The Exchanges

Q of comments. Uh, it seems to indicate to me that China would, so for folks who are listening, who don't know about it, it is a large language model out of China, um, according to its own benchmark. So Take this with, you know, for what it's worth. It outperforms Meta's Llama 3.1 and open AI's GPT four. Oh, um, it seems like China's in the game. Do you agree?

A Uh, absolutely. Uh, and it was one of the conversations that I'd frequently have the last couple of years where they'd say, oh, you're just bringing up China competition as kind of the bug bear. We're like, no, no. Uh, you know, part of my job as a investor, as an entrepreneur, as a theorist is to predict where they, Puck is moving to, and the Chinese are strong and vigorous. There's lots of very capable, very hardworking entrepreneurial folks with technological depth, um, and, and so it doesn't surprise me that DeepSeq has, has, has entered the field, um, with, with vigor, and I think that, you know, part of when you look at, um, kind of what is going to be playing out with AI, um, China and multiple companies within it, because, you know, I haven't evaluated yet. Minimax, which also just came out recently, but will have a number of very strong contenders, uh, for this, uh, in the, the world technology landscape. And so I think it's a, um, you know, the, the game is on or game is afoot if we want to be, uh, Sherlock Holmes.

AI assessment note: “Uh, absolutely.”

Q I think it's always nice because, you know, the things that people fire off in a, in a moment, maybe that's pretty telling in terms of what they think about the world. So a couple from you, uh, one, very soon voice will become the main interface, And AI will get better at learning what exactly you're looking for. So you really think voice is going to be, why voice?

A A hundred percent. One of the party tricks I do is I bring out my phone and put ChatGPT on audio mode to show people. Because part of when we learn to use phones or PCs, we've learned, you know, with GUIs and everything else, we've made it softer, but there's a very precise semantics. One of the things that, that language models allow us to do is to talk to it. And so now, like, you can prompt, you know, ChatGBT with just like, kind of almost like word salad and still get something very interesting. So you don't have to, and, and so it allows you to be more, you know, kind of inchoate and, and, and, and speculative and brainstorming with it. And you can actually have a useful conversation and create useful artifacts from that, whether it's on your phone or PC. And so, um, that's part of the reason why I've, I've, I've, you know, made that as a prediction.

AI assessment note: “One of the things that, that language models allow us to do is to talk”

Q was reading through your blurbs and I found the funniest one. It's from Yuval Noah Harari, who like really writes about how tough a lot of these transitions have been. Uh, he says, I disagree with some of the main arguments, but I nevertheless hope they are right. Read it and judge for yourself. Um, but what makes you convinced that we're not going to have a problematic start here?

A Well, I do think that there will be challenges and, like, I, I, I'm not trying to delude anyone that there won't be real transition issues. We as human beings adopt new technologies fitfully and conflictually and, and, and, and, and, and, and with a lot of, you know, kind of like storm and dron. And so I anticipate problems. Part of the reason why to write super agency to kind of say, hey, how do we navigate these transitions is we say, well, What are the issues we're going to have? And what are the positive futures we want to get to? And how do we navigate that in the most human and most compassionate wise possible way? Doesn't mean there won't be pain and challenge and suffering. But for example, a classic one with AI is say, well, this is going to change a lot of jobs. Uh, and it will, cause it's a kind of a new tool set, like a new tool set. Like, uh, like if you say, Hey, I'm a professional today and I don't use smartphones and I don't use computers. It's like, not really sure you're a professional, right? It's, it's a required part of the tool set. In terms of how you operate, um, and a bunch of the tools within each profession. It's like, well, I'm a, I'm a graphic designer, but I don't use Figma, and I don't use Adobe. And you're like, no, you're probably not a graphic designer, really. And so, um, I think that AI is going to have that kind of transformation. Now, you s…

AI assessment note: “I do think that there will be challenges and... I anticipate problems.”

Q folks, what happened, I think, was that Mustafa Suleiman and a bunch of folks from inflection went over to Microsoft to start to run consumer products, almost as if Microsoft acquired the company, but the company stayed, uh, you know, standing and is, I guess, still operating. Um, is this just a consequence of what was going on in the regulatory environment at the moment, and how does that work?

