Reid Hoffman: Why The AI Investment Will Pay Off

Channel: Alex Kantrowitz

Published at: 2025-01-29

YouTube video id: o-U9QFwkyYE

Source: https://www.youtube.com/watch?v=o-U9QFwkyYE

Reed Hoffman is here to talk about the
promise and The Business of AI we'll be
back with the legendary investor and
entrepreneur right after this welcome to
Big technology podcast a show for
cool-headed nuance conversation of the
tech world and Beyond LinkedIn founder
investor and author Reed Hoffman is here
to talk with us about the state of AI
and his new book super agency what could
possibly go right with our AI future
Reed been looking forward to speaking
with you for a long time and great to
finally get a chance to do it welcome to
the show it's great to be here thanks
for having me definitely I have a copy
of the book uh with me now this is the
the galley the preview and I think the
book that debuts will look uh a little
different kind of cooler I know you're
doing some custom covers we can talk
about that um and the book is all about
artificial intelligence your your belief
in the promise of AI I love the what
could go right subtitle and and you know
I think that a lot of Silicon Valley is
asking what could go right and they have
to find things that go right because if
you think about the way that these
companies have been invested in it's
wild and and maybe it's like the true
Silicon Valley story where you're going
to lose a lot of money and then hope
that you'll make some money on the other
side uh but Silicon Valley has never
done it like this and you know there's
no no one that knows it better uh than
you in terms of the way that these work
the investing and the entrepreneurship
side just a few numbers open AI raised
the largest VC round in history last
year 6.6 billion anthropic raised 4
billion is on track to raise another two
billion uh Elon Musk has raised billions
you know in his own right Nvidia three
plus trillion dollar market cap um don't
these Investments have to pay off in a
way that is going to be difficult for
the math to work out I actually
think that those investments will
actually in fact be pretty
straightforward it's not to say that
there won't be just like the kind of
early internet and others there won't be
a bunch of crazy Investments
that you know will essentially not make
money but when you think about what AI
is going to bring to the transformation
of human life and human work the
investments will I think seem small in
retrospect and obviously that seems
crazy from a Viewpoint when you're
saying billions of dollars in Venture
Capital but actually when you think
about kind of like when every single
thing that has a compute unit in it and
it's not just phones and computers which
will be huge but you know speakers and
lights and thermostats and cars and you
know Planes Trains and Automobiles
everything is going to get smarter um
and as part of that uh you know kind of
intelligence adds a huge amount of value
a huge amount of efficiency and so the
question really isn't if it will pay out
uh you know majorly which I think it
will but which Investments and over what
time frame because those have some some
some variable but right uh you know part
of what I encourage people part of the
reason why you know wrote super agency
is anyone who's not actually engaged in
using AI today and not just for hey I
open my refrigerator I got set
ingredients what should I make for
dinner that's a fun use case easy or a
Sonet for my friend's you know birthday
party or whatever else that's fun but
for serious things for for important
things that range from like oh I've got
this health concern I want to talk about
personally to um hey I'm trying to do
this kind of work um and you know how
does it help me with that work and I
think already today if you play with you
know gbd4 co-pilot Sonet other things
you will find that it can add real value
today look I agree with you in all this
and I think the thing that you mentioned
that's most important is the time frame
because most VC funds tell me if I'm
wrong usually try to get a return in
seven years and if you think about open
AI right let's just take that as an
example you were an early investor in
open AI uh it's been a while at this
point already but even the most recent
rounds 6.6 billion um you know in in
seven years you want to be able to
return 10x on on that money so 60
billion and they're losing a lot of
money they lost 5 billion last year
according to reports so how does the
math work so all venture as Venture
rounds work you know start with the
company like frequently in series a
series B's there's zero Revenue right so
so they're always losing money and it's
kind of the curve of the expectation of
Revenue you know kind of compounding
over the cost curve and so that's just
business as usual now it's a higher
scale with open AI with you know kind of
having uh uh you know kind of a uh you
know both you know a massive footprint
already a massive kind of leadership
position and um you know kind of you
know Revenue that that you're expecting
to grow in the substantial frame but
this is actually one of the reasons why
Silicon Valley tends to create so many
of the technology companies that
dominate The Globe because if you take
an overly kind of classic DCF analysis
business school Prof analysis Etc which
many of much of the world does in
investing and doesn't say no actually in
fact it's a feature that you're
investing massively on something that at
the moment looks you know like today's I
banking analysis is not particularly
good but two three five seven and by the
way Venture Investments can go out to 10
you know kind of years and plus if it's
if it's compounding and growing the
right way um can be you know kind of
just epic Investments and it isn't just
AI things I mean this is part of like
you know Greylock investment in Airbnb
which I led the series a of had that
similar characteristics of just bleeding
money and then later being the amazing
business we see today and that's that
that judgment call on a risk discounted
basis is part of what you're doing and
you know the the the investment that
investors made last year is kind of more
of a growth Venture round relative to it
doesn't necessarily require 10x I mean
you know we have trillion dollar
companies now so you know trillion
dollar companies are definitely within
you know feasibility um but doesn't
require a trillion dollar company to
