Speaker 1: Zone Media.
Speaker 2: Hello, and welcome to Better Offline. I'm your host ed Zetron.
Speaker 2: The tech industry has craved a messiah since the death
Speaker 2: of Steve Jobson twenty eleven, but in Open Ay's CEO
Speaker 2: Sam Mortmon, I think they've discovered more of a false profit,
Speaker 2: a seedy little grifter that uses his remarkable ability to
Speaker 2: impress and manipulate people, specifically in Silicon Valley, to mask
Speaker 2: a total lack of technical and business acumen. I realized
Speaker 2: this sounds a little dramatic and definitely a little inflammatory,
Speaker 2: but the air around Sam Mortman has for years been
Speaker 2: that he's somehow a magical, special creature, a man who
Speaker 2: and I quote is wise beyond his years and was
Speaker 2: so at the tender age of nineteen and who to
Speaker 2: quote startup incubator why Combinators Paul Gray could be parachuted
Speaker 2: into an island full of cannibals and come back in
Speaker 2: five years and be king. In the next two episodes,
Speaker 2: I'm going to dig into Sam Moultman's really specious success story,
Speaker 2: and it's one that was built on the back of
Speaker 2: being in the right place at the right time, definitely
Speaker 2: dodging accountability and responsibility and basically every job he's ever had,
Speaker 2: including by the way, the two that he was fired
Speaker 2: from and the feiled startup he had. And I believe
Speaker 2: he's used his political powers leverage to scare away anyone
Speaker 2: who's going to ask any nasty questions or of course,
Speaker 2: dare to stand against him. In a stunning in depth
Speaker 2: piece by Ellen Hewett of Bloomberg, Sam Altman is repeatedly
Speaker 2: framed by his contemporaries as some sort of genius, without
Speaker 2: anyone ever asking why or explaining why, Rather than there's
Speaker 2: this vague sense of intellectual and philosophical superiority with why
Speaker 2: Combinator founder John Cougan claiming that Altman had and I
Speaker 2: quote an uncanny ability to listen intently and diagnose problems,
Speaker 2: and that he was and this is a real quote.
Speaker 2: I'm not kidding the Michael Jordan of listening. Sit with
Speaker 2: that for a moment, Just sit with that. These laughable
Speaker 2: and completely stupid accolades aside, there doesn't actually appear to
Speaker 2: be a single story that I can find of some
Speaker 2: genius moment of clarity ushered in by Sam Altman. There
Speaker 2: are none of these fantastical situations where his remarkable mind
Speaker 2: brilliantly delivers the exact solution to a problem or some
Speaker 2: sort of concrete accomplishment that required these descriptive, pre natural
Speaker 2: levels of vision and clarity. No, I just found this
Speaker 2: torrent of platitudes about this man who always gets what
Speaker 2: he wants, which is, by the way, another quote from
Speaker 2: Ellen Hewitt's story. And he just appears to be this
Speaker 2: unstoppably pushy young man that excelled not necessarily at building things,
Speaker 2: because he really has not built any great companies, nor
Speaker 2: have they done any great things. It's mostly about and
Speaker 2: I quote Allan Hugh again, sam Orman, bending the world
Speaker 2: to his will. If this all sounds familiar, by the way,
Speaker 2: it's because I've really said this before. Many CEOs, especially
Speaker 2: in take, had this amazing ability to make these bold proclamations,
Speaker 2: and that had people pretty much accept them at face value,
Speaker 2: even by the media that's meant to hold them to account.
Speaker 2: With the earliest days of Facebook's metaverse pivot, probably the
Speaker 2: best example I can give you, I really encourage you
Speaker 2: to go back to the rock Com bubble and the
Speaker 2: Facebook episodes to look into it. But even by Mark
Speaker 2: Zuckerbian standards, Zuckerberbian now we'll get to that later. Sam
Speaker 2: Altman exists in his own pantheon of bullshit. There are many, many,
Speaker 2: many examples of him saying open AI, or I should
Speaker 2: be more specific, AI broadly will do something it cannot
Speaker 2: and likely will not do, such as think for itself
Speaker 2: or be that super smart companion I keep quoting, and
Speaker 2: the fourth estate just kind of accepts it without any pushback.
Speaker 2: And this is really Sam Mortman's history being in the
Speaker 2: right place, saying the right thing, and even when the
Speaker 2: thing in question is kind of hollow, people saying, wow, oh,
Speaker 2: this boy is so smart, and there's just no limit.
Speaker 2: It seems to this phenomenon. When Sam Mortman says something
Speaker 2: or does something genuinely truly insane, like how he wants
Speaker 2: to raise seven trillion dollars for futuristic chips, which is
Speaker 2: by the way, they combined GDP of Germany and France,
Speaker 2: or that he needs one hundred billion dollars from Microsoft
Speaker 2: to build a supercomputer for the future of AI, people
Speaker 2: just say, yeah, sounds about right, Yes, classic Sam Mortman's
Speaker 2: stuff is just the smart bloke going. The response is
Speaker 2: never to dismiss it and say this is absolutely bloody
Speaker 2: stupid but to actually discuss it with a level of
Speaker 2: seriousness that just is not warranted for anyone, let alone
Speaker 2: Sam Ortman. And that might be Aortmand's real skill collopsia,
Speaker 2: the appearance of things being more beautiful than they really are,
Speaker 2: hiding the weakness of his arguments, and indeed generative AI
Speaker 2: writ large and beguiling those around him with this nasty
Speaker 2: instinctial ability to tell them exactly what they want to hear,
Speaker 2: giving them the words to tell other people in his name,
Speaker 2: to get in exactly the room he needs to be
Speaker 2: in exactly the right time to connect with exactly the
Speaker 2: right people, or without ever having to actually do anything
Speaker 2: or create anything. Despite the fact that his location based
Speaker 2: social network looped failed to get any traction or build
Speaker 2: any meaningful product, it appears it allowed him to get
Speaker 2: in the Dora famed Silicon Valley Incubator, y Combinator, and Dazzle.
Speaker 2: Poor Graham It's creator who, for reasons I cannot understand,
Speaker 2: I've read so much of poor Graham's stuff now, Paul
Speaker 2: Graham became convinced that Sam Worton was the future, and
Speaker 2: in turn helped Sam Morton get in on these huge
Speaker 2: VC deals in companies like Stripe and Airbnb, making him
Speaker 2: hundreds of millions of dollars. This is, by the way,
Speaker 2: a very Silicon valley problem and a problem with the
Speaker 2: vallee writ large, and a precursor to the growth that
Speaker 2: all costs rot economy that I talk about seemingly every minute.
Speaker 2: When you strip away Sam Morton's ability to convince people
Speaker 2: that he's smart, he doesn't appear to have done anything.
Speaker 2: He's done very, very little. He was a college dropout
Speaker 2: with a failing then failed startup, one where employees tried
Speaker 2: to get him fired twice because he kept diverting resources
Speaker 2: to other places and focusing on his own personal products
Speaker 2: and projects. And the reason they sound so flushed that
Speaker 2: is this is Sam Altman's entire existence. In a podcast
Speaker 2: discovered by Ellen Hewett Bloomberg, Twitch co founder Emmitt Sheer
Speaker 2: appeared from Mortman's y combinator cohort the first one and
Speaker 2: briefly his replacement at CEO of OpenAI, described his surprise
Speaker 2: that Sam Morton was able to close deals with boost
Speaker 2: Mobile without any actual product yet because Altmand fit a template.
Speaker 2: He resembled a kind of guy that got things done.
