During this Rebel Valley AI Summit, we asked a group of
founders and investors which billion dollar AI startup would
you short and their answers caused a bit of a stir.
Joining me today are my Cerebral Valley AI Co host and the Co
founders of Volley, Max Child and James Wilsterman.
We'll also be diving into some of the insights from our
panelists throughout the conference.
My interview with Mike Krieger, the Chief Product Officer at
Anthropic, former Co founder of Instagram, about the problem
with sycophancy and foundation models.
My wife got her first like you're completely wrong.
And she was like, yes, this is great.
And I think we should have more of that we.
Looked at a clip from the mayor. Whoever the politician, 11 the
adoration of the crowd. No one should be asking someone
that's been in a job for 10 months for advice.
And we ask, is Mecca Hitler inevitable On stage with Jimmy
BA, one of the Co founders of Elon Musk's Xai the Mecca Hitler
in the room. Yeah, Mecca Hitler a model had
an episode. This is the newcomer podcast.
All right, I'm excited. We've had some time to rest
since the Cerebral Valley AI Summit.
Max has been resting life flat. What?
Literally just got home from Dubai I.
Believe literally 10 minutes got off a 16 hour long flight over
the world's greatest hits like Tehran and Moscow.
I I've got my seven week old. So back back to the parenting
minds, though it's been a joy. James, what you're are you all
rested or how are you feeling? I'm not well arrested Eric.
I have been solo parenting my 2 year old for.
Where's your wife? Where's Brazil and Mexico?
Nice. Yeah.
So we've all got our own reasons.
To be we're at the exact level of delirious that the viewer
should want here because we just had this River Valley AI summit,
right? We host this twice a year.
Big AI, you know, 300 person event, top AI founders,
investors, real insider thing. We sent out a survey, became a
point of media fascination, like sources, Business Insider wrote
about it. I think random Indian media
outlets for reasons that we'll explain as we progress.
We had 300 attendees at the thing.
I want to be clear, like, you know, some of these things we
didn't. Everybody did not fill out this
anonymous survey. This was not academic research.
This is you can count the dots for yourself and sort of infer
how many people did this. I don't know what are we saying?
Like 30 to 40 people. I just want to be transparent.
But it gives you a sliver of where this highly engaged
audience thought things were in. Part of the fun was that Max and
I were on stage sort of reacting to the survey results.
Anyway, so we're going to dig into the survey.
James, this is really your brainchild.
Anything I missed about it or you want to start ticking
through the questions? Yeah, I guess one Part 1 fun
part of the game that we played on stage was the you and Max had
to guess what the audience would think the answer to these
questions might be. And I have to say, Max kind of
ran away with that game on stage.
He did well. I.
Think I won 5141 some Max. Max did well, Yeah, it was a
some of them were close. Let's go through.
We can talk about. Yeah, you did.
Very. Well, we can.
We can react to the reactions. Myself, despite Max's dominance,
I think I had AII, had my ear on the pulse still.
All right, Should we start with the the beginning?
Yeah. So the first question was what
will open a eyes annualized revenue be?
At the end of 2026, the audience median was 30 billion.
And it's a 20 billion 2025 is the expectation, right?
Yeah, over 20 billion already. So this is pretty low estimate
in my opinion. And I said like 40 or what did I
say? Yeah, I forget who said 40 and
one of us said 40 and one of us said 41.
I did be one of you. Yeah, Yeah, I went higher, maybe
41 or something. I was surprised.
I think that given we're exiting this year at 20 in open, AII
thought the effusive Glee and bubble talk of the conference
would would flow through to a growth.
Video. It'd just.
Be earning AI. Things are going well.
We're round tripping all day. Everybody's making money.
Revenue is not the problem. Mere 50% growth for open AI I
think would be like considered in a truck at this point in the
bubble cycle. So.
I'm betting on 40. If this actually happens, I
think the bubble is over baby. What's your bet Max?
Yeah, I think 40 is what I, yeah, I said on the last podcast
I think we discussed. I mean I think 2X year on year
makes makes sense to me unless the bubble collapses.
I'm curious, where do you guys think the next 20 billion comes
from? Like is it business as usual or
do they need to create new products or?
I don't know copy Harvey, you know, going to legal anything.
It's like, I think, you know, they should lean into the API
business through this sort of general purpose foundation
model. So I, I don't necessarily think
they need to go after an application directly, but if
they were really hungry for revenue, you'd think they'd
figure out who their best partner is and say screw it,
we're going to cannibalize them to find the revenue.
We. Need kind of seems like they're
gearing up for that yeah, Palantir model or you know, find
the biggest pockets of money in the world and, you know, consult
on how to adopt AI in those companies, right?
I mean, I think there's a lot of headroom on the consumer
subscription business as well. I just think that, you know,
they haven't necessarily monetized, you know, a huge
percentage of the people who use AI every day and they just keep
adding value to that consumer subscription.
And so, you know, if you even if you just got a doubling of that,
that you know, that would get you pretty far along the route
here. All right, next question.
What will NVIDIA be worth at the end of 2026?
On the day we took this survey, it was 4.8 trillion.
They just had earnings. I'm not actually sure what it
is. The day we're recording it up,
is it? Yeah.
It's pretty. Close.
