May 17, 2024 · 56m · more-or-less
#47: Algorithm-Proof Media and New Twists in the AI War · More or Less Podcast
Sam Lessin · 17m spoken Jessica Lessin · 14m spoken Dave Morin · 10m spoken Brit Morin · 7m spoken Intro Singer · 13s spoken
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In this episode of More or Less, the co-hosts dissect the escalating AI platform wars between Google and OpenAI, the impact of AI search summaries on digital media, and the necessity of building algorithm-proof business models.
How this conversation actually went
Every chapter scored 0–10 on four independent dynamics. Hover any point for the reasoning behind the score. The hosts hold 99.2% of the talking time here. How this is scored →
The hosts as informed peer 6.7 Guest teaching 3.5 Guest disagreement 3.4 The hosts pushing back 3.5
speaking balance: gold is the hosts, purple is the guest (3 minute bins)
Sharpest disagreement ▶ 23:55 Sam rejects Dave's decentralized LLM comparison
Sam flatly dismisses Dave's thesis that LLMs will decentralize into local computing devices, insisting they will inevitably re-centralize around major cloud operators.
Hardest push from the hosts ▶ 41:40 Sam presses Jessica on non-owner media incentivesSam pushes back against Jessica's prescription for media companies, arguing hired operators cannot afford to burn the boats like independent founder-owners.
Biggest teaching moment ▶ 15:13 Jessica explains RAG mechanics to the panelJessica clearly breaks down Retrieval-Augmented Generation, educating the room on why real-time publisher licensing deals are designed for fresh factual grounding rather than base model pre-training.
The host holds their own ▶ 32:17 Jessica drops The Information's xAI Oracle scoopJessica asserts her investigative expertise by breaking down the financials of xAI's pending $10 billion Oracle server contract and simultaneous $6 billion capital raise.
the scores for every segment, with the reasoning behind each
| Chapter | Topic | The hosts as informed peer | Guest teaching | Guest disagreement | The hosts pushing back | Why |
|---|---|---|---|---|---|---|
| Welcome Banter and Setting the Weekly Agenda | 4 | 2 | 3 | 3 | The episode opens with casual banter as Brit shares her daily use of ChatGPT while brushing her teeth. Sam mocks the premise, asking what middle-intelligence scraping could possibly answer in a bathroom, while Brit defends everyday curiosity and practical questions. | |
| Google I/O Features and Sam's AI Meeting Avatar | 6 | 3 | 2 | 3 | Brit outlines specific Google I/O features like Gemini summarizing school emails, prompting Sam to identify his ideal practical AI use case—dispatching a bot avatar to sit in large Zoom meetings. Jessica and Dave contribute anecdotes about expert network bots and GLG. | |
| Big Tech Distribution Moats: Google and Apple vs. OpenAI | 7 | 4 | 4 | 4 | Jessica and Brit analyze Google's multi-product distribution advantage versus OpenAI's standalone demo releases like Sora. Brit makes the case that Apple and Google hold the long-term moats because of existing user bases across Android and Workspace. | |
| The AI Trough of Disillusionment and The Full Tech Stack | 7 | 4 | 5 | 5 | Sam declares tech is entering the trough of disillusionment as flashy AI demos fatigue investors, while Dave and Jessica push back that he is off on the timing. Jessica explains the broader vertical stack from applications to energy infrastructure. | |
| Google Search AI Overviews, RAG, and Modern Content Moderation | 8 | 5 | 3 | 3 | The discussion covers Google AI Overviews scraping Reddit and crushing digital publisher traffic. Jessica explains Retrieval-Augmented Generation (RAG) licensing deals, while Sam and Dave connect LLM verification to social media content moderation challenges. | |
| Dave's Take: OpenAI's Free GPT-4o vs. Google's Product Clutter | 7 | 4 | 4 | 4 | Dave contrasts Google's cluttered product announcements with OpenAI's clear messaging and decision to offer GPT-4o for free. Sam and Brit argue that making the flagship model free was forced competition because base models commoditize to zero margin. | |