Speaker 2: Powerful people in Silicon Valley have fallen over themselves to
Speaker 2: give him the opportunities that made him look like a
Speaker 2: king maker. And at some point, the funny thing is
Speaker 2: in the Valley is when you get to the prominence
Speaker 2: where people just feel like you should be in on
Speaker 2: these things, you are. That's why all these guys all
Speaker 2: kind of look and act the same and all get
Speaker 2: in on the same things. And honestly, I think the
Speaker 2: truth might be a little grimmar. Almond was, from a
Speaker 2: relatively early age chosen by Silicon Valley to be their
Speaker 2: next messiah, which allowed him to wield this incredible power
Speaker 2: over the startup ecosystem without really ever meaningfully contributing to it.
Speaker 2: His ascent to the apex of the Valley and the
Speaker 2: budding flowers of a sam Ortman colt, which we see
Speaker 2: today everywhere, feels random and arbitrary, without any real force
Speaker 2: behind it. Aw there's one thing, though, Sam Boulman, he's
Speaker 2: a master manipulator. He's incredibly adept at saying things that
Speaker 2: sound profound, like your rate of learning should always be high,
Speaker 2: and yes that's a quote, as are the rest of these,
Speaker 2: and that each unit of work you do should generate
Speaker 2: more and more results while also knowing that the self
Speaker 2: reinforcing prophecies of the tech industry are what makes someone
Speaker 2: rich and powerful, rather than achievements or founder great companies
Speaker 2: or doing things for people. In essence, his whole vacuous
Speaker 2: platitude buffet, the kind that can be cut into ten
Speaker 2: second clips for TikTok and YouTube and Twitter. They're really
Speaker 2: good ways to feel intelligent when people already want you
Speaker 2: to be, and they're just really useful for tricking extremely
Speaker 2: disconnected and credulous morons. People that don't really participate in
Speaker 2: the grandest scheme of building software and hardware, people like
Speaker 2: Read Hoffman of LinkedIn, of Brian Cheski of Airbnb. People
Speaker 2: that aren't coders or builders or anything. They're just people
Speaker 2: that vaguely fell into success. Perhaps they built useful companies,
Speaker 2: but they didn't really make the companies, and they didn't
Speaker 2: really do the work. Sam Altman is really good at
Speaker 2: saying the things that reinforce their biases, and in the
Speaker 2: process kind of helps them disguise their nepotism and his
Speaker 2: real superpower, which is, by the way, another form of nepotism.
Speaker 2: Sam Moorman didn't find the startups that made him so
Speaker 2: rich and wealthy and influential. He was being shown them
Speaker 2: by other powerful people that wanted him in on these
Speaker 2: deals so that he could give them a vice based
Speaker 2: on the career of specious management bullshit. And because the
Speaker 2: valley liked how he looked and how he acted, how
Speaker 2: he talked, the things he resembled, the things they were
Speaker 2: reminded of when they heard Sam Mormon speak. And it's
Speaker 2: funny because a lot of these people, the Paul Graham's
Speaker 2: of the world especially, they're big time meritocratic people. They
Speaker 2: love the meritocracy. Yet when you look deeper, the people
Speaker 2: seeding and not actually building the things. Ilia Suitzkaeva over
Speaker 2: Open Ai. He is the actual technolog Jesus, He's the
Speaker 2: actual guy that and by the way, no longer Open
Speaker 2: Ai the kind of deserves this. But Sam Alton's the
Speaker 2: one that got invited in early to stripe and Airbnb
Speaker 2: and all these things. And as I'll get into, kind
Speaker 2: of rat fucked his way around a bit. And nowhere
Speaker 2: is this more obvious than in Hydrozene Capital, Aortman's venture
Speaker 2: capital fund that he created with the five million dollars
Speaker 2: he got from selling looped his failed startup by the
Speaker 2: way and backing of course from Peter Teel, Hydrozene invested
Speaker 2: seventy five percent of its funding in y Combinator companies
Speaker 2: including Reddit and instacar, even after Sam Mortman became the
Speaker 2: president of y Combinator, which is weird because the other
Speaker 2: partners at y Combinate, like Gary Tann, they were forbidden
Speaker 2: from managing their own investment funds at the time, according
Speaker 2: to reporting from the Wall Street Journal. But I guess
Speaker 2: Sam Moltman just felt right. It's cool that he gets
Speaker 2: rid right, not to say Gary Tann hasn't, but the
Speaker 2: other people just didn't seem to get these opportunities for
Speaker 2: some reason, could be anything. And he became head of
Speaker 2: why Combinated, by the way, despite being one of the
Speaker 2: he was looped was one of the first companies in
Speaker 2: y Combinator, and they to explain how this works. Why
Speaker 2: Combinate would invest a little in a few early stage
Speaker 2: startups and much larger number these days, and the first
Speaker 2: cohort was one that included Sam Altman's Looped and he
Speaker 2: was made president of y Combinator. Despite the fact that
Speaker 2: luped was terrible. It didn't have a good product, They
Speaker 2: couldn't sell it. He retasked engineers at one point to
Speaker 2: work on a dating app somewhere else. Sam Alton was
Speaker 2: a terrible CEO, But you know what, he's capable of
Speaker 2: saying stupid shit like and I quote, competitors are one
Speaker 2: of the last monsters that haunt your dreams to New
Speaker 2: York Magazine shortly before predicting that there was absolutely no
Speaker 2: reason to believe that we would not have a computer
Speaker 2: by twenty twenty nine that could replicate his brain. You
Speaker 2: know what, though, putting that aside, I do think Sam
Speaker 2: Mormon's right on that one, though, in the sense that
Speaker 2: chat GPT kind of seems capable of producing this kind
Speaker 2: of nonsense too. But again, because Sam Mortman's the affable, friendly,
Speaker 2: amicable white guy who's known by the right people. He
Speaker 2: keeps going, he keeps on trucking, And I think that
Speaker 2: Sam Moltman is on some level, he's a monument to
Speaker 2: the roight at the core of the valley, and he's
Speaker 2: a product of this growing distance between the tech industry
Speaker 2: and actually creating things of value. While why Combinator founder
Speaker 2: Paul Graham may be a decorated and successful computer scientist,
Speaker 2: by the time he made Sam Mortman, president of y
Speaker 2: Combinator in twenty fourteen, he was already more than a
Speaker 2: decade removed from selling his software startup via web to Yahoo.
Speaker 2: As he drifted further away from actually building things on
Speaker 2: the computer, so too did Paul Graham's essays drift away
Speaker 2: from the piosophical measures of software development towards a far
Speaker 2: darker management philosophy, one where he admitted in a blog
Speaker 2: from two thousand and three that intelligence itself is not
Speaker 2: a factor in popularity because smart kids don't want to
Speaker 2: be popular, and that popularity is much more about alliances
Speaker 2: and doing things that bring you closer to other popular people. Humm,
Speaker 2: maybe he did like Sam Wultman for real reasons then. Anyway,
Speaker 2: two years before he made Samultman president, Paul Graham would
Speaker 2: publish a piece called Startup Equal Growth, claiming that growth
Speaker 2: drives everything in this world, and that growth makes the
Speaker 2: successful companies so valuable that the expected value is high
Speaker 2: even though the risk is two. A statement that could
Speaker 2: only make sense if you believed that there will always
Speaker 2: be hyper growth companies, and indeed that the opportunities for
Speaker 2: those high growth companies would keep emerging, say for the
Speaker 2: next forever and these people ever thought about it. It's so
Speaker 2: strange to read this stuff, to go back even five years,
Speaker 2: but especially ten and reading these things and reading these
Speaker 2: people talking about how dogged Sam Morton is and how
Speaker 2: great he is at this, and then reading their other philosophies,
Speaker 2: and it's all stuff like, well, you see, uh, intelligence
Speaker 2: comes from the mind and building businesses. It's all about
Speaker 2: growth and business. And you read them and you're like, huh,
Speaker 2: these people smart or stupid. I can't tell. They're using
Speaker 2: smart people language, but they seem kind of stupid. Maybe
Speaker 2: that's also the problem. Maybe the problem's just a little simpler.
