The Exchanges

Q Okay. Why, why do you feel that? It's a bubble or what?

A It feels a bit like The internet bubble. I'm not saying AI will not have a use case, but again, this is a very like immature understanding of somebody who does not, who's not an expert at the science. I'm not an engineer or in that domain. But I feel like all of these models will get to a point where they're very similar to each other. Either by copying or reverse engineering or whatever, there will come a point Where these models become so similar to each other that more countries will go the China way where I think the world was getting globalized. The next phase is the world gets fragmented. India will have its own copy of the model. Another country will have its own copy. The tokens, the energy, all of that will sit domestically within our country. It might not be the, at the cutting edge, but it'll do the job. If the world goes in that direction, I don't see the reason to pay the multiples that these private companies have today.

AI assessment note: “It feels a bit like The internet bubble... I don't see the reason to pay the multiples”

Q Bretton Woods, to the dollar being on the gold standard, to going out of it, in a way, the The institutions have been modeled in a manner to favor the incumbent, and the incumbent since World War II to now, to a large part, I would say, the transition from the British incumbency to American happened pre-World War II in my opinion, but have these institutions not favored the incumbent?

A In a way, yes, especially at the beginning. They were the ones that they established those institutions, so they established them in a way to serve their interests. What is the difference today? We are living in a very interconnected world. Let's go in the Gulf, and what's going on in the Gulf with Iran, Israel, and the countries of the Gulf is something that influences also the United States, which geographically is very far away. It influences everybody. What's happening in India influences also the situation in the United States. So, the world today is much more interconnected compared with, ah, the way it was in 1945. So, the institutions that they were established following World War II, And we needed those institutions. We need to update these institutions to reflect today's reality and how interconnected our world is.

AI assessment note: “In a way, yes, especially at the beginning.”

Q Since people are inherently competitive, Don't you think on the 90th day, whoever raises money at the highest valuation in that peer group will feel like a winner?

A I think, uh, Fortunately or unfortunately, that's the way people are viewing it. Anybody who's raising money at a higher value is getting judged. Being a unicorn is a status symbol. Yeah. Raising money at a certain value gets you certain kind of success metrics as the world views it. But I think what you are building, one should get joy in that. Because every business will have its own trajectory, have its own shape. Some people might like a certain business. But selling a concept is about storytelling. Somebody might be a better storyteller. He can raise better money. But somebody might be a introvert, a shy person, may not be able to raise money, but maybe he's doing business, maybe much, much better than the other person.

AI assessment note: “Fortunately or unfortunately, that's the way people are viewing it.”

Q How do you register the health authority will?

A Yeah, I'll tell you how that is done. So, you have a product discovered by Pfizer, or you say semaglutide discovered by no one else. It's an injection. Injections are simpler in some ways, because you just have to establish analytically that they are the same solution that you are putting in the body. Sometimes they are not, then you have to do studies on humans. Tablets, you have to establish that the release of the drug in your body, It's equivalent to the way the innovator's product is released in the body. Right? When you take a pill, you, it goes into your digestive tract, it passes the thing, and it goes into your bloodstream, and then ultimately the liver kind of cleanses it out of your system. But in this interim, the blood takes it to where it's supposed to go, and the ingredient acts on the cells that it needs to act, and cures your disease. It's like a lock and key. The protein is there, and your drug goes there, and Corrects whatever needs to be corrected. So, there is the concentration of the product in your blood when you take a tablet for the next 24 hours, 28 hours, whatever, it goes up, the concentration goes up, then it's cleansed out of your system. So this is called the concentration curve. You have to match that.

AI assessment note: “you just have to establish analytically that they are the same solution”

Q Because you guys are from different places. Has the attractiveness of America gone down in the last three months or up?

A I think totally. I think that, um, I know a lot of my friends from South Africa who were very excited to come and study in the United States, and I think there's an uncertainty that exists in the air right now that makes it really difficult to invest your entire future in a country where not only you're unsure what is going to happen in terms of your own outcomes post your degree, but there's almost a certain sense that perhaps you're unwanted, Um, and that's difficult, right? And in a world that is still competitive for international talent, I think a lot of my friends are thinking, what if I go and study in Canada? What if I go and study in the UK?

AI assessment note: “I think a lot of my friends are thinking, what if I go and study in Canada?”

Q So in a way, are you saying the psychology of people, mass mentality in a manner remains the same, and that can be modeled for more so than events can be?

