SPEAKER_00: I heard Gemini 3 is out. I heard Grok 4.1 is out.

SPEAKER_01: Everything is happening so quickly in our industry. Look at what XAI did. Grok 4.1 is really good across a number of metrics.

SPEAKER_02: Compared to Grok 4 Fast, it's a dramatic improvement. When 4.1 was released onto the charts, it went straight to the top. And I think it just shows that there's several different AI labs here in the US that are able to successively create state-of-the-art models. And I think it also pushes back, Jason, against some of the doomerism that's been kind of building in the last three months.

SPEAKER_03: One of the great things is, I guess,

David Friedberg: that now that we have these leaderboards, it's motivated all these companies and gotten these teams super excited about claiming the top spot.

SPEAKER_00: That's where I'm just getting a little concerned of, you know, like, are we actually making progress at solving the real-world problems people have?

SPEAKER_06: Or are we getting good at acing the SATs? And that is a question for me.

SPEAKER_09: This Week in Startups is brought to you by Zyte. Zyte is the fastest way to build business software with AI. Build apps, forms, websites, and portals that connect to the tools you already use. Go to zyte.com slash twist and get 50% off your first project. Evry. Running a startup is hard enough. Evry takes care of incorporation, banking, payroll, benefits, accounting, taxes, and more so that you focus on building, not back-office admin. Visit evry.io. And Gold Belly. Gold Belly ships America's most delicious, iconic foods nationwide. Get 20% off your first order by using the promo code TWIST at checkout.

David Friedberg: All right, everybody, welcome back to This Week in Startups. There's tons going on in the news. I heard Gemini 3 is out. I heard Grok 4.1 is out. Everything is happening so quickly in our industry.

SPEAKER_14: I'm having a hard time keeping up.

SPEAKER_02: No, it's been really, really busy. I want to start, though, Jason, with the Cloudflare outage. I don't know if you were awake or asleep. I know you've been going through some jet lag. The internet broke this morning. It actually made getting the docket ready kind of hard. It's funny when a news story really impacts us because services like JGPT and X and other kind of major planks, you might say, of the podcast economy broke. And for several hours, Cloudflare had these really embarrassing downtime outages. And the good news is that now that we're here, it has been resolved. They've come out and apologized for it. If you're curious, everyone, what drove this? They said that, quote, a latent bug in a service underpinning our bot mitigation capability started to crash after a routine configuration change we made. And Jason, you'll know this, that cascaded into a broad degradation of our network and other services.

SPEAKER_15: Sure, whatever that means. It was bad, though.

SPEAKER_16: Yeah, you know, Cloudflare is this great CDN, I guess,

David Friedberg: content delivery network. And if you have a website and you get these DOS attacks, these denial of service, DDoS, where, you know, people would send, you know, tons of pings to your server, try to slow things down and cause a disruption in service. They figured out ways to, when all those attacks come in, to just drop them. And because it's a network, you know, if some hacking group has, you know, 10,000 servers or maybe even individual machines on the internet that they've hijacked to send in these denial of service attacks, just to think about it simply, they'll hijack 10,000 Windows machines, send a bunch of attacks to a website, and then all of a sudden you can't read the Drudge Report

SPEAKER_18: or New York Times or whoever their target is.

David Friedberg: They know those IP addresses. They know what it feels like when those kind of attacks happen. They know the signature and they just drop those requests. It's pretty sophisticated. It's pretty basic. But Cloudflare has become kind of a standard for this CDN. I remember when we were running Weblogs Inc. back in the day, this 20-year-old knowledge, but we started using these different CDNs, different caching servers. We put up our own caching servers. We were handling these issues ourselves. Now everybody abstracts it to providers. What's the value of being able to abstract it to a provider like this? Is, well, you can focus on other things in your business.