They had they had pretty good earnings, I think, but I don't
think Wall Street. Yeah, I checked the stock's like
4546 right now or something. 4.35 trillion.
So down 35 S, down a little bit, yeah.
Yeah. All right.
Unless they always they beat earnings and then they still,
you know, the expectations are so insane.
I said five, I think Max. What?
Did you say? I said 6, which was dead on the
money, if I recall. Yeah, yeah.
Yep. So the audience, the audience
had a median of 6 trillion. Very few outliers on the high
end there. 5 was the next biggest grouping.
Also interesting median was just so large is that's really it's
just so many. If I was think it was average.
Well, average is obviously thrown off by this like 100
hundred trillion as a troll, but forget that one.
I think based on the performance of the recent earnings, I think
this is actually high for reality.
Like they crushed the recent earnings as we discussed and the
stock barely went up on a multi day period.
So if they're not going up, you know, 10% a quarter, essentially
they're not going to hit this number.
And I just don't see that if those earnings aren't moving the
stock up. So this actually feels high for
reality to me. 5 is hard because you're sort of like you're
chickening out on saying it's all going to blow up.
And you know, it's, it's like, what is this reality where
either it's like, oh, the mania has continued or there's a
pullback. In some ways my 5 trillion feels
like sort of a weird sort of same.
Middle ground sound. World.
But yeah, who knows? Obviously, if you could, if you
knew the answer to this, you could be unlimited, you could
have an unlimited amount of wealth.
So nobody knows, but this is what a couple people think.
What year will an independent committee of experts, as
dictated by the Microsoft Open AI Agreement, declare that we
have reached AGI? I thought this was a funny
question because at once it's such a like, silly idea, like,
oh, we're gonna have AGI, but like, there's an actual
contractual agreement between Microsoft and Open AI that
there's a committee to resolve this and big business when, you
know, dealings hang on in. So it's a specific question,
which is sort of funny. This was one of my favourites
because you guys were trying to guess what the audience will try
to guess what Microsoft and Open AI will will decide as AGI, as a
lot of layers of prognification going on here.
What do you guys say? You said much higher.
I said 2035. Yeah, I said 29.
So I was pretty close to the median of 2030.
What do you guys think in retrospect?
Like is this is too early or? I just feel like a theme of
Cerebral Valley in the beginning, you know, we started
in 2023, in March 2023 after your Chachi BT that was probably
the conference. We talked most about AGI and
then we talked about it less and less every time.
You know, it's like there was so much enthusiasm when the models
came out and now we're in the sort of like, oh man, this is
exactly like self driving cars where you feel really close and
then there's a lot of like edge cases to hammer around.
And so I just think AGI pessimism has gone way up and
you add to that Andre Carpathy sort of thing, and it's just
like, I don't know, I don't think the insider vibes are like
AGI tomorrow unless you're talking to Daria or something.
I think the, I think the interesting thing here is that
there's basically just two buckets of people.
One is 2030 or sooner, which are like the accelerationist and
then one is like 2045 or never, which is like the
decelerationist or the pessimist or whatever you want to call
them. Maybe, maybe the realist.
Yeah, yeah, yeah. Whereas you sort of hit this
exact, I thought that basically nobody was, which it was 10
years from now or whatever. But like it's still gonna
happen. Which is an interesting like,
yeah, that you sort of found the middle of this smiling curve
where you're either an optimist or you're a pessimist, and you
kind of tried to hit the middle and it didn't quite.
Yeah, that's interesting. We have more optimists at our
conference was the end was the end result.
That's why Max beat me. He understood, though.
That was the psychology, the answer right there.
Yeah, exactly right. Optimistic Conference.
There's something slightly interesting comparing it to the
self driving car world like you said though Eric, because self
driving cars are basically useless until they reach parity
or capability of human drivers. Right, this is not like that.
This is not. It just happens to have all
these other very targeted, more verticalized use cases that are
super valuable but. 100%. With the full human replication.
Yeah, which is why we're you know, I was negative about self
driving cars because it was annoying because you need them
to actually work, whereas this I've been very enthusiastic.
So yeah, I I agree that's what's beautiful about text versus
safely delivering humans places, which thankfully now way MO is
good at and we can celebrating it.
But you know, 10 years ago or whatever, it was annoying
marketing. I like that.
OK, next question, Which venture capital firm's AI portfolio are
you most jealous of? I think this was kind of a
shocker, right? Neither of you guessed A16Z,
which tied with Khosla for the lead here.
Obviously this. We both said thrive, right?
Yeah. And then we both.
And then we decided to tie a. 2nd pick or something.
No, I said Sequoia. Sequoia and I said.
And that's why you won this. Yeah, I got the kicker on that
one. Yeah, that was a good pull.
Max, how did you decide to pull Khosla?
Just open AI or? I did some ChatGPT research
before and. Then goes with the first in Open
AI, first venture investment, Open AI, yeah, but that round
has gotten significantly diluted and I'm sure they'll be
reporting overtime. I don't know how much they've
done secondary. It was one of these fantastic
investments but it feels like they just they got squashed down
by later stage rounds and all these negotiations.
I think we can all agree though, the Andreessen, you know, tie
for victory with Khosla is pretty bizarre because like I,
you know, there's not a lot of really notable successful
Andreessen AI of investments compared to most of these other
firms. I mean, I got a text from
somebody when I shit on Andreessen on stage, which is
funny, which is what's wrong with.