A Well, of course, events are largely The things that people do, which is largely the result of their psychology. But I do think that, that events in the future are somewhat predictable because B, because The implications of past behavior are somewhat predictable, and future behavior is somewhat predictable. The things that have happened, for example, in the economy and the markets are likely to induce certain behavior in the future, and you can know a little bit about that. And, but when, when the history and the past behavior has been extreme, the ability to infer from that rises. In other words, I wrote a book about, uh, cycles, and that's the one where I refer to my experience traveling in India. And, uh, Cycles are induced primarily by behavior. By, you know, uh, uh, the upcycle is exaggerating, overgeneralizing. The upcycle, there's a trend line. Let's say it's GDP growth. There's a trend line. But sometimes, uh, the economy grows more than that. Why? Largely, I think because of optimism. Because people are optimistic, so they spend a lot of money. Producers are optimistic about demand for their product, so they build new factories and hire labor and buy machinery. And the sum of these things produces a period of above trend growth. But then when Producers have more than prepared for the coming growth, and consumers have been sated by consumption than The, then things will …

AI assessment note: “events are largely The things that people do, which is largely the result of their psychology.”

Q Any last words, Howard, to our audience? Any piece of advice?

A Well, I, I, what I, what I always say to people about investing, Nikhil, is that investing is a puzzle. Challenging puzzle investing. I define as positioning your capital to take advantage from few of future developments. But I also say that future developments can't be predicted accurately. So you need superior insight to get it more right than most people, but you're not going to get it right all the time. If you have to be right all the time, if there's something in your makeup that recall, that says you're going to be unhappy if you're not right all the time, don't become an investor. Uh, Taleb in his book fooled by randomness, uh, talks about the difference between investing and dentistry. He says, if you go to dental school and you learn how to fill a cavity and you fill the cavity that way every time you'll be successful every time. So if you have to be successful every time, become a dentist or, or an engineer. A civil engineer, you say, I want to build a bridge from here to there. He does his calculations. How much steel? How much concrete? Every time the bridge stands. But, but, but it's not that interesting in my opinion. And so investing deals with this fascinating puzzle that you're trying to solve To a better degree than others, even though there are no laws that work absolutely. Fascinating. And I love it. Um, it's still a puzzle. It's still a puzzle. I'm trying …

AI assessment note: “if you're not right all the time, don't become an investor.”

Q When I think about poverty and income inequality, it almost appears to me like the world does have enough. The distribution of what the world already has is not Equal, and hence there is poverty, and there is excess on the other side. Do you think that's right?

A Yeah, I don't think like that, because I think you're looking at an utopian system where somehow you could wave a magic wand and take from Peter to feed Paul, and I'd be a little careful about that thinking. That's not the way I believe. I believe that what creates wealth, first of all, is entrepreneurship and the private sector. I believe government's role is to create the infrastructure and the ability And the human capital and the rules and governance that enable the private sector to create jobs. I mean, 85 to 90% of jobs in the world are created in some form or the other in the private sector or in private sector-oriented enterprises in the state-owned sector.

AI assessment note: “I don't think like that, because I think you're looking at an utopian system”

Q next. Voice is likely next. Voice is a natural way to communicate that we are accustomed to, but nobody seems to have cracked it yet. Uh, do you think the medium of interacting with Tech will move from hardware, which does feel unnatural to hold a thing in your hand and like type into it with your fingers. How does that transition from that kind of hardware to voice happen?

A Yeah, the, you know, like as we think about the future, a hundred percent Voice will be a big interface and big way of how we interact with the technology around us. That's the thing about 11 Labs mission. It's to transform how we interact with technology around, um, holistically and whether that's, you know, calling into customer support, whether that's how you will learn, uh, at school and how you'll deliver education all the way through to how you interact with the robots or devices around you in the future. Um, and to your last part, like, I think the most exciting part of that is like, could you have the technology kind of fold into the background, the phone goes back into the pocket, and you kind of immerse yourself in the, in the, in the, in the world around you. Um, so I think there's like, to make this possible, there's at least three things that need to happen. One is of course the foundational technology and research. It needs to get to the level where, where you feel like you're interacting with A voice at the level of, of, of a human. It's, it's, you can interact, you can interrupt it. It has the right emotions, intonation, and it's quick. Um, it has the high intelligence. And I think the current model is, is good for set of, um, set of use cases. It's not yet like a full human level. Um, so that's the kind of the first component that needs to change on the, on lik…

AI assessment note: “to make this possible, there's at least three things that need to happen”

Q We spoke about pain. I wouldn't like to say a prerequisite to success in the capitalistic world, but it helps if you've been pained. What is your story? Where did the hunger come from?