SPEAKER_16: What's the downside? If everybody trusts, everybody's got their eggs in one basket, whether it's Amazon Web Services or Google or Azure or in Cloudflare,

SPEAKER_02: everybody gets affected at the same time. That's kind of what I want to talk about because normally this is a little bit outside of our wheelhouse, Jason, but there was a Cloudflare outage also in June. There was an AWS outage in October. There was a Google Cloud outage in June and there was an Azure outage in October. So you're a startup founder and you are running a software business as most of them are. You are using Cloud services as most of them are. Communication strategies for downtime mitigation. Just I'm curious what your advice is to founders as they go through this apparently recurring issue.

SPEAKER_21: It's a recurring and non-consequential issue at this point.

David Friedberg: Like the downtime happens for an hour or two and frankly, we're all permanently online. So it's actually good. Everybody gets a little break. I would be concerned if your service is down for more than a couple of hours. If it gets into like, okay, it was down this morning, but it's still down this afternoon. It's still down this afternoon. That's when people start to go, wait a second,

SPEAKER_18: maybe I should look at another option. And you just don't want to get into the, okay, it's time for me to look for another option.

SPEAKER_24: If you're a startup founder and your service is down in the morning for an hour, no big deal.

SPEAKER_25: If it goes into the afternoon, now you got a big deal. People will start looking for other solutions.

SPEAKER_27: When AWS and their US East one region went down and everyone kind of lost service. If you lose service with everyone else, Jason, is the penalty just not that high

SPEAKER_02: for your individual company? Because that's good news and better than I expected. If it was AWS,

David Friedberg: everybody gives you a mollywood. No big deal. No harm, no foul. Now, you might, if you're a financial services company, you know, if you're a Robin Hood or you're Stripe and you go down and it costs people money, that's a whole different ball of wax. You might need to give a credit, you know, and things can get, yeah, a little bit ugly. People lose money. If you are selling pay-per-view and it's Netflix and it's that boxing night, yeah, that is a big problem. So I think, you know, it's service dependent. The financial companies have a different order of duty. But, you know, if you look at the video game industry, they'll be like, hey, we're having downtime Saturday afternoon. You can't play your game for three hours.

SPEAKER_04: Expect downtime.

SPEAKER_02: And they communicated to you ahead of time. I don't mind that. But like, you know, Tuesday morning, I mean, I think Cloudflare likes to say they power or protect about 20% of the websites online. That's a pretty big chunk of the internet to bring down yourself. Going back though to what you said about their footprint and how they help protect websites from data DOS attacks and they do content delivery around the world. Cloudflare just bought a company called Replicate, Jason. And this is a startup that I hadn't spent enough time looking at. Raised a couple of rounds, including a Series A from Andreessen and a Series B from Andreessen. And what's interesting is they're kind of offering serverless AI access. So if you want to just basically not deal with an individual provider of AI services, you could go to Replicate and just kind of via one API hook access a bunch of different AI models and they handled all the technical backend. And so it kind of makes sense to plug that into Cloudflare's global infra footprint because then you can kind of have AI at the place of your consumers with limited lag and so forth. But like, is it kind of crazy that I didn't really know anything about Replicate before this and it raised several rounds? How many companies are there doing this sort of thing? This is a company

David Friedberg: I'm not aware of either, but yeah, being able to use an API to just send something to a model and get a result back is kind of how people are running these systems now. instead of, you can run your whole application on AWS or Azure or Google Cloud, Oracle Cloud, and then just be calling APIs from Grok, Claude, you know, Anthropic or ChatGPT. That does make it a lot easier, doesn't it? You don't have to like stand up a bunch of hardware. You don't have to stand up like a bunch of instances. So it has become quite modular. I do think at a certain point in time, people are going to want to stand up their own language models with their own data to just not educate other LLMs and to keep their data private. So I think the future is going to be, you know, a lot of people are running their own DeepSeq instance, you know, over at a Google Cloud or Azure, et cetera. Yeah, I do think I'm just seeing it with startups. Let's say you have a startup that does some obscure thing like, I don't know, building codes, right? Sure. And you are going to fine tune this model to do building codes and it's going to be for architects and builders, developers to understand all these different codes on a global basis. You know, your Starbucks, your opening stores everywhere. You need access to all these codes and you're taking all the time to go collect that data and to normalize it and train the model. Do you want to train ChatGPT's model or Anthropics model, have them get the benefit of it or do you want to just create an island, put all your data into it and not have them see the prompts, not have them learn from your prompts, not have them learn from what are the queries you're sending from your customers to them? I think people are going to become very, very cautious about the large language models becoming competitors and I said it before on the shows,