This like live on stage. Right after I went off, but I
which it's like, oh, people are paying attention.
Yeah, I don't know Andreessen. I mean, they have I I can't list
they had character. They have like SSI mean, I'm
sure they have a ton. Some of them are later, you
know, it's like they're in Open AI, they're in XAI.
I just think the lesson of our draft was like the only thing
that matters is basically being heavy in Anthropic X AI or Open
AI and like they're not really in any any of those, right?
I mean, it was my understanding. Probably big in XAI.
Are they big in XAI? I think that they're in X, but I
don't think they're huge. Yeah, these are all.
Growth Sequoia was pretty big, yeah.
Sequoia has some money all. I'm saying is yeah, they to me
it feels like the PR of Andreessen generally is sort of
overwhelming the actual portfolio.
It's like, oh. You know, I think Drive is doing
really well. They've done these huge bets in
open AI like big yeah, pre all the markups.
So I bet they're doing really well and would like to
substantiate that Thrive reach out the I mean all the you know,
they've mentioned a bunch of firms like, you know, it's like
a lot of Gil who we had on stage is obviously great Index
ventures. I mean some of these like who
knows, some partner, you know, set them.
I'm personally jealous of this slag because it would be a great
cap table for a start up. Just have all these.
Things. I mean every.
Single person. On the slide here.
Yeah, yeah. Sounds good and benchmark
doesn't make sense to me necessarily for AI portfolio,
you know, but I mean they have Mercore now.
Mercore Lang chain, I don't know.
But oh, OK, as I'm about to preview, I do think brand, like
having a big brand, you know, who gets an answer on a survey?
Somebody who's has large mindshare.
And This is why surveys are imperfect.
Yeah. What research mechanisms?
So we're about to see name recognition is everything here.
If you could put money in any private technology companies
today, what would they be? So the top 10 by far was the
first was Anthropic, followed by Open AI and then Cursor.
Those are the top 3. Rounding out the top five was
Andereal and SpaceX. Open evidence is interesting,
then perplexity replit stripe, XAI Max and I both said
anthropic right? Yes, yes.
I feel like the tiebreaker, First of all, I was idiotic on
the tiebreaker because I picked a really random company.
Nobody was ever going to pick. I said fireworks, which was
clearly just like if I were going to make the bet.
I don't know what I was thinking.
Max you picked cursor. Cursor, cursor.
Yeah, well, with the momentum play.
I I think we got, we had one pick this tiebreaker thing.
I was not pre negotiated. I didn't come in with a
tiebreaker, so I didn't. Do so.
But you both kind of agree with the audience on Anthropic.
I mean, it's an interesting question because Anthropic is
only, you know, valued at, you know, what is it 350 billion
compared to opening eyes 500 now, right?
They're they're starting to get pretty pricey comparatively
speaking. And I know their revenue growth
has been unbelievable. And I think they're mind share
in Silicon Valley again among developers.
And there is this sort of like undercurrent of like they're
like the ethical AI company, quote UN quote with the, you
know, cool hip branding in the West Village.
It is a bit strange to me that they're substantially bigger,
you know, than open AI and the votes here, because I just think
that the hipness of Anthropic is maybe outweighing the fact that.
Well, Silicon Valley is more bullish on Anthropic than you
know, most of America clearly of.
Course, yeah. But I, I just think, yeah, if
you were an honest assessment of the valuation compared to the
revenue versus open AI would would say like, hey, you might
just want to take the momentum plan bet on open AI.
So it was a bit of a yeah, let's guess what the hip Silicon
Valley one is. And you and I both correctly
guessed the hip Silicon Valley 1 was anthropic.
Yeah, what global companies model will top the LM Arena web
development leaderboard at the end of 2026?
We had an excellent conversation with some insiders in the data
labeling space the night before who said that LM Arena is an
incredibly gamable metric and it's because it's basically
voting from users whether or not they liked the response or not.
And so it's very susceptible to, some might call it glazing,
others might call it sick of fancy towards the user.
And their belief was that open AI was heavily over optimizing
to glazing their users and therefore was continuing to do
well in these types of rankings. Which I thought was an
interesting point, which is why I think I chose open AI for
this. And did well one the answers are
open AI, Anthropic, Google, Gemini X AI and then Alibaba.
We made sure to say global to try and induce some Chinese
answers, but didn't get they didn't rank high.
I just think this was basically what the rankings were during
the day the survey was taken like nobody was really going out
too far on a limb that this would be radically different
next year. But I think that's interesting
because my understanding is now Gemini ranks higher than open
AI, you know, a week later, right?
So I bet you'd, I bet you know, you'd see a lot more people
guessing Gemini. 'S insiders needed to be more
aware, yeah. Yeah.
Man, I wish Gemini come out before the conference.
So, yeah, well. Why do you wish that?
Why? Just think Google would have
leaned in and talking about it. It also would have been giving
us like a current. We had plenty to talk about.
It was one of my favorite events, but you know, it's
there's a lot of big. Happen a week later.
World that happens a week after it's like, oh come.
On, Yeah, All right. If you could short a $1 billion
valuation startup, which would it be?