| Mainframe Era of LLMs: Centralization vs. Local Edge Computing | 8 | 5 | 5 | 6 | Dave frames current LLMs as mainframes that will decentralize to local personal devices for privacy, drawing a parallel to the PC revolution. Sam pushes back forcefully, asserting that compute will re-centralize around cloud giants like AWS just as operating systems consolidated. | |
| The AI Startup Dilemma and the 'Get Laid or Get Paid' Doctrine | 7 | 4 | 4 | 4 | Dave and Sam explore the startup dilemma of building AI features that underlying foundation models inevitably swallow, pointing to defunct copywriting tools. Sam articulates his thesis that consumer tech ventures must tangibly help users 'get laid or get paid.' | |
| Scoop: The Information Reveals xAI's $10 Billion Oracle Cloud Deal | 8 | 3 | 3 | 2 | Jessica breaks news regarding The Information's scoop on xAI negotiating a $10 billion cloud server deal with Oracle alongside a $6 billion funding round. The hosts also touch upon Ilya Sutskever's formal departure from OpenAI. | |
| The Information's Sports Rights Database and the Cycle of Bundling | 6 | 2 | 3 | 2 | Jessica introduces The Information's interactive sports rights database tracking expiring broadcast contracts, prompting Dave to praise sports coverage. Sam complains about FAST channels on his gym TV pushing obscure women's lacrosse. | |
| Navigating Media Bundling and the Digital Revenue Crisis | 8 | 4 | 4 | 5 | Jessica warns digital media companies are chasing micro-pennies instead of restructuring to produce superior content. Sam challenges Jessica by noting that hired media executives lack an owner's mandate to burn the boats and reinvent. | |
| Designing Algorithm-Proof Media and Creator Business Models | 8 | 4 | 4 | 4 | Dave champions 'algorithm-proof' media models, which Jessica reminds him was The Information's launch thesis. Sam outlines creator venture investing, arguing niche creators have near-zero customer acquisition cost, though Dave pushes back that creators struggle to launch second acts. | |
| The Reality of Big Tech Developer Conferences | 6 | 3 | 2 | 2 | Sam and Dave demystify big tech developer conferences, describing them as self-serving partner lock-in mechanisms rather than consumer events. Sam notes that when consumer hype dominates developer keynotes, tech ecosystems are often in trouble. | |
| Pop Culture Club: Comedy Stand-up and Television Picks | 4 | 2 | 2 | 2 | Brit leads the Pop Culture Club segment discussing celebrity Ozempic use, prompting humorous commentary from Sam and Dave before the group recommends Nikki Glaser's comedy special and the television series Hacks. |
Statements from this episode (30)
Brit Morin: Talking to AI While Brushing Teeth Won't Be Weird by End of 2024
“And like I said, my prediction for 20, 24 is that by the end of this year, it's not going to be so weird to just be talking to yourself or talking to your AI while you're in the bathroom brushing your teeth.”
Sam Lessin would deploy an avatar AI agent to attend large Zooms
“If you told me I would use an AI that I could dispatch onto large zooms as me, Can log in, review them and just send me notes. That is an actual use case. It has to look like me because otherwise it wouldn't be allowed in. But if there was a thing, which is li…”
Jessica Lessin: Investor Spent 15 Minutes Consulting an Expert-Network AI Bot
“Someone told me they had their first one where the person was a bot, and it took them about 15 minutes into the call to realize they weren't actually talking with a real expert.”
Sam Lessin: GLG Paid Me $5,000 an Hour to Advise Hedge Funds
“When I left GLG, they used to pay me like five grand an hour to like talk to hedge funds. And I did it a few times.”
Sam Lessin: Hedge Funds Pass Expert Network Fees to Their LPs
“It's actually, they paid an insane amount of money because hedge funds don't care. They just pass it on through to their LPs.”
Brit Morin: Google and Apple will be last standing in AI race
“And for me, it got me to believe that Google and Apple, I continuously believe are going to be the last remaining horses in this race.”
Sam Lessin: OpenAI investors have been lighting money on fire
“Or as I've said, for two years are lighting money on fire. Like, you know, the good news is they get paid on the fees. So as long as they make reasonable DPI somewhere, they'll be fine.”