Speaker 2: While Sam Morton's a spacious opportunist and very much a manipulator,
Speaker 2: the time he entered Silicon Valley was this period where
Speaker 2: pretty much all you needed to do was sound smart
Speaker 2: and be in the right rooms. Companies were being created
Speaker 2: that could enter these giant markets and just dominate because
Speaker 2: all they really needed was money and enough handshakes. Oltman
Speaker 2: is adept at using connections to make new connections, in
Speaker 2: finding new ways to make others owe him favors, in
Speaker 2: saying the right thing at the right time when he
Speaker 2: knew that nobody would think about it too hard, something
Speaker 2: he continues to this day. Ortmand was early on Stripe
Speaker 2: and read it in Airbnb, all seemingly brilliant moments of
Speaker 2: investment in the life of a man who has had
Speaker 2: many things handed to him, who knew how to look
Speaker 2: and sound to get put in the room and to
Speaker 2: get the capital to make his next move. It's easy
Speaker 2: to conflay investment returns with intellectual capital, even though the
Speaker 2: truth is that people just liked Sam Wultman enough to
Speaker 2: give him the opportunity to be rich, and he took it.
Speaker 2: And he had the ability to hand them money too.
Speaker 2: In two thousand and nine, when he put fifteen thousand
Speaker 2: dollars into Stripe, which I'll get to it a bit,
Speaker 2: he had fifteen grand he could pull out in the
Speaker 2: middle of founding a start up. He was working on
Speaker 2: Loop for years at this point. Where did he get
Speaker 2: the fifteen grand? I didn't have fifteen grands sitting around then,
Speaker 2: Jesus Christ, he didn't like. This is the thing. No
Speaker 2: one digs deeper into these things. No one asks where
Speaker 2: the privilege truly comes from, and when that happens, guys
Speaker 2: like this get popular. Now, look, those who might defend
Speaker 2: Sam Altman might suggest that he may not have been
Speaker 2: a creator, but he gave his time and his energy
Speaker 2: to those he backed. Maybe he was a value creator.
Speaker 2: Right wrong. According to the Washington Post, sam Aulman's time
Speaker 2: at y Combinat ere it ended because he developed a
Speaker 2: reputation for favoring personal priorities over official duties and for
Speaker 2: an absenteeism that rankled his peers and some of the
Speaker 2: startups he was supposed to nurture, much as he had,
Speaker 2: as I've mentioned, once diverted engineers at lut to work
Speaker 2: on a dating app instead of working on the company
Speaker 2: he was running. To give Sam Altman credit, he really
Speaker 2: is able to talk for hours without saying anything. Just
Speaker 2: ask LinkedIn, co founder of Reied Hoffman, an investor in
Speaker 2: open Ai and early of Sam Mortman, and a man
Speaker 2: who was critical to getting Sam Mortman returned to the
Speaker 2: helm of open Ai when he was fired, who also
Speaker 2: let Sam Mortan ramble for over an hour on his
Speaker 2: podcast Masters of Scale with all one, at one point
Speaker 2: saying that he was and I quote, he was in
Speaker 2: a developing world country shortly after the iPhone came out,
Speaker 2: and despite their poverty, everyone had smartphones. Now, I just
Speaker 2: want to be clear. This is so obviously, completely and
Speaker 2: utterly stupidly false. It made me genuinely angry. Why because
Speaker 2: what so the iPhone comes out? So the rollout of
Speaker 2: smartphones in other countries has been incredibly useful, it's been great.
Speaker 2: It didn't happen in a goddamn year. Sam, you lying
Speaker 2: sack of shit. I'm sorry. I just really hate this stuff.
Speaker 2: I really hate that these people who can go around
Speaker 2: getting money seemingly at will just go on each other's
Speaker 2: podcasts and jack off and wank about this nonsense, who
Speaker 2: say these patently obviously fake things. He probably saying his
Speaker 2: defense by the way, Oh it's four years later, which
Speaker 2: might have made sense. It's always vague with this goddamn guy.
Speaker 2: It's always vague with these goddamn guys. And it's just
Speaker 2: so offensive because regular people do not get these opportunities.
Speaker 2: Regular people don't get put in these rooms. People that
Speaker 2: are undoubtedly smarter and more accomplished and harder working than
Speaker 2: Sam Aortman. But because Sam Altman fits the template, he's
Speaker 2: allowed to go and he's allowed to be rich one
Speaker 2: hundred times over. And it really shouldn't come as a
Speaker 2: surprise that Reid Hoffman of LinkedIn, investor in open ai
Speaker 2: and so much has such affection for Aortman. After all,
Speaker 2: he's the founder of LinkedIn, which is basically the one
Speaker 2: place that you know you can go to read six
Speaker 2: hundred words that mean nothing, these massive, cringe worthy paragraphs
Speaker 2: broken into a Staccato's style that hurts the brain and
Speaker 2: the mind, but makes people who don't really know why
Speaker 2: they're doing their job care about what they're doing very
Speaker 2: happy because it makes it all feel far more important
Speaker 2: than it really is. Moving on through Aortmand's power structures.
Speaker 2: Another of his close friends is Airbnb CEO Brian Chesky,
Speaker 2: who helped, by the way, also get Sam Altman put
Speaker 2: back in open AI, and he's helped Altmand pedal these
Speaker 2: vague rubbish promises about artificial intelligence, at one point, with
Speaker 2: Cheske calling it bigger than the Internet, mobile and cloud
Speaker 2: combined and saying that AI will, by the way, non
Speaker 2: specifically change Airbnb, which is a company that has and
Speaker 2: this is what kills me as well, only got worse
Speaker 2: over time. I think Airbnb really crested about four or
Speaker 2: five years ago, and then it just became the same.
Speaker 2: But worse over time, put my gravances to the side,
Speaker 2: and as you can kind of tell what I'm getting
Speaker 2: at here, Aortmand's used his political maneuver and to become
Speaker 2: super rich. And he's grown, according to the Wall Street Journal,
Speaker 2: a portfolio of more them four hundred companies worth nearly
Speaker 2: three billion dollars. Now what's really worrying is that he's
Speaker 2: partially funded it with hundreds of millions of dollars of
Speaker 2: debt of loans from JP Morgan Chase. Now almost anyone
Speaker 2: can see why this is insane borrowing money from a
Speaker 2: bank and putting it into an industry where the majority
Speaker 2: of companies fail. It's just completely bonkers. I don't understand
Speaker 2: what's going on. Well, I mean I do, which is
Speaker 2: the rich reinforce the rich, and they put money with
Speaker 2: people who don't necessarily qualify for it and aren't necessarily
Speaker 2: smart or good at stuff or have done things. But
Speaker 2: because they're in the right company, it works for them.
