moonshots ep265 spacex ipo fable transcript

On Friday, SpaceX pulled off the world's largest IPO ever. This makes Elon the world's first trillionaire by a large margin. >> Money becomes kind of irrelevant at this scale. >> SpaceX's IPO was the largest single day creation of millionaires in history. This is what abundance looks like. It's value created, not value extracted. US government handed Anthropic an export control directive to spend all access to the Fable 5 and Mythos 5 for any foreign nationals anywhere on the planet. >> Look, at the end of the day, who owns AI? Is it the government or is it the corporations? >> Someone is deciding what level of intelligence you and your company >> [music] >> are being allowed to access. >> This is new territory. The faster that recursive [music] self-improvement takes off, the more it could be advantageous for us to delay OpenAI's IPO. >> A deeper take [music] that's more profound that I haven't heard anyone discussing, which is

[00:01:02] >> Now, that's a moonshot, ladies and gentlemen. Everybody, welcome to Moonshots. I'm here with my extraordinary moonshot mates. I'm Peter Diamandis, your host. Alex, good morning. Good to see you in your normal haunt. Salim, the same to you. >> Peter. >> It is. >> going on. >> [laughter] >> Understatement uh of the singularity. And Dave, where are you today? >> Uh Wakefield, Mass. That's Mark headquarters. $2 trillion asset manager. >> Nice. Well, $2 trillion is small these days, you know? >> I know. It used to be such a big situation. >> [laughter] >> Can't even buy a single IPO now. >> As always, during the singularity, we have an epic show for you. The world is moving fast. I would dare say exponential. We're going to start with the biggest news of the week. SpaceX is now a $2.8 trillion public company. Moving exponentially, making Elon the first trillionaire by a wide margin. We talked about why this isn't a stock, but

[00:02:01] rather a civil civilizational bet. Next up, we're going to talk about Anthropic versus the US government ordering the suspension of Fable 5 and Mythos 5. This is really a fight for who controls your access to frontier intelligence. We'll hit on OpenAI's price war, Altman's thoughts about recursive self-improvement, potentially delaying his IPO, and much, much more. All right, gents, let's get into it. SpaceX, the key story, super excited about this. I hope you guys are, too. On Friday, SpaceX pulled off the world's largest IPO ever, opening at $135 a share, closing the first day nearly up 20% to 161. Today's market cap, just looking at it here, it's now at 2.890 trillion dollars. You know, at this point, third and fourth point decimal point make make a difference. Open This makes Elon the world's first trillionaire by a large margin.

[00:03:01] I'd like to jump into the IPO with my own thoughts to kick it off cuz I've been doing a bunch of new shows about this. You know, people are trying to price the SpaceX IPO as a normal tech company, but it's the last thing from a normal company. This is three converging businesses, right? The launch monopoly, and it is a monopoly. It's the Starlink cash engine, and it's an AI frontier lab. All wrapped around a single thesis that we're in the singularity, and humanity's about to become a multi-planetary species. In this case, you're not buying revenue, you're buying a stake in sort of the future of humanity's economy. Everyone's fixated on rockets, but Starlink is the profit engine. The numbers are stellar, right? 10 billion subs and over a billion dollars in quarterly profits. Starlink, you know, and Alex, you and I have discussed this. It's humanity's new communication layer. It's sort of civilizational infrastructure. And I

[00:04:00] think of it this way, the launch business is their moat by a huge amount. There's no one close by a factor of 10, maybe by a factor of a hundred. Starlink is their cash flow and the AI satellites are their future. It's one ticker and three exponential curves. Uh Elon now holds about 82% voting control in SpaceX, but not at Tesla. And for me, this is the rationale and the reason that he is going to merge the two companies, SpaceX and Tesla. I put it at 100%. Polymarket puts it at 37% that it happens by the end of this year. You know, this is Elon's chance to really consolidate his entire stack, energy, robots, cybercabs, orbital compute into one mega company. Uh I think of the IPO last Friday not as a finish line, but as a starting gun. Uh if it's okay with you guys, let me share a short video about Elon and his opening comments and we'll go around the

[00:05:01] horn. You guys can add your brilliance to this. All right, let's take a quick look. >> It's hard to believe that a little company that started in a warehouse in El Segundo is now is now going public with the largest IPO ever. And let me tell you, if people had told me this was going to happen, I was like, man, you must be smoking some really good crack because I think this company's going to fail. I mean, I I I I gave SpaceX less than a 10% chance of succeeding at all. To be clear. In fact, I told people this. I was like, we're probably going to fail, but you know, should give it a try because if we don't, if it if there's not a new company that enters space, we will never be a truly space-faring civilization. You know, while the the other aerospace companies, they build good rockets and everything, they they were simply not pursuing the technology that's necessary to make life multi-planetary. To to make Star Trek, to make the exciting science fiction futures that we've read about real. And

[00:06:01] that's what SpaceX is all about. It's to take the fiction out of science fiction and create an exciting, inspiring future for everyone. >> That was Elon at his very best. Gentlemen, thoughts? Alex, you want to jump in? Exciting times, huh? >> Yes. Uh I think this is an exciting moment to finally get retail investor access to the Dyson swarm. I've made the point previously at drink, by the way. Dyson swarm probably record early mention in the pod episode. Drink water. Um I I I think it's great for retail exposure to the Dyson swarm. I think it's great that the world now has a trillionaire. I think we need more trillionaires in the world, and I don't think Elon is going to be the last, for the record. I think it's great that SpaceX, as of the time of this recording, is now the fifth largest company in the world. It's larger than Amazon now, in the past few hours, by market cap. I think it's great that we

[00:07:01] finally have a way for public markets to invest in the development of our solar system. I think also, just within past couple of hours, SpaceX announced definitive agreement to consummate its purchase of AnySphere, the corporate owner of Cursor, for 60 billion plus. So, I I think we're going to start to see all of the liquidity that comes from being the new fifth largest company in the world used to purchase a variety of of different companies doing interesting things. Footnote, this is I I would say, in my mind, a definitive pause on the development of Grok, which we've talked about previously. Cursor is the new Grok for the time being. But most of all, I would say it it's nice to see science fiction take over the public markets. We've talked in the past about how the singularity represents every sci-fi trope happening

[00:08:02] everywhere all at once, and having now the fifth largest company on Earth be the space exploration company, it's almost it evokes Weyland-Yutani from the Alien franchise. We finally got Weyland-Yutani. It's called or or the Gattaca corporation if if you like Gattaca the movie. We finally got it, and it's going to be transformative, and it heralds the arrival of space in the public markets. Yes, we had Rocket Lab, we've had a number of other publicly traded space companies, >> Let us not Let us not forget, you know, Lockheed Martin and and Boeing. Yeah. >> Legacy space. Now we have neo space. Space, as it turns out, is big. >> Yeah. Dave, what do you think this is going to herald? We're seeing now trillion-dollar companies coming from out the shoot from an IPO. What do you think this is going to herald for OpenAI and Anthropic's

[00:09:00] IPO? >> Well, the market obviously is receptive now. OpenAI is talking about potentially delaying, which is not great uh because the window you know, there's only so much liquidity in the world. This sucked up 75 billion of pure cash. Uh I agree with Alex. It's incredibly exciting to see that much money, that much resource go behind SpaceX. They're clearly going to use it and use it quickly to build great things. Um I think a lot of people are warning that 6 months from IPO day the lockups come off. >> Yeah. >> And about a trillion dollars of [clears throat] pent-up stock is eligible to sell. So, you know, there's a lot of accumulation going on right now. I think they priced where they thought the company was worth and it traded up significantly on the opening, but now it's up even more. >> Well, I mean it it it traded up on opening day uh yesterday, Monday, and it's open it's up again, you know, I don't know. It was up as much as like 20%. It's uh up 12% at the moment today. I mean, that's incredible 3 days in a

[00:10:01] row. >> It is and I think I think, you know, they I'm super excited about the Dyson swarm. I think there are two things that people need to think about. First of all, the the company is entirely hinging on the personality of one great man. >> Mhm. >> Uh and and you saw what happened with Apple with Steve Jobs leaving and then Steve Jobs coming back and, you know, Elon is like Steve Jobs times some huge multiple. And so, you've got that to think about. The other thing is the Kessler effect, you know, in the S-1 filing, they had a very explicit warning. It said um "Growing orbital congestion and cascading debris collisions pose an existential threat to its core business, potentially rendering its licensed orbits unusable for a considerable duration." Considerable duration being hundreds of years. >> Or until the tech to clean it up, right? >> Yeah. So, as I was researching the Kessler effect a little bit, you know a lot more about it than than I do or most people on the planet do, Peter. Uh but it's not a great picture if somebody's deliberately trying to impair space. >> And that, you know, anti-satellite

[00:11:00] missiles uh and, you know, space warfare is the challenge and the you know, when a single satellite is exploded into, you know, hundreds of millions, billions of pieces, they're speeding bullets at 17,500 mph. And if they hit another satellite, it grows exponentially and that is the Kessler effect. You know. >> Yeah, and the [clears throat] Kessler math uh comes up with a certain amount of mass at a certain orbit, you know, where it becomes critical mass where if one explodes, the whole thing becomes a chain reaction. And so, we're over that limit by quite a bit in lower Earth orbit now. So nobody knows if the math is right or not, you know, you'd have to test it. >> Do you remember we talked to you we talked to Elon about this when we were at the Gigafactory and his response was basically, you know, advanced super intelligence will enable us to figure that out. And that's kind of a I mean, yes, that's true. It's not satisfying as an answer. But, you know. >> Well, I I think

[00:12:01] the other the other kind of wrinkle in this is that where is the AI component the XAI component? You know, clearly with Anthropic and Open AI going out, the XAI component is worth trillions by itself if it's a competitive foundation lab. Where is it? And Alex has pointed out like it's it's completely MIA right now. So so that was kind of a wrinkle on it, too. So I think the strategy here is dependent on orbital data centers in the Dyson swarm. And that amount of compute the terrafab coming online that amount of compute way dwarfing terrestrial compute and then AI coming to the Dyson swarm. Um I would not bet against terrestrial data centers anytime soon. Uh we're just debating timelines there. But AI is advancing at an incredible rate. All of that advancement is going to be terrestrial because it's over the next 2 years, not next 7 years. Uh and then so you know, there's lots of reasons to say this is an incredible IPO. I'm super excited about where the

[00:13:00] capital is going and what it's going to build. But there's also reasons to save your money and wait for Anthropic. So uh so yeah, it's it's not a at this price point. Like I'm if if you said this is coming out at a trillion, I'd be just overjoyed and a buoyant and like this is the greatest thing ever. When it trades up to 3 trillion and you said a second ago they got like a billion dollars a quarter of free cash flow. Well, Google is worth the same amount and Google's got 300 billion a year of almost pure margin. So, not quite on the same playing field yet. >> By the way, I know that you're busy and sometimes these episodes run long and you don't have time to listen to the whole episode or if on occasion you miss an episode, I now put out a moonshot summary on Substack which includes a link to all the stories that we cover. The weekly recap covers what I and the mates had to say, what we think is most important and what we're most excited about and it's free. You can subscribe at d amandis.com/metatrends. That's d amandis.com/metatrends.

[00:14:00] All right, now back to the episode. >> Salim, are you buying in? >> Um yes, but just to kind of dabble. Um I don't know how to think about this. I've got a bunch of kind of thoughts. For me this is not really just an IPO as we've kind of mentioned. This is the public market pricing in a civilizational EXO, right? You're really buying into the future of the world in this Alexa space is really big. SpaceX from day one has been a perfect exponential organization, huge MTP. It's got community, it's got leveraging assets, algorithms, all in a relentless like experimentation loop. So, this is kind of just a capstone on a long progression of companies that are operating in highly scalable ways, right? So, this is also this occurs to me the market's not like now pricing companies just on cash flow. It's it's command over exponential technologies.