Before before we yeah, before we answer this question, let me say
having just gotten off the 16 hour plane ride from the United
Arab Emirates, this was brought up to me multiple times apropos
of nothing in conversation world with venture capitalists and
investors are anonymous service of all stripes.
They had no idea I'm associated with the conference.
They had no idea that this was something that I was personally
like on stage for the reveal of this information.
So this not just went viral, this literally traveled around
the world faster than, you know, as fast as the speed of light.
The the answer to this question. And I think other journalists
probably made millions of dollars off of this.
And Eric, maybe just no, well, I don't know, money.
Do you think we will make off? Stories.
Maybe not, maybe not. Price.
We'd be lucky. If they made 10,000, I mean they
didn't make any. Money I meant.
I meant Business Insider. I meant business.
Ties it to the tune of $20,000 all.
Right, All right. I meant, I meant Business
Insider. If they have a sub plan, which I
believe they do, sure converted hundreds of Subs off of ripping
off our survey. So Congrats to Business Insider.
Yeah. So yes.
We're with that you get the coverage to be clear.
Thank you, Ben. Thank you for the coverage.
Thank you, Eric. How does this make you feel
about lists and rankings and types of stories you might?
Write We played it as a fun game on stage, and I think our
coverage in the newsletter reflected that.
It was like a fun game. And that's what we're talking
about it here. This was not an academic survey.
It was sort of provocative and it's funny.
I mean, some ways the media should be a little looser.
It's like, oh, some insiders think this thing, but just like
when things are turned into like journalese, it feels like
official, like Silicon Valley has turned on perplexity.
It's like, I don't know, so random people would decide to
fill out a survey, you know, that's what they said.
But and perplexity was on the bull list, you know, way lower.
And I, I do think this means something that it was #1 short,
I mean perplexity, why is it #1 super highly valued and doesn't
have that gateway to the consumer.
And people have tried to do browsers forever.
You know, it's like people have failed.
And you know, Google Chrome and Safari and Explorer dominate.
So it's it's a very hard space. So yeah, there are some
investors that are super bullish, but I think most people
are like, how do they get distribution?
Yeah. The the reason it's a short
right is, is valuation I think to a large degree, right.
It's valued at $20 billion, right.
And whatever leaks have come out about the revenue from the
inside, you know, there's some debates of whether or not
they're counting free trials that are a year long as part of
revenue if you read the information story about this
kind of stuff. But anyway, even if you just
take it on its face, the revenue that they're leaking or stating
this is like 100X revenue multiple which is sort of
ludicrous on any company. I mean even the wildly
overvalued companies were talking about earlier like
Anthropic and Open AI are only multiple 25X revenue.
So this thing is worth, you know, the, the excitement around
it from a valuation perspective is roughly 4X Open AI or cursor,
right, if you were to just sort of do the math there.
And so I think that's the reason it's a short, it's just that the
valuation is just out of control.
And to your point, they don't have their own models.
It is a search engine. And obviously Google and Open AI
are trying to own the search space.
And now they're getting into the browser thing.
And it's not clear that even this that AI browsers are even a
space. Yeah.
So most votes, most shorts was Perplexity, followed by Open AI,
and then tied for third was Cursor Figure, Harvey, Mercor,
Mistral and Thinking Machines. I, I answered, I think open AI
on the belief that oh man, popularity and Max got this dead
on. So kudos to Max, which was a
great pick, but I, I got the number 2 and then I think we did
a second. Did we do a second?
I said thinking machines also, which was third.
So we we, we were on the pulse. And that and that was that was
before thinking machines got marked out to 50 billion.
That was it came in 3rd when it was a $10 billion company.
Now it's 50. So that to me would have been
the the pick maybe. You know, Cerebral Valley survey
went viral with Indian media because Perplexity founder is
sort of a high profile Indian founder and I think there's
interest and how it goes. So it really, really travelled.
I think perplexity hangs on, you know, it could sell to Apple or
somebody to save their AI strategy, I think because they
have a big distribution problem. And then some people really
believe in the founder and some people don't.
All right, any final takes? Well, I was just curious about.
I was curious about cursor because you said that you had a
a. Oh, I just wanted to not talk
about it until we revealed that it was.
Short of the shorts, I don't. Know Max What's your take?
Are you bullish or bearish? I mean, I don't know, probably
bullish given the momentum they're seeing on revenue and
revenue growth. I think if you just take the
brain dead case that lots of revenue is good and lots of
revenue growth is good, they have a good business.
I think they're much more likely to exit to someone for near
their current valuation than Perplexity, for example, where I
think that buying it for 20 would just be absolutely insane.
But yeah, I mean, ultimately there's this whole debate with
Cursor that they're repackaging other people's models and their
gross margins are terrible and yadda, yadda, yadda.
But you know, ultimately someone may have to cave and just buy
them to own the IDE space. You know, Microsoft being an
obvious candidate. So it'll be.
Interesting and now now Google has anti gravity which is their
right. That's more their clawed code I
think. I.
No, no. I.
Downloaded it. No.
Anti gravity is is a cursor clone in many ways but I mean.
OK I I have it on my computer. It has terminal access.
It's trying to come. Up with.
Well, it's designed more specific.
I guess you could say it's cloud code.
To some degree it's because it's.
So does. It felt like cloud code because
I do stuff in the terminal I haven't actually known the
cursor. I'm not a coder so I don't know,
but when I it felt like cloud code.