make real money because part of what
happens 10x is when you expect zero as a
possibility um lower multiples are fine
when you know that you already have a
baseline mass of value that you're
building on top of but there's still
questions about the ROI here so
basically if the ROI doesn't come
through I think you believe it will but
if it doesn't uh that could be a real
problem again it's talk thinking about
the size don't you think that that has
some blowback and it's interesting to me
one more thing about that a lot of the
big traditional VCS did not participate
in the most recent rounds I don't know
if grey like did I know Andre and
Horowitz I think sat out after
evaluating uh and then you saw Josh
kushner's fund really LED open the open
AI round but the traditional names in
the valley were not
involved well there's kind of different
risk profiles and different um you know
games like for example in Valley
history uh DST L around in Facebook when
the traditional funds were all like oh
we'll only do a three to five billion
pre you know with lots of caveats and
everything else and DST came in and said
we'll do a 10 billion post and no
caveats and it was an epic investment
for DST in a Facebook right just like
literally you know like blazing amounts
of money and establishment of a position
and so sometimes when the traditional
VCS go hey we're only early stage or
we'll only do this like new firms come
in and show that through through a smart
bet can make a ton of money and so that
is a also historical Silicon Valley
position and you know I think that the
questions around you know you say Well
when can you invest billion dollars as a
venture firm and the answer is look
you're you're trying to hit a return
multiple but it's much easier when you
know when you believe with some Vigor
and evidence that your chance going
below 1X is very very small um and you
know when you look at open AI position
you go well actually in fact is my
position guaranteed on the downside
seems you know like a good bet and then
do I believe in compounding with a risk
discount that I can make a multiple on
the upside that's when you know
investors make money and part of venture
is there's you know it's traditional in
a lot of venture Investments that you
know firmx goes I'm going to I'm going
to bet on company a when firms Y and Z
go oh that's nutty and sometimes you
know firm X is right and sometimes
they're not I mean this is you know
whether it's you know you know like for
example speaking for Greylock you know
when Greylock invested at Facebook at a
500 million preone valuation literally
all of the companion VC firms were oh
that's crazy this college website
gaylocks demonstrating that it's past
past time etc
etc that's how you make potential and
they're risky of course but that's how
you make epic Investments so then how
does this change the AI field I mean
you're an early investor in open AI the
idea was for it to be open it's not open
anymore I mean you don't see a lot of
Open Source releases from them they
don't publish as much as they intended
to at the beginning uh it's kind of a
Perpetual joke from Elon that they're
closed Ai and you know this technology
that you invested in I think because you
thought it's going to be a fundamental
building block of the future for
Humanity uh now has such pressure on it
to deliver that profit for the investors
that put the money in so how does that
change the
field well so first um in terms of being
open there's lots of different
parameters of open and open AI has been
you know working to have like open you
know kind of um you know with obviously
identity and registration for safety but
open AI API access it wasn't called open
Source AI it was called open AI right or
open model AI wasn't called that either
and so the question is is the parameters
of open and sure people would say well I
think what you should be open is all
your meetings should be Zoom broadcast
to the world and that's what I think
open should be I mean it's not an
Outsiders ability to claim open it's
insiders and you know for you know kind
of the entertainment you know Elon was
part of that decision for uh you know as
as kind of uh co-coo in terms of making
that decision uh and so that's how open
AI has always operated now um I think
that open AI continues to stay on its
Mission um which is how do we make AGI
for the maximum benefit of humanity and
there's various things that it is done
for you know kind of catalyzing safety
practices catalyzed you know kind of
knowledge about what kind of things
would be um the right kinds of design
for bringing it into um you know kind of
uh everyday usage and I think part of
what uh open AI also led the field in
was doing this thing that I call in my
book super agency iterative deployment
which is make it available to you know
hundreds of millions of people around
the world so they can play with it give
feedback you know kind of say hey these
are the things that really work these
things don't work as well and be able to
get familiarized and participate in the
conversation of it uh evolving and I
think that is also part of the openness
and so I think that all fits within the
open AI Mission uh for what they're
doing it doesn't mean that there aren't
footfalls doesn't mean there aren't
Corrections you know um in early days
open AI was publishing a lot and then
what well from a safety perspective we
think we should slow down publishing
some because part of being you know for
the benefit of humanity is paying a lot
of attention to what are called
alignment issues within Ai and and open
AI has continued to be one of the major
leaders in that and so I think it's um
you know I'm still very uh I think the
AI has has stayed true to its Mission
and continues to do so with Vigor but
the the money does change things and you
sort of send to tend to see it as a
consumer when you're in an app and
you're like oh they're growth hacking me
and that's because they have to return
some value to investors and they need
you to get back on the app um either to
see an ad or they just want to show Wall
Street that their daily active or
monthly active user account went up um
it changes the product and so I'm
curious what you think uh all this
investment does to the product like do
we get a different product uh because of
this need to show returns well one of
the things look there's a kind of a
little bit of a Trope within a bunch of