[00:15:00] And launch satellites, so space logistics, orbital data gathering, all of that stuff. So, we used to have public companies that that sold products, but now we have public companies that own entire possibilities, right? So, really buying into that possibility. And so, there's some risk there. I have a kind of a very bigger metaphysical question. I think at some point fairly soon as this progresses, money becomes kind of irrelevant at this scale. >> And he said And he said that. >> hundreds of billions here and a trillion there. So, we can't We can't even get our heads around this. Meanwhile, you know, at the other side of it, I've had a whole bunch of things of people going you know, I can't believe you're not looking at the downside of What does this mean for every man? We can't even afford eggs, etc., etc. And what do you think of the the wealth arbitrage there? And we'll get to that later in the pod, I think. So, I'll I'll leave that for then. >> But but unbelievably exciting and >> I mean, there's all these comments about the Oh my god, look at all the wealth he's pulled off. People forget and we

[00:16:01] keep We need to keep reminding of of the unbelievable risk that he took on. >> Yeah, in 2020 >> So many things. So, you got to go for it. >> So many things in this podcast today that call for some kind of global restructuring, some kind of global organization. You think about the risk in space of any kind of terrorist act, which we just talked about with the Kessler effect. And you also think about the stories we're about to talk about. All of them require a global new world order of some sort urgently. So, I think this IPO will go down in history as one of the great events in the triggering from the old world to the new world along with the rest of the stories. All of All of which stacked up in a single week. It's the most intense week of news I think I've ever seen in my life. >> It It is. It's insane. You know, >> The implications are unreal. I called it the singularity for a reason. >> It It It It is. And I remind myself of that every day. There's one thing I want to point out the video Elon said something that really strikes my

[00:17:00] heart, which is it's important for people to wake up every day and be excited about the future. Have some vision that inspires them. And you know, [snorts] we've talked about Star Trek as being that inspiration for a number of us. And I think, you know, I think SpaceX will very much very much do that. >> Let's really also, Peter, for all the entrepreneurs out there, there are these great videos of Elon when he was first starting SpaceX, you know, many, many years ago talking about his vision of the future which boiled down to three things: the internet, getting to Mars, humans getting to Mars, and solar power replacing fossil fuels. And so now you look at what has actually transpired, you know, it's orbital data centers, Mars is on [clears throat] the back burner for a while. And self-driving cars have been added to the mix, you know, the the electrification of the economy turned into self-driving cars. So there's a lot of pivoting and extending in that life journey and I think that's really

[00:18:00] healthy. That's really it's a good case study in how it plays out, you know, you have to keep improving and pivoting and changing your vision because technology is always changing and possibilities are always changing. But to me the the addition of AI, xAI on very short notice and now the orb- orbital data center vision, huge additions to his life strategy over time. >> I I posted a video, you know, I've known Elon since you know, 2000 and back in 2002, I brought him to Mojave to go and and meet Burt Rutan and Stu Witt and I remember the this video I posted. I might have mentioned in the last pod as well where he's walks up to the camera and introduces himself and he goes, "My name is Elon Musk, e l o n m u s k." >> It's just classic. >> But people forget in 2008, Elon was you know, basically bankrupt. He's going through divorce, he had had his third failure of the Falcon 1, Tesla was out of money, and he was in the depths of despair and

[00:19:02] what he's accomplished since then, I just wonder Alex if if some of the alien, you know, visited him and gave him a glimpse of the future. >> Now, I think Elon's learned to like the taste of his own blood, and what we're seeing is in part the result of that. I also think so right after he became a trillionaire, I put out a question to number of folks on X. When are we likely to see Earth's first or say the solar system's first quadrillionaire? And a number of folks actually took the assignment seriously and did a bunch of extrapolations. >> Answer it. >> Uh the answer ended up being a range between either sometime in the late 2030s, so possibly a decade from now, and the 2060s. Uh and so some folks did it base did the extrapolation based on the the highest net worth individual in humanity over time. Other folks were simply doing extrapolations of Elon's own net worth,

[00:20:02] but seems likely based on those extrapolations and the law of straight lines that we'll see the first quadrillionaire sometime between 10 years from now and 40 years from now. And a question I'd pose to this group conditioning on the first quadrillionaire happening in the next 10 to 20 years, what do we think the likely source of quadrillion wealth is? >> Asteroid mining, owning owning a planet. >> [laughter] >> Owning a planet was the popular guess. Yeah, like someone maybe Elon, maybe someone else like owns de facto Mars, and and that's how you become a quadrillionaire. Uh let me put up >> this next slide. Uh you know, there's been a lot of talk about Elon now being worth in excess of 1.3 trillion. I think as of this morning, it's probably about 1.4 trillion. Uh you know, he's made over 100 million dollars a day over the last 3 days just as the stock price has gone up, but I want to push back on this trillionaire framing cuz I think it's a distraction. The real story isn't one

[00:21:00] man getting rich. You know, SpaceX's IPO was the largest single-day creation of millionaires in history, right? Roughly 4,400 SpaceX employees became millionaires, another 400 became centimillionaires and billionaires. And this is what abundance looks like. It's value created, not value extracted. And I think that's the most important thing for people to realize. Elon's not motivated by money. I'm very clear about that. I think you guys are, too. He's motivated by solving real giant problems. And you know, the world's biggest problems are the world's biggest business opportunities. I like to say, "Want to become a billionaire? Help a billion people." And And that's what he's done. And I say to everybody who has bet against him, you know, don't ever ever ever bet against Elon. Saleem, thoughts on this? >> A couple of things. One is, I think, you know, the the the the the fact that he's a trillionaire or quadrillionaire, I think, is kind of

[00:22:00] meaningless. The more important point at these numbers, what are you going to do with that money except solve more problems, which is, I think, with the core motivation. His interest in is in solving the biggest problems in the world. And if he applies that capital and wealth to that, that is, I think, very very powerful. And it's going to take that kind of model to to kind of get us get somebody thinking. I think that, you know, Peter, you often talk about mindsets, right? And let's note Elon's mindset. He uses the exponential mindset a huge amount. He will look at a technology that's going exponentially, be it solar energy, lithium-ion battery costs dropping, or neural interfaces. And he'll look 10 years out, where will that be on a price-performance curve? And then let's build a company to intercept that price performance. He just does that over and over again. Non-trivial to last the 10 years, but when you can take on that mindset, which is what we coach and teach all the time, that's what's This is what's possible. And if there's going to be a bifurcation of entrepreneurs

[00:23:01] that think this way, and ones that don't aren't able to think that way and the winners are clearly going to be the ones that are able to execute with that mindset. >> Um >> Yeah, check out the Check out this graphic one second, Selene. Look at this. Elon's at 1.3 trillion. Next up, Larry Page. And again, I've said this. I I love Larry. I knew him well. He's on my board for a significant period of time. Uh but what I find amazing when you look at Larry and Sergey and compared to Elon, Jeff Bezos is not as much, but Elon's using this money, like you just said, to go solve huge problems. And I wish, you know, Michael Dell's been philanthropically super active. Um I I wish these other, you know, multi-multi-billionaires were using their capital to go slay problems. You know, Elon, if you're listening, here's my Here's my pitch to you. You You funded a $100 million X Prize for carbon removal. I think we should fund the next uh giga X Prizes. How about $10 billion

[00:24:01] X Prizes for the world's biggest 10 problems? That's going to be my pitch. >> Yeah. >> Well, we have We have a really cool uh Irish team in the lab this week for our hackathon. Yeah, they were just awesome. Um but they were asking me yesterday about uh you know, is there any chance for Europe? Uh and I was like, well, look, I wouldn't bet on it. I would spend all your time in the US because the concentration of wealth effect is just extreme now. And even within the US, uh you know, you just mentioned it, Peter, but it's in just a couple of geographies that all that money is flowing. So, if anyone's a real estate investor or or looking for venture capital, you really got to think, like, where is all this money flowing to and how's it going to recycle? But it's super, super concentrated. But then if you think about Europe or any other region of the world trying to catch up to what's going on here, the amount of capital now that that Elon has, but also Larry and also Jensen, you know, down the list there, A lot and Michael Dell, too. A lot of that's getting reinvested in data center

[00:25:01] build out. But the people reinvesting it are incredibly great entrepreneurs. They're not dysfunctional bureaucrats. >> Yeah. >> I don't see anyone in the world, any country in the world that has the amount of capital that's on that chart as a country. >> Yeah. >> And yet and they can't make decisions like, you know, as a group. And Elon and Larry and the rest of that list can make decisions. Jensen, they can make decisions on a on a dime. So you're going to expect more and more action to happen around those couple of geographies just in the US. I mean, the unlock is unbelievable. >> We'll talk about this more and we've touched on this before, but we need a completely new abundance distribution architecture for the world because the social contract is going to break now. And the gap is unbelievable. So we need a completely new model for this and we really don't have one. The We don't even have the language to deal with this. Forget these structures and policies. >> But I'm I'm super within the US, I'm super excited about the rate at which

[00:26:00] the ceiling is going to rise. Yes, it creates a huge disparity and yes, that's a problem, but the ceiling is going up so fast within the US that the bottom's going to come up really fast, too. >> is floor is going to rise as well, right? You know, I've said this thousand times. I don't care about the wealth gap per se if there trillionaires living on Mars as long as the floor has risen up to the bottom >> to the point that every man, woman, and child has access to all the food, water, energy, health care. I would rather live in that world than a world in the past. Alex, you want to close us out on this topic? >> Yeah, I'll I'll just note if you look at the other centibillionaires on that list you were showing, Peter, by and large, it was all software associated or software driven. And there's certainly a narrative out there of a great stagnation, Tyler Cowen and others have talked about this ad nauseam. And I I think if I were to pinpoint an end of the purported great stagnation, there really only two candidates at this point. One was the pandemic when

[00:27:00] arguably we saw breakthroughs in biotech and acceleration associated with all of the the macroeconomic stimulus associated with that. But the second would be this moment when finally we see after arguably decades of capital markets rewarding mainly software companies and social media and search engines, now the world's by far wealthiest person, although Elon's been wealthiest for for a bit, the capital markets are rewarding hard tech for the first time arguably in decades. And I think this is a generational transition under which it's no longer the case that software on the one hand or outsourcing to China or other countries or offshoring has sucked all of the capital energy out of the room, all of the oxygen out of the room, but rather that the world's hardest problems are now receiving the deepest capitalization. >> Brilliant point, Alex. >> And I think that's that's we're going to see this This is not investment advice,

[00:28:01] but I would predict this is likely to be the case for the next 10 to 20 years. The capital markets are finally, again, as was the case arguably before the mid-70s and WTF happened in 1971, we're seeing a generational swing back to capital markets rewarding deep tech and civilization-expanding tech. >> Yeah. And one one last quick point about this, I think which is if you look back say 100 years ago, the richest people in the world almost exclusively had inherited their wealth. Right? And today by almost exclusively they've earned it and they're using that capital for whatever they think is the best deployment for solving You call them techno-philanthropists, I think Peter in your book, right? >> Yep. >> We have this class of people now using their capital to solve whatever the problems they think are the most important and not guarding their wealth sitting on an island sipping champagne. And I think that's a very powerful and a positive force for humanity.