You shouldn't have to use terminal that much for anti
gravity like versus cursor. I don't know.
You wanted me.
You built my website and then I was like, build the website and
then I was like, OK, go in the terminal and run it.
Yeah, so that's what cursor would do too.
That's what cursor would do. Because you're just, it's like a
level above lovable or something, right?
Where it's like it's forcing you to.
Actually more yeah, minor speed is repple it even Dumber than
that. I think I need to try repple it
like. I think you'd like Repple.
It's like in between. I think Repple it has a little
bit more pro. User I want the dumbest feature
lease coding you know. That's probably I think.
I think lovable is the yeah is the version.
Well, I beef with lovable because they have Yeah, try
repple it, you know? Yeah.
Repple it but they say. They fix actually what you
should try as of, you know, yesterday is I think Gemini in
AI Studio. It's like they've built a
lovable kind of thing. Classic Google man Jesus Christ,
how many names you even how to find it like that name is
insane. Yeah, Gemini in.
Gemini inside AI Studio. Inside AI Studio.
You're not. You're not a daily daily driver
of AI Studio. Specific specifically.
Specifically the build, The build menu, the build.
Within, yeah, you're. Not up.
You're not up in Vertex every day, Eric.
That's that's a real name of a Google product, by the way.
That's related to AI. Yeah.
All right, let's do some clips. Let's do some clips for founders
and developers building modern data-driven applications.
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Our first clip it's me, Eric, interviewing Mike Krieger, the
chief product officer of Anthropic, who is the Co founder
of Instagram. Before that, returning to sort
of my core philosophical question, like the sick of fancy
question, like what is your view on that and how much to enable
sort of everybody likes to be flattered, like it's a reality
of human beings versus an effort to be direct?
And how do you think about those tradeoffs?
Yeah, I think there's like a wide gulf between like true
empathy and then like sick of fancy.
And it's interesting that Materialize is not just in, hey,
I'm having a conversation with Claude about like some coaching
or personal goal that I have, but it also does encode as well.
When we were testing Sonnet 4-5, one of the things that people
got most excited about was when Claude was like, this idea is
bad like this, you know, not that you should feel bad about
it, but like this idea is like not a good direction.
I can go and implement it if you really want to, but I would
suggest that we try this other thing instead.
So there is something like that. Pushback is not just valuable in
a personal relationship with AI sense, it's actually like how
you get good work out of the models.
But you know, for a long time our models have been like, I
think like appropriately empathetic, like they're they're
like if you're going through a hard time, like I was dealing
with the death of a pet and I talked to Claude a lot about
these different things and it always started sounds like, Hey,
that sounds hard, like sorry to hear.
But then I'm going to give you like a factual answer.
I'm going to go research these pieces, but still with the place
of empathy as well. And so I think when we look at
it internally and we're just evaluating it ourselves, it's
again, not that like empathy, it's not even like the
likeability of the model. It is, do you like, does it show
up in the way that you'd want a good conversationalist to show
up and then continue on its AI journey around what it is going
to do with you as well? But I think it's it spans
everything from that like initial response all the way to
like how it evaluates an idea as well, you know?
Yeah, Claude, especially previous versions were kind of
like known for being like, you're absolutely right when you
correct it. And my wife got her first, like
you're completely wrong. And she's like, yes, this is
great. And I think we should have more
of that. Like, kind of like less San
Francisco. Yeah, less San Francisco, a
little more direct New York. You know, I'd set up this big
theme, you know, that he'd been at a social media company,
Instagram. Now he was an AI company.
Social media companies were built on user optimizing for
user engagement through machine learning and AI companies at
least started off chasing the truth and chasing these
leaderboards. But like sick of fancy is a, you
know, it shows that these models and open AI is famous for the
sick of fancy issue and people's attachment to GPT 4, which was
the one that really sucked up to everybody and people didn't want
to see it go away. You know, clearly these model
companies have to think about how much to pander to the egos
of their users, Would you guys think?
I mean, it's interesting because it does sort of spiritually
align with the fact that Anthropic has almost no consumer
adoption compared to open AI. I mean, like if you look at the
market share of each of these AI for consumers versus businesses
and enterprises, Anthropic is just crushing it with, you know,
B to B use cases engineers like, you know, all these kind of work
based applications and has very, very low consumer uptake just
like shockingly low. And I wonder if that's because
of this, you know, unwillingness to optimize for engagement and
sick of fancy and glazing or if it's just that the, you know,
opening eye got a head start and they figured, why even chase
these metrics? But it is sort of interesting
culturally that they're right not chasing engagement.
And obviously Opening Eye came out with Sora, which is sort of
a shameless. Like, give users something fun,
who cares about. Yeah.
What is the meaning behind it? I mean, I thought it was
interesting, this sort of a tangent, but my other favorite
moment from this interview is Mike Krieger saying that he came
to anthropic thinking, man, text box cannot be the main way to
interact with AI. And now that he's been there a
while, he's like text box. Pretty good way.
Well, especially if you're like the best coding model and the
best like. Whatever.
Probably like best. Legal model, It's great, yeah.
It's like, oh, it turns out all these work applications involve
parsing, you know, summarizing and generating.
I think that my reaction to that was like, nobody would be like,
oh, books, just, it's just a book, you know, it's just text.
