what he said. So always smarts. Two, you want someone who's philosophically aligned, right? Someone who understands that the Constitution needs to be interpreted as it's written. You need to be committed to the rule of law in that respect. And then finally, courage. You need someone who's going to not flinch Uh, in the face of, in the face of criticism, uh, or risk, uh, you need people who are independent, courageous, determined, and are not going to bend to the political winds of the day.

AI assessment note: “I think it's really just three ingredients. One is smarts.”

Q Let's talk about principles and philosophy. You know, we want to educate the next generation of leaders in our country who can reason, who can debate, who can build. We want, we want to somehow inculcate, you know, a courageous spirit in these people. Like, what are the principles that matter for the university?

A Well, it's very important that the classroom itself should be somewhere where young people can speak freely and take intellectual risk. Be able to say what they think, answer a question as best they can without having to worry About their answer turning up on social media or being in some way used against them. So I think one of the first principles of the University of Austin is going to be, ah, that, that the Chatham House rule applies, and what you say in the classroom must stay in the classroom. That will allow a genuine culture of free speech to exist. We've gone to great lengths to draw up a constitution for our university that explicitly states the rules. What are your rights in terms of academic Freedom, and we've got a mechanism to enforce those. So unlike, say, Chicago, which has great principles, we have even better principles, and they're enforceable, which in practice they, they really aren't, even at the University of Chicago. So I think the most important thing for us to create is an atmosphere of intellectual risk-taking, uh, of being able to speak up in class and venture that answer that you worry might be wrong, Without there being some massive downside risk to doing so. The other key thing I really want to emphasize is that we want students to have real range, particularly in the first two years. We want them to cover the intellectual waterfront, and that mea…

AI assessment note: “one of the first principles of the University of Austin is going to be”

Q And I've gotten dozens of texts saying, actually, I want to help now. I realize why you're doing this. But Pano, why is this the moment for you, ATX?

A It's a moment because when we first announced what we were doing, we proclaimed that we were building a new university dedicated to the fearless pursuit of truth. And we're watching college presidents testify before Congress, incapable of saying things that they know are true. You're just watching them shut down in a moment and incapable of speaking the words that they know are true to, to be incapable of saying that genocide is an evil. And that students on your campus who are hearing calls for genocide are in some ways not threatened or intimidated by that. Being incapable of speaking those words, it makes you realize that from the top down, uh, truth itself is at risk in American higher education.

AI assessment note: “It's a moment because when we first announced what we were doing”

Q So practically speaking, Pano, how can parents and students engage with UATX over the coming months? What sort of ways can they, can they learn more?

A Well, you know, obviously the website is a place to start, youaustin.org, but, but because, you know, when we think about recruiting students and we're out there looking for that brave 100, you know, we're recruiting students the way that other universities recruit their football teams. All right. We're going out there. We're hitting the ground. We're meeting students where they are. We're having salons, for example, in cities across the country where we have small groups gathered for dinner and conversation. We're taking our intellectual foundations high school program on the road. We've, we started in Austin. We've been in San Francisco and New York and DC. We have programs upcoming in Phoenix and LA and Denver, I believe. We're trying to go out there because we think the most important thing we can do in recruiting students is actually get to know them face to face and in person because it's a huge commitment to make in both directions. I mean, to, to become part of a, a, a nascent university, um, You know, this is, this is a major adventure, and so the better that they can know us, and the better we can know them, uh, we will be assured of finding those brave 100.

AI assessment note: “obviously the website is a place to start... We're having salons, for example”

Q Do you think eventually you could help them too with what you've built?

A I, I, I 100% think we could because if you think about what we're doing, we're pre-adjudicating the claim. We know how the payer's, we know what the payer wants on their claims. We know, like, what their rules are for how to submit a claim. And there's a bunch of noise of, it, every time they deny these claims that were Uh, could have been avoided. The provider's going to have to call the payer, and now the payer needs to pay for support people to answer those questions. They don't want to pay for that, I don't think. And so there's very much a world where I think we could just sell what we're doing, our rules engine, back to the payers and be like, look, we're, we're pre-adjudicating these things. You would have adjudicated it anyway, and I can save you this support staff money.

AI assessment note: “I 100% think we could because if you think about what we're doing”

Q You represent Wisconsin's eighth district. You're the chair of the House Select Committee on the Chinese Communist Party on the CCP. That's, is that taking up a lot of your focus recently?