A Well, the, the basic thought from an inflection standpoint is that the original model wouldn't really work, which is building frontier models for doing a consumer agent that the cost curves to the revenue curves and, and what you would have to do, uh, wouldn't work as a startup. And so we kind of looked at it and said, we have to pivot. The company has pivoted to a, you know, kind of a, a B to B model and is working with a variety of, Of, of companies now. It keeps its, its, its landmark and still very special kind of agent, Pi, live. Uh, so, you know, Pi, P-I, personal intelligence, pun intended. You know, AI, you can find it on, you know, both the internet and also on, on, on various, you know, app stores. And, um, and to do that pivot. And so, you know, part of what Mustafa's like, well, but I really wanted to be creating this agent, and so we could make this deal work You know, economically by getting this kind of big licensing deal and ability to, to kind of do a, a non-exclusive, uh, inclusive license of the technology and bring over a set of the, the, the, the team that really wants to continue to be working on the consumer scale agent while we'll hire other people who are like interested in the B to B model. And so, you know, it's a lot of different moving parts, but you know, it's something that, that investors of inflection were happy with. It was something that allow…

AI assessment note: “basic thought from an inflection standpoint is that the original model wouldn't really work”

Q example. You were an early investor in open AI. Uh, it's been a while at this point already, but even the most recent rounds, 6.6 billion, um, you know, in, in seven years, you want to be able to return 10 X on that money. So, sixty billion, and they're losing a lot of money. They lost five billion last year, according to reports. So, how does the math work?

A So all venture as venture rounds work, you know, start with the company, like frequently in series A, series Bs, there's zero revenue, right? So, so they're always losing money and it's kind of the curve of the expectation of revenue, you know, kind of compounding over the cost curve. And so that's just business as usual. Now it's a higher scale with OpenAI with, you know, kind of having, uh, you know, kind of, um, uh, you know, both You know, a massive footprint already, a massive kind of leadership position, and, um, you know, kind of, you know, revenue that, that you're expecting to grow in the substantive frame. But this is actually one of the reasons why Silicon Valley tends to create so many of the technology companies that dominate the globe, because if you take an overly kind of classic DCF analysis, business school prof analysis, et cetera, which many, much of the world does in investing and doesn't say, No, actually, in fact, it's a feature that you're investing massively on something that at the moment looks, you know, like today's iBanking analysis is not pretty good, but two, three, five, seven, and by the way, venture investments can go out to 10, you know, kind of years, and plus, if it's, if it's compounding and growing the right way, um, can be, you know, kind of just epic investments, and it isn't just AI things. I mean, this is part of, like, you know, Greylo…

AI assessment note: “expectation of revenue, you know, kind of compounding over the cost curve.”

Q value to investors and they need you to get back on the app, either to see an ad or they just want to show Wall Street that their daily active or monthly active user count went up. It changes the product. And so I'm curious what you think all this investment does to the product. Like, do we get a different product? Uh, because of this need to show returns.

A Well, one of the things, look, there's a kind of a little bit of a trope within a bunch of media that money somehow is, is anti the interest of individuals or anti the interest of society. It's actually how we power everything in society. And so, you know, I'm not anti money. I get it. I'm just, you know, I hear what you're saying. Money itself is not necessarily a problem. It's a question of how the money plays in. So for example, money playing in as within the Within the kind of functioning of society, products and services, um, you know, integration in industry, et cetera. Broadly, most of those things are mostly very positive. Now, of course, Uh, in a pure mission standpoint, you'd say, hey, we could make our service, you know, kind of free for everybody, and that would be a really great thing. And OpenAI is actually, you know, uh, spending a bunch of money making it free or subsidized to get the widest possible exposure, engagement in the, and, and learning about these products and being able to use them. You know, a lot of OpenAI products are offered at below what their cost right now in order to do that. Um, but of course, you know, They will, as, as an invested company, need to begin, you know, kind of, you know, over time, showing returns. It means that they need to also focus as intensely on their money-making capabilities as their, you know, engage the world, um, you…

AI assessment note: “need to also focus as intensely on their money-making capabilities”