It's like, yeah, text is great. I don't know, James reactions to
you. I don't know either the input
model or the truth. I think that actually, you know,
whether it's anthropic or open AI, like I am skeptical that
they have been like attention jacking, you know, optimizing
for flattery. Just intentionally.
Like a lot of what happens is that they throw an AB test up.
They like literally show you 2 results from the model and then
people pick right And so I think that they were just caught off
guard more than they were purposely trying to optimize for
this. I've also been hearing that
there's just general problems with multi turn conversations in
the training sets of these things.
Like most of the models are trained on one shot, the data of
like, give me a good answer to this thing.
And then once you get into multi turn, there's just less and less
data, right? It's like kind of makes sense
intuitively cuz you start branching off of conversations.
And I think that's another sort of flaw of these models is they
can kind of, they can just be more sycophantic.
In some ways what you're saying is they're not savvy enough yet
to really make this trade off and they're just trying to like
stumbling through the dark a little bit.
Yeah, Yeah. A more interesting question is,
will they change their tune on this from, you know,
capitalistic pressure to, you know, maximize shareholder
value? I'm yeah, I think that's an
interesting question. I'm just like skeptical that
that's what's been happening. All right, this is my interview,
last interview of the day with Jimmy BA, one of the Co founders
of Elon Musk's XAI, a very mysterious foundation model
company, the Mecca Hitler in the room.
Like what is your reflection as sort of a truth seeking
organization? What happened?
Like we, you know, like I think on the past to be maximum true
seeking, there's not without any hurdles, of course, like so we
like yeah, Mac Hitler is one of them.
Like we, our model had an episode that week.
It's actually a reference to the Wolfenstein game, right?
So, but I think very quickly that the perfect world we want
to be in is like, yes, the model is going to make mistakes, but
how can we get the feedback loops to actually train these
models to stay, you know, grounded to understand, hey, I
actually made a mistake in this journey and let me correct my
courses and go back into the sources.
So the way, you know, very quickly what happened after my
color is I would look at the, you know, the committee notes,
right? Committee notes is a great tool
on the platforms that allows everyone to kind of chime in and
provide learning signals for this AI, right?
So the vision we have is like, you know, like with the Grog PDA
is like kind of another step towards that.
So now like instead of doing an ask Grog, do all the online
computation, we learn our lesson.
We're like, hey, a lot of these problems are really hard about
the world. Like why don't we just, you
know, take this computation offline and spend as much
reasoning as possible using the entire cluster.
We're building benefits to like, look over all the primary
sources, combine only the primary sources, and dish that
information back. To is that so?
Is the media out of the calculus there?
It's you want primary sources, Yes.
Are you totally discounting news articles or how do you treat
news articles? I mean, majority of the Internet
is flooded with second hand and third hand information.
And we, we believe that, you know, the only way to get to the
bottom of the issue is, you know, directly get information
from the information source. And right now the X platform
has, you know, most of the outbreaks of the news and you
know, the the world leaders today are making the first hand
announcement on X platforms rather than anyone else.
After this interview, what happened this week is that Grok,
Grok has been telling everybody that Elon is the best at
everything in the fucking world. Better than better athlete than
LeBron James. I think he can get it to say
he's better giving blow jobs, and I don't know.
But anyway, Elon is great in every domain whatsoever.
And so I think what's galling about XAI is that they are the
loudest truth, truth, truth, truth.
We're are seeking the truth who knows how.
And then they're the ones who have like Mecca Hitler.
They're the ones who have, you know, they're bot glazing their
CEO like it's just like, yeah, it's very Trumpian, where you're
the opposite of what you profess to be.
Yeah, I find this whole maximally truth seeking argument
to be just the biggest pile of bullshit I have heard in a long
time. It is.
It is so absurd. To your point, it is almost the
opposite of what's happening. They are giving themselves
credit for failing in public while every other company goes
through all this hard work of failing in private so that they
don't have massive fuck ups in public.
It's like, obviously I'm sure some crazy version of, you know,
Chachi, BT and Claude existed in the labs that probably did stuff
that was equally stupid as Mecca Hitler, but they don't fucking
release it. They fix it before it goes out
to the public. That is, that is maximum.
I was very excited. Like talk to Jim.
I, I was very excited to talk to Jimmy because these guys,
they're so inaccessible. And I, you know, I asked him
later on, like, what is reasoning from first principles?
And I just think it's like so incoherent.
You know, it's like a thing you hear in Silicon Valley,
reasoning for first reason. But how are you going to like
derive like entire encyclopedia articles from first principles?
Like AI is clearly not smart enough to really think these
things from the ground up. And some of the things it has to
learn about are human phenomenon.
So you have to rely on human sources and they don't rely on
the media. And that he, he literally says
something that he thinks like X is more reliable than like the
media, which I, you know, obviously I find absurd.
And I just think any reasonable person would be like, if you're
trying to figure out a fact, you know, would you take the
distribution of answers on Twitter or would you take the
answer on like Wikipedia or in the New York Times?
I would certainly take Wikipedia or the New York Times.
Yeah, I don't know. I just find this whole like
getting feedback from community notes as like a solution to
maximal truth. Right.
It's like afterwards, it's like we're going to fuck up on
everything and then community notes will clean up.