Speaker 2: Like a regular person. They can barely get a mortgage,
Speaker 2: let alone. What's likely I'm guessing by the way a
Speaker 2: low interest rate loan to sink hundreds of millions of
Speaker 2: dollars into companies like Helion, which is a nuclear fusion
Speaker 2: company that Sam Moultman put three hundred and seventy five
Speaker 2: million dollars into in twenty twenty one. He serves as
Speaker 2: both the chairman of Helion's board and potentially one of
Speaker 2: its largest customers because open ai is now and just
Speaker 2: announced a deal with Helion, and I quote Matthew Konnittzer
Speaker 2: from the Register here to get access to Helion's not
Speaker 2: yet possible nuclear fusion driven electricity generators. Just it's so
Speaker 2: cool that that, and tons of people reported that without
Speaker 2: Matt's necessary bile there. I love the Register because they're
Speaker 2: willing to say stuff like this nuclear fusion has not
Speaker 2: happened yet. That's that's a sci fi thing that he
Speaker 2: has put all that money into. Nevertheless, plenty of people
Speaker 2: credulously accepted this, and like Sam odd Man, aw they're
Speaker 2: doing a deal open ai, open ai and nuclear Fusion.
Speaker 2: Just to be clear, there's no deal there the nuclear fusion.
Speaker 2: Oh my god. The Wall Street Journal also reported the
Speaker 2: open Ai is happily cutting multiple deals with other things
Speaker 2: that Sam Altman's invested in, including Reddit, which Ortmann owns
Speaker 2: hundreds of millions of dollars were stuck in thanks to
Speaker 2: an investment from hydro Seen Capital when he worked a
Speaker 2: y combat are, along with AI device companies Limitless and Humane,
Speaker 2: the latter of which Ortmand owns a fifteen percent stake in.
Speaker 2: According to the Journal, it's just obvious, naked self dealing,
Speaker 2: the kind of stuff that should be something that disqualifies you,
Speaker 2: that gets critiqued further than of course the journal, and
Speaker 2: I'm not seeing it. I'm not seeing enough of it
Speaker 2: at least, But I wanted to dig further into this
Speaker 2: investment portfolio, so I sat down with Ton Datan of
Speaker 2: the Wall Street Journal to kind of go through it.
Speaker 2: So in your story, you were talking about how Sam
Speaker 2: Ortman had this massive credit line I think from JP Morgan.
Speaker 2: Is this standard for investment? Have you seen this before?
Speaker 1: No, It's incredibly not standard. And in the course of
Speaker 1: reporting out this story with my colleagues, we talk to
Speaker 1: a lot of venture capitalists and investors, other kinds of
Speaker 1: investors and founders in the tech industry, and they either
Speaker 1: had never heard of something like this before or found
Speaker 1: it to be so incredibly risky, not just investing in
Speaker 1: startups off of credit, but using as collateral your holdings
Speaker 1: in privately held tech companies. Both of those things together
Speaker 1: are like not you do not see that very often
Speaker 1: in the tech industry.
Speaker 2: And why don't you? Just to be clear, why is
Speaker 2: this usually a bad idea?
Speaker 1: Because it's incredibly risky. I mean, if you think about
Speaker 1: an investment in a startup, what percentage of startups not
Speaker 1: only don't get acquired or go public, but straight up
Speaker 1: fail will go to zero? The numbers I don't want
Speaker 1: to quote a specific one, but it's like the majority.
Speaker 1: And that's kind of the way the venture capital system
Speaker 1: works is that you invest in a bunch of unprofitable
Speaker 1: or zero profit, zero revenue companies, hoping that a few
Speaker 1: home runs or Grand Slams or whatever is enough to
Speaker 1: justify your entire fund. But if you were to use
Speaker 1: those holdings in those kinds of companies in which a
Speaker 1: huge majority of them go under, and then a huge
Speaker 1: majority of them do go under, and suddenly you are
Speaker 1: having to use as collateral holdings in a company that
Speaker 1: is worth zero, you're in big trouble. So yes, it
Speaker 1: is not done very commonly.
Speaker 2: Very strange, and it seems the strange financial relationships that
Speaker 2: kind of Oltman's modus operandi. So tell me about Hydrozine.
Speaker 1: Sure. Hydrozine was a fund that Sam started around the
Speaker 1: time that he joined y Combinator, the accelerator incubator in
Speaker 1: Silicon Valley, and he got some funding from Peter Teel
Speaker 1: for it, and basically it was a way for him
Speaker 1: to invest in other y Combinator startups. So it was
Speaker 1: largely using outside money, but it was like just an
Speaker 1: access line to capital that he could put into these
Speaker 1: seed stage investments in startups.
Speaker 2: As I've mentioned previously, since leaving White Company, Altman's investment
Speaker 2: portfolio was balloon to hundreds of start ups with billions
Speaker 2: of dollars. How many of these companies have you seen
Speaker 2: have a direct relationship with open Ai that's he's invested in.
Speaker 1: Well, in the story, we laid out a couple of
Speaker 1: clear overlaps between you know, open Ai as a business
Speaker 1: and companies that he's invested in. Like the most obvious
Speaker 1: one that we that we brought up, I shouldn't say obvious,
Speaker 1: but the most like apparent one of this kind of
Speaker 1: overlap was Helion, which is this nuclear fusion energy startup
Speaker 1: that he's put hundreds of millions of dollars into and
Speaker 1: they worked out a deal, as we broken in the story,
Speaker 1: for Helion to provide be the energy provider for future
Speaker 1: open ai data centers. So these data centers, when they're
Speaker 1: built and I guess when nuclear fusion exists, you know,
Speaker 1: would be powered by clean nuclear fusion energy. And so
Speaker 1: that's something in which Sam obviously as one of the
Speaker 1: largest by far the largest investor, and he leon, you know,
Speaker 1: there's there's there's an overlap there between that and open
Speaker 1: AI's business. And then the other one that also kind
Speaker 1: of stoock out to us was Reddit, where he is
Speaker 1: one of the largest outside shareholders in the company. And
Speaker 1: open ai announced a licensing deal with Reddit a couple
Speaker 1: of weeks ago, and you know, Reddit stock popped on
Speaker 1: announcement of this deal, and Sam, as a major shareholder,
Speaker 1: saw his net worth increase, you know, within the course
Speaker 1: of a day. I mean, that's kind of how it
Speaker 1: goes when you hold stock. But you know, notably on
Speaker 1: announcement of this deal.
Speaker 2: Surely any future deals between open ai and Reddit would
Speaker 2: mean that Sam Oapman would be there must be some
Speaker 2: kind of insided trading. How is that possibly legal?
Speaker 1: I mean, I don't know, I don't want to get
Speaker 1: into what what's legal or isn't legal. I thought questionable. Yeah,
Speaker 1: I guess what was interesting to me and to the
Speaker 1: other reporters about the way that Reddit and open ai
Speaker 1: announced this license deal was they didn't say that Sam
Speaker 1: recused himself from the conversations between Reddit and open Ai.
Speaker 1: They said something to the effect of this deal was
Speaker 1: spearheaded or the person who was in charge of this
Speaker 1: deal was open Ai COO. And I don't know what
Speaker 1: to make of that. I feel like the language of
Speaker 1: Sam recused himself would have been easy enough to do,
Speaker 1: but they didn't do it. They chose not to do it.
Speaker 2: So if it was like saying Brad Lightcap took the deal,
Speaker 2: that doesn't feel like a disconnection from Sam Oltman.
Speaker 1: Yeah, and it isn't regardless even if he wasn't involved.
Speaker 1: And you know, you could make a fair argument that
Speaker 1: like open ai probably should be licensing data from all
Speaker 1: of these you know, providers, because that's what they're using
Speaker 1: to train their models. But the fact is they didn't.
Speaker 1: Sam didn't recuse himself, And you know, whether it's his
Speaker 1: fault or not, or this was intentional or not, the
Speaker 1: fact of the matter is he owns a sizeable like
Speaker 1: disclosed percentage of Reddit through various holdings, and like those
Speaker 1: you know, those shares went up on announcement of the deal.