A Well, the hunger and the pain are two different things. The pain came from my parents and just, you know, I think it's just the, the neglect that comes from a, A home in crisis. And I don't think that that's a particularly unique story to me. And I've, and I think I've learned to forgive my parents, but that's what it is. You know, there was alcoholism, there's abuse, there's all of these things that are the byproduct of just dealing with a life unfulfilled in, at least, you know, from my, from my dad's side. And then there was a lot of codependency and complacency That my mom lived out. And then the byproduct of that was, you know, I was a curious, loud, sometimes, and generally overachieving kid, not in school, but in every other realm. And I think that it, um, I think it touched a lot of my father's insecurities. And so, you know, the way that he dealt with it was Painful, um, for me, but also for him probably. And then, you know, my mom just kind of didn't really do much to intervene. So that's where it all started.

AI assessment note: “The pain came from my parents and just, you know, I think it's just the, the neglect”

Q How was it, was it like a fork in how OpenAI was thinking into what Anthropic eventually did?

A Yeah, you know, I would say, you know, my conviction and the conviction of my co-founders when we founded Anthropic were two of them. And I think one, we were starting to convince OpenAI of, the other, I was, you know, not, I didn't feel that we were convincing of. So the first was the, you know, the conviction in the scaling laws. And the idea that, you know, if you scale up models, you give them more data, more compute. Again, there are a few modifications like RL, but not really very much. It's pretty close to pure scaling. Um, you, you find that, you know, when you, when you do that, you, you find, you know, incredible increases in performance. And, you know, I was finding that in like, 2019 with, with GPT two, um, you know, when we just first saw the first glimmers of the scaling laws. And of course, there were a lot of folks, you know, inside and outside who didn't believe it at all. And we really made the case to leadership like this is, this is important. This is going to be a big deal. And I think they were kind of starting to believe us and ultimately went in that direction. And there was a second, um, You know, conviction I had, which is look, you know, if, if these models are going to be kind of general cognitive agents, like general cognitive tools that match the capability of like the human brain, we, we better get this right. The economic implications are going t…

AI assessment note: “my conviction and the conviction of my co-founders when we founded Anthropic were two”

Q Do you have to build Mail and Chad?

A Yeah, yeah. You know, I don't think we need to build all those things. Um, you know, it, you know, my, my thought would be, you know, we're gonna, it's gonna be a mixture of things we make ourselves and integrating into others, right? Like, you know, we can, we can integrate Claude into Google Docs. We can integrate Claude into, into, you know, Google Sheets. Like, you know, we have external connectors there. We can, you know, we're starting to do that with, with co-work. You know, same for Microsoft Office, same for other tools. So, you know, I think, I think we do whatever is, you know, easiest and fastest to do. You know, we, we integrate into the existing tools. Now it might turn out at some point that the existing, you know, tools aren't enough and we have kind of a different vision. You know, we want to, we might want to slice things differently, right? You know, maybe traditional email doesn't make sense or traditional spreadsheets don't make sense given what you can do in, in AI. So I, you know, I don't exclude that we could Chop up products in a different way, but we're happy to use the ecosystem that exists and work with anyone else, right? In many ways, we're a platform company. We allow many people to build on us, even though we sometimes also build things ourselves.

AI assessment note: “I don't think we need to build all those things.”

Q What do you think, Yuval, of what is happening in the world today? Geopolitically.

A Terrible. I mean, we are going back to kindergarten. To kind of the first, most basic lessons of politics and of human behavior. You now see the rise or the re-emergence of this view that the only thing that exists, the only thing that really matters in the world is power, is force, and especially military force. You hear many leaders and many ordinary people now say this. That everything else is just facade, is just veneer. It never really existed. The only thing that really happens in the world is power, and all human relations are power relations, are power struggles, And if anybody tells you otherwise, this is just a trick, they are, they are using to gain power over you.

AI assessment note: “Terrible. I mean, we are going back to kindergarten.”

Q Because if I'm not thinking of something actively, I'm not suffering by virtue of having that thought in my mind. If there is pain in the world, say for example, People are dying in Iran today. My ignorance of people dying in Iran will make me suffer lesser, no?