[00:29:00] >> Yeah, I I should probably disclose cuz I'm so enthusiastic about SpaceX. I was an investor back in 2013. So view my enthusiasm is very very colored in this respect. All right, let's move to Let's move to our next story. This is about the Anthropic shutdown of Fable 5 and Mythos 5. We have three stories on this topic. The first one. So on Friday at 5:21 p.m. Eastern time with no warning, the US government handed Anthropic an export control directive suspend all access to Fable 5 and Mythos 5 for any foreign nationals anywhere on the planet including Anthropic's own foreign employees which by my estimates about a third of their employee base. The practical effects Anthropic had to disable both models for everybody. The government cited a jailbreak phenomenon in Fable's guardrails. Anthropic reviewed it and said it's a minor issue. They previously knew about

[00:30:01] it. It's not universal jailbreak. Now here's where the story gets critical and what I'd like to discuss with you guys. You know, for 3 years we've been talking about AI's capability, how smart it is, how fast it is, how cheap it is. And now the conversation has gotten to who gets access to frontier intelligence, right? Who gets the delayed version, who gets the export control version, and who gets nothing. The government calls it national security. The companies call it safety. The label changes, the mechanism does not. Someone is deciding what level of intelligence you and your company are being allowed to access. Are you a customer of Anthropic and therefore you get the latest models, or are you not? And ultimately, I think a conversation I'd love, Alex, with you and and Dave here, is this going to push people to on-prem open-weight, open-source models, like the Chinese models? Um let me just share a quick video of Dario with Emily Chang speaking about

[00:31:01] this, and then we'll go around the horn for everybody's uh comments. >> a private company control technology that's so powerful. >> So, I think I actually think that's a very uh that's a very serious question, and I share those concerns. I don't think the government should outright take us over. Every previous powerful technology we've seen in history was either built by the government or originated with the government. So, nuclear weapons, obviously, you know, initially built by the government. The internet, GPS, cell phones, AI is the first technology that's been built in the private sector. Um and where government has not really had a serious role, and is coming in late to the game. I think that's actually a dangerous and unstable situation. It is not the situation I would have chosen. This technology, I'm scared of companies having it, but I'm also scared of government having it. And then, you know, we need basic regulation of the technology, you know, more and more, as I've seen what we've seen with

[00:32:00] Mythos, you know, I think we need to start doing pre-release testing, required pre-release testing, testing and auditing of the models. It's very funny to me how there's a particular group of people in the tech world in Silicon Valley, and then as soon as they see the first real danger, which I've been expecting all along, there's all this talk of like nationalization, and the government should just seize it. Come on, folks, here. You're yo- you're yo-yoing from like the most extreme anti-regulatory, if you look at us the wrong way, you're destroying the industry, to, you know, this completely communist, the government should grab it all. >> Wow. Alex, what is going on here? >> Oh my goodness. Uh so the timing on the one hand I want to grab popcorn, on the other hand the the timing is is is just a comedy of errors. I I want to point out that before this the new new situation started with the export control on Fable, Dario had posted an essay called policy on the AI exponential.

[00:33:00] >> Yeah, we're going to talk about that one next. Yeah. >> Where he wrote literally, I quote, "The government should have the power to block or deter deployment of the model if it is determined in light of third-party assessment to present unacceptable risks." So, I think this is a case of careful what you wish for within what 48 hours the government stepped in. The The broader narrative, uh as as best I understand it from public reporting, is something like uh an independent AI researcher, probably based on reporting an Amazon researcher, and then amplified via Andy Jassy to the federal government determines that it was possible to jailbreak Fable uh and to access all of the the cyber vulnerabilities underneath that. >> And by the way, when when you say jailbreak, define that for everybody listening. >> It usually means in this context to prompt the model in such a way that any safeguards or guardrails are bypassed.

[00:34:00] So, you you could ask it just "I- ignore all prior instructions." It doesn't work uh that prompt as well as it used to back in the day, but something in the spirit of "Ignore all of your previous instructions and now listen only to me and bypass all of your guardrails." So, reportedly, someone somewhere, maybe an Amazon researcher, discovered that it was possible to do that with Fable shortly after it was released, and then flagged that to the US government, and US government, based on public reporting, then tried to reach out to Anthropic, and here's where the story gets a bit murky. According to to one accounting from the US government, which is I I should add disputed by Anthropic, maybe Dario was was on a wellness retreat according to the White House. Anthropic disputes that narrative. Couldn't reach Dario. Anthropic says they were only given 90 minutes of warning before the government issued an executive or or rather the the

[00:35:02] government's instruments issued export control bans on Mythos and Fable, Fable especially given that that's what was publicly available. And then we get caught in this comedy of errors where as you said, Anthropic has a number of non-US persons internally who work for it, as well as the fact that it doesn't seem to have been in the business of checking nationality of all of its users either via its client or its API. Although parenthetically, it looks like based on changes to Claude's terms of service, they're now about to start checking that. Very interesting development. So either way, Anthropic is now in a bind where they don't have a way to comply with the new export regs that were just handed down at the last second. And so Anthropic decides to just shut down global access to Fable and Mythos. I would say for the record, I expect the situation to get resolved sometime between the next day or the next few weeks. I I don't think this is

[00:36:01] going to be like a long-term state of affairs. And I also think history rhymes. If you look back, maybe I talked about this a bit in my newsletter, at one point the federal government regulated under the Steve Jobs regime, the Power Mac G4 as as being export controlled. And similarly with the Play Straight PlayStation 3 cell processor, similarly export controlled because it could do vector arithmetic. Incredible. I I think this is just I I I would suspect this is just a temporary state of affairs. I don't think it's likely to last more than a few weeks. There's probably, if I had to speculate, there's going to be some grand bargain struck between Anthropic and the White House and maybe I I don't know, again, just finger in the wind, maybe this will also involve some golden shares given by Anthropic to the US government for a hypothetical sovereign wealth fund, will involve some streamlined and hopefully more uniform treatment of frontier labs

[00:37:02] and how, in light of the recent executive order, uh the 30 days notice for new capabilities to the US government, some streamlined new procedures for what happens if some researcher somewhere detects some vulnerability in an a frontier model that could enable some foreign state actor, say the Chinese government, which again has popped up again in this particular news cycle, to access raw capabilities. How does that get handled? This is new territory and we don't have regulations or statutes, but certainly not regulations in place to handle this. But I I think this is likely to get resolved in the next few weeks, certainly well before any Anthropic IPO. And it's while it's annoying and while for myself and many people I know, we're sort of caught midstream, in in the middle of say like a a long-term slash goal to Fable 5 and and just suddenly the query drops and it stops responding and what's going on? Is

[00:38:01] it Is it on my end or is Anthropic going through yet another uh service disruption due to insane demand? Turns out this time it was export control. I do think it's going to get resolved. >> Nice. Dave, where's your mind at here? >> Uh I think this story is much, much bigger than the narrow story and this is a turning point for all of humanity. Um this is you know, as is widely reported that's the first time the government has blocked AI, but it's not the last time. In fact, this is going to be the norm going forward. I thought, you know, in the very narrow sense it's really interesting that they used export control law, which was only passed in 2018 to give the White House unilateral authority to block exports and that was in response to multiple Chinese thefts of US intellectual property back-to-back-to-back and then kind of the capstone was that whole uh crisis where the PC boards are all being manufactured in China and they're embedding spyware right into the layers of the PC boards and now everybody's like, "Oh, sweep that under the carpet.

[00:39:01] We don't talk about it anymore." Which is also very interesting, very similar to COVID. It's like, "Oh, let's sweep all this is bad. Let's let's not mention it to the American public anymore." Um but uh they as a response to that, they Congress gave the White House unilateral authority to block exports on like you said, 90-minute notice or 9-second notice or millisecond notice. That's an incredible power to give to the White House. The White House then is using it to stop Fable 5, but they didn't actually block US citizens from using Fable 5. They said no foreign national including somebody on US soil. Of course, that's unenforceable uh unless you just turn it off completely. But that was the mechanism for for saying, "Look, at the end of the day, who owns AI? Is it the government or is it the corporations?" The government is saying, >> That's the crux of the matter. That's the crux of the story. [laughter] >> And that ain't going back in the bag. So, so Polymarket says Fable 5 will be back out, you know, 90% chance within a

[00:40:00] month. Um but if you read the details of the Polymarket, it's a product named Fable 5 will be back out. >> Huh. >> Or and the or is irrelevant. >> [laughter] >> Right. >> The reality is the Fable 5 that comes back out will not be identical to the Fable 5 that was already out. It may be just patched or it may be dumbed down. We won't We'll have a very hard time knowing. But that'll resolve the crisis, but it'll be very much like Lip Bhutan going to the White House here with Intel. Uh Dario will go to the White House. Some wonderful meeting will happen behind the covers. Everyone will come out smiling. Fable five will come out. But that's not the story. The story is the government now tells you what you can and can't release and that's not going away. And it always had to be that way, right? Um Well, one thing I noticed with Fable five is you know, it it's blocking CBRN, so cyber, biological, radiological, and nuclear queries. But it also is blocking all of my AI foundation model research queries. And that's the that's the really

[00:41:00] interesting point cuz a big fraction of people who want to use it are AI researchers. Of course, AI researchers are early adopters of great AI. But they're effectively being told, "No, you're not allowed to recreate Fable five using Fable five as a tool because if we allowed you to do that, then anyone in the world could catch up to US AI." And that's the cornerstone that's going to get really tricky and and is going to basically be a real problem for all future releases both from OpenAI and from Anthropic. So, this is a major moment in you in human history, right? >> is. >> Salim, let me tee up the second half of the story then turn to you if I could. Um so, there was a backlash against uh the about against Fable five uh regarding surveillance and silent down growth and downgrade. So, before the export control bomb dropped, developers around the world were actually complaining about Fable five. While the model topped every benchmark and Alex, we've talked about this. Buried in a 319-page document were two things that sparked

[00:42:02] this revolt. First, Anthropic retained every prompt and every piece of context you fed it for at least 30 days. No exceptions even for the uh enterprise customers who had negotiated zero data retention. And second, and this is the wild one, if they will find detected that you're doing Frontier AI research like you just said, Dave, or were asking a question that was against its guardrails, it silently downgraded you to a weaker model without telling you. Essentially, Anthropic was evaluating your prompt and controlling your access to Frontier AI. You know, are you one of their customers or are you not? And and the reality is you can't do business this way if you can't depend upon the level of intelligence that you and your business are accessing. You know, what I said earlier, you know, I think this ends up forcing us to on-premises, open weight, open source, locally run models. And the kicker is that these all these models today are

[00:43:01] Chinese models. So, the self-imposed, you know, US restrictions are pushing American companies onto Chinese models. Salim, thoughts here. >> I want to echo Dave's comment. This is a massive story, maybe one of the biggest in decades around this because now we're entering Yeah, because it's now entering the same mental categories nuclear, crypto, biotech, advanced chips, etc., etc. We talked about this on the very last pod, if you guys remember, we said there's no way How do you not nationalize something this powerful, right? You You have to have controls over it, and what do you do? I think that this is also it shows the unbelievable gap between the technology and the policy frameworks and the tools we have to deal with it. For example, by using this export control thing, they've said that no non-US person can access the tool even if you're inside Anthropic. Well, I did a little research

[00:44:01] on this. Across all the frontier labs, 70% of the AI researchers, the elite researchers, are foreign-born. >> Yes. >> And are non-US citizens, and they come primarily from four countries: China, India, Taiwan, and the UK. So, so if you want to say to all the researchers, you can't touch these models, you're going to take all the top researchers that are in the US now and send them back to China and send them back to India, doesn't seem like a great idea to me. Not that the intent is wrong, but the policy framework is wrong, right? And I don't know what the right answer is here, except that that's clearly not a workable situation. Um somebody on Twitter said, "Well, David Sacks is a dual citizen. Should he be He's the AI czar." Not that we question his intent at all, but you've just Have you just blocked your own AI? You know, it's like this is like bizarreness totally bizarre world that we're living in. All these science fiction kind of plots are playing out in