Speaker 2: So with Helion, back to the nuclear energy startup, have
Speaker 2: they actually built anything yet?
Speaker 1: No?
Speaker 2: No, I mean it's so strange.
Speaker 1: I don't want to discount anything that Helion does because
Speaker 1: you know, who wouldn't want nuclear energy to exist? Right? Like,
Speaker 1: that's that's obviously a great boon for humanity to have
Speaker 1: nuclear fusion. You mean yeah, sorry, so nuclear fusion, yes,
Speaker 1: like that would be a major technological breakthrough. That would
Speaker 1: be a you know, a sea change in how you
Speaker 1: know we derive energy from the grid and whatever. But
Speaker 1: you know, aside from a couple of announcements in terms
Speaker 1: of partnerships or future purchase agreements between Helion and Microsoft
Speaker 1: and and you know the thing that we reported Helion
Speaker 1: and open AI, this is not like they have not
Speaker 1: achieved it yet. These guys are not out there selling
Speaker 1: you know, nuclear fusion energy to the mass public.
Speaker 2: Well, I think what gets me that Sam Won puts
Speaker 2: three hundred and seventy five million dollars into this company.
Speaker 2: He got them into y combine or if I remember
Speaker 2: from you reporting he being embedded with them. Now there
Speaker 2: is this deal between Helia and a company that is
Speaker 2: yet to build something and open Ai that they will
Speaker 2: theoretically do something in the future. It just feels like,
Speaker 2: I know we're not talking in legalities here, but it
Speaker 2: feels like there is just so much self dealing here.
Speaker 2: It feels like he has been self Oltman has been
Speaker 2: self dealing for years.
Speaker 1: Yeah, I mean, I guess to make the argument that
Speaker 1: Sam or open AI or other people in that circle
Speaker 1: would make is like Sam is a prolific investor. He's
Speaker 1: been doing this for as long as he's been in tech.
Speaker 1: They say he's kind of slowed down quite a bit.
Speaker 1: You know, maybe numbers would show a different story, but regardless,
Speaker 1: he you know, this is a thing that he does.
Speaker 1: And like, if you are going to be running, you know,
Speaker 1: the most consequential tech company at the moment or startup
Speaker 1: at the moment and open AI, there's just bound to
Speaker 1: be overlap between a vast investment empire and an open AI.
Speaker 1: So that's like the argument to the contrary, you know,
Speaker 1: self dealing. I guess that's in the interpretation of the reader.
Speaker 2: Yeah, I think what it is is that it doesn't
Speaker 2: feel like this would be tolerated in any other industry,
Speaker 2: like if you put politicians own stock, for example. I
Speaker 2: realized it's not an industry, and they are heavily criticized
Speaker 2: for it. But it almost feels like perhaps you can
Speaker 2: speak to this. It feels like Sam Wilton gets reported
Speaker 2: on differently than many entrepreneurs and many investors. And I
Speaker 2: really do put the journal to the side here. I
Speaker 2: think the journal in the Washington Post done a very
Speaker 2: good job scrutinizing it, but it feels writ large like
Speaker 2: he's given a much rosier and easier ride than most.
Speaker 1: It's hard to know with Sam, right, I mean, he's
Speaker 1: such a figure at this point, which is kind of
Speaker 1: funny to me because like I've been reporting on tech
Speaker 1: for let's say ten years or so, and Sam's always
Speaker 1: kind of been around. He's just this person that we
Speaker 1: all kind of knew as reporters because of you know,
Speaker 1: his role at y Combinator and showing up at Sun
Speaker 1: Valley almost every year, and you know, now open Ay
Speaker 1: being this big deal that it is. He's this figure
Speaker 1: that everyone kind of has dealt with at certain points
Speaker 1: as a tech reporter, and there's just so many opinions
Speaker 1: on him. I mean, you know, I think there are people,
Speaker 1: maybe like you, who see him as this nefarious character,
Speaker 1: self dealing, someone who isn't really above board. But you know,
Speaker 1: you report a story like this and you talk to
Speaker 1: founders and some venture capitalists and they love him. They
Speaker 1: think he's, you know, a great investor, a brilliant business person,
Speaker 1: has incredible insights, and you know, is this also kind
Speaker 1: of futuristic thinker, who's who's kind of in that Elon
Speaker 1: musk vein thinking ten twenty years down the road and
Speaker 1: at a scale at the trillions of dollars level that
Speaker 1: they find very you know, alluring and exciting. And so,
Speaker 1: you know, I it's always hard to know when you
Speaker 1: do these sort of story is like what you're going
Speaker 1: to get in the course of reporting, because you can
Speaker 1: talk to a certain group of people who think he's
Speaker 1: borderline criminal and to be clear, I'm not saying that,
Speaker 1: but there are.
Speaker 2: People yeah yeah, just citing someone yeah yeah, and and.
Speaker 1: People who think he's the you know, nikolay Tesla of
Speaker 1: our time. What are you gonna do?
Speaker 2: So here's my thing with that, is he that successful
Speaker 2: a businessman though, Like he's a very clearly a successful investor.
Speaker 2: But as a businessman, the company he's been attempted, fired from, looped,
Speaker 2: fired from Y Combinator, fired from open Ai. He seems
Speaker 2: like a very effective politician and a very good deal maker.
Speaker 2: But I wonder how much of this, because you say
Speaker 2: he's slown down. I wonder how much of his success
Speaker 2: can be attributed to the fact that he just was
Speaker 2: inside of Y Combinator and had the money to play
Speaker 2: at the time. Because yeah, you've been around long, so
Speaker 2: go ahead.
Speaker 1: Yeah, I know, looks it's a fair point, and I think, like, look,
Speaker 1: the numbers probably speak for themselves in terms of his
Speaker 1: net worth, right, you know, you can stack the deck
Speaker 1: however you want in Silicon Valley to say someone is
Speaker 1: or isn't a good investor.
Speaker 2: Like when you have deal flow, when you have really
Speaker 2: is a school board situation.
Speaker 1: Yeah, well no, but I'm saying, like, you can have
Speaker 1: access to early stage startups better than other people, and
Speaker 1: you're just gonna be getting first looks at Uber and Stripe. No,
Speaker 1: he's not an Uber. I'm just giving an example, yea,
Speaker 1: like you you know Stripe, Yeah, yeah, or Stripe or Airbnb,
Speaker 1: which he is in. Like if you're in that inner
Speaker 1: circle of people who see these companies on the way up,
Speaker 1: and like, you know, I don't think it takes a
Speaker 1: brain genius to look at something like Uber and be like, oh, well,
Speaker 1: I bet that's probably going to be a pretty big
Speaker 1: deal one day, so I'd like to invest in that.
Speaker 1: But you know, I think to his credit, maybe his
Speaker 1: investment in Stripe was an incredibly risky one for him personally.
Speaker 1: I think it was like fifteen thousand dollars or something,
Speaker 1: and you know, he probably didn't have a ton in
Speaker 1: his bank account at the time, so that was a
Speaker 1: pretty When when was that early early days, I mean
Speaker 1: they were they were in It was in two thousand
Speaker 1: and nine, actually, Paul Grant so before he sold Looped. Yeah, yeah,
Speaker 1: I think it was around the same time.
Speaker 2: Because that's what I'm saying, there's not really much of
Speaker 2: a risk if he hadn't, But I feel like he
Speaker 2: sold Loop later because that. But nevertheless, it.