SPEAKER_33: everybody listening to me knows it's going to be a big end of the year, November and December. You're trying to get a lot of things done at work, but Thanksgiving's coming, Christmas is coming and you're going to need some help gifting and hey, getting ready for your Thanksgiving table and we've got the perfect partner,

SPEAKER_34: my favorite, Gold Belly.

SPEAKER_33: Yum, yum. Get yourself some amazing gifts for your partners. Get some amazing food for your table like Martha Stewart's salted caramel chocolate cake How about this? John's of Bleecker Street, New York style pizza, amazing. Lombardi's pizza. These are some of the best pizza makers in the world. It's a great way to reward your team members. I do it. I order great stuff from around the country. Just surprise my team with it when we have team meetings. So if you're looking to reward your team for doing a great job in 2025, maybe you want to surprise your loved ones with a special holiday treat. Here's how you do it. You go to goldbelly.com, use the promo code twist and you get 20% off your first order. That's goldbelly.com and use the offer code twist.

David Friedberg: Some of them are positioning themselves as like neutral third parties.

SPEAKER_06: They're not going to be in your business. Other ones, you know, that have to spend a trillion dollars, quite possible they need to make two trillion dollars. How are they going to make that money? I think they're going to compete with you. So for this startup that was working hypothetically in building codes and they took the time to go find all these building codes. Let's say they hired a hundred researchers to, you know, full time for a year and they spent $10 million on these hundred researchers to go collect all this information, normalize it, whatever. And then they feed it into somebody else's language model and now they learn this information.

SPEAKER_14: Not good.

SPEAKER_02: So in that case, Jason, the corollary, the follow-up question is just are the startups that you're seeing that are kind of rolling their own models, are they using, I presume, all models from China than the open source stuff from your moonshots, your deep seeks, et cetera?

David Friedberg: I think this is the year this is happening. So TBD. Okay. Well, you know, let me ask a couple of them if they're willing to talk. So producer Marcus, like maybe we should see if there's somebody

SPEAKER_18: in our portfolio who's doing this. We can just ask in founder university, et cetera. Anybody working on open source AI models and training themselves and running them themselves and maybe they can come on the show and talk a little bit about it. But it is definitely a trend that's going on. And I saw Andreessen Horowitz was publicly saying, hey, a lot of our startups are using deep seek.

SPEAKER_27: So that's what I was going to say. Martin Casado, I think said that it's like 80% of startups they see are using open source models from China.

SPEAKER_44: They're probably using other models as well, by the way. It's just not exclusively, but I mean, like, you know,

SPEAKER_04: I think that's how people took that quote though. People took it as like, oh, they're picking the open source Chinese model

SPEAKER_06: over open AI's model. I think it's in addition or maybe they're experimenting with them. So in other words, they're aware of them.

David Friedberg: They've got an instance running and they're sending some jobs to it. And why wouldn't you? I mean, I think ultimately what's going to happen is we're going to have a large language model on our Mac Mini M17. If it's an M, I think I have an M4 right now. And I guess someday I'll have an M5, you know, somewhere around M10, you know, I'm going to have four M10s or an M10 will have four microprocessors in it and some amount of bandwidth and RAM that will give it the ability to run my language model locally. Then when I do that search and I say, hey, show me all the photos of us skiing and, you know, a bulldog in the background because I'm looking for those pictures of the bulldogs playing on the mountains while we're skiing. It's just going to do that locally, not in the cloud. It's going to index

SPEAKER_04: my photos locally. It's going to have

SPEAKER_03: all my Gmail local. It's going to, you know. So do I then have

SPEAKER_02: like a server in my basement, Jason, that has like my family collection of GPUs or am I just running a single Mac Mini Pro 2015 edition or 2030 edition, whatever? I think that the