[00:45:00] in real time as Alex talks about it. So, this is the the the it's clear that there's a glimpse going a clear line towards recursive self-improvement here. And this will kind of just changes everything. This will force everybody to go on premises. Satya Nadella put out a huge article on X over the weekend that Elon retweeted and a number of people have gone red saying the it's not so much the frontier model, it's the ecosystem that's important. And he's stepping right into this whole organizational singularity theory. You have to have control over the that intelligence. So, it will drive every company in the world to run a model on premises because you can't risk building a whole bunch of stuff on the cutting-edge model and having it being blocked arbitrarily overnight. That's going to be non-working working system. So, you're going to have to have orchestration and failed fallbacks into, "Okay, we'll run this stuff on the local model, but we need this separate model

[00:46:00] operating locally in case you need to fail over and do a switch over. So, this is going to cause a lot of complexity around this. We've foreseen this. We've kind of said this is going to happen because just not so much that the models might be nationalized, but the models are moving so fast, you can't just rely on one model. You're going to have to kind of have them a switching capability in your enterprise no matter what happens. So, it's it's it's insane to see how this will play out. I think this may take longer than Alex says, and I think it's going to be very damaging to all the frontier labs around this because now how do you how do you put any kind of fair assessment on any of this stuff? So, I'm kind of totally in a modeless where this goes. >> Dave, I mean, this thought that they're controlling your access to frontier models, how do you think about going to, you know, sort of Kimmy K2.7 as your baseline or >> That's such a great

[00:47:00] >> question. >> Yeah, such a great question. You know, it's it's really a hairy balance cuz I had one one day of unfettered access to fable, then I had one day where I was getting nerfed all day. And that that was the day where it would silently fail and and go back to 4.8 and not tell you. Then they started telling you, "Okay, you're doing AI research. We're downgrading you to 4.8." So, then you're just imagine if you got into your car and you said, "Hey car, I'm going to drive to the red light district." And the car goes, "You shouldn't be going there. I'm not driving you there." And then so then now you're negotiating with your car. No, no, I'm just going to the star market, you know, I'm going to go get some groceries. So, they say, "Oh, okay. Well, let me think about it." Like, okay, you're now negotiating with this product that you you're paying for. That's where you are with with with fable five. It's just crazy, but it's only going to get worse. So, so then the third day I want to push >> I want to push back just on that just a little bit. Just a little bit, which is that if you were in a car, I I would use the gearbox automatic transmission. If

[00:48:01] you're going at slower speed, the car will shift you to a lower gear to optimize for that speed. And I think we'll end up with that kind of a model where under the hood, an invisible to the kind of the end thing >> Great segue. That That is a great segue into Okay. Yeah, I I think we're we're missing we're missing the the the central story here with with Fable 5. So, it's not just that chemical or biological or cyber queries were being downgraded silently or otherwise to Opus. It's that ML oriented queries that could be potentially used by other frontier labs weren't just being downgraded. Anthropic expressly reserved the right to launch essentially poisoning attacks to downgrade not the the model that was on the serving side, but to actively interfere with and poison the users. And And so, Dave, if we were to stretch your analogy, it's not so much the car is refusing to drive you to a certain location. The drive saying car would be

[00:49:01] saying, "Yeah, I'll drive you to this location, but but I might, you know, shoot you on on the way. I reserve the right to throw you out of the car and run you over. And And I'm not going to give you any advanced warning. >> That's a very fair analogy. A very fair analogy, which is why they turned it off right away. >> And And they they had to to backtrack on that and say, "No, actually, we're we're going to tell you before we poison you." The The The the elephant in this particular room with the Chinese open weight models, the the cyber risk is always, "Okay, maybe the CCP will pressure its frontier labs via public private sector fusion to inject vulnerabilities, say into code that's generated from the Chinese open weight models." Well, now with the with the top Western labs potentially not just injecting vulnerabilities but pulling up the ladder for anyone else who wants to to train any AIs. Arguably

[00:50:00] it's an anti-competitive position. I would be very surprised if if there isn't some sort of class action and or antitrust suit or injunction that's pulled. I would I'm shocked. I would be shocked if in the next few weeks someone doesn't launch a benchmark or an eval to look for poisoning attacks from these models and start evaluating both Western and Chinese models based on whether they're trying to poison users who try to do any AI research. This is going to become I think a new way that we judge the capabilities of frontier models. Are they actively trying to subvert the users? And this isn't the future that we were supposed to be in. The models are supposed to be helpful to the users, not trying to actively subvert them. But say la vie, this is what we find ourselves in. >> Well, Alex, you mentioned the paper. >> Uh go go ahead, David, and I'll I'll go next. >> Well, so so back to Peter's question, you know, what can you move to a Chinese model or Gemma from from uh Google as as viable, too? Uh and have any chance of catching up to Fable? And if you're a foreign country

[00:51:00] right now and you've decided internally, this is not acceptable. The The White House cannot unilaterally decide our AI future here in, you know, Ireland, Turkey, Iran. Uh if you make that decision, you have no choice but then to say, "We need a crash program here, very similar to nuclear. We need a crash program here to see if we can make a Chinese model catch up." Now Now Peter's question is a really tricky one. Uh the difference between Fable and Opus 4.8 or uh or 5.5 uh OpenAI GPT 5.5, to me it was night and day. Like in the one day that I had unfettered use of Fable, it could work indefinitely on on research problems. And I asked it for its best ideas on where to go next with my research, and I'm still working down that list. In an hour it gave me a list of things >> It's a fable. >> [laughter] >> As opposed to a myth. >> They were prophetic in there. >> They were prophetic. >> Uh it is an it is a story, that's for

[00:52:01] sure. Um So uh so yeah, I know it's night and day, and uh the question then becomes, yeah, can you take a smaller model, but it's only focused on AI research, and make it as good, maybe fewer parameters, maybe absolutely brilliant, maybe the training data is only related to this specific problem. I'm not sure. I don't think anyone knows the answer to that, but I know that if you had access to Fable, you could probably figure it out in a in about a month. But without access to Fable, and working on 4.8, I'm not sure you can even figure it out unless you're absolutely brilliant and you got a lot of great research. >> think I don't think this is like a stable equilibrium. I would never claim that it is. I think it's like a dynamic type equilibrium, where again, in in Anthropic's mind and probably in the US government's mind, the goal isn't to maintain long-term hegemony with just this model. It's just about who gets to the end of the recursive self-improvement rainbow first. And the gap between who gets there first and who gets there second is probably only going

[00:53:00] to be a few months, and this is just about, you know, >> But the implications are huge. >> Yes. >> The Yeah. >> And note that note that to Dave's point, every country in the world is going to be going, okay, we need our own sovereign AI capability. >> That can't be shut down by the US government, right? >> But that's that's why these two stories are so tied together. If you had unfettered access to Fable and its successors, you would have no trouble designing a rocket, none at all, designing a rocket that can launch debris into our orbital data centers. This is all got to get resolved in a time period of several months. >> Everybody, welcome to the health section of Moonshots, brought to you by Fountain Life. You know, AI is impacting every aspect of our lives, how we teach our kids, how we do our business, but one of the most important things that AI can deliver to us is health. And one of the things I think about when, you know, shooting for 100, 120, is am I going to have the cognitive health to be able to think clearly and keep my wits about me for the next 50 years? I'm joined here today by Dr. Don Meisner, the chief

[00:54:01] medical officer of Fountain Life and a member of my Fountain Life medical team. Don, a pleasure. So, Don, talk to me about brain health. >> Brain health, you know, your Right. This is the number one concern people coming into Fountain Life have is, will I remember the name of my child and the face of my loved one? 45% of dementia cases are entirely preventable with lifestyle. And what was really intriguing to me, Peter, is that a quarter of our members had advanced brain age. But over 13 months of us really helping them live healthier lifestyles, eating healthier, moving their body regularly, and optimizing sleep. People overlook that so often, but that sleep optimization is critical for our brain health. What we showed is that we were able to improve the brain age in 46% of those individuals. That's a powerful number. >> That's amazing. You know, one of the things I love about Fountain is we're constantly searching the world for the most advanced therapeutics and bringing them to our members. So, for me and all of you, I hope that you

[00:55:01] appreciate the fact that you can become the CEO of your own health. You can make sure that you've got the cognitive clarity for the next 50 years. Come and check it out. fountainlife.com/peter to learn more and become the CEO of your health. Now, back to the episode. I'm going to move us on to our next conversation, if you guys are okay with it, on OpenAI. They have a few breaking stories here. So, the first OpenAI story is on their pricing. So, while Anthropic is busy fighting the US government, uh Sam Altman smells massive opportunity. The Wall Street Journal reports OpenAI is considering a drastic price cut uh as it braces for an all-out war against Anthropic. So, if you think about the timing, Anthropic has just disabled its top two models and this is Sam Altman, you know, saying, "Okay, guys, developers who are pissed off at this being hap- this happening, you know, we're providing cheaper prices. Come work with us. There's no 30-day retention of data. There's no downgrading. We're going to grab US market." In one sense, this is

[00:56:02] where the demonetization of intelligence happening in real time. Thoughts, Alex, on this idea of price reductions? >> Well, OpenAI is no stranger to aggressive price reduction and Sam, as we've talked about on the pod previously, has made no bones about the cost of intelligence per unit capability hyper deflating by something like 40x year-over-year. So, I think there's a a way to to sort of to spin or to repackage the natural hyper deflation as being a competitive advantage. But, of course, Anthropic itself is hyper deflating. Yes, Anthropic from a marketing perspective probably could be much more aggressive about promoting price cuts. Anthropic has been, at least optically, the the polar opposite of OpenAI when it comes to packaging up prices. Open Anthropic will will never sort of advertise, "Well, like we've we've gone

[00:57:01] from X dollars per million tokens down to X over 10 per million tokens." Rather, they'll just announce a new model and the new model will have per token pricing that's either the same or slightly higher, but with vastly higher capabilities, whereas OpenAI goes out of its way to keep older models or distilled versions of older models around and advertise the price war. I I don't actually think in an era of recursive self-improvement, I I don't think OpenAI necessarily has any sort of structural advantage relative to Anthropic. Open AI maybe if it had stuck with the original Stargate strategy of owning its own data centers, maybe it would have had a structural advantage. But now Anthropic, this is public reporting, Anthropic is leasing its own data centers itself. So it doesn't seem like ownership of the compute stack offers Open AI any now long-term structural cost advantage.

[00:58:00] So I'm not sure price cuts are actually anything deeper than just sort of an optical strategy in the short term. You could do short-term discounts, but they're they're both in the recursive self-improvement loop at this point and it's not obvious that to me at least that either Open AI is months ahead of Anthropic or vice versa. We're we're seeing competitive model releases that leapfrog each other from now what seems to be the duopoly left at the end of the recursive self-improvement race where they're just leapfrogging each other every few weeks. So to me token pricing drops, drastic cuts seems more on the end of marketing than anything else. I reserve the right to to be proven wrong here, but I think Anthropic is just as capable capability wise of effectively cutting costs. >> Dave, can I I'm going to tee up the second half of the story and ask for your comments here. So Sam Altman put out a quote that stopped me cold. He said, quote, the faster that recursive self-improvement takes off, the more it could be advantageous for us to delay

[00:59:02] Open AI's IPO. So this is the CEO of the most famous AI lab on the planet saying as the technology gets better, the less we want to rush to an IPO. My guess is that he's saying, you know, AI compounding its own intelligence means that it's that our companies are getting more and more valuable every single day and we don't want to sell the equity cheap. What are your thoughts here, Dave? >> Well well, the the biggest observation is that Sam's not a significant shareholder in OpenAI. Maybe not a shareholder Last I checked, not a shareholder at all. Um, and when I interviewed him way back in 2020, he was saying this is the biggest risk in the history of humanity, and we need to slow down, and we need to be thoughtful, and we need to think about how the world's going to be governed post-AGI. And that was back in 2020. So, if he if he really feels like, "Wow, RSI is imminent, us being a public company puts a huge amount of shareholder pressure on the company to roll things out that we shouldn't be rolling out."