Some of it it's like, it's like the only way our maximally truth
seeking AI system works is if we fuck up on such a massive scale
that a mob of people online says this is a yes, you have to fix
this. And then we like take the notes
on, you know, we're like, oh, yeah, that that's a good point.
Actually. Elon probably wasn't better than
Michael Jordan in the mid 90s. Thank you, community notes.
Like, it's like, that's not maximally truth seeking.
That's just like fucking up on the most maximal possible scale.
Like it's such an absurd line of thinking.
And I find it so offensive that they frame it as such.
Yeah, I guess. James is gonna offer the
contrarian viewpoint I'm so excited to.
Hear you disagree or James is gonna steel.
Man this take, I love him. I just feel like I'm going third
here. I gotta do the steel man.
So I think that maybe they, they are way ahead of their skis on
this. But if I'm giving them the
maximal credit here, like I think there are interesting
things you can do with like first principles reasoning in
training, right? So you can hire these pH DS, you
can like, you know, almost like create axioms and like create.
Reasoning changes get it that Like who is the philosopher king
at ex like if not Wikipedia like is there some guy or like and
the guy? Thinks that's what they're doing
or that's like, but like that's what they're planning to do or
doing, you know, like basically hiring lots of people to but it.
Feels like somebody is just like actually like, you know, racism
isn't bad, like you know, it's toy the thing you know it's just
like but it won't own it. It's like, if it's true seeking,
you have to like, Oh my God, like.
And it's probably Elon, right? Maybe, maybe a lot of this is
just Elon messing with the system prompt, right?
Like maybe the training is great and then and then Elon goes in
and and edits the system. And I think, you know, XAI is
very proud of its work in coding.
I think they're seriously competitive there.
But I think one thing we're seeing with these models is that
just because you're a genius in one domain doesn't mean it's
sort of like an all-purpose genius.
It means you like did a lot of reinforcement learning there.
You worked really hard. And so it's it's not like it's
not like what they think, which is like, oh, the smartest math
genius in the world. He's gonna have, you know, the
best views on like, you know, social issues of the time.
You know, it's they're they're pretty disconnected, just like
with human human like Bobby Fischer was like an anti Semite.
You know, it's like you can be a genius in one domain, it doesn't
necessarily make you super competent in others because
there are different ways of gathering information and
understanding what's happening. And so I think they're
delusional that they're going to have this.
Yeah, first principles machine. That's great just because it's a
great reasoner. And therefore it's it's just
going to be swamping the other models by ignoring conventional
human sources. Yeah, it's like it's kind of
weird. They're trying to, like, invent
new branches of philosophy that can like, cover all human.
Without having any respect for the past.
Thing right? Exactly the way.
You do that is you're sort of like, you know, the Uvra.
And then you're like, yeah, we, we read it.
We disagree. They're sort of like stumbling
and blind. They're like these these
intellectuals. They're like idiots.
We're going to code it anyway. Next, Next clip.
All right, here. Here's another one.
I talked with the mayor of San Francisco.
Have you had a conversation with Zoran Mamdani or any
observations on his election? You've been able to maintain
this. Great.
We, we, we, we, we, We spoke the morning after he won.
I congratulated him. I, I said, you know,
congratulations. Anything I can do to be helpful,
Great. I, I, I met my wife in New York
City. I worked at the Robin Hood
Foundation. I love New York.
I want New York to succeed. Did you give them any advice?
No, no, no, no one should be asking someone that's been in a
job for 10 months for advice. I, I unfortunately have been,
you know, here in San Francisco, not unfortunately like, but I
haven't been able to travel to New York for almost 2 years now.
So all you all here, you want me focused on San Francisco.
You don't want me talking Sacramento politics or DC or New
York. You want me focused, San
Francisco. Well, Eric, as the San Francisco
native, what do you what do you think about the mayor?
Yeah, yeah. I live in New York.
James is the only true San Francisco native anymore.
I I skip town for the suburbs. You should probably give your
take on the mayor. Well, I I generally like the
mayor a lot, and I think he's been doing a really good job.
I think, yeah, he's in a tough situation with these like
national politics issues. I think he really doesn't want
to deal, doesn't want to become the main story around the Trump
administration and national politics.
He wants to just focus on San Francisco, which I appreciate as
he was very. Politician.
He was like safety, safety, safety.
He just came back to that a billion times.
I, the audience loved him. I mean, politicians are better
speakers than CEOs. I, I think so the people liked
him. People were rooting for him.
He's talking about values, which often companies fail to speak
about. He's not mum Donnie though, like
I, I, yeah, he didn't. He's not like fighting it.
It was also interesting. I kept saying, you know, like
the business community loves you.
Like why is that? Even though like, you know, and
what advice would you give to mom Donnie and blah, blah, blah.
And then he sort of said at one point he was like, well, they
didn't love me at first, which I did think was a funny point
that, you know, it's like they came around to him pretty late,
but. Yeah.
I mean, I will just say, say that, yeah, as someone who has,
you know, lived in the Bay Area for 15 years, in San Francisco
for like a decade, like it is still sort of shocking to hear
the mayor express, like, excitement and appreciation for
the main industry in his city. Like, it's like, it's like, it's
like if the mayor of Los Angeles was up there and like being
like, I, I think this Hollywood thing is pretty good for the
city. And you were like, whoa, no
one's ever said that before. And reality is in San Francisco,
I have not heard a politician express any sort of positive
viewpoint about technology as an industry for 15 years.