David Friedberg: ultimate manifestation of all this is going to be Apple will have local language models and they'll be pitching us on. They're encrypted, they're private, your data's safe, just like they do for iCloud. We can't get your iCloud stuff. If the government comes and asks us to crack it open, we can't get there. Just like, you know, I guess Sam Waltman gave a warning like, hey, if somebody sends us a letter, we're sending them everything you've talked about. And when this kid tragically committed suicide recently,

SPEAKER_06: they had all the logs, right? Like, yeah, they're going to dump the logs. So if you're in a relationship with ChatGPT, you know, they have all that. Whatever you said to your ChatGPT,

SPEAKER_01: they've got it stored. But the Apple point's great though,

SPEAKER_02: Jason, because if you wanted to have that model succeed, you would need to have a smartphone, a desktop computing experience, a slate computing experience, a headset computing experience, a future glasses computing experience, and you need to be in cars, perhaps do something like CarPlay. They literally have

SPEAKER_03: all the surfaces already that they would need. And whoever has the operating system,

David Friedberg: I think is going to have a real operating system plus privacy is going to be a really interesting combination. I've talked ad nauseum about my love of the Comet browser and watching my browser,

SPEAKER_06: you know, go to United Airlines and find a flight for me and put it into, you know, the shopping cart was like, hmm, that's interesting. Or I used it the other day. I said, go to Blue Sky because I don't have, I'm not following it in Blue Sky. And I just said, I think I said, follow anybody on the explore page who's like featured, just follow like 200 people. And it went and it followed like 20 people. It's like, ah, 20 is the limit. And I was like, why is 20 the limit? Okay, do it five times. It wasn't good five times.

David Friedberg: The idea that Apple is watching what you do on your phone and there's this give Apple intelligence. I don't know if you've seen this setting. You can pull it up. We've talked about this. Yeah. Give Apple intelligence access to what you're doing on this app. So if you go to the settings for any app on your phone, there's a thing like give Apple intelligence access to it. What does that mean? What that means is Apple intelligence is watching how you use your phone and they're watching how you use, I don't know, the contacts app,

SPEAKER_06: your phone app, your superhuman app. And then over time, you're going to be able to say, go do this in the StubHub app. Go find Nick's tickets.

SPEAKER_04: But it will have recorded

SPEAKER_02: and studied it over and over again. People asked online quite a lot about how to turn this off. But to me, if you're going to use any sort of intelligence on your iOS device, you're going to want to connect into other applications, Jason. So just

SPEAKER_51: so Apple

SPEAKER_02: intelligence here, learn from this app. Next on the docket, we have Grok 4.1. We'll talk about Gemini 3 in a second, but I think it's worth stopping and saying, look at what XAI did, because this is a company Jason that started later than OpenAI and has really done, I'm just going to say, impressive things. I know a lot of my friend group aren't the biggest Elon fans, but I do think it's important to give credit where it's due. And Grok 4.1 is really good across a number of metrics. One, they did a lot of work on reducing hallucinations, which I think is a very important step compared to Grok 4 fast. It's dramatic improvement. And I think most importantly, based on the usual kind of panoply of things that LM Arena tracks in its battleground for different AI models, when 4.1 was released onto the charts, observe. It went straight to the top. Grok 4.1 and Grok 4.1 thinking took the absolute pole positions. But this is a real accomplishment. And I think it just shows that there's several different AI labs here in the US that are able to successively create state-of-the-art models. And I think that's very encouraging for startups. I think it's encouraging for the AI economy writ large. And I think it also pushes back, Jason, against some of numerism that's been kind of building in the last three months. It feels like

SPEAKER_03: AI needs a win. And I think this is an example of such a win. Less hallucinations obviously

SPEAKER_04: better. And one of

David Friedberg: the great things is I guess that now that we have these leaderboards it's motivated all these companies and gotten these teams super excited about claiming the top spot. So kind of cool that these things you know somebody came up with this concept of the arena and all these different tests. I do wonder if building for the tests at a certain point is kind of like kids mastering the SATs and like at a certain point maybe that's not what's important. Maybe like there are other things. So I wonder if these tests are changing. I don't have enough information on that. Like how are these tests changing? I know early on some of these one of