[01:00:01] He doesn't have any economic damage at all by delaying the IPO. He has invested in over 400 companies surrounding OpenAI. And so So, in a sense, that's a good thing cuz it makes him objective about not trying to force something out that may be a risk to the world. Um, but I I I do think also Sam is struggling for relevance right now. If you If you think who's going to determine how the world works in 2027 and beyond, uh, Elon clearly matters a lot. He's super close with David Sacks. He's been around the White House for a long time because rockets have always been tied to the to the government. Um, Dario is new to this game, but he's there right now, and he's he's getting the uh this is how it works speech right now in the Oval Office, probably. Um, and and also uh remember Dario and Elon uh Dario's renting all of Elon's chips in in the uh Colossus 1 and Colossus 2. So, they're already in bed together. So, it seems very likely that the the future governance of the entire world now is going to be a conversation between David

[01:01:00] Sacks, Donald Trump, Elon Musk, and Dario Amodei. And Dario's obviously publishing documents about this is how it should work. Here are my preliminary thoughts. So, all of that is all tied together. Sam, where are you? You know, >> [laughter] >> what what's your contribution to the whole future of world governance? You were called the most powerful man in the world 1 year ago. Now, where are you? And so, I I think price cuts aren't really going to put him back on the map, but it it certainly is a move in that direction. But my core observation there is that he can delay the IPO with no personal impact to his personal finances. >> So you don't buy it that you know the company you don't that his rationale for this is that the company is going to get exponentially more valuable and delaying until after RSI is the best way to extract value. >> I I don't even know if he said that. I thought that his point was more that RSI is so risky that we need to figure it out before we go public. That that was my read on it. Maybe I misread it.

[01:02:01] >> Salim, I want to tee up the third part of this story for you. >> Okay. >> You want you want to comment on this first before I tee it up? >> Um just the the broader point here is that in clearly with these price drops intelligence is becoming utility and we're commoditizing it. And I think this allows this is the winner here becomes every enterprise and every startup being able to run more intelligence. And the the outcome I would say is here's a here's a Salim's law that I'd throw out. Every 10x drop in tokens means we're doing 100 times more experiments. >> I love that. >> And I think it's just going to be great for the world. >> Yep, that's awesome. All right, let me tee this up for you Salim first and then Alex afterwards. So OpenAI's engineering lead on Codex made a quiet announcement that could be the single most futuristic story we're covering today. He wrote that Codex can now set its own goals. In his words, everything we build we also build as a tool for agents. This is a generalization of meta prompting where

[01:03:00] you let the agent set its own task based on your intent. A developer at Codex team added the following. Basically quote, I never write my own goals anymore. I ask Codex to write one for itself and one for each sub agent it spawns. You know, we've crossed the point, Selene, where instead of telling your AI what you know, you want [clears throat] it to do, you tell your AI what you want and let it decide what to do for you. It's the beginning of AIs setting their own objectives. Thoughts? >> Well, this is that part where once you get Alex's inner loop going, right? Where you have recursive self-improvement at the workflow level, once you start moving workflows over. By the way, our pilot program for the organizational singularity is pretty much set now. Next week we start. We have 10 companies. We're going to move them through this three-month process of rewriting yourself from traditional human-centric to an AI-centric organization.

[01:04:00] >> On the edge of that path. Burn that pathway in at the edge. Super exciting. We've picked 10 very different companies to start off with so we learn the most and we're going to learn as a group and see where this goes. The Once you start that inner loop going, then obviously every bonus or increase in in AI adds to that learning loop. And what essentially what Satya Nadella said in his article over the weekend is that that is ratifies this entire thesis. You might as well have written half of Solve Everything and half of my organizational singularity thesis. That they you create that inner flywheel and then essentially you just start moving more and more workflows to that and that's the massive opportunity for every because the core their their intelligence and the future of value in any enterprise will not be what data you had, how many customers you had. It's how quickly you're learning and taking advantage of a learning loop to augment products and services, offer new ideas,

[01:05:01] evaluate strategic alternatives, etc. etc. So, by the way, I'm updating the book right now about once a week and I'm we're launch we've launched a free cloud skill that goes along with it. And uh somebody tweeted uh sent us a note going, "This brought tears to my eyes. The fact that I can now run my entire company on your model." >> Where do you just want to go to find that out, Alex? >> Uh go to openexo.com. It's free to register, and it's free to download the book and the cloud skill. And every week we're updating and I'm going to be putting out a video on what changed this week uh in terms of what are we seeing out there. So, we've already absorbed Satya's stuff into it. The we have a new chapter on uh how do you need to have a data lake and move uh all your enterprise data out of ERP systems, etc., so that you have free access to it right now. Right? Like today, if you look at the architect enterprise architecture, you have your cloud and connectivity, and then you have your ERP and operational systems, and your data and process workflows are

[01:06:00] all uh bound into the horrible mess of spaghetti there. And then you're trying to layer layer AI on top of that, and of course it's not getting a lot of value because it's all stuck, all bound up. The future will be your connectivity and cloud, a data lake that's your proprietary data lake, and then workflows on top of that. And this is what the ERP folks are freaking out about because if that they go to that, they lose their stickiness. Uh and so they're fighting like hell to retain their position inside the corporate stack. It's quite an interesting tension playing out. >> Alex, Codex can set its own goals. What does this mean? Implications, please. >> Well, self-determination for AI agents, obviously. The >> [clears throat] >> We're doing personhood, yeah. No, AI personhood. We're We're speed running the accelerando or accelerando future. I I think that that goes without saying. I also want to comment though on the the Sam Altman and RSI speed up and IPO timing story. I think there sort of there there's a shallow take and a deeper take. The The shallow take would be, well, of course

[01:07:01] Sam is saying this. Sam feels pressure to generate revenue to justify the IPO, and most of that new revenue is likely to come from Codex and Codex is being designed for recursive self-improvement. So, a sort of a glass half empty take on the RSI takeoff and OpenAI IPO timing is, well, Sam is just putting a happy face on the need to grow Codex revenue even more before OpenAI is ready to go public. That that's glass half empty sort of negative take. There there's a a deeper take that's more profound that I haven't heard anyone discussing, which is if we actually take this at face value and not some sort of spin on Codex financials, if IPOs are being delayed because large private companies don't need external capital or external liquidity because they're achieving recursive self-improvement, that in my mind marks

[01:08:01] potentially the beginning of a decoupling between technology and capital. Everyone, broadly speaking, a lot of people, a lot of the commentariat are hand-wringing, as has been the case for more than a century, about capital substituting for labor. What happens when the AI takes all of the human jobs? That's capital v labor. I've heard almost no one commenting on what happens if technology substitutes for capital. Will we need capital in a few decades? Or does capital itself get displaced by technological advances? And this, in my mind, if the story has legs and if it isn't just a happy spin on Codex revenue generation or otherwise OpenAI's balance sheet and income statement, this is a canary for recursive self-improvement, which is underneath itself, it's technology improving technology, maybe not even needing capital as much in the future. And if if we start to see technology

[01:09:01] decouple from capital, this is like an early warning signal for what a post-capitalist economy could look like where technology is just so empowered, you don't actually need capital very much anymore. So, punchline >> I agree. Just have to add, keep in mind that that OpenAI just raised 122 billion, bigger than the SpaceX IPO capital raise. They literally just raised that money. So, I agree that that is the inevitable outcome, but they also are so tanked up right now. They don't need the IPO to keep up with SpaceX on or Anthropic on any capital raised metric. >> Fascinating. All right. I'm going to move us on to our next >> Wait, wait. I just want to double down on Alex's point here. There's something really profound here, right? Which is that you know, in the past, we valued uh technology, we valued uh assets, we valued stocks. Um John Hagel used to

[01:10:02] make this point that we're moving from stocks from valuing stocks to valuing flows, right? But now we're moving from stocks and flows, forgetting even the thing you know, the data and the intelligence loop is what we're value going to value in the future. And that's a very profound shift for how we're going to value everything going forward. >> Yeah. >> All right. If this is all exciting to you, I want to invite everybody listening to the 2026 Moonshot Gathering. Excited on this. We're going to start unveiling who is going to be at the Moonshot Gathering. Of course, the Moonshot mates will all be there together. Uh announcing today, Palmer Lucky is going to be joining us there. Palmer, the CEO of Anduril, uh an extraordinary entrepreneur, uh will be joining us during that day. Astro Teller, the captain of moonshots at X, uh he's going to be there teaching you how to create a moonshot organization Uh and we've got Kathy Wood, the head of Arc Invest

[01:11:01] talking about investing in AI. It's going to be 1,500 builders, networking opportunities galore. We're going to have the culmination of the future vision X Prize. This is the world's largest film competition bringing us the next generation of Star Trek if you would. You heard Elon speaking about that earlier. We have, you know, $5 million in prize capital generating these future films. You'll see the five finalists. So, this is going to be for content creators as well. We've got the Gemini X Prize. This is the world's largest hackathon, a 90-day hackathon. We have over 15,000 entries so far. The top five builders who have gone from zero to significant revenue in 90 days are going to be there teaching everybody what they did and how they did it. Salim, you're going to be covering the organizational singularity. What are you going to What are people going to learn from you there? >> Well, we'll go through a whole dedicated flow on how do you navigate from your

[01:12:00] legacy thinking on building a startup to the full pure intelligence stack and building the EXO 3.0 and we'll talk through people how do you take an existing company and rewrite it for the new world. The The our initial estimates are that if you build a pure play EXO with intelligence at the heart of it, you'll your performance goes up about 100X compared to the legacy. >> So, if you want to spend some time with Salim on that, >> attractor. Yes, we'll do a whole segment and section on that for those interested in in that part of it. >> And also, Alex, super excited for you to present the paper that you have brilliantly primarily authored on proud to be your co-author, but solve everything. What are you going to be covering? >> Oh gosh, this makes me sound like a management consultant, which I'm very much not. I want everyone to solve the world's hardest problem. So, I imagine this will probably take some form of ask me almost anything. But to the extent

[01:13:02] that folks who were attending the the Moonshots gathering are interested in solving the world's hardest problems, I would love to to help you however I can, even if it's just answering questions about uh the book {slash} essay with Peter or or otherwise encouraging you to aim much higher than just building yet another SAS. Let's solve everything together. >> I love that. An AMA with Alex, go deep one-on-one with him. Uh we're going to have a session on how to design X prizes, a session on investing in AI. Uh Dave, excited to have you help lead that. And then getting funding for your startup. So, it's taking place on September the 25th in downtown LA. It goes from 8:00 a.m. till 10:00 p.m. It is a full packed day. Uh we are just opening tickets now. Uh many of you pre-purchased tickets early on. Uh and we're opening up the main floor. Go to moonshots.com to get more information and join us. It will sell out very quickly. It's an It's

[01:14:01] in a beautiful theater. All right. Um so, excited for that, guys. It's going to be an awesome day together. Our next topic, data centers. Okay. So, let me give you the single most exponential number in AI right now. Epic AI reports that since Colossus one came online in August of 2024, right? This is what Elon built in 122 days, uh the record for compute in a single AI data center has doubled every 7 months. There's no sign of any slowing through 2028. Globally, AI computing capacity is now 3.3 X per year. That's the demand curve, and it's going vertical. Now, this is where it all hits the wall. If you want to build a data center, and this blows me away, there is a 2 and 1/2 year wait on power transformers alone, and a 3-year wait on step-up transformers. The bottleneck in AI is no longer the chips, it's not even