media that money somehow is is anti- the
interest of individuals or anti the
interest of society it's actually how we
power everything in society and so you
know having products I'm not anti-money
definitely I get it I'm just you know I
hear what you're saying so money itself
is not necessarily A problem it's a
question of how the money plays in so
for example money playing in as within
the within the kind of functioning of
society products and services um you
know integration in Industry Etc broadly
most of those things are mostly very
positive now of
course uh in a pure mission standpoint
you'd say hey we could make our service
you know kind of free for everybody and
that would be a really great thing and
open AI is actually you know uh spending
a bunch of money making it free or
subsidized to get the wi as possible
exposure engagement in the and and
learning about these products and being
able to use them you know a lot of open
AI products are offered it below what
their cost right now in order to do that
um but of course you know they will as
as an invested company need to begin you
know kind of you know overtime showing
returns that means that they need to
also Focus as intensely on their
money-making
capabilities as they're you know
engaging the world um you know kind of
possibilities But ultimately I think
just like many commercial products
that's not antithetical to its Mission
because succeeding in raising Capital
succeeding in building these products
and succeeding in offering them to the
world is part of the you know pro-
Humanity Mission uh and you you know we
live in a capital world where these
things are decided by Capital so I think
that's a good thing now might it say hey
we're going to focus on some real money
Mak making products for Enterprise
before we get to the mass Market you
know kind of global South you know
things that are you know for Fe for
people who are in in less wealthy
economies you could have impacts like
that that's a natural part of how the
the the capitalist system works but I
know that open ai's mission for Humanity
won't allow it to be you know uh it
allow it to be strategic but not
distracted from its focus so you think
that we can still
get AI technology that's going to
benefit Humanity um as the North Star
even if there's a imperative to return
to investors 100% And I think that's
already what we're seeing in motion
right
now you know as long as we're talking
about open a I have one more question
for you because you are on the Microsoft
board and um it's been pretty obvious to
everybody watching from the sidelines
that you know there was this really
close-knit partnership uh then some
governance weirdness at open AI Sam is
fired Sam comes back and then next thing
you know um Microsoft hires Mustafa
soliman who you uh co-founded inflection
with and it seems like there's some
healthy competition but competition
where Microsoft is trying to start to
build some of the same products that you
might see within opening eye maybe
insulate itself from some of the risk
that you know became painfully aware of
during the incident uh with Alman so um
what's the status of that relationship
and Can Microsoft uh and open AI still
form a strong a strong partnership and
still have a tight Bond uh given all
that's transpired and where where things
seem to be heading well I think they're
both partnering and competing um and
actually I think that's healthy for both
companies and healthy for the ecosystem
so they're partnering because there's a
lot of ways in which open aai uses Azure
infrastructure which you know has been
you know building you know amazing new
capabilities through being on this
journey with open AI um I think that you
know open AI sells things to Enterprises
and consumers that are you know it's
like you you can pay open AI or you can
pay Microsoft and so they have a that
there's competing in that and I think
that's healthy for the ecosystem and for
also both companies and so um but you
know they also have ways that you know
they um by partnering uh they also
potentially both you know uh both get a
lot of benefits from that and so I think
it's a it's a good ecosystem I think the
the um I think when the his the history
books are written I think this will be
one of the kind of Epic uh Partnerships
that you know kind of uh plays out in
into the field and you know there's now
lots of people who you know it's it's a
growing number of of competitors uh you
know so not just Google not just
anthropic you know Amazon's beginning to
do stuff directly itself as well um
there's you know deep seek and and
others within China and so the the
competitive sphere um you know as
anticipated is
growing yeah and you're you're setting
me up perfectly for the next question
Reed so thank you for that which is you
started off by saying the question
really is time frame and who's going to
win uh who do you think is going to win
well the good news is I think there's
going to be multiple winners um and you
know maybe that you know uh you know one
company wins at one one company wins at
another um you know the incumbents are
obviously trying to bring AI into the
areas that they have strong positions so
you know Microsoft's very focused on AI
for the Enterprise Google's very focused
on AI for search um and obviously that
doesn't mean that the only thing that
any of these companies are doing you
know part of what I think you know open
AI is
doing is saying hey we need to to have a
kind of a third strong position on with
kind of an AGI for Humanity mission
um and so I think they're going to be
multiple winners and you know I you know
and Greylock have continue to invest in
a variety of startups um because we
think there's going to be a a massive
number of startup positions that will be
uh really interesting as well and so um
so I think that the there's going to be
lots of winners and so the kind of who's
the winner is I think actually in fact
it's like who's the winner of the
internet right well obviously Google had
a really strong position as did Amazon
as as did Facebook
um but there were a bunch of others uh
as well and so I think that similar
there's going to be many winners but do
you think there's room for all these
foundational model companies to uh
succeed and pay off like one of my
perspectives is that like there's going
to be some company that's just going to
sort of collapse under the weight of
what it needs to deliver whether that's