SPEAKER_06: the tricks that was occurring is when you give people an incentive like a leaderboard like this people then try to game the leaderboard what's a way to game the leaderboard doing unnatural acts like if you know it's going to ask

SPEAKER_00: certain types of questions then studying for those types of questions or feeding those exact questions or those you know multiple versions of those questions into your training set. In other words kind of gaming the system precisely and I think that that's where I'm just getting a little concerned of you know like are we actually making progress at solving the real world

SPEAKER_06: problems people have or are we getting good at acing the SATs and that is a question for me.

SPEAKER_55: There's people are worried about I'm trying to

SPEAKER_02: remember the exact phrase of this but it's like diffusion or when the model gets like so suffused with people knowing how it asks questions that it kind of loses meaning because you can tune and if you think back to Meta's launch of Llama 4 Jason if you recall they actually made a bunch of different versions of Llama 4 and then ran them through the same test to get the best results and they got mocked for this pretty mercilessly because it was clear they were trying to cook the numbers to appear impressive the reason why I shared Elam Arena information versus just kind of a raw rundown of individual benchmarks is that this is their users in a head-to-head battle choosing which result is better with the model names masked and so it shows what people that are actually using these models think and I'm hoping that provides a better perspective on actual progress here I'm a big enough deal

SPEAKER_57: now that I can afford to hire my own admin team look at me they handle all the details of running my company but if you're a startup you need to spend your time obsessing about your product not filling out paperwork and doing all these books that's why I want to tell you about every they've worked with over 1,000 startups from first-time founders and they've got the experience to help your company navigate whatever's coming around the bend maybe it's time to incorporate your startup so investors take you seriously every is going to take care of those filings for free without any unnecessary delays or legal fees hey maybe you just got some new funding and it's time for you to scale up with every you'll get 3% cash back on every dollar you spend on your company's position while protecting your business both legally and financially plus you'll get a $2,000 bonus when you move $250,000 or more into your every account so for your incorporation banking payroll benefits accounting taxes and other back office administrative needs visit every dot IO that's E-V-E-R-Y

SPEAKER_14: dot I-O

SPEAKER_02: but anyways let's move on to this morning's big news similar idea new AI model this time from Google Gemini 3 Pro is out limited early access it's rolling out as we speak earlier Jason you mentioned how the benchmarks are a little bit dodgy so I don't want to over index on this particular data set but I think it is worth just sharing with people what the numbers show so here's the Gemini 3 Pro benchmark results I 20% for Gemini 3 Pro big improvements in math and screen understanding and these numbers really are materially better than other models that are currently state-of-the-art and I just really think this pushes back against the idea that AI improvement has slowed dramatically so I view this all as very very bullish and there's a little bit of a teaser though one last thing here if you here and that a lot of folks are really going to dive into this pretty much right away because this is going to be

David Friedberg: looks incrementally better you know to be honest we need to have an expert on here to

SPEAKER_16: know who that person is

SPEAKER_02: in a more real world application than Jason to put it into more kind of functional context browser use it was 500 company gave it very strong marks and said it was much better than previous models from the company boxes Aaron Levy compared it

SPEAKER_03: in the field are actually reporting

David Friedberg: that's good to know got rave reviews from some leaders who actually use it yeah at their major company so Aaron Levy likes it Stripe boys

SPEAKER_10: like it that's pretty good endorsement that they're seeing a difference

SPEAKER_02: it's at least as good as people hoped unlike GPT 5 which was not as good as people hoped so at a minimum the vibes are persisting so that's pretty good and then just for fun Jason I thought we talked about the poly market perspective here there's a funny little wiggle here in this poly market if you're on the audio version we're looking at which company has the best AI model by the end of 2025 the end date of course is December 31 and there was this really interesting wobble Jason we're zoomed into a one day context here but look crock 4.1 came out people got really excited about it maybe XAI is going to win and then Gemini 3 came out and got crushed it again so the market is once again betting that Google is going to run the AI game through the end of 2025 how does this one