A From that particular thing. But if then you get into the habit of ignoring inconvenient things, this is, if you just ignore the suffering in Iran, ok, nobody can care about everything that happens in the world. We are just, you know, we are just frail human beings. We can't carry the whole world on our shoulders. But if you get into the habit pattern of ignoring things that are inconvenient, Then you will bring this habit pattern into everything in your life, into your family relationships, into your professional work, into your relationship with yourself. And again, this will cause you to be ignorant of the ways that you hurt others and the ways that you hurt yourself, and then you can't do anything about it. We can't fix something that we are busy ignoring.

AI assessment note: “From that particular thing. But if then you get into the habit of ignoring”

Q What are some, what are some other skills you think we should?

A Other skills? You will, as founders of companies, have to negotiate a lot. Cap tables, fund raises, contracts, to become better negotiators is probably useful. Uh, this is again something I learned Or I think I learned through experience, but people don't often disagree with ideas, they disagree with people. So when you guys are here today, you came with the preconceived notion that either you like me or you dislike me, you're going to agree with me or disagree with me. To figure out who wants to agree with you and who disagrees with you before you negotiate with them is important. Because if you're dealing with somebody who wants to say your business is shit, You should project circumspection when you're talking about your business.

AI assessment note: “You will, as founders of companies, have to negotiate a lot.”

Q the last one week. So I'd like to thank you for taking the time to do this, and To learn at how you look at technology from the lens of this region, I think would be very interesting for, uh, uh, for a city that to many of us seems almost like an extension of India today. So maybe we can start off with that. What has you most excited?

A What excites me the most, to be very honest, I think we're at the beginning of something incredible. A country of ten million people cannot compete today with a country of a billion people. It's impossible. Physics determines that, you know, there's a certain size where you can't really compete. However, with AI, I think we will have the ability to punch way above our weight, and we will be able to sit on the table with the larger countries. If you're able to produce a lot more, if you're able to be a lot more productive, a lot more intelligent, you will be able to be taken seriously regardless of your size. And this is something that is important to us. The comparison Is the comparison today, those who embrace AI wholeheartedly, but as those who embrace AI with, you know, a lot of red tape and a lot of nuances, the difference is going to be between a community that still lives on wood fire versus a community that lives in the 21st century with electricity and internet. It's going to be incomparable. That's what excites me.

AI assessment note: “However, with AI, I think we will have the ability to punch way above our weight”

Q Why did you go from there to this point where you wanted to create an impact as you grow older?

A I think that my parents instilled in all of us is the fact that we should know our roots. We should know where we came from. We should know what our fathers, our forefathers, our ancestors did for us to reach this point. And I believe, as many other people believe, that I come from a family who has a stellar reputation in creating impact wherever they go. So my grandfather had profound impact on my country, on the broader region, um, on our religion, on other things. So my, my grandfather was a religious preacher, and he was a man that most people speak very highly of to this day. And you see a lot of people that have a lot of money, or at one point had a lot of power, After they pass away, you look at them, and you say, you know, his era has ended, and you don't really remember them for the right things. But those who've had the right impact, whether it's the right impact with the knowledge that they bestowed on the world, With the money that they invested in creating positive impact, with just being a person that was a delightful person to deal with, are remembered beyond their lifetime. And this is one thing that I think all of us in our household want. Like, I want to be remembered as a person that has changed the world after I've been part of it, for the better. It could be because of the interactions I had, because of the knowledge I was able to, ah, bestow on others, bec…

AI assessment note: “I want to be remembered as a person that has changed the world”

Q And Umar, if I may ask, we left the part between school and how did you become a minister at the age of 27 after not having come from a political family to a father who was in the army and a mother who was a principal. Were you a good student?

A So this is a wide-ranging discussion, which I love. We're going into philosophy and politics and other things and taxes. So I was a good student. Um, I was a nerd. As you can tell, um, uh, in school. So there were a few things that happened between school, university, and, uh, work. The first thing was, um, I really wanted to study abroad. So I wanted to go to Harvard after finishing school, and, you know, that didn't work out because my mother at the time felt like it's better for me to stay close for two reasons. Uh, nine 11 happened a few years earlier, and there were hate crimes against Arabs and Muslims, uh, in the US, which, uh, really struck a chord with her. She felt like, you know, if we go there, someone might, you know, target us for whatever reason. So she said, I'd rather you stay, uh, home. The second reason was, you know, the world was going through so much turmoil. So I graduated in 2007. And, uh, I went to university, but at that time you could feel like there was something that was off. Uh, so our stock market boomed, and then dropped, and then started booming again, and people felt like, okay, there might be something, um, lurking in the horizon. So, there was a sense of optimism and pessimism. So my mother and my father were saying, it's better that you are close rather than you go abroad. The second thing is I decided with them that if I were to stay and st…

AI assessment note: “So I was a good student. Um, I was a nerd.”