an anthropic I don't know or open AI um
it just doesn't seem to me like they can
all succeed but maybe I'm wrong what do
you think well I do think that there
will be efforts at foundational models
that won't work um and especially I
think late entrance um like late
entrance have a harder you know catchup
routine and a lot of uh kind of expense
to go to it especially given that the
early folks like open AI have a very
broad-based like to some degree if you
you ask the average you know worker or
person in the street what is what is AI
they'll say chat gbt right and so that
gives you know open AI kind of a strong
you know kind of initial position but
you know I think that the later entrance
to Frontier models as startups may have
particular
challenges uh Does Elon Musk fall into
that category I mean he's a late entrant
with xai but he's building a million GPU
uh cluster yeah t TBD now it's a huge
expense line you know prior to kind of a
revenue position um but you know that as
we talked about earlier can be a classic
Silicon Valley position so I think it's
a he's a he's a you know the the the
grock and the x is a later entrant but
you know obviously a very capable
player okay um let's just talk quickly
about deep seek since you brought it up
uh it's one of those things that no one
saw coming at least in the US and now if
I talk about Ai and I don't mention deep
seek I get a lot of comments uh it seems
to indicate to me that China so for
folks who are listening who don't know
about it it is a large language model
out of China um according to its own
Benchmark so take this with you know for
what it's worth it outperforms meta Lama
3.1 and open AI
gp40 um it seems like China's in the
game do you agree uh absolutely uh and
it was one of the conversations that I'd
frequently have the last couple years
where they'd say oh you're just bringing
up China competition as kind of the bug
bear was like no no uh you know part of
my job as a investor as an entrepreneur
as a theorist is to predict where the
puck is moving to and the Chinese are
strong and vigorous there's lots of very
capable very hardworking entrepreneurial
folks with technological depth um and
and so it doesn't surprise me that deep
seek has has has entered the field um
with with Digger and I think that you
know part of when you look at um kind of
what is going to be playing out with AI
um China and multiple companies within
it cuz you know I haven't evaluated yet
Minimax which also just came out
recently but we'll have a number of very
strong contenders uh for this uh in the
the world technology landscape and so I
think it's a um you know the the game is
on or game is a foot if we want to be uh
Sherlock Holmes every little thing that
the US and the West have done to hamper
China's ability to play in Cutting Edge
technology doesn't seem like it's
working uh there's been restrictions to
the Silicon that they can use in China
and now deep seek is has shown there in
the game now look maybe it started with
a llama model and they've just kind of
frankensteined it but anyway they've
done it it exists uh then you think
about phones right uh there have been
efforts to make sure that the um
processors within phones that are the
most advanced don't get into the hands
of Chinese phone manufacturers I think
the Huawei mate 70 uh is a real Advan
and maybe on par with uh the iPhone in
some ways or maybe us smartphones in
some ways anyway it's definitely cutting
into the the margins of apple apple
struggling within within China us uh
handset makers are struggling there and
it's almost like a point of national
pride there I was there recently just
for a very brief stop but um it seems to
me like the government ban of iPhones
within uh Chinese government offices is
legit and you know part of the way that
they can do that is because they've
gotten around these restrictions so talk
a little bit about why the West has
failed uh on that front but I wouldn't
necessarily it's failed because most
restrictions are are kind of call it
headwinds or are kind of slowing not
stopping right and so I the question is
what degree has it actually successfully
slowed now part of the reason why I'm a
supporter of the chips act and and other
kind of efforts is because I think part
of the thing that we as the world
including America have to kind of demand
from China is kind of a Level Playing
Field so if they say hey we can sell our
stuff everywhere in the world you know
and we can subsidize it in various ways
that make it you know less you know kind
of free market competitive and you're
restricted from how you can sell things
here that's a kind of a mercantilist
policy that you have to essentially
respond to and I think that part of the
chips Act is to say well if you're going
to be playing this Merk lless policy
we're also going to you know put some
breaks on you know kind of your ability
to
develop uh the kind of the large siiz
very effective clusters that we think
the next generation of Al models are
going to be very dependent on because it
doesn't surprise me I mean
gbd4 was built on A1 100s doesn't
surprise me that with the current kind
of A1 100s and other things you could
build another gbd4 model so that's not
as as
surprising and you know we have h100s
going to Blackwells and the question is
what is the speed at which we're going
to be getting into that and I think
that's part of the game that's you know
still a foot um and so I don't think
it's a failure and I do think that the
it's the right thing for the US to be
doing given that China is generally
taking a kind of a a mercantilist
competitive position and I think that's
something that the the the the Us and
other uh you know kind of countries uh
Europe and everything else should be
opposed to you mentioned the Blackwell
which is nvidia's Cutting Edge chips all
the headlines have been showing that
they've been having some trouble getting
them to to production or getting the
yields they want and there have been
some delays I feel like Reed you'd
probably have a pretty good window into
what's going on there maybe not like
what's happening in the halls of Nvidia
although you might but certainly uh what
type of delays we're seeing given that
you work with Microsoft and you invest
in startups like is this is this a real
concern like is this going to be a
bigger story over over time if they
can't get their yields up and produce
the black well chip the way that