A That is taking up a ton of my focus, but it's, uh, been an incredible challenge and mission. When Speaker McCarthy, former Speaker McCarthy created the select committee, he really kind of intended it to do two things. One was to communicate to our colleagues and the American people why any of this matters, right? Why someone in Texas or Wisconsin should care about the threat posed by the CCP, which at times can seem Like a distant over there problem, but occasionally we have a spy balloon or pandemic to remind us that it's not, it's a right here at home problem. And then also to kind of act as the accelerator or incubator for smart bipartisan CCP related legislation that could pass in the 118th Congress, even in divided government. So it's been a huge challenge, but very rewarding. And, um, you know, I think this is the biggest challenge for us national security. So to be in a position where I can influence it is It's really a privilege.

AI assessment note: “That is taking up a ton of my focus, but it's, uh, been an incredible challenge”

Q never stopped fighting for our country. You went from being a Marine who's fighting, now you're fighting potentially the most important fight we're facing right now with China. You know, before we jump into your committee's work more, I want to ask, what do you make of President Xi's visit to San Francisco last week? Are there any significant outcomes? Is there anything to this fentanyl deal? What's going on?

A Well, I, I will confess I'm very skeptical about the fentanyl deal for a few reasons. One is we, we've kind of seen this movie before. Trump had an agreement with Xi on fentanyl. Nothing came of it. Um, you know, they, they tend to kind of agree to working groups and then the flow of fentanyl continues. Even when they scheduled or did the equivalent of scheduling fentanyl in China, they switched to precursor production and they shipped the precursors to Mexico. And the DTOs have now taken some of the technology that used to be in In China and the fentanyl continues to flow across the southern border and, um, it's killing tens of thousands of Americans every year. And of course the Biden administration has no interest in securing the southern border. I w listen, I'd love to be wrong about it. I, I hope that China cracks down massively on precursor production and the flow of fentanyl across our borders dries up. I would welcome that development. It is unfortunate, however, and this is kind of the second point that we had to kind of give up In this case, a human rights related sanction in order to get their cooperation when they just should, if they want to be treated as great power, they should be taking this, this, uh, step proactively. The other big, um, development that came out of this allegedly was the reestablishment of military to military communications. The Chinese had, …

AI assessment note: “I'm very skeptical about the fentanyl deal for a few reasons.”

Q it's, it's, it's anti-American. It's against our patriotism, against our country to even invest there. And I'm horrified because we have lots of U.S. pensions, U.S. endowments financing their military innovation right now still. I mean, I mean, I'm curious, like what, what, what should Congress be doing about this? Should we pass laws to stop us From investing in certain things in China? Like, like what's going on there?

A I think so. I mean, we, we did, we've done an investigation of BlackRock MSCI, and we've only scratched the surface. We've investigated some other, um, some venture capital, uh, organizations, and we are, we're, Capital continues to flow even to companies that are on various, uh, federal government blacklists. So it isn't just like a technology company, like a biotech technology company, which, you know, you could squint and convenient, convince yourself yourself that there's no dual use purpose. We're talking about companies that build aircraft carriers, artillery shells, fighter jets. So just as a matter of principle, I don't think American capital should be subsidizing the production of things that are designed to kill Americans in a future conflict.

AI assessment note: “I think so. I mean, we, we did, we've done an investigation”

Q It's a good self awareness insight. You know, I want to ask about, you know, tech today. Obviously a lot of what we've, you've described is how we created Silicon Valley. When you look at the big tech companies today, do you worry some of them are at risk of losing the geek way? Is it still there?

A I absolutely do, mainly because the people I talked to worried about it, and not, not just because of whatever the current crop of companies is, but because these tendencies that we've been talking about push, lead you away from the geek way. Overconfidence will make you invest way too much money in, I don't know, like the metaverse, for example, or the fire phone, or your pet project. Overconfident, uh, successful leaders will have a very strong tendency To take their organizations in bad directions, which can be very, very expensive. We haven't trained that away. And people like Reed Hastings have worked super hard to make companies like Netflix a place where the organization serves as a check on the leader's overconfidence. I think that's imperfect. I think it's very, very hard to sustain. It's very hard to keep the bureaucracy from creeping in. It's very, mainly because we humans, we want the status we want, and things tend to get accumulated, to get kind of Encrusted over time that none of the geeks that I talked to and Joe, you know, that your friends and colleagues, they're not the most humble people on the planet, right? Like this is a confident group and who have achieved amazing things. Nobody that I talked to in the book when I asked your question and where I did a version of it and said, do you think that the current crop of companies at the top are permanent or do …

AI assessment note: “I absolutely do, mainly because the people I talked to worried about it”

Q Why did it break? What would you do wrong?

A So, uh, forgive me for being too technical here, but, um, uh, it was a fatigue fracture, so if you have, like, a paper clip, you move that a lot, then eventually it will break. So it's the same effect. So at this, this big, uh, you know, plastic pipe, essentially, that, um, uh, of course, because of the, the waves, it, Keeps going up and down, and the calculations we did using just a, you know, a clean pipe without anything attached to it, but on the bottom of it, there's this, this skirt going down to catch plastic that's not exactly at the surface, and those attachment points, there were like little notches in between, and essentially that caused a concentration of, um, of stress, where then a crack started to form, and then After three months, it became critical, and we had, we had two cleanup systems rather than one.