Q What are the issues with it? The secret choppers themselves might be corrupt.

A So, okay, how do you identify a secret chopper? If they know the power that they wield, if they understand that they can raise something to you and a decision will be taken, then they could be corrupt, or they can support a certain party over another. Like, there are so many things that they can do. Now, uh, the choice of the secret choppers is, I think, the art that designs Sheikh Mohammed, Ibn Rashid, Implemented. Identifying people, and identifying checks and balances on them as well, to understand how these people are always going to raise the right things. There are always constantly people that are added and removed from that overall group of people. But, you know, the, the need to always constantly inject new blood, remove old blood that, for example, might go in the wrong direction, But also ensure that there is validation on the reports that they're raising. Like, okay, someone might say, this is good. If you don't check, and you just take an action on it, you might take the wrong decision, right?

AI assessment note: “then they could be corrupt, or they can support a certain party over another.”

Q I'm not talking about equity. I'm talking about the assets that you hold with relatively lower risk, like gold and treasury and Bitcoin, which is not you taking a bet on a particular industry, but some place to park money. What else would you do?

A I see. In other words, you're, you're not asking whether there's equities in the portfolio or bonds or what country or anything like that. You're just saying that piece of equities. Okay. Then you think about, um, that on that storeholder wealth, you start to think about what that nature of that thing is. There aren't many. Some might say there are gems. Some might say there are works of art. I mean, basically when they say these things, they're going through criteria, which is, uh, can I move them around? Um, are they storeholds of wealth that are recognized in different places? They're not like real estate. Real estate is something that's nailed down in a location. It's easy to tax. It's not transferable and so on. So it's, you know, those kinds of things.

AI assessment note: “Some might say there are gems. Some might say there are works of art.”

Q Ok, this is on the work side. Tell us what's going on in the personal side. By personal, I don't mean like some controversial thing or anything like that. Where is your headspace at? How are you looking at society, at music, at what is occupying mindshap?

A I think what's beautiful about the past, uh, I would say, uh, 18 years is starting the foundation, starting the music school, and, uh, watching miracles happen there. You know, kids, Um, demolishing the whole stigma, saying that this caste is intelligent, this caste is not, demolishing all that stuff. If any kid who's created by God, this, the light of God is in every kid, and the knowledge comes from God, it's not that they are worthy or not. If they're taught properly, and we find those kids, they shine, they become an orchestra, and they all play together as one voice. It was one emotion. So that's what we discovered, and it's a phenomenal breakthrough, which we are proud as a family. My sister runs a school, I go there, I'm the mentor, I'm the principal. And then recently we went to Canada for the Glen Gold Foundation. They invited us, and they all played. It's such a great moment to see kids from corporation schools taking your flight, going to Canada, And playing for, you know, billionaires sitting there. And that itself is a great statement. And that keeps me going. If I'm the principal of that kind of kids, I need to be shining more. I need to be working more. And that keeps me going. Like people ask me what keeps me going is that I need to inspire my, my school children there, my students, where we are teaching incredible artistry. Right? To sing or to play the piano, …

AI assessment note: “starting the foundation, starting the music school, and, uh, watching miracles happen there.”

Q Is it like in a pharmacy where you pay rent to get shelf space?

A It's, it's a lot more than that. You have, they let you, you have to give them products that you can use on, on a service. So you basically craft an entire treatment menu with your, with your product. And then that's how you actually sell your product. Cause it's all about the after sales service and after sales purchase, right? So if I like a product, if I go to my hair hairstylist who I trust, because again, beauty is all about trust and, you know, believing in someone who you believe is an expert. So when I go to them, And you know, my hairstylist told me Bhakti, your hair is falling. Why don't you use this serum? You know, and let me, let me use it after I, you know, shampoo your hair before blow dry. This is how you use it. And oh, you know, um, the weather's really dry outside. So maybe you should try this shampoo that's moisturizing and that'll make your hair, um, you know, uh, hold, hold well in this weather. And then at the end of it, he's used all of that on me. And then he'd be like, listen, do you want to buy it? And I'm like, oh, I really like my hair, because again, then it goes back to validation.