everybody is anticipating well it's
definitely if they can't get their Ys up
and produce it that will be a you know
concerning thing for NVIDIA and will
slow down some of you know kind of ai's
development because the the the faster
chips in a dense environment is actually
in fact instrumental and helpful um not
it slows it down it doesn't stop it um
and but you know on the other hand and
you know look I think this is again one
of the things where the actual timing
matters it's actually not a typical for
either Nvidia or chip manufacturers to
sometimes be you know uh to have six to
12 month error bars in in the stuff
they're doing and even though you know
public markets tend to be the oh my God
this quarter and it's like well the real
thing is what does the next two to three
years look like um and so I you know
maybe this is my my longer term Venture
perspective I tend to go well you know a
quarter here a quarter there you know
doesn't really matter in the 3 to 10
year you know kind of time Horizon and
so maybe I'm a a little bit too casual
on this but you know time will tell yeah
you can you can be chill given your
position but Public Market investors
will will freak out um but I guess we'll
cross that bridge when we come to it
okay I want to speak more about your
book which I think is sort of like a in
some ways a Manifesto um to the world
talking about the positive uses of AI
and why that book uh needed to be
written so um we know that there's some
issues with trust in Ai and maybe that's
the reason I'm going to ask you a bunch
of questions about it when we come back
right after this and we're back here on
big technology podcast with Reed Hoffman
uh Reed has a new book out called super
agency what could possibly go right
about our AI future and as I teas before
the break I think it's going to be uh uh
quite interesting to see this question
what could possibly go right because a
lot of people seem to be thinking what
could go wrong uh every survey you look
at I was just looking at one beforehand
uh has a remarkable level of distrust in
AI I think it was a PWC study that I
just looked at that said uh 61% of
people do not trust artificial
intelligence so I'm curious if you could
comment on why there's so much distrust
here and then again your book is all
about what could go right there's a
great chapter in it uh all about like
think about the best case scenario and
so tell me a little bit about the
motivation behind that well very much
broadly most human beings start with a
new technology with this trust you could
see similar dialogue you know in recent
history with the Internet or mobile
phone and and kind of go oh my gosh this
is going to like corrupt our children
this is going to you know interfere with
our ability to have you know a quiet
time to think um there's going to be
Mayhem and so that's always with new
massive Technologies the first human
response and that human response is
reflected in everything from you know
individual consumers say what do you
think about this thing you don't know
it's like I don't know to you know
journalists to academics you know to
political leaders um and even sometimes
technologists in this and so that's the
kind of typical pattern so part of the
reason why I you know know kind of wrote
super agency was to say by the way this
pattern has gone back to the history of
the written word and the printing press
and has done everything from like the
power loom and the Industrial Revolution
cars planes you know the entire thing
and so this is actually in fact a common
pattern of this technology means the end
of you know what what I think of as
human agency and I think actually in
fact at the end it ends up being super
agency
and as opposed to that it's like no no
we create great things with these now
that doesn't mean it's it's there's no
concerns the transitions are almost
always difficult we want to learn from
the past to make these transitions now
better even though there's you know new
new difficulties as well in the
Transitions and what um part of the
reason why a focus on agency is not just
because we have this discussion with AI
as being this new agentic technology
which you know adds a little confusion
to people but it's because when you
think about the kinds of things that
people are worried about whether it's
you know privacy whether it's
misinformation whether it's jobs you
know other things this all kind of
actually resolves the questions around
human agency and actually when you look
at um both the historical things with
these you know massively disruptive
Technologies and also AI I think we're
going to see a great increase in human
agency we just just you know kind of and
it will happen I think no matter what
but I think we want to navigate it in
even better ways and that's part of the
reason why you know writing a book right
and so it's so interesting because a lot
of those technologies that you mentioned
uh you mentioned the printing press uh I
think which was followed by lots of War
because people started fighting Wars
over ideas uh the loom I mean the
Industrial Revolution uh wasn't pretty
uh for folks in their immediate
aftermath like a lot of the introduction
of these techn kind of sucked for the
people who were there during the
transition and uh I was reading through
your blurbs and I found the funniest one
it's from youve all Noah Harari who like
really writes about how tough a lot of
these transitions have been uh he says I
disagree with some of the main arguments
but I nevertheless hope they are right
read it and judge for yourself um but
what makes you convinced that we're not
going to have a problematic start
here well I do think that there will be
challenges and like I I I'm not trying
to delude anyone that there won't be
real trans issues we as human beings
adopt new technologies fitfully and and
conflict and and and and and and with a
lot of you know kind of like storm and
drong and so I anticipate problems part
of the reason why to re write super
agency to kind of say Hey how do we
navigate these transitions as we say
well what are the issues we're going to
have and what are the positive Futures
we want to get to and how do we navigate
that in the most human and most
compassionate wise possible way doesn't
mean there won't be pain in Challenge
and suffering but for example a classic
one with AI is say well this is going to
change a lot of jobs uh and it will
because it's a kind of a new tool set