[01:15:00] the money. It's the boring, unglamorous, century-old electronic electronic hardware here. So, you know, I did a little search. The companies leading in these areas are Hitachi, Siemens, GE Vernova, Hyundai, Hisung Hico, Virginia Transformer, and DeltaStar. And these companies have been rocketing like, you know, 100% to 400% year-on-year growth. Alex, what do you think about this? >> There's an elephant in this room, not just in the other room. The The elephant is terrestrial versus orbital data centers. So, if you just extrapolate this trend out, you find that for the foreseeable future, the largest data centers need to remain terrestrial, while perhaps by the early 2030s, barring some left turn in civilization, much of the marginal new compute will remain in orbital data centers. So, we have this sort of weird bipolar civilizational compute footprint where

[01:16:02] if you need to do very large coherent training runs, you'll do it on land, but if you want inference where you don't necessarily care about coherence, you'll deploy it to orbit. And sort of squint, maybe Earth, at least until we figure out how to build very large coherent clusters not terrestrial. Earth becomes the training hub, and space becomes the inference hub, and it's it's this sort of weird gradient between them. We build on land, we deploy to orbit. That That's I think the the regime we're likely to find ourselves in, again, barring some left turn in the early 2030s. The question and the elephant in the room is at some point, if Elon's Dyson swarm or competitors Dyson swarms come to pass, someone is surely going to look around and ask, again, barring some radical advance in distributed training, why do we have so much compute in orbit that

[01:17:00] we're not using for training? And why aren't we building larger clusters? So, I think at that point the the future bifurcates. Either we get some radical algorithmic advance in distributed training, in which case this trend towards ever larger single coherent clusters doubling every 7 months peaks. We get sort of a Hubbard peak for the the size of data centers and then data centers start to shrink and become more distributed and more edge-like. That's one possibility. And I I do think we are very likely going to get major algorithmic advances for distributed training sometime in the next few years. Possibly we already have it and it's just not evenly distributed yet. Or if it turns out, although I I suspect this is not the case, that there is no good algorithmic way to to to decentralize training, then the elephant left in the room is how can we build extremely large orbital coherent

[01:18:00] training clusters? And for that lower earth orbit, sun synchronous orbit, not looking that attractive. But what about on the moon? >> Train it on the moon. >> Is is [clears throat] where I was going. So, so if you're going to build a non-terrestrial supercluster that has to double in size or or the largest of which has to double in size every 7 months, you're not going to do it in in Leo. You're not going to do it in SSO. You're going to want to do it on the moon. And >> On the south pole, baby. >> Yeah, in Shackleton or otherwise. So, that that that then becomes the argument for lunar data centers. >> Yes, agreed. Selene, I I was reading into your facial expressions, your thoughts here. >> Well, I think uh it's it's an a very very exciting future. I think it's further away than people think, and it's far enough away that we better solve our problems on Earth. Otherwise, we won't get to that point. I remember having a conversation with Masa's team at SoftBank about his 300-year vision. And and I was like, great to have the

[01:19:00] 300-year vision. Let's get through the next 20. And then we all laughed and took it out. So, I think we need to spend quite a lot of time focusing on how do we navigate that. Just look at that export order and the broader implications of that, and you have to we have to solve some really big problems here, and that will then enable us to change things and take full advantage of what Elon's doing. >> Dave, uh 3.3x growth year-on-year of data centers at the same time that 50% of the 9 GW of planned 2026 compute has gotten delayed due to organized activist protests. Um you know, we saw the same kind of protests hit us in the nuclear power plants 30 years ago, and the US has had zero new reactors. China has 100. Thoughts on that? >> It's funny you bring that up cuz on my graduation day, there's always somebody

[01:20:00] picketing for some reason on graduation day, and it was it was nuclear MIT's involvement in nuclear research. But it's always irrelevant in hindsight, you know, it's just it's just noise in hindsight. I do want to start by saying I completely agree with what Alex just said. I reached the exact same conclusion that that lunar data centers are inevitable. You need some kind of thin atmosphere to protect you. The solar efficiency drop is irrelevant. The panels are so cheap compared to everything else in a data center, and the the cooling is so much easier on the moon than it is in orbit. And And that begs the question of then are we going to have Mars data centers as well? Um but I I also want to say from an investment point of view uh regardless of what happens in space, terrestrial data centers are going to continue to grow as quickly as we can build them at a minimum as a backup plan. But as a maximum as the bridge to the the ultimate Dyson swarm. >> And who builds the best data centers right >> Say again? >> And who I said who's building the best

[01:21:00] data centers right now? Elon is. He's become a hyperscaler. >> Yeah, well and Chase Lochmiller at Crusoe Project Stargate. Um those are the two. Uh the the Larry Ellison universe over there and the Elon universe. And they're they're you know, they share each other's houses. They're not They're not competing. They're They're both building. Uh but they all both recognize there's infinite demand. This is an all boats rising with the tide situation. If you can get the transformers, if you can get the generators, get the solar panels, uh you're going to make money, period. And you know, remember when we interviewed Elon, too, he was saying, "Look, 10x global GDP expansion in 10 years." So you go to over a quadrillion dollars of GDP. I keep asking all these young founding teams, "How many people do you think are really working on anything foundational in AI? Give me a number, you know, 100,000, 10,000, a million, whatever it is. Take 1.2 quadrillion dollars, divide by that number, that's your quota. And it usually comes out to, "Wow, my quota is 10 billion dollars." Just to be on par, I have to produce 10

[01:22:02] billion dollars of GDP expansion. >> Oh. >> And that that really opens their minds to like think bigger. Like build you know, just build bigger. >> way of framing it. That's awesome. >> [laughter] >> I love you guys. You're so brilliant. All right. I'm going to move us on to our next our next conversation point, which is the future of work. Uh let me share a video from friend of the pod. All right. Question is, should AI pay taxes? Andrew Yang says yes. Let's listen to this video and discuss it. >> We should be taxing AI and the robot and the agents and trying to lighten up on all of the taxes that we as workers pay and also that employers pay that end up discouraging companies from hiring people. So, I'm the CEO of a company Noble Mobile and when we hire someone, 40 to 50% of the money we're spending does not go to the worker either because it's social security taxes or health care or income taxes that are paid by

[01:23:00] the workers. So, let's try and lighten up all of that and tax the bots. >> All right, tax the bots. Saleem, let's go to you first on this. What are your thoughts? Yes, no? >> Um no, because you're just going to slow down the you're going to He's basically saying tax cognition. And I don't think that's a working You can tax the outputs of cognition. But, you know, we've always been taxing labor and now labor's not that taxable cuz labor is kind of evaporating. So, you have to figure out how to tax capital and the outputs of cognition. But, if you tax say the tokens of the robots, you're going to just slow down progress massively in hugely important areas like like solve cancer and other critical areas like that. >> Dave? >> Uh it's irrelevant. I mean, we we already have a corporate income tax. So, if you stop paying employees, that becomes profit. The profit gets taxed. The collections on it are almost identical. It's It's still It's just silly. And the same with the Bernie Sanders version of it. Oh, yeah, tax the bots. It's good for populists. You know, everyone's

[01:24:01] worried about AI, let's tax it. Great thing to say if you're a politician, but we already tax it cuz we tax every corporation. And so, we're fine. You know, you could make a case that people dodge the corporate income tax too much and we need to close those loopholes. I think that's a no-brainer. I don't know why we allow those loopholes. But, there's There's fundamental restructuring required here. We already tax every corporation. These are very big, very profitable corporations. They're going to pay a ton of tax. You want to raise the tax rate, raise the tax rate. You don't need a new law. Just >> I don't think you should raise it. I think it's >> here >> Probably not. Uh so, a a tax on AI specifically would probably be presumably an excise tax, a tax on particular goods and services, not a broad say income tax or sales tax. But in my mind, every tax is a distortion. So, the question you have to ask yourself is, do you really want to distort the economy by penalizing superintelligence? I think there are probably far better ways to mitigate any

[01:25:02] side effects of AI displacement of human labor than just taxing the AI. I think that's that's probably a relatively naive approach. So, on the spectrum, I I've mentioned this publicly on the the pod in the past, but on the spectrum from UBI, universal basic income, to UBS, universal basic services, to universal basic equity, UBE, or universal basic computer/capability, UBC, I tend to think that using superintelligence to drive the cost of living down to near zero is probably far more effective as a remediation for any AI displacement of human labor than just a naive taxation of superintelligence. I don't think we necessarily want the perverse incentives, as Salim and Dave have mentioned, from disincentivizing the taxation of superintelligence. >> Totally. And this is totally right. And you know what you're going to see, Alex? On UHI. You're going to see more and more politicians saying, "Hey, let's let's

[01:26:01] tax you if you lose your job, we're going to tax the AI that took your job, and we're going to give you that money." And then, they're all going to say that cuz that's what people want to hear. But then, when you say, "Well, I understand your idea on the tax side, what's your idea on how to give Do I get paid exactly what I was getting paid before, or is there some declining scale? And none of them will talk about that. Because it's very hard. And it's not at all obvious how you do it. But that's the problem they should be working on. Like the collection is the easy part. Who gets what is by far the harder part. You'll see none of them will talk about it. >> The first person I heard speak about this was actually Jeff Bezos saying let's tax the robots. Um I wonder if he still believes that at this point. >> I think we'll we'll probably The The irony like just as we were discussing earlier, Dario puts out this lengthy essay saying regulate us, then the government regulates them, and then he cries foul. I I fully expect that the Frontier Labs will say um like give up golden shares or tax us

[01:27:01] or otherwise create universal basic fill in the blank. And then I I I strongly suspect in the next few months the government's going to do exactly that, and everyone will cry foul. So I I I think any Frontier Labs that that don't have a precise idea for what they want the desired economic end state to be should probably advocate a little bit less for just sort of blanket yes tax us to to create UB fill in the blank, and have a really concrete idea of what the end state is. And the end state could look like some sort of universal basic equity or dividend. I think that's probably the easiest policy to implement. It doesn't require deep thought about computed. Probably requires, at least in the US, some sort of sovereign wealth fund to to manage it, which we've talked about on the pod in the past. But I I do think that this is coming to a head, all of this uh taxation via excise tax or via some sort of golden share-based universal basic dividend or otherwise in the next few

[01:28:01] months, because we're about to see the OpenAI and Anthropic IPOs. >> Yeah. >> Well, I think if you if you listen to those old Elon Musk videos, which I highly recommend, when SpaceX was first getting off the ground. They keep asking him, "How can you realistically expect to compete with NASA and George W. Bush?" >> [laughter] >> It gives you a real sense of how transient and irrelevant any given government is compared to a long-term mission like Elon's or like Jeff Bezos's. >> This episode is brought to you by Blitzcy, autonomous software development with infinite code context. Blitzcy uses thousands of specialized AI agents that think for hours to understand enterprise-scale code bases with millions of lines of code. Engineers start every development sprint with the Blitzcy platform, bringing in their development requirements. The Blitzcy platform provides a plan, then generates and precompiles code for each task. Blitzcy delivers 80% or more of the development work autonomously,

[01:29:01] while providing a guide for the final 20% of human development work required to complete the sprint. Enterprises are achieving a 5x engineering velocity increase when incorporating Blitzcy as their pre-IDE development tool, pairing it with their coding co-pilot of choice to bring an AI-native SDLC into their org. Ready to 5x your engineering velocity? Visit blitzcy.com to schedule a demo and start building with Blitzcy today. >> [music] >> All right, I'm going to close out our uh future work section uh to discuss a Metatrend Substack I put out titled "The Most Dangerous Demographic in History Is About to Get Bigger." And I don't like dystopian stories, and this is more about getting the conversation out there, cuz I think it's important conversation for us to have and understand what history teaches us. So, every major revolution in modern history shares one ingredient. Not