AI assessment note: “It's, it's a lot more than that. You have, they let you”

Q Does it get in the way in any way today, the fact that your origins are there, while the countries where you live today, and that might be in conflict?

A Not, not a conflict in my life. Um, you know, there's a sadness in leaving your home country. I mean, my country's now the United States, and we got to rebuild in the U.S., and I'm so thankful for it. But, would I love to go back? I would. Uh, but to some extent, the, the culture of Iran matches the Western culture. It's a group of people who want to build. It's a group of people who value education, who are ambitious. Um, so I don't find it a conflict with who I am now, but there's a part of me that I feel is incomplete, and will be incomplete if I never am able to go back to Iran.

AI assessment note: “Not, not a conflict in my life.”

Q I've never met him, but I suspect he is, he's much bigger than me too. With everything you're building, Dara, uh, is there a super app coming? Is that the eventual outcome?

A I think that, um, Super apps seem to be particularly relevant in, uh, in, in Asia and China, etc. They've been quite successful there. They've had less success in Western markets. So I don't know if we will get to what you would call a super app, but we certainly want to be a connected family of apps. So if you, if you go on Uber now, Uber Mobility, we have Uber Eats available to you, and, and people are Are transacting billions of dollars of Uber Eats on the Uber Mobility app. And on, on Eats, obviously we have grocery, we have retail, you'll know next time you need a travel, uh, adapter. And so the, the, we, we have, I'd say ecosystem that is making it increasingly easier for you to work from surface to surface or with, with a membership, uh, plan Uber one that gives you discounts on, on both. So, I absolutely know that we are building kind of this local ecosystem, that local OS of yours. Um, whether the physical manifestation is a super app or not, I don't know. Uh, and my, you know, kind of the way I view it is I'm gonna, I'm gonna let our engineers and our product folks kind of innovate, come up with the next idea, and then we'll go kind of one step in front of the other to, to get to that outcome.

AI assessment note: “I don't know if we will get to what you would call a super app”

Q a prince should always appear, appear but not be religious, compassionate, trustworthy, humane, and honest. Uh, do you think this particular projection of, I've heard you, I've watched a lot of your interviews of late and I've heard you say repeatedly that you're not formidable and use words like that. Uh, this projection of humility, is it apt for the world we live in or the world you're walking into?

A I'm not sure it's apt for either one, but, uh, When I, when I was 19, to go back to what you said, I, I assumed that the people running these big tech companies really had it all figured out, and there were, you know, adults in the room, and somebody had a plan, and there were these people that were, like, way different than me that understood how to do things, and, you know, had this, like, the companies were, like, running very well, and there was, like, not much drama, and everything was, like, you know, just everything was, everything was being handled by the adults. Um, And now that I'm supposed to be the adult in the room, I will tell you, I think no one has a plan. No one really has it all working smoothly. Everyone, or at least I am figuring out as they go. And, you know, you have things you want to build, and then things go wrong, and you bet on the wrong people, or the right people, and you know, you get a technological breakthrough here, or you don't there, and You just keep putting one foot in front of another and you put your head down and work and you, you know, you have these like tactics that some of them become great strategies. Some of them don't, uh, you try something in the market, reacts in some way, or your competitors react in some way and you do something else. And, and the. And now my conception is everybody is kind of figuring it out as they go. Everyb…

AI assessment note: “I'm not sure it's apt for either one, but”

Q Do you think the world retains, largely the world retains the current model of capitalism and democracy in a way? Let me give you a scenario. What happens if a company X, let's say OpenAI, gets to the point where it is 50% of world GDP? Does society allow for that or?

A I would bet not. I don't think that will happen. I think this will be a much more distributed thing, but if for some reason that did happen, I think society would say, we don't think so. Like, let's figure out, let's figure out something to do here. Um, my, my, the analogy I like most for AI is the transistor, which was this really important scientific discovery that for a while looked like it was going to capture a ton of the value. And then turned out to be something that just gets built into like tons of products and services. And you don't really think about, you know, the fact that you're using transistors all day long. It's just kind of in everything and all these companies make incredible products and profits from it in this very distributed way. Um, so I, I would guess that's what happens and it's not like one company is ever half of global GDP. I, at one point I did worry that that might happen, but I think that was a naive take. Right.