like a new tool set like like if you say
hey I'm a professional today and I don't
use smartphones and I don't use
computers you're like not really sure
you're a professional right it's it's a
required part of the tool set in terms
of how you operate um and bunch of the
tools within each profession it's like
well I'm a I'm a graphic designer but I
don't use figma I don't use Adobe and
you're like no you're probably not a
graphic designer really and so um I
think that AI is going to have that kind
of transformation now you say well
what's going to happen it's like well uh
a bunch of uh jobs that human beings are
going to be done is going to be replaced
by other humans using AI but AI can help
with that transition it can help the
human learn how to use it can help the
human use AI to do the job in the new
way can help find if there's if it's
like well I'm no longer well suited for
this what other jobs might I be able to
find how can I learn and do those AI can
be part of the solution and that's part
of the kind of the the the kind of
optimist uh message is not that hey your
everyone's lives everyone's work stays
exactly the same and now we just have a
little bit of salt and pepper of AI on
it no no there's going to be big
transitions but we can be helped with
those transitions then people say well
but I don't want to do the transition
it's like well you know I understand I'm
sympathetic we we should try to be as
helpful as possible but if you know as I
go into some depth in the in in the book
If the the Lites had successfully
destroyed all the power looms and said
well no we want to have independent
weaving then that would have meant the
that that that the their children their
grandchildren Etc would have been kind
of doomed to uh poverty and less
relevance and so that's part of the
reason why you know kind of in the
global sphere of Technology adoption
it's very important in the cognitive
Industrial Revolution that that for for
for not just for yourself but for your
children grandchildren your society that
you're in the Forefront of doing this
and that's that's one of the things that
is part of being a responsible citizen a
responsible member of your industry um
and by the way doesn't mean that your
life has to suck I mean you can learn
the new technology you can you can make
it work on that note AI can code pretty
well is learn to code good advice
yes although by the way of course coding
will be changing so as opposed to the
previous skill set this kind of like
example of transformation is like okay I
learn to do uh very precise semantics of
how when I'm using you know Objective C
how I do memory management you know etc
etc you'll need to understand the
concepts of kind of code but AI will
will will will be the kind of generation
uh a massive generator a massive quality
insurance Checker a bunch of other
things you'll still want to be learning
the kind of as it were the the pattern
of the Computing and coding mindset but
now uh as opposed to like the oh I'm
really really good at the rigid
syntax that will be less relevant not
zero relevant but less relevant and what
be more relevant is conceptualizing like
oh this is the kind of thing you can do
with code and one of the things I think
will be interesting with the AI
Revolution is all of us will have a
coding co-pilot and assistant on our PC
on our phone that will help us do these
things and so when we think about like
you know how do we accomplish some kind
of professional task how we do uh
information gathering information
analysis report generation Etc we will
actually in fact be using coding
assistance to help us do this and now
that will be available to everybody um
and that will you know kind of speed up
the level of of informational
intelligence part of the reason why in
the book we call it an informational GPS
in terms of how you operate and so I
think yes AI is great A code and yes
that will be a massive accelerant across
a wide variety of professionals and a
wide variety of
Industries now as I read the book maybe
this was explicit maybe it was implicit
but I had a little I basically heard
your
voice through the lines telling policy
makers oh don't don't regulate this or
don't make a mistake regulating this and
so I want to ask you just
practically do you think there's a
chance that this stuff gets regulated
and if so what regulation do you think
might be put into place um you know it's
regulation is a Hot Topic but I don't
think a lot of people have interest in
it because our at least in the US um our
our lawmakers talk a big game but they
do basically nothing on Tech maybe in
Europe they do uh and but Europe has
been plagued with companies not wanting
to release products there I mean even
Apple intelligence isn't available uh in
Europe and apple intelligence does
basically nothing so I'm curious um what
your take is on the regulation
side well the problem with most people's
default modes of Regulation including a
lot of regulators and including a lot of
European Regulators is you say well our
job is to protect bad things from
happening and by the way the simplest
way to do that is to prevent anything
from happening
right and so you really massively slow
everything down which means that you you
know disadvantage your own innovators
your own industry it's part of the
reason why the tech
industry you know tends to be evolving
very fast from the US and from China and
not as much from Europe because of that
kind of mindset and approach and then
people say oh you're saying you should
not regulate at all it's like well no
but try to be smart about it so for
example when when you're building things
in the future and we have this chapter
in super agency saying Innovation is
safety you can actually build a bunch of
things that in the future that are part
of that that that safety and that future
safety and it's important to get to and
by the way what you want is you want
small errors and small problems that
you're learning hence iterative
deployment that you then fix as it gets
to scale and that's the way you create a
safe future now for example most often
when people get to regulating and they
think about regulation and important
Technologies they always get to
regulating and preventing bad things
from happening at scale is an important
function for regulation in the
government but they say well I just I'll
just start like saying Thou shalt and
thou shalt not right now it's like well