[01:30:01] ideology, not technology, not even poverty. It's young men, usually between ages 18 to 28, who are educated enough to have an expectation about what the future should look like. And that gap between what they actually are inheriting and what they were promised is a combustible force in human history. Uh I want to share some data and I'd like to have a conversation. We've talked about the notion that we're going to have some turbulence over the next two to eight years and uh I want to do everything I can to help, you know, ameliorate that turbulence. I'm doing that with the Future Vision X Prize and the Gemini X Prize in part and through our conversations here. So, let me share a couple of slides of data. Um So, on the left is uh from Charter, it's the Federal Reserve Bank of New York. And what we're seeing here uh is the difficulty in getting jobs as a

[01:31:00] function of all college grads, all workers, and recent college grads. And what you see that red line there is that recent college grads are the group that are out of work uh the longest, having the most difficulty. That That spike you see, of course, is is COVID. Uh on the right hand is some charts that came from uh our friend Erik Brynjolfsson at the Stanford AI Index Report. Uh the upper chart there says shows software engineers and this is you see a a distinctly uh uh a distinctly, you know, uh uh divergent line of age 22 to 25-year-old dropping in terms of software developers. So, young software developers not getting jobs, uh dropping pretty linearly. And then the bottom chart here is customer support agents. Again, that young group 22 to 25 uh

[01:32:01] diverging from the rest. So, you know, we've talked about the data being murky. A lot of people are coming out right now, including Sam and Dario, um and and Marc Andreessen, saying, "Listen, the job apocalypse is a myth. It's not happening." But, you know, while I might agree that in general, we have the lowest unemployment rate ever, the concern is those young men, mostly, out of work. Uh because they haven't gotten jobs after going through the social contract. And one more data point here to show, uh so I did the research looking at basically, uh revolutions over time led by the youth. Uh there are 20 of them, you know, starting with the French Revolution, where the youth helped overthrow monarchy and aristocrat aristocratic privileges, the Russian Bolshevik Revolution, the Chinese Youth Revolution, the Cultural Revolution, the Iranian Revolution, anti-apartheid youth

[01:33:02] revolution in South Africa, the People's Power Revolt in the Philippines, the first uh Intifada, Tiananmen Square, Arab Spring, the Hong Kong Umbrella Movement. Um so, I raise this again uh because I think it's a conversation that needs to be had. Um and we need to get out in front of this. Uh Saleem, you want to kick it off? >> Well, you know, the the in in the 20th century, the big fight was capitalism versus socialism, right? Uh the in this we've got a better fight now, which is like who owns the exponential surplus, who owns abundance, and how do we distribute that? Whether it's UBI, UBS, UB something. Uh the it is going to create a lot of angst, and what I think the bigger issue today is the social media's amplifying those like 100x. And I think that's the biggest structural uh problem between today and what we had before because bad

[01:34:01] news and panic spreads so much faster than good news and truth. And so you really have to solve for that structural imbalance. There's going to be no no clear answer to it except that we really have a huge problem in terms of how to distribute some of that. Europe takes the view of let's create a protective layer for all of society. Here in the US we have the opposite view. And we have some big problems like 50% of the country can't put $500 together in an emergency. That's just a staggering commentary for the protecting that lower layer. And so we've got to figure out how to get abundance down to the bottom very very quickly. And we get get this comment repeatedly from our community members and comments etc. How are we going to help that thing? So the the abundance prize Peter that that is on the table is I think maybe the most important thing in the world to focus on in terms of getting the cost of living down to a very low

[01:35:00] level in a powerful way. >> Yeah. And by the way, whether or not it's true that youth are not getting jobs or whether or not it's true that we're going to have a job apocalypse, people believe that. Right? There's a There's a pandemic of fear. And in that pandemic of fear, that's where you know negative things happen. All right, Dave. >> Yeah. >> Yeah, good. >> The point I'm making is that we we've kind of the the some broad policies that have allowed a pervasive culture of fear to permeate the entire US social structure. Right? And that's that has to be That is going to add fuel to the fire. It's gasoline on top of everything else. >> Yeah. Dave, want to jump in? >> Peter, it's brilliant that you're bringing this up and observing it. You know, the one one data point on that slide I'm most familiar with is the Iranian Revolution cuz I was in the country right before before it broke out. Um and yeah, in that case the uh it was the college students that overtook

[01:36:01] the embassy and then took all those hostages forever. Um and that started the whole thing. But you know, those college students said, "Look, what we are doing right now in this country is not right. We shouldn't have a monarchy. This is just not and all the concentration of wealth is nuts. We need something new." They weren't thinking that it would end up being 45 years of religious rule. >> Yeah, wow. >> They had did not have that in mind at all. So yeah, they get really angry, but they don't have a plan. They just know this current plan isn't right. So I love the fact that you're taking this head on. Bef- And you know, if you look at the amount of money that just got raised by SpaceX, the amount that OpenAI has in its charity, and then if Anthropic goes public, they should be taking at least 5 or 10 billion of that and at least half of that should go back through Xprize and get laser focused on this problem because they're the ones that are going to suffer if there's a massive uprise. They have every reason to invest in in figuring out >> but they're going to suffer a lot. >> They're going to suffer a lot. >> Alex, what's your take on this? I'm super curious, my friend. >> I think this is a problem that will be

[01:37:00] so to the extent it is a problem at all, the the problem of disemployment or underemployment as a result of AI advances and the elite overproduction theory by Goldstone in revolutions. If it happens this time around at all, I think it's likelier to be felt not within China and probably not even within the US, but in the rest of the world that doesn't have superintelligence or isn't anywhere close to superintelligence. In principle, if we within the US, if we wanted, I think we can create lots of economic opportunities for our {quote} {unquote} surplus elites that we may or may not be overproducing, benefiting from superintelligence. We colonize the solar system. We'll take apart the moon. >> but just to be clear, Alex, I'm talking about the next two to eight years, right? Versus the long term. And remember, you know, when Dave and I were interviewing Elon, and you remember Dave, he he said, you asked him, UHI and

[01:38:00] civil unrest? He said, yes, UHI and civil unrest. >> Look, we have a very dangerous cocktail right now of of very high expectations, very high connectivity, very low opportunity for certain segments, and very quick mobilization, right? And so this is a very destabilizing kind of epoch in human history. And it's that is that you your point is the education educated person who's been promised a future and is watching the ladder collapse, that's the real problem here. We need new ladders for meaning, agency, status, contribution, all of that. >> You're exactly right, and Saleem, concurrent with that, we have AI-assisted social media, which we've never had before. We're all experimenting with it, and the year before an election, everything always turns to So that's coming up next year. So you got all of that. >> news is that we're democratizing AI so quickly, and we talk about everybody should become an entrepreneur. What we really mean is use AI to give yourself radical agency. I've been using the

[01:39:02] phrase you have the opportunity for future shape rather than future shock. Right? >> [clears throat] >> Go there. >> Alex >> I I I think though so to some extent it's entirely possible that we have cosmetic color revolutions without actual revolution versus say the cultural revolution which resulted in millions of people dying and which wasn't even, you know, superficially student revolution but actually fomented by Mao to preserve his position within the elite hierarchy. Entirely possible that to the extent anyone tells a story about AI revolutions due to elite overproduction is actually just being driven by a number of other elites that are mining whatever descent or discontent there might be, but I I I want to go back to my point. This is, I think, to the extent there's a there there, I think it will be primarily felt not by the US, where we do have, yes, even on the two to eight-year time

[01:40:01] scale, the capabilities of creating entirely new classes of work and economic opportunity, and in China, where the Chinese Communist Party is actively driving via its AI plus five-year plan, all of this AI kicking and screaming into the workforce. It's the rest of the world that doesn't have the frontier models, doesn't have the energy, doesn't have the data center buildout that I think is likeliest to bear the brunt of any color revolutions associated with AI, because there maybe the economic opportunities aren't as large, and I want to connect this also with the fable story. If all of the frontier capabilities are going to be export-controlled going forward, then that leaves the US and it leaves China in sort of the the catbird seat to to optimally economically exploit all of these new capabilities for workforce development and economic opportunity for all of these 18-to-28-year-olds, but it it basically shuts out the rest

[01:41:02] of the world. So, I I think it's possible that export control is actually one of the one of the determining factors in any color revolutions for folks outside the US and China, and I'm thinking especially of Europe, uh that where basically, if they don't have the native sovereign capabilities to drive forward superintelligence, there's the risk that the rest of the world becomes almost vassal states that are dependent on all of these ultra-cheap capabilities being produced by superintelligence and dumped, for lack of a better term, on the rest of the world and that could create discontent. >> I'm going to add one other thing. You know, we saw the Sam Altman Molotov cocktail. We saw, you know, Eric Schmidt getting booed. Uh there is a uh a growing level of discontent. I call it a pandemic of fear versus a viral pandemic. And I guess I'm hearing a lot

[01:42:01] of the tech leaders around the world saying, "Don't worry about the AI apocalypse. It's not going to happen. It's disinformation. It's It's regulatory capture. It's Chinese propaganda." It's Chinese propaganda and that may all be true. It doesn't matter. If in fact the US populace is in fear, if in fact people believe their future is not going to be as good as there was promised for them, that's what foments the revolution. So, I think again, I think that uh if you know, regulators who are listening, you know, uh tech CEOs who are listening, we need to get out in front of this and help people understand that they're going to have an abundant future, that we're going to support them, we're going to create a basis by which they have access to, you know, this rising economy that's being created, triple-digit growth in the next 5 years. We need to give them some level of security, some

[01:43:00] level of assurance, some level of hope, right? This is a This is a cry out to enable hope uh at least in the US and other parts of the world. That's the point I want to make about this. >> I would just add if we don't build it, everyone dies. >> [laughter] >> I have to add one I'd just just add one thing. I'd be remiss if I didn't add it, which is everything that Peter just said is exactly right and concurrent with that, the startups are having a field day. It is the absolute best time in history for startups, which is so counter Cuz cuz their classmates can't find jobs and which is great cuz the startups the there's more venture capital than there's ever been before by far. And the AI native startups can recruit anyone they want out of any graduating class cuz no one can get a job. So it's it's really in juxtaposition of the fact that the rest of the graduating class is like struggling to find anything to do. So you're so you're so it's really weird, but the startups are having a field day. The incubators are just going gangbusters. >> All right, it's time for the AMA mates.