AI assessment note: “it was a fatigue fracture, so if you have, like, a paper clip”

Q Went to Harvard Business School, graduated debt free, got involved in the tech world, and you started your own fund in 2008 with three million dollars from friends and family, is that right?

A Correct. So, the journey really began in 99, 1999. I was hell-bent to get to Silicon Valley, like a lot of other students at, at that point in time. I had come out and met with some startup companies at the time. One that sticks in my mind is tell me. Another one was a little search engine called Google. Um, my classmate who became my wife decided we were going to stay in Boston. I'd met David Fialco and Joel Cutler. They were thinking about starting their own venture capital firm. Um, and I partnered up with them to help them launch their first business, which was a company called NLG. An early, uh, online travel company that we had sold to Barry Diller in 2001. I became the co-CEO of that business. Um, and so it was really helping them start GC starting that first company. We had two more companies. I started open list. We sold to a public company in Seattle room. 77 sold to Google, um, got back to the investing side of the business, knew I wanted to start my own business. And the idea really Um, was to build a crossover fund that was venture first based in Silicon Valley by a founder. Um, you know, that invested in kind of early venture all the way through the public markets. Um, and so that's what, you know, that's what drove me down that path.

AI assessment note: “Correct. So, the journey really began in 99, 1999.”

Q the brain works is you're constantly predicting what you're going to see next. Like this may be why we see ghosts, but either way, your brain's constantly looking at what it thinks it expects to see. And then if something is not unexpected, it kind of jumps out at you. Is there anything like that with transformers or there's nothing, there's nothing like that where there's trying to predict things?

A Well, that's exactly how you train a model like GPT-IV. So, um, you know, if you take it to, to train a model like GPT-IV, basically we take all of the text, everything we can scrape off the internet. Um, and what the model is trying to do is it goes character by character and it's trying to predict the next character. So, you know, uh, if, if it sees, you know, the rain in Spain falls mainly on the, it's going to guess, oh, that's a P and it's going to be plain. And it does this over and over again for huge amounts of documents, like trillions of characters. And over time, it seems as though that yields something that looks like intelligence.

AI assessment note: “Well, that's exactly how you train a model like GPT-IV.”

Q Very interesting. And in, and in terms of, in terms of research projects going on, if anything you could talk about, is there anything you're really excited about for the next few years that's going to change things or any kind of new use cases that you're really excited about?

A Well, I, I think the, the thing that we have done that I am most excited about right now is, uh, something called code interpreter, uh, which is launched in beta right now. And it's, it's exactly what we were talking about. It's the ability for the model to write code and then run that code in a sandbox environment. And so you can do really cool things with it. You can give it a, you can upload a spreadsheet and you can have it analyze the spreadsheet for you. Um, you can have it make a, uh, you know, uh, animated GIF of, uh, you know, a data visualization. Um, and, and, you know, we're not specifically telling it like, okay, let's, let's make the spreadsheet model. Let's, let's give it this. It's just learn these things organically from everything on the internet.

AI assessment note: “thing that we have done that I am most excited about right now is, uh, something called code interpreter”

Q You might have asked it wrong. You might have misunderstood what, yeah, what it's doing. You might have misunderstood it. No, that's true. So tell us about the launch of ChatGPT, Bob. There's all sorts of competition going on there. What was, what was the, what was the scenario?

A Yeah, well, the funny thing is when we launched it, there was no competition. Um, so we had, we had launched GPT-III, uh, two years prior, and then we launched a better model, which is still, still okay, called GPT-III. And at the time, Um, the, the idea was we'd put these in an API. They weren't really ready for humans to talk to them yet. You know, if you, it, it'll finish your sentence, but it wouldn't have a conversation with you. And, um, we'd had these models out there for a while, and we had already then secretly trained GPT-IV. So this was the first half of last year. And GPT-IV was amazing. We knew that if we could, you know, figure out what to do with GPT-IV, it would, it would change everything. And so the whole company was focused on GPT-IV. What could we do with GPT-IV? And one guy, John Schulman, Uh, who ran our reinforcement learning team, said, you know what? What if we just make the models conversational? So we took one of the old models, GPT 3.5, trained it to be able to have a conversation. And we all thought the, the right ultimate path for the GPT models was for it to be an assistant to help you do things. But we were like, these models are clearly not good enough. We've had them out there for forever. And John was like, look, it's not perfect. I know GPT four is going to be the answer to everything, but let's just, let's just put it out on the internet and…

AI assessment note: “the funny thing is when we launched it, there was no competition.”