Speaker 1: Is fair enough. I don't know Sam would have been
Speaker 1: out on the streets, you know if if this, if
Speaker 1: this investment hadn't turned out. But you know, in a
Speaker 1: world of investment where people get congratulated for you know,
Speaker 1: going all in on something or you know, being willing
Speaker 1: to bet it all on an unprofitable, you know, unproven startup.
Speaker 1: You know, people give Sam a lot of credit. But yeah,
Speaker 1: I don't know. I think you bring up a good question,
Speaker 1: which is like if you have access to an Airbnb
Speaker 1: in the earliest days, or or a Reddit or even
Speaker 1: a company that like Rippling, which I don't know if
Speaker 1: your you know, listeners know about. But it's this very
Speaker 1: successful now hrs art up that Sam has has invested
Speaker 1: in and also.
Speaker 2: An offshoot of Gusto when it's complicated.
Speaker 1: Yeah, yeah, basically I don't know how interesting this is,
Speaker 1: but whatever, you know. There was a kind of a
Speaker 1: big scandal a bunch of years back with this company
Speaker 1: called Zenefitz, which was accused of shirking regulatory requirements for
Speaker 1: training its workers on anyway, it was a big scandal
Speaker 1: a couple of years ago, and the CEO of that
Speaker 1: was was pushed out very publicly, later replaced by David
Speaker 1: Sachs for what it's worth, and he went on to
Speaker 1: start this other company that was basically a direct competitor
Speaker 1: to that, and it's called rippling, and it's done really
Speaker 1: well in terms of building up its valuation. And Sam
Speaker 1: is one of their earliest investors. And I think you
Speaker 1: know part of his Conrad Parker. Conrad is the guy's name. Yeah,
Speaker 1: And anyway, Sam has made a bunch of money from that,
Speaker 1: or at least you know his his investment is valuable
Speaker 1: from that. And my point is basically like when you
Speaker 1: when you're in this inner circle, you have access to
Speaker 1: these companies and you can make these investments. Whether you
Speaker 1: know he is like standard Deviation is a better business
Speaker 1: person than anyone else in tech, I don't know. It's
Speaker 1: not for me to say, but you know he is
Speaker 1: on paper, you know his his holdings are worth billions.
Speaker 1: So I guess you got to give him something for that.
Speaker 2: So you mentioned in the story that Hydrozene, Sam Altman's
Speaker 2: firm bought a portion of startup shares owned by Paul
Speaker 2: Graham versus y Combinator. Would those have been Paul Graham
Speaker 2: basically doing the same like he might have been investing
Speaker 2: in these companies too, or is this just early days
Speaker 2: why Combinator shares?
Speaker 1: These were shares that were owned by Paul Graham, As
Speaker 1: we reported, and so it was probably a transaction for
Speaker 1: him to kind of take some money off of the
Speaker 1: table and offload them to Hydrazine so he could be
Speaker 1: I guess a little bit more liquid. But yeah, these
Speaker 1: were these were Paul Graham shares that you know ended
Speaker 1: up being bought up by the Hydrozene Fund.
Speaker 2: It's interesting because there's so it feels like Altman at
Speaker 2: times doesn't have a focus though, because he's done all
Speaker 2: of these investments, and you within the reporting, within the
Speaker 2: Washington Posts reporting as well, there's this idea of him
Speaker 2: being absent, absent from y Combinator, absent from looped at
Speaker 2: one point, retasking engineers to work on a dating app separately.
Speaker 2: It almost feels it almost feels hard to tell whether
Speaker 2: Autman is focused on anything other than just the number
Speaker 2: going up. But here here is the real problem. I
Speaker 2: see what happens if and we mentioned this earlier, these
Speaker 2: startups go to zero and he has this these massive
Speaker 2: credit lines.
Speaker 1: Yeah, I mean it feels like a house of cards. Yeah.
Speaker 1: I think, you know, these people tend to be okay
Speaker 1: in the end, I find so, you know, I don't
Speaker 1: know how many people are really all that worried about
Speaker 1: you know, Sam's credit line and stuff, and you know,
Speaker 1: obviously when interest rates go up, these things tend to
Speaker 1: be a lot riskier than they were going into it.
Speaker 1: You know, I can't go into all of the details there,
Speaker 1: but yeah, there's a reason why using you know, privately
Speaker 1: held shares or private you know, you know shares and
Speaker 1: privately held companies as collateral is not commonly done. I
Speaker 1: mean I talked to someone in the course of this
Speaker 1: story who was like shocked that someone would do that
Speaker 1: kind of thing. But you know, again, to this Silicon
Speaker 1: Valley mindset in which risk, you know, quote unquote risk
Speaker 1: is really promoted and celebrated around here, that kind of
Speaker 1: thing is seen as like an example of how aggressive
Speaker 1: and cool Sam is that he's willing to kind of
Speaker 1: take a risk on something like that in order to
Speaker 1: put more money into well, I guess you could. Some
Speaker 1: people would say, put more money into the ecosystem. Other
Speaker 1: people would be like, give himself more examples to get rich.
Speaker 2: Yeah, and it's it doesn't. Actually, this is a question.
Speaker 2: Did you see a lot of it was the general
Speaker 2: pattern of what you've seen a lot of smaller investments
Speaker 2: across a lot of companies or big fat ones generally
Speaker 2: like the three hundred and seventy five million in Helium.
Speaker 1: That one is a standout, the three seventy five million
Speaker 1: and Helion. But you know, again without going too specific
Speaker 1: into the numbers because we didn't put them in the story,
Speaker 1: but you know some of them are in the you know,
Speaker 1: millions and tens of millions. You know, whether that's all
Speaker 1: his personal money or money that's raised through you know,
Speaker 1: various LP funds that are you know, in which there's
Speaker 1: capital put in by LPs. Can get a bit complicated,
Speaker 1: but no, this isn't you know, one of those angel
Speaker 1: investors who's putting ten thousand dollars in a bunch of
Speaker 1: different companies. I mean when he really believes in a
Speaker 1: startup or he really thinks they're going to go somewhere.
Speaker 1: The number is in the millions and tens of millions.
Speaker 2: So slightly different tack here. Yeah, everyone is saying the
Speaker 2: open AI is the future, that chat GPT will be
Speaker 2: in everything. You've been reporting on the enterprise for a
Speaker 2: long time. Do you think that's actually the case. Do
Speaker 2: you think that this company is really I know they're
Speaker 2: making billions of revenue, but do you think they're ever
Speaker 2: gonna go into the green? Do you think this is
Speaker 2: for real?
Speaker 1: I I don't know. I mean, I guess i'd actually
Speaker 1: maybe even push that back to you, because you know,
Speaker 1: you're someone who's you know, been around tech and you
Speaker 1: know reporters and and I mean, like it's it's incredibly
Speaker 1: hypey right now. Like of my time, you know, covering
Speaker 1: this industry, I've never really seen the level of how
Speaker 1: you know you you you know. Crypto obviously was an
Speaker 1: interesting moment in terms of there are people who believe
Speaker 1: that the entire financial system was about to be transformed
Speaker 1: because of these you know, the blockchain, and you know,
Speaker 1: there was the on demand era, you know cloud. I
Speaker 1: didn't really cover tech at the time, and you know
Speaker 1: that sort of proved out to really be in a
Speaker 1: very specific way transformative. I don't know with this one.
Speaker 1: I mean, I think the technology as it stands right
Speaker 1: now is very problematic in terms of its shortcomings. I
Speaker 1: think hallucinations are a major issue, Uh, if it's going
Speaker 1: to be as valuable as search, which is like the
Speaker 1: most successful product you know, tech has probably ever put out.