SPEAKER_33: resolve I always bring the same thing up which is we need to understand how the bet

SPEAKER_02: arena LLM leaderboard so it's the chatbot subset of the LLM arena leaderboard that we discussed earlier again head to head no models listed people just pick which one they think is best so it's kind of a blind taste test and Google has to have the highest score in that area and it didn't when Grock 4.1 came out and now it

David Friedberg: I bet I bet there's people inside the there's some group of developers this is my hypothesis there's some group of developers who run LM arena

SPEAKER_16: and there's people inside of Google who are betting on themselves like a basketball like Michael Jordan betting on himself to win a game or cover the spread it's like in his control so when themselves working on the language

David Friedberg: model or the person and or the people who actually run the leaderboard who are watching the leaderboard activity and they have some inside information this is why these you know poly

SPEAKER_06: market is like really changing the world because there's an opportunity to make

SPEAKER_00: money from your knowledge people have some proprietary knowledge some inside line or they're in control of it but this is what makes these things so interesting do you want to

SPEAKER_02: see a funny little addition then jason while we're talking about this if you look at this this is the same chart but zoomed out to the entire year for this kind of end of year bet and you can quite literally see people's enthusiasm for GPT-5 and then it came out and just collapsed its percent chance of being correct so not everyone trading you can

SPEAKER_82: see right there

SPEAKER_01: I think I'm

David Friedberg: with them it just seemed like Google is going to run away with it for this year and they also have this massive advantage with their profit machine and the number of searches growing they can build out their CapEx yep off of profits and have from browsers gmail youtube I mean think about their data advantage gosh what is and have they come out with an agentic chrome browser yet has there been any rumor about them releasing an agentic chrome browser I

SPEAKER_27: think they're taking the same approach to adding AI to Chrome as Microsoft is with Windows which is trying to

SPEAKER_02: slap it on the top so they don't disrupt what currently works and I version Jason or at least I know I don't

SPEAKER_04: think there is Gemini is in Chrome like in the top there is like a Gemini button yeah that will like I don't know summarize

SPEAKER_03: the page you're on and do basic stuff like that I'm now playing with this this okay this is better I never actually clicked that

SPEAKER_02: button until now so sorry if this seems kind of bolted on to me and not as deep of an integration as we see with Comet Atlas and other browsers yeah

SPEAKER_89: I think they'll do like some basic things

David Friedberg: like create a calendar event for you but I don't think you can have it go do a task for you like Comet does where you can say like hey go find me 10 camping put 10 camping supplies I versions of each flashlight two versions of each sleeping bag and I'll delete the one I don't want give me the highest rated and average price and I think those are the kind going to know everything you shop on Amazon so then they could every time you're this would be super aggressive and probably trigger some antitrust stuff but imagine if they were studying your purchasing and then just

SPEAKER_06: taking that into account with an AI agent for like hey I can build your shopping cart for you for your groceries next week based on what I've seen you do in the past right I

SPEAKER_16: needs custom software but building your own secure production ready apps is hard right and

SPEAKER_57: not every founder has the expertise or time to get started well now you don't have to just use zite z-i-t-e make whatever you need from idea to a working app in just minutes easily all on your own plus you can fill it in with forms apps databases and learn let alone master but zite is both easy to use and powerful enough to build out the apps you want and it quickly connects all the other tools you're already using for example earlier this month they added the ability to bulk create and update record so it's easier and faster than ever to design data heavy apps that are constantly syncing between systems that's the kind of attention to detail that sets zite apart start using the number one AI powered business software generator on the market and we're going to give you 50% off your first project go to zite.com twist to get started that's zite.com twist for 50% off your first project we