AI assessment note: “I would bet not. I don't think that will happen. I think this will be”

Q Do you think there's a use case for the rappers that are getting built on these large models right now? Like I was in the US recently and I met Harvey, for example. What happens to a rapper like that? Does it get innovated out by the model itself at some point of time?

A Some of them yes, and some of them no. Um, and it's, you know, it's like, sometimes you can obviously predict when one is going to go one way or the other, and sometimes it really depends on the choices the, the company makes down, uh, down the line. The, the, the main thing I would say is, Using AI itself does not create a defensible business. You see this with every technology boom where people are like, well, I'm a startup doing X, and because I'm using the latest technology trend, the normal rules of business don't apply to me. And that's never true. You've always, you've always got to You've always got to, like, parlay that advantage that comes from using the new technology into a durable business with real value that gets created, and it's kind of a race against the clock to do that. So, you know, ah, you can definitely build an amazing thing with AI, but then you have to go build a real defensible layer around it.

AI assessment note: “Some of them yes, and some of them no.”

Q Sam, what happens to the form factor? I've been using the cell phone for a long time. I know you will not likely speak about what you're doing with Johnny Ive and what happens there, or maybe you will, but what happens to form factor overall?

A One of the things that I think we'll be defining about the difference of AI versus the sort of previous Way we've been using computers and technology is you really want AI to be, have as much context as possible, do stuff for you and be proactive. So a computer or a phone, you know, it's kind of either on or off. It's in your pocket or it's in your hand and you're using it, but you might want AI to just be proactive. You know, like a companion with you throughout your day and alerting you in different ways when it can do something to help you or when it's, you know, there's something really important you need to know or reminding you of something that you said you needed to do earlier in the day. And the current form factors of computers are, I think, not quite right for that. They do have this either on or off binary, uh, That I think isn't quite what we want for like a, the sort of sci-fi dream of the AI companion. So the form factor that enables that, you could imagine a lot of things. Um, there's people talking about, you know, glasses and wearables and little, you know, things that sit on your table and, uh, I think the world will experiment with a lot of those, but this idea of sort of ambiently aware physical hardware, that feels like it's going to be important.

AI assessment note: “this idea of sort of ambiently aware physical hardware, that feels like it's going”

Q Can you explain how that is? I read that, but I couldn't understand because I'm a totally non-technical person.

A So the way it works is when you communicate to something else and you're trying to send data in an encrypted fashion, I send, I encrypt it, I send it to you, we decrypt it to your end so nobody can intercept it and steal it or observe it or read it, right? Now the industry has a protocol where there is a protocol which defines how to decrypt, how to share keys. So you have the key that is required to decrypt the communication I sent you. Those keys are effectively codified in such a way that it's hard to break them, but it will require a lot of compute to break them. But with the arrival of quantum, they will be able to break those keys in seconds or minutes as compared to days.

AI assessment note: “with the arrival of quantum, they will be able to break those keys in seconds”

Q I was talking to one of our private equity common friends, and he seemed to think that the models, the language models will become like the device, like the iPhone today. And the real marketplace is going to be What gets built on top. Do you suspect that to be true?

A Yeah, I have my own version of that interpretation. I think it's broadly consistent. And the way I say it is that what you're getting in the form of a model or AI is the equivalence of a brain, right? The early version of the brain had parroting capability. It could read everything in the world and repeat it to you. Over time about pattern recognition. Over time, it's building some judgment as based on pattern recognition. What is good? What is bad? What is right? What is wrong? Over time, as you feed it more, it's starting to get PhDs and starting to pass the bar and starting to get smart enough to, you know, so it knows the entire world's information. Your problem set is known. Your answer set is known. It's able to answer the questions, able to get smarter and smarter. Now, Given the breakneck speed that you're, you're seeing the evolution of models, they're getting smarter and smarter, and there's sort of an arms race, no point intended, between all these people. And yes, so will people build smarter and smarter and bigger and bigger brains? Yes. But if in your company at Zeroda or at Palo Alto Networks, we said, hey, here's a really smart person. They have the best brain in the world. Eventually you have to adapt that brain to the problem you're solving. Right? That's the art of building something on top. That's the art of creating a wrapper around that brain and applying …

AI assessment note: “Yeah, I have my own version of that interpretation. I think it's broadly consistent.”