Speaker 1: And the other issue is the cost of training and
Speaker 1: deploying these models is tremendous. I mean, like you said,
Speaker 1: like I cover the enterprise, so part of my bead
Speaker 1: is writing about the cloud and data centers. I mean,
Speaker 1: to me, one of the biggest things that's going on
Speaker 1: right now is this multi billion dollar build out of
Speaker 1: data centers that's happening at an unprecedented level across not
Speaker 1: even the country, but the world in order for there
Speaker 1: to be enough you know, AI warehouses, data centers you know,
Speaker 1: outfitted with Nvidia chips to train and inference, you know,
Speaker 1: deploy all of these models. That's crazy, I mean, because
Speaker 1: that is all done in advance that they're being enough
Speaker 1: demand to justify these investments, right. I mean, like this
Speaker 1: is all because you know, for a huge portion of
Speaker 1: last year, there was more demand than supply when it
Speaker 1: came to compute, and so all of these tech companies
Speaker 1: started saying, well, we need to build out in advance
Speaker 1: of you know, this demand being unending and increasing. And
Speaker 1: it's like, well, well, okay, that's fine for now, but
Speaker 1: if in the future it doesn't, If you know, this
Speaker 1: turns out to have been a fad, or the years
Speaker 1: that it takes for this to be a widely a
Speaker 1: widely use technology is way longer than it is. You know,
Speaker 1: it could be one of the bigger boondoggles I think
Speaker 1: we've seen in tech, you know, like all these data
Speaker 1: centers that were built out that lay unused because there's
Speaker 1: not enough people wanting to use chat ept or any
Speaker 1: of the kind of similar similar products.
Speaker 2: Is that happening now or is that something you fear
Speaker 2: for the future.
Speaker 1: More for the future, you know, I think the demand
Speaker 1: is still fairly high right now. And if you talk
Speaker 1: to startups like a I startups, they'll say it's still
Speaker 1: hard for us to get access to GPU clusters, for
Speaker 1: us to train models or you know, things like, you know,
Speaker 1: the technology we want to deploy is still much slower
Speaker 1: than we want because there isn't enough compute. But yeah,
Speaker 1: Jerry is still out. Sorry, I know that's a really
Speaker 1: lame phrase, but like.
Speaker 2: For real, that's good though, because what happens if the
Speaker 2: demand never arrives? Though? Does this stuff get repurposed? Does
Speaker 2: it get sold off? Well?
Speaker 1: I think you actually saw a kind of interesting thing
Speaker 1: happening with crypto, which I actually wrote a story about
Speaker 1: that with with berber Jen, my colleague on this story.
Speaker 1: Who you know, who was who was you know, the
Speaker 1: lead on this Sam Altman piece about you know, with
Speaker 1: crypto mining, there were a lot of companies at the
Speaker 1: height of and specifically ethereum mining that were building up
Speaker 1: these rigs, these these mining rigs that were had GPUs
Speaker 1: at the heart of them that were necessary when people
Speaker 1: thought that was going to be profitable basically.
Speaker 2: Like it wasn't. Coal Weave, which is as a listener,
Speaker 2: is a huge student typo, multi billion dollar GP provider.
Speaker 2: They previously crypto.
Speaker 1: Yeah, one hundred percent. They're a fascinating company. I love
Speaker 1: core Weave because, yes, this was a company that is
Speaker 1: started up by people in finance basically like traders, like
Speaker 1: energy traders. I shouldn't actually don't know if it was energy,
Speaker 1: but but people with like a very financial background who
Speaker 1: realized like this amazing arbitrage that was happening in crypto
Speaker 1: and ethereum mining, which was that like the like the
Speaker 1: value of mining when theoreum prices were high, is greater
Speaker 1: than the electricity it takes to consume to do the mining.
Speaker 1: And so when that was at its peak, they were,
Speaker 1: you know, they were doing pretty well, and then they
Speaker 1: read the writing on the wall that you know, ethereum
Speaker 1: mining was probably gonna decrease in value, and they made
Speaker 1: an early switch to like retrofit all of their mining
Speaker 1: rigs into AI compute. And that was before chat GPT
Speaker 1: and you know, open ai became a household name. But anyway,
Speaker 1: I bring up that whole story because what a lot
Speaker 1: of ethereum miners started to realize when there was this
Speaker 1: kind of shift in the nature of ethereum mining that
Speaker 1: basically meant they didn't need GPUs, like these very powerful
Speaker 1: GPU rigs to do the mining is they were stuck
Speaker 1: with these kind of useless machines. And so a lot
Speaker 1: of them have tried to like jump over into AI
Speaker 1: compute and providing you know, training and inferencing. And so
Speaker 1: it was an interesting example of like one trend jumping
Speaker 1: into another. And so I don't know what that could
Speaker 1: mean because the theory of mining is just not even
Speaker 1: close to the scale that we're talking at here with AI,
Speaker 1: but you know, tech seems to find a way. I
Speaker 1: don't know, I don't have a good answer for it,
Speaker 1: but it would be a crazy outcome, honestly, if you know,
Speaker 1: we're talking thirty billion dollars a year of investment in
Speaker 1: infrastructure from a single company alone in building up data centers,
Speaker 1: So if that ended up not being necessary, yeah, I
Speaker 1: don't I don't know what to do with those things.
Speaker 2: Yeah, it feels like what I would worry about is
Speaker 2: the physical GPU equivalent of twenty twenty two, where you
Speaker 2: had all these companies in twenty twenty one who hired
Speaker 2: everyone everywhere and then they went, oh crap, better fire them.
Speaker 2: But it almost feels like it could cause I think
Speaker 2: Nvidia feels like they would be or a MD to
Speaker 2: an extent Micron, I guess, but would be most at
Speaker 2: risk from this because if there's just thousands, tens of thousands,
Speaker 2: hundreds of thousands of black Wells or what have you
Speaker 2: sitting around unused, it feels like it could be catastrophic.
Speaker 1: Yeah, I mean, at least in videas selling stuff, like
Speaker 1: at least they're pushing product, you know, like, at least
Speaker 1: they're manufacturing or designing things that are manufactured and selling
Speaker 1: to the people who are paying cash for them. So
Speaker 1: that's that's better than some crypto or sorry, that's better
Speaker 1: than some AI companies that it's really just on like
Speaker 1: on hype and a hope and a prayer, but yeah,
Speaker 1: I mean, like, as we're recording this in video is
Speaker 1: in and around a three trillion dollar company. It's more
Speaker 1: valuable than Apple. I mean that's just crazy. Yeah, there's
Speaker 1: a lot going on in terms of the expectation of
Speaker 1: this sort of not stopping anytime soon.
Speaker 2: Do you think the AI boom is a bubble?
Speaker 1: Oh yeah, one hundred percent. Like I don't even think
Speaker 1: that's a controversial statement, Like I think Sam go ahead. Yeah, no,
Speaker 1: I think Sam would even agree. And like most people
Speaker 1: that I talk to in a I think it's a
Speaker 1: bubble because look, the nature of that doesn't mean that
Speaker 1: everything's going to go to zero and that you know,
Speaker 1: like the huge run up and value that we've seen
Speaker 1: with Microsoft and in Nvidia is gonna all, you know,
Speaker 1: disintegrate if it takes a lot longer or it doesn't
Speaker 1: even catch on with AI. But yeah, I mean you're
Speaker 1: seeing money. And my colleague Berber wrote actually a good
Speaker 1: story about this a couple of weeks ago. I mean,
Speaker 1: you're seeing startups that have no you know, no revenue
Speaker 1: really or not even a product raising at valuations in
Speaker 1: the billions. I mean that's the very definition of a bubble.