SPEAKER_27: just did confirm Jason that

SPEAKER_02: current browser has the same kind of right rail agentic interface that's very similar to again atlas and comet from perplexity speaking about data and which companies have it Microsoft has a lot of data because they run of course the office suite and have for a thousand years and they are going to invest in Anthropic this is the other enormous AI news story from today both Nvidia and Microsoft are going to in from Microsoft wow also yeah also Microsoft is going to become a compute provider for Anthropic so you're going to be able to use Anthropic clawed models inside of the Azure ecosystem and they're going to buy compute from Azure as well so it's kind of one of these classic AI multi-part deals in which Microsoft is going to work with Anthropic and be fun now no matter what cloud you're on Google cloud Azure or AWS you can get access to cloud models I think it's the first AI company to be available on all three major clouds which I think speaks to their business focus

David Friedberg: they're very much don't want to compete on an application level with their customers they want to be a neutral third party although they do have a coding product I think they're not going to do what open AI is going to do which is try to you know invest in every single space but Microsoft investing 5 billion after just settling their open AI deal I worked that out that they're going to go public and they have certain ownership and now this drops Microsoft investing 5 billion Anthropic will use 30 billion worth of Azure compute potentially so that's pretty amazing and you know these contracts are now starting to say we'll invest up to so I think people want to now you're starting to see that those qualifiers come in up to 10 billion up to 5 billion although here in the notes it says they're going to purchase 30 billion worth of Azure I wonder if that is actually locked in or that's based upon you know certain

SPEAKER_04: targets being hit but

SPEAKER_02: that's kind of big news Anthropic has committed to purchase 30 billion of Azure compute capacity and to contract additional compute capacity up to one gigawatt that's pretty sturdy language to my

SPEAKER_04: point like I think you're

David Friedberg: starting to see more precise language in these deals because people are wondering like is this going to actually show up or there's all kinds of contours and

SPEAKER_03: qualifiers being put on these things these companies want each other to

SPEAKER_02: succeed so I don't think they're going to be so hard nosed about individual contractual things that they're going to cause a ruckus like Microsoft doesn't want Anthropic to look weak nor does NVIDIA want Microsoft to look like it made a bad deal they want everyone to look brilliant and profitable

SPEAKER_06: if they are making commitments to buy a certain number of NVIDIA's chips well NVIDIA needs to actually make those so there could be outs they're time-based obviously

David Friedberg: so the nature of these is rising tide lifts all boats and we need more power more GPUs but Dario was also on 60 Minutes this weekend and there was an interesting clip of him talking

SPEAKER_117: about white-collar jobs and it was exactly in line with some of the reporting I've had

David Friedberg: he basically is saying for the early stage and I'll summarize it but he's concerned that rote work in the next couple of years in the short term it's going to be really cataclysmic and he just kind of comes out and says it which is refreshing let's hear the clip

SPEAKER_122: you said AI could wipe out half of all entry level white-collar jobs and spike unemployment to 10 to 20 percent in the next one to five years

SPEAKER_124: yes that is

SPEAKER_126: that is the future we could see if we don't become aware of this problem now half of all

SPEAKER_122: entry level white-collar jobs

SPEAKER_126: well if quite good at and without intervention it's hard to imagine that there won't be some significant job impact there and my worry is that it'll be broad and it'll be faster

SPEAKER_130: than what we've seen with previous technology this

David Friedberg: is interesting because he's pretty concise there again back to contours qualifiers he thinks this could be 10% unemployment now we've had 10% unemployment quite recently amongst young people it's 8% right now coming out of college so saying 10 to 20 is basically not that 4% number you'll hear me quote this is the unemployment rate amongst 16 to 24 year olds and you can see

SPEAKER_04: what's

SPEAKER_02: that climb from the bottom of 6.6 in April of 2023 to a high of 10.5% as of August recall government shutdown data delays that's the most recent data yeah

SPEAKER_06: so it's already at 10% amongst the 16 to 24 group the higher group which is like I think 20 or 27 I think it's 8% or so that group is an important one to look at because that includes like the college grads who've been in the market for a couple years

David Friedberg: the point is what he's saying is not far fetched and it's not dumerism it's actually really well thought out and you people to be as matter of fact about this but he is exactly right if you were to look at an entry level PR person or an HR person or an entry level researcher entry level apprenticeship level accounting person or legal person a lot of what they do is a drag on the senior people and the senior people are now able to do that young person's grunt work