actually in fact engaging in dialogue
finding out what's happening if you can
articulate what your concern is as a as
a metric that you can run you say hey
I'd like to
see information about job loss job dis
placement and other kinds of things and
I'd like to see what's happening in that
so that I if if there is such I can
start figuring out if I need to do
anything create an incentive that's
different create a rule that's different
uh in order to do that and that that
engaging in dialogue and measurement
first is a great way to enable things to
happen you have to always be remembering
that the tool set of the future can be
so much better than the tool set of now
and we don't want to to to to to stop
that tool set not just for its
opportunities but for also what it might
mean for the things that that regulation
cares about like safety and kind of the
well functioning of
society okay so this show is going to
air uh last week of January the
inauguration already happened uh in this
world uh we're talking right before it
and looking back in terms of the way
that regulation has played out over the
past four years I'm curious what your
opinion is of the job that Lena Khan did
uh as the head of the FTC I mean she's
currently still the FTC I'm sure that
when this airs she'll either be out or
on the way out um what's your view on
her
performance well I've made you know kind
of some you know comments on television
shows before and I thought that you know
she misunderstands like kind of the role
of how to stop the
aggregation of of power in large tech
companies because she says well if she
stops large tech companies from buying
small startups what that means is
Venture capitalists like myself and this
was made entirely as a venture
capitalist statement don't invest major
dollars in companies that might be end
up competing with large tech companies
because you need as we were talking
about open AI you need to have that 1X
possibility of getting back to make
major dollars so is opposed to stopping
the aggregation of of of of major Tech
Power by by slowing down all this m&a
actually in fact that policy will um
actually in fact aggregate power in the
large Tech by by having less startup
competition and that's that that's my PR
now she's done a great job on like drug
pricing and anti- competes and a bunch
of other things so I made kind of a
specific thing that is like no no we
want to be in favor of investing in
startups at every level of scale and we
need to be enabling that to be creating
the diversity of
competition cuz we want to be we want to
be not you know 5 to seven large tech
companies heading to three we want to be
five to seven large tech companies
heading to 20 um and and and Venture
investment is what enables
that and so then what did you guys do
with inflection I mean it was one of the
more confusing I don't know if you call
it an acquisition or a migration or all
right so folks what happened I think was
that Mustafa soliman and a bunch of
folks from inflection went over to
Microsoft uh to start to run consumer
products almost as if Microsoft acquired
the company but the company stayed uh
you know standing and is I guess still
operating um is this just a consequence
of what was going on in the regulatory
environment at the moment and how does
that
work well the the basic thought from an
inflection standpoint is that the
original model wouldn't really work
which is building Frontier models for
doing a consumer agent that the cost
curves to the revenue curves and and
what you would have to do uh wouldn't
work as a startup and so we kind of
looked at and said we have to Pivot the
company has pivoted to a you know kind
of a a B2B model and is working with a
variety of of of companies now it keeps
its its its landmark and still very
special kind of agent Pi live uh so you
know pay uh Pi Pi personal intelligence
pun intended you know AI you can find it
on you know both the internet and also
on on on various you know app stores and
um and to do that pivot and so you know
part of what MF is like well but I
really wanted to be creating this agent
and so we can make this deal work you
know economically by getting this kind
of big licensing deal and ability to to
kind of do a a non-exclusive exclusive
license of the technology and bring over
set of the the the the team that really
wants to continue to be working on the
consumer scale agent while we'll hire
other people who are like interested in
the B2B model and so you know it's a lot
of different moving Parts but you know
it's something that that investors of
inflection were happy with it was
something that allows the the kind of
Mustafa and the team to continue to
build you know broad-based consumer
agent and yes it was a it was a it was a
you know kind of a a complex deal but
you know the large scale deals usually
are complex in a different regulatory
environment that's an acquisition right
it um it certainly could be um and by
the way inflection you know who knows
maybe some year will still be acquired
um ufdc potentially on the way so yeah
uh you're politically involved it's been
I mean we're talking again mid January
it's been pretty remarkable to see the
parade of uh Tech CEOs everyone from
Mark Zuck Zuckerberg to Jeff Bezos uh
Elon we know um gravitating towards
Trump for the second term and in a way
that they didn't for the first what's
happening there what do you think
they're trying to get out of trump and
do you view this as a a change in their
politics uh an authentic change in their
politics or is this
pragmatic well I think you know one of
the things about technology is a more
important Global business and if you're
doing Global you have to have good
relationships with multiple governments
including of course your home country um
and I think that that's you know part of
what you're seeing Ed in what's
happening here and and I do think that
one of the things that's really
important is we focus as you know kind
of Americans and how do we build
American Prosperity American industry
how do we kind of you know take a
leadership position in the world it's
really important to be working with the
government well and so I think what
you're seeing is people saying hey
that's that's that's that's part of how
we build great things for America and so
they're they're doing the things that
they think are important to do there so
sounds like you don't really think this
is an authentic move then