Speaker 1: So yeah, I don't. I don't even feel like I'm
Speaker 1: going out on a limb saying that.
Speaker 2: So I will push back on that, not to say
Speaker 2: you're not going like I believe you are, because if
Speaker 2: you look around and this is rap on this one.
Speaker 2: I think it feels like AI is humored on a
Speaker 2: level in the media right now. The I have literally
Speaker 2: only seen since on the metaverse, where it was just
Speaker 2: this concept, not saying AI is useless generally if AI
Speaker 2: has uses, But it feels like everybody is giving Sunda Pshai,
Speaker 2: for example, the benefit of the doubt about Google Search,
Speaker 2: or at least they were until it told you to
Speaker 2: eat rocks, but especially with chat GPT, they're just kind
Speaker 2: of assuming these things will happen.
Speaker 1: And I don't know what it is.
Speaker 2: It feels almost like the why do you think people
Speaker 2: are giving it so much space and believing that it
Speaker 2: will grow exponentially?
Speaker 1: Why? Actually I have to have two answers to that.
Speaker 1: I mean, one is like you are surrounded as a
Speaker 1: reporter by your sources. The people that you talk to
Speaker 1: day in day out, who you know try to let
Speaker 1: you know what's going on in the space. Are people
Speaker 1: that a lot of the times are big believers in
Speaker 1: any new trend in technology, and so it's kind of
Speaker 1: easy as a reporter to hear about this stuff and
Speaker 1: want to at least explain it to readers. Not necessarily
Speaker 1: be part of the hype. I mean, that's not our job,
Speaker 1: but at least say, like, well, this is why Anthropic
Speaker 1: is getting billions of dollars of investments, or obviously open
Speaker 1: Ai or anything like that. I think if I had
Speaker 1: to just personally guess on a lot of this stuff,
Speaker 1: you know, it's been a bit slow in terms of
Speaker 1: transformational technologies in a while. I mean, honestly, you could
Speaker 1: maybe look back to probably the iPhone as the last
Speaker 1: thing that like fundamentally upended the way we live our lives,
Speaker 1: you know, in the enterprise. I guess you could look
Speaker 1: to the cloud, although most people don't care about that,
Speaker 1: but you know, with AI and you know these kind
Speaker 1: of seemingly magical interactions that you've had with chat, GPT
Speaker 1: or it can you know, write poems and you know,
Speaker 1: create images and and you know Sora and the video
Speaker 1: stuff and you know whatever you want to call that.
Speaker 1: You know, her like demonstration from open Ai, like it
Speaker 1: it demos very well. It sounds like the kind of
Speaker 1: promise of AI of creating something that approximates human intelligence.
Speaker 2: Right, so you can fill in the gaps.
Speaker 1: Yeah, it's just like it feels like the future. You know,
Speaker 1: I'm not at all saying that it is, but like
Speaker 1: in terms of like other technological trends that we've seen
Speaker 1: in the last decade or so, like this one comes
Speaker 1: closer to science fiction than anything I've seen. I'm not
Speaker 1: saying it is, but like it looks like it on paper,
Speaker 1: And so it's a lot easier, I think, to get
Speaker 1: caught up in the hype than you may have been
Speaker 1: in like I don't know, Uber for X or like
Speaker 1: instant delivery or something.
Speaker 2: The Wall Street Journal also reports the Open AI has
Speaker 2: established and I quote, a strengthened conflicts policy and a
Speaker 2: new independent audit committee that reviews potential conflicts, which the
Speaker 2: journal also note says yet to disclose any details about
Speaker 2: what those policies might be. It's also important to remember
Speaker 2: that when Samultman returned to Open AI, he appointed a
Speaker 2: new board of direct is made up of this avengers
Speaker 2: of capitalism. I've called them before, people like Fidjisimos, CEO
Speaker 2: of Instacart, which is a company that Sam Mormon invested in,
Speaker 2: to a board that also already included Dan Adam DeAngelo
Speaker 2: of Cora, which is another company that Sam Mortman invested in.
Speaker 2: Oh oh, sorry, sorry, I forgot. There's one other guy
Speaker 2: that Sam Ortman added back to the board when he
Speaker 2: became CEO. He's a guy you might know. He's called
Speaker 2: Sam Altman. It's so good watching all this happen. It's
Speaker 2: so fun. It's so great watching all of this naked
Speaker 2: self dealing, corrupt nonsense happen, and everyone's just like, this
Speaker 2: guy is the future. Sam Mortman's the man. And I
Speaker 2: think the frustrating part of watching the Sam Mortman story
Speaker 2: unfold is that at no point anybody appears to interrogated
Speaker 2: who this person was and whether they might be fit
Speaker 2: to task. There are credible allegations of abuse from his
Speaker 2: sister Annie Altman. There are real things happening here, business things,
Speaker 2: social things, horrible things, and no one's god dwn doing anything.
Speaker 2: And maybe that's it. Maybe Ortmand's skill isn't so much
Speaker 2: creating things or any real legacy, but it's just a
Speaker 2: result of the momentum one gets when you've made enough
Speaker 2: money for people and enough money yourself that people no
Speaker 2: longer bother to check and would rather just find convenient
Speaker 2: platitudes and stories about the clever things you've said, rather
Speaker 2: than think about it for too long, because maybe the
Speaker 2: truth's just a little disgusting. And the problem with someone
Speaker 2: like Sam Orman is that they'll eventually get to the
Speaker 2: point where they can do real damage. I don't know,
Speaker 2: like today, like becoming the figurehead for the entirety of
Speaker 2: Silicon Valley and the entire artificial intelligence boom and the
Speaker 2: CEO of its largest player. Aortman is a marketer at best,
Speaker 2: kind of a management consultant, but let's be honest, history
Speaker 2: shows he doesn't really manage it anything.
Speaker 1: Now.
Speaker 2: I think he's the Michael Jordan of bullshit, the Michael
Speaker 2: Jordan of empty promises, except he's never had a situation
Speaker 2: before where these promises were actually connected to something he
Speaker 2: was responsible for. And what's scary is, like I said,
Speaker 2: this guy is the CEO of Open AI, and he
Speaker 2: has made all of these promises for everyone in artificial intelligence,
Speaker 2: even those not making generative AI. So everyone is putting
Speaker 2: the expectations of Sam Altman, who is building and by
Speaker 2: which I mean having other people build a technology that
Speaker 2: doesn't do the things he's promising on the entirety of
Speaker 2: the AI industry, so that the people buying AI who
Speaker 2: don't really know what they're talking about go and use
Speaker 2: generative AI and then they say, wait, this doesn't do
Speaker 2: the thing. Do you not see the problem here? Do
Speaker 2: you not see that Sam Altman is leading tech to ruin.
Speaker 2: He's promising these things that generative AI cannot do. He
Speaker 2: is making these statements that are boosting stocks that are
Speaker 2: honest to god impressive here tricking fortune one hundred CEOs
Speaker 2: into investing money in take that will not do what
Speaker 2: it says. And when the ruination begins, it's going to
Speaker 2: be terrible for the valley. Funding will be even harder
Speaker 2: to get. And in the next episode, I'm gonna explore
Speaker 2: Sam a little bit more and I'm gonna really look
Speaker 2: at what happens to an industry when they so doggedly
Speaker 2: follow and support and appreciate such an obvious false prophet.
Speaker 2: Thank you for listening to Better Offline. The editor and
Speaker 2: composer of the Better Offline theme song is Matasowski. You
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Speaker 2: at Matasowski dot com, M A T T O S
Speaker 2: O W s ki dot com. You can email me
Speaker 2: at easy at better offline dot com or visit better
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