SPEAKER_16: with AI so then

SPEAKER_33: do you want to mentor these two or three annoying kids who are just learning how to

SPEAKER_06: show up at work and they can't even get in on time or they're goofy and they fool around or they do some stupid stuff at work like everybody's had this experience like mentoring people is hard it takes time out of your day some people find it provider or if it's an HR person and they're like I'm going to put people on recruiting for these new positions and writing the job descriptions then I've got to go edit the job script it's just easier for me to do it

SPEAKER_02: because everything you're saying Jason is right often mentoring people slows you down it burns time and it makes the senior person who's more expensive less productive net because they have to go back and do a lot of busy work but if we should start right after college and begin to accrete value and income and therefore wealth and therefore the ability to buy a house and have children if we short circuit that process at the beginning we're going to have a lot of people that are 45 with two roommates and a shared dog yeah it's already happening yeah so I mean these conversations that people don't want us to have because they don't want us to you know tell

SPEAKER_03: it scares me it doesn't need to be scary it

David Friedberg: should be concerning that smart people building in this space Dario Elon yeah myself not that I'm on their levels but and Bernie Sanders and other folks are saying hey this is a little bit concerning and we should be thinking about it individual businesses are not going to think

SPEAKER_06: collectively the government is like they're never going to be able to get in here and solve these problems so you're on your own young people the message to young people you're on your own nobody's coming to help you and you got to figure it out they're not going to do it they'll be like 10 years in the review mirror by the time they get involved I mean they're just thinking about breaking up Google search monopoly in

SPEAKER_01: year 30 so they're out to lunch government moves slow but what about making conscious decisions like putting

SPEAKER_02: together a consortium of leaders of businesses and say hey we could get together and

SPEAKER_148: choose to do if they wanted to

SPEAKER_147: I'm trying to figure out if there's

David Friedberg: any precedent for what you're saying it's idealistic but these are competitive businesses so it would be like during the banking era saying oh we're going to put in teller machines let's all the banks get together and we'll coordinate having more tellers to do more things which eventually exactly

SPEAKER_06: happened you go inside the building they had more services they offered other than just counting you money and giving you a deposit they moved those people

SPEAKER_14: to work on other offerings I think in some cases they often have but it's different this time

SPEAKER_02: the thing is I when when Dario says this and you say he's right and he's being up front we are implying that we are going into a great depression level of unemployment because we're going to automate away tens of millions of jobs I

David Friedberg: of the commons kind of situation nobody is going to be looking out for the interns and the apprentices they're just going to adopt the technology go faster lower their costs Amazon is just going to be a machine they're not going to think collectively about

SPEAKER_03: anything other than faster deliveries at a cheaper price you better get accustomed to Mondami

SPEAKER_02: winning in surprising to me because you're saying essentially it has to be such short term thinking they can't think long term and that's an indictment of the capital formation

SPEAKER_14: process they

David Friedberg: automatically pursuing efficiency now the question is do people want to create more companies and products and services using these new tools if you know these tools you're going to be infinitely employable and that's the best advice I can give any young person who is going

SPEAKER_06: 27

SPEAKER_47: year old if you look at that okay here's the 20 to 24 year old unemployment rate historically okay that's interesting that's like really graduates if you go to the 93 it was like

SPEAKER_01: 12 percent it

SPEAKER_02: as he says it is we're going to end up with socialists running every single major city in this country so something for business people to think about as they approach productivity so we're going to

SPEAKER_06: who like to write 10 to 50 checks into startups as well as all my seed fund and venture friends in Silicon Valley you can apply to come

David Friedberg: if you're an active investor you have to be an active investor this is only going to be like 150 seats I think or even 100 there's no room for friends to

SPEAKER_01: D-I-M-S-U-M dim sum so jealous that's going to be so much fun I love dim sum I

SPEAKER_03: love dim sum in San Francisco and I love me some nerds so that's like my three favorite things

SPEAKER_159: it's going to be

David Friedberg: party if you happen to be coming in for that awesome and that'll do it for us today