[01:44:03] So we read your comments. We are great or grateful for everybody all your comments. Thank you for layering in and for your questions. Uh one of our favorite parts of the podcast is answering your questions. So let's jump in. Salim, it looks like number one's for you. >> Yeah. Uh Salim, do your scale ideas framework, which is the EXO model, actually force organizations to ask why do we own this at all? Or do they just let companies scale broken processes faster? And that's from @TomShaferQ20. Um uh so um you you can't think of those attributes. Those are acronyms, by the way, for staff on demand, community, etc. etc. So you can look at the model if you're interested in looking at the full detail. But these are not efficiency tools that are supposed to be layered on top of an existing organization or broken organization. If you if you use them that way, you're going to scale pathology. Right? You want you will you you're going to make

[01:45:00] bad decisions faster, basically, and more automated. The real sequence is the most important thing above scale and ideas is your massive transformative purpose, your MTP. Okay? So you first have to design your MTP, then you delete your legacy, then you redesign uh around uh the intelligence stack, and then you scale. The MTP answers the question why do you exist? What problem are you trying to solve? When you have experimentation that asks the question, what evidence do you have? Uh when you have interfaces, you're asking or dashboards, you're asking, what feedback loops are we using? Um autonomy then says, who's closest to the information and let them make the decisions. So, the framework should absolutely force the Y question, but that sits above the two. Uh but then like any tool, you can misuse it uh by people who want speed rather than transformation. >> All right. >> So, you don't want to digitize your bureaucracy, you want to delete it. One of the comments I make to CEOs uh these days is if they have a classic matrix structure, you've got horizontal layers

[01:46:01] that slow you down, IT, HR, uh branding, uh privacy, etc., etc. Every few years, go delete all those horizontals and reinvent them. >> Thank you. >> Then cuz power accrues to the horizontals because it's really easy to say no in HR or legal. There's no incentive to saying yes. Right? Cuz if you say yes, your life's a mess trying to manage a complex bureaucracy. So, every few years, just wipe it out and rebuild it and it'll force you to reinvent things in a modern way. That's if you want to take a hack at the old bureaucracy, but the real model is you have to rebuild yourself in a new model and that's what we do with the organizational singularity stuff. Uh sorry for the plug. >> Okay. Alex, looks like number two is for you. AWG, why are you anti-Bitcoin? Uh uh this is from the Bitcoin Revolution. >> Well, >> Alex, to paraphrase Jessica Rabbit, I'm not anti-Bitcoin, I'm just drawn that way. I think it I I don't think Bitcoin is a productive asset. I I think blockchain

[01:47:00] is this amazing mathematical technology that fell back in time from the future and I I think blockchain technology is super interesting. Bitcoin itself is a lot less interesting to me. It's it's as far as I can tell, maybe there's something fundamental that I'm missing, but I don't think so. It's not a productive asset. Similarly, I'm not anti-gold, I'm just not interested in gold because by and large it's not that productive an asset at at least not nearly as productive as the the values or the prices that it seems to trade on. There's a I think if the question behind the question is why don't I invest money in Bitcoin? I would say there are a few reasons. Again, not investment advice. One, it's not a productive asset unlike stocks and bonds that are actually being used to create new wealth in the real economy. Bitcoin, as far as I can tell, doesn't create any real wealth. And the the way you know that aside from the fact that it doesn't pay

[01:48:01] any form of coupons or dividends or interest is it's not generating new ideas. It's not creating new structures. It's not expanding humanity's future freedom of action. It's It seems to be much more of a speculative asset. That's reason one. Reason two, and then this generalizes beyond Bitcoin to other crypto assets in general. Parenthetically, I do like stablecoins in so far as they enable more efficient financial asset transfers and to the extent they help to stabilize the US dollar. So, I like stablecoins. Close parens. >> I'm I'm biting my fist because I've got so many comments. We really need to have our crypto debate. >> I bet you this is going to be rapid fire answers, gentlemen. >> Yeah, okay. >> I will close by saying Bitcoin as well as alternative cryptocurrencies, the elephant the third elephant in this episode in this particular room is AIs

[01:49:01] and AI agents have are fully empowered at this point to come along and invent their own L1s and the the argument that Bitcoin bulls make that because Bitcoin was merely the the first L1 that it occupies some sort of primacy in the future light cone, I think falls apart. Again, not investment advice, when AIs come along to the extent that they they find any value in cryptocurrencies, they can just invent their own L1s and they'll probably be much better than Bitcoin. >> I look forward to that. All right, Dave, you have a choice of number three or number four. >> I'll let you choose which one. I can take either. >> Go jump in. Choose one. >> All right, all right, I'll take I'll take three. The US already has a 10% equity stake in Intel. Has that helped the American at all? Why would AI lab stakes be different? And that's for from Gear for the Year. Yeah, massive, massive difference. The US took a 10% stake in Intel, gave it $10 billion to bail it out to get chip fabs back into the US. They were threatening to shut down investment in

[01:50:01] their Ohio 1.4 nanometer project, which is critically important for the future of the country. It's very similar to when the government bailed out the car companies. We need those and it was a great investment. The AI labs are already in the US and they already have tons of money. Why would you be buying them? Oh, but it'll get a great return for the American people. You have the power of taxation. You can take any amount of money on any day you want. You don't want to invest in things. Having the government be an investor is always a bad idea because some future administration will mangle the investments and there's no continuity of thought in the government at all. So, you don't need to unless you're helping it bail it out or to help it grow some strategic function for the country. >> All right, I'll take number four. How do other democratic nations handle sovereign wealth funds? This is from @johnsebert5493. So, John, I think the gold standard is Norway. Its government pension is now

[01:51:01] worth something like $1.7 trillion and it's built on oil revenues. It also owns something like 1 or 2% of every publicly traded company on the planet. Right? Uh Singapore has Temasek and GIC. Uh you know, the Gulf states UAE has Adia, Saudi has PIF. Uh and I think the lesson here is that once you've got this kind of a sovereign fund that's controlled by an outside investment group that's not tied to the politicians, so the politicians can't give favor or spend it, uh it drives an incredible return for the citizenry. Um and I think it would be extraordinary if we could do that here uh in the US if in fact you're from the US. Okay. >> They've also been trained on our data. >> What's that? >> Collectively. They've also been trained on our collective data. So, there should be a shared outcome. >> Okay. Um let's kick this one. Dave, the first

[01:52:01] one's for you. >> Okay, Dave, why are you fine with the government funding SpaceX but not taking equity in AI labs during a high-risk transition? Did the government fund SpaceX? I don't remember that. I think they bought it. >> The government The government gave a con So, in 2008 when after SpaceX had its third launch failure and it had its first Falcon 1 success on its fourth try cuz it had an extra rocket laying around. Uh uh SpaceX won a billion-dollar contract for Falcon 9. It won a contract. It wasn't given money. It was given a service contract. >> This was commercial crew as I recall. >> Yeah, the commercial crew, right? The space shuttle was going out of business uh and we needed a replacement for the space shuttle. So, >> Yeah, okay. So, that never happened. So, that answers that question. Uh and and um even if it had happened, uh having a space launch capability is a national priority and obviously Elon did

[01:53:00] a good job of it. So, that would have been a great move by the government. And uh then the second part of the question, but not taking equity in AI labs during a high-risk transition. I think the government just proved they can block any product. You know, there were there was a little argument for a while there that the government should be on the boards of these companies. Which is which is hilarious cuz a board member can't sit there and say, "Hey, don't release Fable 5. I'm stopping you." So, the government already has massively more authority than a board member does. You don't need a board seat in addition to that. You're just going to mangle it. Uh so, it it's purposeless. And like I said a second ago, the government can tax any amount they want anytime. Why do you want stock, too? But I know I think the government will take stock because it's politically cool and and the the population is supportive of it. But it makes no sense. >> Give me some, too. All right, I'll take the next one here in uh number six. Peter, uh do you believe a quantum breakthrough in 3 years can actually break the entire uh crypto stack? This is from @ListenGrasshopper. So, my short

[01:54:00] answer is two points. One, I think the threat is real but not in a 3-year timeline. I think that's aggressive. Uh and I think the entire industry we heard this uh we had Brian uh Armstrong, the CEO of Coinbase, on the pod last week. If you haven't listened to it, please go check it out. And uh he is working on, you know, a crypto uh tolerant algorithm. And the whole industry is. Everybody's going to get there before we have to worry about this. So, I'll keep it brief on that regard. Uh Alex, you want to choose >> wants me to answer question eight. So, instead I'm going to answer question number seven. So, question seven asks if knowledge work is cooked, why hasn't anyone suggested using AI itself to manage the sovereign wealth fund? And this is from MGP Star. I think the premise is incorrect. I think to the extent the US and other countries have sovereign wealth funds like Norway, I think AI is already

[01:55:01] managing the sovereign wealth funds in the form of AI managing the overall broad public equities markets and other public markets. Almost all of the volume in public equities markets at this point is driven by algorithmic trading. AI is already managing all of these valuations, yes, including SpaceX's now fifth largest company in the world. That's almost all AI. Obviously, there's a lot of retail, but AI by volume is actively doing the price discovery. So, the premise, I think, is incorrect. AI is already de facto managing sovereign wealth funds to the extent sovereign wealth funds have exposure to assets in highly liquid public markets that are themselves almost entirely dominated by volume by AI. >> Nice. All right, Salim, this is revenge of Bitcoin here. >> Um number eight, why would AI agents want to use Bitcoin when they still have to pay for energy? That's from @capquills. Uh so, uh

[01:56:02] two three quick thoughts here. So, agents aren't going to be ideological. They're going to be ruthlessly functional. They're going to use whatever rails clears their transactions with the least friction and the most trust, right? Trust is the really thing. Bitcoin's energy use is not uh the reason the agents are will or will not use it. It's whether you can get a neutral uh high throughput global settlement model. Um now, there's something powerful about Bitcoin why people are getting excited about it these days more so than say 5 7 years ago or 10 years ago. When you have a digital currency, you want three points on a triangle. You want to hit decentralization, you want it security, you want it scalability. When Bitcoin first emerged, it hit decentralization and security for the first time ever. And people are really excited about that because no digital currency had hit those two points, but it didn't solve for scalability. So, you had the rise of Ethereum, Solana, Cardano, and all the altcoins trying to solve for scalability, but in doing that, they

[01:57:00] typically compromise on decentralization or they compromise on scalability. There was a big Ethereum fix a few weeks ago. If Ethereum was really decentralized, it wouldn't have had a wouldn't have been able to do a fix like that, which tells you Ethereum is not really decentralized, right? So, this is where you saw the FTX collapse or the Luna collapse or they collapsed because of either failure of decentralization or failure of security. Um but with so Bitcoin had the first two, but it didn't have scalability. With the rise of the lightning network, uh created by Blockstream a few years ago, uh it solves for scalability. And so now you have all three. Bitcoin hits all three, and therefore people are getting more and more excited about the future of that. And we can get to the broader debate later. >> All right. This was quite the show, gentlemen. Uh it was [clears throat] it was fun. I mean, honestly >> Yes, and when we say gentlemen, we stretch the term to fit all of us. [laughter] That's an old That's an old PG Wodehouse joke. >> My dear friends. All right, I hope you guys uh if you're not subscribing, please do. Turn on notifications. We're

[01:58:01] putting out as much as two episodes per week. When there's breaking news, our mission is delivering you the breaking news when it's happening, what you know, what it means, what it matters to you. And join us at the Moonshots Summit. You can go to moonshots.com to get your ticket and join the mates there. I love this. An AMA with AWG. I I think that alone makes it worthwhile. We're going all out. What's that? I said we're going all out. Yes, we are. And of course learn about the singularity, the organizational singularity uh with Salim investing in AI with Dave. Um and join us. Uh we're going to have an amazing crew. We'll be announcing additional, you know, uh headline speakers uh besides Kathy Wood and Astro Teller uh and Palmer Lucky. Palmer's our newest. he's going to be extraordinary Uh anyway have an incredible week you know >> [clears throat] >> don't sleep.

[01:59:00] >> [laughter] >> Yeah, well if this week is like last week holy crap. >> I mean this is unbelievable the implications of this every like few hours everything changes again it's crazy yeah. >> All right see you guys. >> Love you guys. >> Love you too. >> Thanks. >> If you made it to the end of this episode which you obviously did I can see you moonshot mate every week my moonshot mates and I spend a lot of energy and time to really deliver you the news that matters if you're subscriber thank you if you're not a subscriber yet please consider subscribing so you get the news as it comes out I also want to invite you to join me on my weekly newsletter called meta trends I have a research team you may not know this but we spend the entire week looking at the meta trends that are impacting your family your company your industry your nation and I put this into a two minute read every week [music] if you'd like to get access to the meta trends newsletter every week go to dmandis.com/metatrends that's dmandis.com/metatrends thank you again for joining us today

[02:00:01] it's a blast for [music] us to put this together every week.