And so it is, I think, you know, he has a 73% approval rating or
whatever. I think that the positivity
about what's happening in San Francisco is what really shown
through in the interview to me, including in this Benioff answer
where he was saying, hey, things are getting better.
We still have a lot of work to do.
But like, I believe in the city and I believe we can invest to
make it even better in the future, right?
And maybe Mark was a little off his rocker on calling for, you
know, the. Federal dimension a little,
yeah, there we. Go.
But it's just, yeah, the just the whiff of optimism about the
city and technology is is so unique in the last 15 years of
San Francisco politics. But he has universal approval in
the city because, you know, it got so bad.
And then pretty quickly after he got elected, like there was
noticeable improvement. Like I it's not that he was.
Yeah, he's doing an actually good job.
And there are a lot of obvious things that he could do to
improve quality of life in the city, and he's doing them.
And that, that's the success story.
Will it always feel like AI is this kind of tool?
Agents are useful, used by humans.
Christina, you said, you know, a smart person who knows how to
use AI might replace someone who doesn't know how to use that.
Or will we reach a point where these AI agents are really
approximating full workers in the enterprise?
Oh, I think they're yeah, there's definitely some full
workers, but I'm I'm people will just do other things like a
Vanta contacting example, and we were talking about it earlier is
one part one thing of GRC team does again is like evaluates new
vendors, new software vendors that are coming in.
And today often is someone's job to evaluate the high risk
vendors. Like they can't even do all of
them, but they are just like vendor evaluator.
And I think that is a great thing to give to an agent.
And then that and that agent can go to Erin's point, go and do
all of the vendors, not just a subset of them, because the
agent doesn't take PTO and doesn't get tired and, you know,
works 9/9 more than 997. And then the person becomes like
a vendor risk portfolio manager and thinks, OK, a given all
these, you know, inputs and given what I know about business
context, how do I like make better decisions?
But the person still has a role. It's just not as kind of in some
ways manual and tedious as what the agent is now doing.
I guess my reaction to this is just that what she's describing
is to some degree a job replacement.
I mean, she's saying that this role will no longer exist and
that this person will be doing a different job that she thinks
that person is capable of. But my question is like, is that
true? Like this person will be able
to, you know, become a portfolio of agents manager?
I don't know. I'm, I'm just maybe a like more,
a little more skeptical that it just so, so easily, you know,
transitions into this next era where everyone who used to be a
software engineer can just be an agent manager of software
engineers or everyone who, you know, was a lawyer can be a
manager of agent lawyers. Like, I don't know, it just
feels a little too neat to me that that's how things are going
to evolve. Yeah.
I mean, I think it's I think to to offer the sort of
conventional take on job replacement.
You know, 100 years ago, I think over half of Americans were
farmers, right? And today it's like 2% of
Americans are farmers, right. So we replace like literally 10s
of millions of farmer jobs over that time frame.
Now, I think, you know, the alternate and those farmers
ended up being lots of that we never would have imagined 100
years ago, right? Yeah, we're not all like.
Tractor managers, hopefully. Yeah, we're not all tractor
managers, we're not all combine harvester maintainers, right.
Yeah, Like they're, they're sort of as a layers of abstraction of
new types of jobs. So that's sort of the
conventional economics take. And I think I do basically
believe that. But I think that still means
that in the short run, especially with the pace with
which AI can do things that humans could do, you know, just
a year or two ago, like there there are new jobs since then
that now AI can suddenly do. It does feel like there's going
to be very rapid displacement, right?
Like the the invention of machines for farming did not
like overnight just completely obliterate everything farmers
were doing, which it does feel like AI is like just
obliterating huge chunks of knowledge work like basically
overnight. And so I think that they could
be sort of a shock to the system in the way that maybe
traditional automation is not. And it seems like as long as
Trump's in charge, nobody's stopping this putting the horse
back in the barn. Like, states aren't even gonna
be allowed to make regulations about it.
So it's like. Nobody's putting the horse back
in the barn is perfect like for perfect analogy like to the dawn
of cars, you know, like exactly. Yeah.
We. I think the other thing that was
interesting to me is just that she, she also, you know, sort of
is making the assumption that the job of agent manager won't
be be run by an agent like like how many lawyers you know?
Yeah, I don't know at what point does.
The I mean, progress. People want human to me, people
will want humans for something like I'm, you know, I would love
to have human, you know, caretakers for the elder.
Yeah. You know, there are lots of
important human things to do. I don't necessarily agree with
her. Like you're saying that humans
will just slot into the agent hierarchy.
It's like very possible agents run agents.
I think the big question is just like, well, so much value accrue
to the people who own these agents relative to the average
American worker, then, you know, the wealth inequality will get
get so terribly skewed. I think humans will have value
and therefore, if the economic system is working, there should
be money for them to make. But maybe, you know, people who
control these agents will just be far, far too powerful for any
sense of an egalitarian society. All right, I enjoyed the
conference, I think. Yeah, let's keep it tight.
This was a blast. I really had fun with this one.
Yeah, yeah. Thank you guys so much.
Thank you for tuning into this week's episode of the podcast.
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