Sam Lessin: Standalone AI tools will struggle, giving Big Tech leverage
“It's going to be really hard to make money on them directly, but it's going to be a huge point of leverage to the big tech companies, I still believe.”
Jessica Lessin: Non-subscription, ad-supported publishers are 'dead, dead, dead, dead'
“Publishers are dead, dead, dead, dead. Not subscription publishers, everyone else.”
Jessica Lessin: LLM publisher licensing deals are for real-time facts, not training
“And so all these licensing deals the LLMs are trying to do isn't for training per se. These things have been trained 12 months ago, but it's this layer which is really important, they believe, to sort of the fact ecosystem.”
Sam Lessin: Fact validation for AI models is just content moderation on steroids
“It's like, this is literally just content moderation, two point out on huge steroids.”
Morin: Only about 5% of ChatGPT users had used GPT-4
“Like the most interesting stat that I saw this week was that it was something like five percent of people that have interacted with chat GPT have used GPT for.”
Sam Lessin: AI base models will be competed down to zero profit
“You're not going to make money on base models. Right. They're going to be competed to zero.”
Morin: LLMs are computers, not networks, unlike the internet wave
“It's very hard to compare what's going on to the internet wave because LLMs are not networks, they're computers, and they're very simple. It's like you put in A bunch of things happen inside a box and output comes out and that's a computer, not a network.”
Dave Morin: Local LLMs will match centralized models within 10 years
“And I think that that ethos is going to play out in this realm over the next 10 years as powerfully as like the centralized ones do.”
Sam Lessin: OpenAI 'ain't nowhere' because middle-tier AI players will lose
“It's going to be great to hold the stock at the top five biggest companies in the world, but like open AI ain't nowhere cause they're neither.”
Morin: AI copywriting startups like Jasper are 'game over'
“If you remember, like at the very beginning of, I think it was last year, or I guess right after ChatGPT launched or around that time, there were actually quite a few writing tools. There were copywriting tools... It's super clear that's game over.”
Brit Morin: AI learning startups will fail because education is commoditized
“I don't think, people don't pay anything for learning. They just want learning to be free anyway. So I think it's another thing that's totally commoditizing... No one's going to pay for it. And all these models are going to like, do it anyway.”
Jessica Lessin: The Information's reporting substantially moved Oracle's stock
“By the way, we moved Oracle stock substantially this week over at the information.”
Jessica Lessin: Elon Musk's xAI in final talks to pay Oracle $10B
“They're in final stage talks to give Oracle ten billion.”
Sam Lessin: Writing PR press releases will be eliminated by AI
“So one business you shouldn't get into that will be taken out by AI is writing PR press releases. That's not a business anymore.”
Sam Lessin: BuzzFeed doubled its market cap to $70 million
“Somehow Buzzfeed has doubled its value from thirty million to seventy million dollars in market cap.”
Dave Morin: DTC is 'absolutely dead' alongside algorithm-dependent distribution
“Because like, DTC is like absolutely dead now. Media, basically all of this stuff that depended on the algorithms for distribution in one way or the other, whether it was organic distribution or paid, no longer works.”
Sam Lessin: Slow Ventures Targets Niche Creators With Zero CAC Advantage
“The way we've been playing this is our creator investing strategy, right? Which is you find creators, right, who have built cults around them in super specific verticals where they are the trusted brand, right? Whether it's in lawn care or terrariums or someth…”
Jessica Lessin: Media Companies Riding Tech Waves Create No Lasting Value
“We've seen a lot of media companies whose thesis has been to ride a tech wave, and that has, by definition, is not where value will be created. And that doesn't mean you don't leverage new tech waves, turbocharge your superpower as an organization, but it just…”
Sam Lessin: Tech is in trouble when consumers care about developer conferences
“When consumers start caring or paying attention to developer conferences, you're almost certainly in trouble.”
Brit Morin: Taylor Swift Drew More Visitors to Paris Than the Olympics
“She brought more people to Paris than the Olympics are expected to.”