I think it depends on different folks
and you know I I look part of my thing
is we had an election in 24 and
25 um you know what everyone should be
focused on is how do we build you know
kind of more strength into American
industry and the American middle class
and and kind of our position and so
that's what I'm personally focused on in
25 and so you know I that's what I think
everyone's doing for in different ways
but but it you know I think people
should answer this for themselves do you
think they're going to get what they
want you know I mean pregame speculation
you know given that we're so close to
being in the game I think we I think we
want to watch to see how it plays out
okay that's fair um Elon Musk is now
extremely close to Trump uh they call
him the first buddy he's basically
living at maral Lago um he he does not
have a a good relationship with Sam
Alman and there's already been
discussion of whether he will use his
proximity to Trump to try to uh
challenge Altman and open AI I mean some
ideas have been that uh the US
government looks more deeply into the
transition from nonprofit to for profit
and you know potentially is looks at
some punishments there uh do you do you
see that as as a feasible thing like do
I mean I know again this is speculation
but U you know both of them is that a
real concern
well again pregame but to happen over
speculation mistake but you know on a
positive note uh you know Sam has
tweeted that um you know he doesn't
anticipate Elon you know engaging in
that kind of behavior and Elon has
retweeted those sections saying yep
that's totally right so that's at least
positive data um but again we're in a
we're in a uh we're we're in kind of
pregame speculation so you know I know I
I think it's really important for us to
be building and doing the right thing
and I do think it's really important to
have you know kind of like a vigorous AI
industry uh for you know kind of
American prosperity and I think that's
that's
um uh you know so
hopeful okay yeah everybody you would
imagine everybody be on the same page on
that so I guess what again yeah we'll
see it all play out um all right let's
do a quick lightning round with some of
your tweets I I I think you have a
pretty good uh Twitter presence and uh I
think it's always nice cuz you know the
things that people fire off in a in a
moment maybe that's pretty telling in
terms of where they think about the
world so couple from you uh one very
soon voice will become the main
interface and AI will get better at
learning what exactly you're looking for
so you really think voice is going to be
why voice 100% one one of the party
tricks I do is I bring out my phone and
put chat GPT on audio mode to show
people
because part of when we learn to use
phones or or PCS we've learned in you
with goys and everything else we've made
it softer but there's a very precise
semantics one of the things that that
language models allow us to do is to
talk to it and so now like you can
prompt you know chat gbd with just like
kind of almost like word salad and still
get something very interesting so you
don't have to and and so it allows you
to be more you know kind of incoit and
and and and speculative and
brainstorming with it and you can
actually have a useful conversation and
create useful artifacts from that
whether it's on your phone or PC and so
um that's part of the reason why I've
I've I've you know made that as a
prediction okay yeah I'm with you on
that it's pretty amazing speaking with
these things okay last one I want to
talk to you about is prompting you
mentioned prompting just before
prompting is a skill that can 10x you as
an employee creative Etc as we learn how
to prompt AI I wonder if we'll be able
to prompt better prompt each other um
any advice for for prompting I mean you
have your own AI bot but uh you know we
all trying to prompt better what's
working for
you so so here's a simple thing and
obviously the book before super agency
was impromptu um which is trying to show
people you know not just show like tell
how it's amplification intelligence but
show and through kind of some examples
of the Chrome of prompting but here's a
simple thing is that the large language
models are very good at role taking so
you prompt it with I want you to answer
this from this perspective now a classic
one is you want to sharpen your thinking
like so I think X are you against me
that's take the role of the of the of
the contrary Advocate um but it also by
the way could be the I I would be
curious about like what other ways you
might argue for my position but then as
you begin to get to it you say well so
I'm writing a book on super agency I'm
writing a book on you know kind of like
what does the like technology mean for
the kind of the ution of humanity and
human agency um so here is my arguments
what would a a a historian of Technology
say about this what would a European
historian technology say about this and
you can begin to get some richer
perspectives on this to help sharpen
your thinking because as you tell the AI
to adopt this particular kind of
prompting P you know like uh uh kind of
informational perspective it's one of
the things that can make it um uh uh use
ful and directed and deeper in the
things you're looking at so think about
like the different kinds of role like
like if I was talking to an expert of
the mode of you know whatever a
marketing expert a sales expert a
financial service expert a a a a a a a
short
trading a tra a person who does public
market trading who who specialized in
shorts what would they say here and you
can do all that and that can really help
you in your prompting that's cool and
I'm sure if the the books aren't already
there you could probably upload a book
uh like some good sales or marketing
books and say I want you to read this
and now you know come up with the
strategy based on the book like hope is
not a strategy uh you know throw that in
there and then see what it spits out all
right Reed so great to speak with you
let's call the book out one more time
book is called uh super agency what
could possibly go right with our AI
future it's out in all bookstores today
encourage you to go pick it up read
great to speak with you for the first
time thanks again for founding LinkedIn
of course we're part of the LinkedIn
podcast Network so Alex always a
pleasure all right everybody thanks for
listening we'll see you next time on big
technology podcast