Why This Crypto Billionaire Wants to Slow Down the AI Arms Race

Ripple CEO Chris Larsen once told Kara he’d rather vomit blood out of his eyeballs than run for public office. But that doesn’t mean he won’t use his wealth to influence politics or install a Flock surveillance system that helps the San Francisco Police Department. The latter has some civil liberties advocates crying foul. Kara presses Larsen on everything from surveillance, the AI arms race, cryptocurrency regulations, California's billionaire tax ballot measure, and the midterms. This conversation was recorded live at San Francisco’s Pier 27 as part of the Odoo Experience. Learn more about your ad choices. Visit podcastchoices.com/adchoices

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:12Kara Swisher?

  Hi, everyone. From New York Magazine and the Vox Media Podcast Network, this is On with Kara Swisher, and I'm Kara Swisher. My guest today is Chris Larsen, the co-founder of the cryptocurrency tech company Ripple. Larson has become a controversial figure over the past few years due to his funding of an extensive surveillance network in San Francisco that many credit with lowering crime in the city. He's never been shy about using his wealth and influence to propel certain policy goals, gaining detractors and admirers along the way. But Larson insists that his interest in San Francisco stems from a true love of the Bay Area, and I believe that's true. He's willing to talk about almost anything, and we get into it here: surveillance, AI reform. He's actually one of the tech bros fighting other tech bros, cryptocurrency regulation,

• 0:56Kara Swisher?

  and national politics. Chris is a really interesting thinker, and he goes all over the place, unlike a lot of these tech bros that shifted right. He did not. He shifts in ways that I find more sensible. I don't agree with him on everything, but he's a really smart thinker, and he's putting his money where his mouth is. This episode was recorded live at San Francisco's Pier 27 as part of the Odoo Experience, so let's get into it.

• 1:28Speaker 01

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• 2:00Kara Swisher?

  Chris, why don't we just get your assessment of San Francisco right now? There was, of course, the Fox News period where everything was doom and gloom. Much of what they were saying were lies. Talk a little bit about how you look at San Francisco as an innovation center right now.

• 2:15Speaker 02

  Yeah, well, first of all, I mean, the city's really doing great. We've really come back. We were, we had some problems, right? A lot of those were political, self-inflicted wounds. But, you know, we've got a fantastic mayor now, Mayor Leary. And we've really, yeah, I think we should applaud 74% approval rating. That's incredible in San Francisco. But we, I think we fixed our public safety problem as well. We were, you know, the nation's capitals in terms of smash-and-grab crimes, which are not violent crimes, but they are the kinds of crimes that make people say, "I just don't want to go into the city, and I don't want to have my workers there." It's like 25,000 smash-and-grab incidents that were reported every single year. That's down now 70%.

• 2:58Speaker 02

  And it's because we've given the police the right tools. The voters approved Prop E back in 2024. That gave them drones, these license plate readers. I know there's some controversy on cameras. But it's been incredibly effective. And we've stood up something called the Real-Time Investigation Center. So that's a game changer, because now, instead of, you know, there's a crime, and it gets reported, and it's too late, everybody's gone, nothing can be done about it. That's how it used to be. Now they're catching these smash-and-grab crews in real time. They come into the city, they do 10 hits a day of crimes.

• 3:38Speaker 02

  Now you see one of them, we send a drone over to witness them doing a second act. With the license plate readers, we can see where they're going. You send an unmarked police car with a plainclothes police officer in it. They put a spike strip out right when they're going by, and they've basically eliminated these crews. And even the crews are talking about this on some of their podcasts, believe it or not, they have podcasts.

• 4:04Kara Swisher?

  As they should.

• 4:05Speaker 02

  Which is, as they should. But it's great news, because nothing works unless you have public safety. And that's why the mayor says this is number-one objective, still is. And then you need clean streets. We've made a lot of progress there. Obviously, we had a big homeless problem. Still have some work to do there, but we've made a ton of progress in making sure that, particularly in the Tenderloin, that that doesn't become a containment zone. So you can see the results, and I think that set the stage for this AI boom, that people wanted to be right here. And that's great news, obviously, for not just the city, but for the state. It's literally like the entire world is sending us a check. And, you know, that's been a real blessing.

• 4:44Kara Swisher?

  Talk a little bit about the AI boom. Obviously, you and I have been through several of these, you know, where it grows and then it comes back. And San Francisco itself has gone through many of these.

• 4:53Speaker 02

  But we're a boom-bust city, for sure. Always have been.

• 4:55Kara Swisher?

  But talk about the current one, because obviously, people are worried about the AI boom turning into an AI bubble, and we'll get to that in a second. But what, why are they coming back to San Francisco? I often tell the story of this one guy. They all left all of a sudden from Miami or Austin or wherever they wanted. I know. It's like, it's hot and wet there, and it's hot and dry there. But they all were like, trying to tout and sort of kicking San Francisco. The place where they made their fortunes, which I thought was particularly ungrateful, but they had to kick it at the same time. And so I was, I was at a really good restaurant here, a place, it was a Tartine, actually, down, down over that way.

• 5:36Kara Swisher?

  And we, I was with a very well-known AI person, and we saw this guy from across the room, big table of people eating the delicious food of Tartine. And we went over and were like, "Get the fuck out of here. You can't have our food. What are you doing?" Of course, had moved back, but still continued to pretend they were conducting themselves in Miami, where none of that happened. Is there something about San Francisco in your, like, is there, in this world of digital, is place important anymore for innovation?

• 6:05Speaker 02

  I think place is super important. I mean, what we have here, I think it's a, it's a fine souffle that's very hard to replicate. You've just got the right amount of, you know, obviously, major capital that's just down the street. But you've also got still the remnants of the hippie movement, right? You've got all kinds of experiential ideas around art that you don't see anywhere else. I think even Burning Man is a great influence for a sort of creativity.

• 6:33Kara Swisher?

  You're going tomorrow, right?

• 6:34Speaker 02

  We'll go tomorrow, absolutely. It's, a lot of people say you can't understand Silicon Valley.

• 6:38Kara Swisher?

  He asked if I was going. I laughed in his face.

• 6:40Speaker 02

  We'll get you there one day.

• 6:41Kara Swisher?

  No, you never will. Never.

• 6:43Speaker 02

  Okay, all right.

• 6:44Kara Swisher?

  Not unless there's a Four Seasons Hotel there.

• 6:48Speaker 02

  Okay, good point.

• 6:48Kara Swisher?

  Yeah.

• 6:50Speaker 02

  But, you know, it's the creative energy, thinking differently. Art and engineering, that's kind of what goes on there, but I think that's what you have here. And that's very hard to replicate. Everybody always says, "Hey, we're going to build a Silicon Valley." It's not happening.

• 7:04Kara Swisher?

  Right.

• 7:04Speaker 02

  And the concentration of venture capital here, when you look at AI, I mean, it's, it's just off the charts compared to anywhere else. That says a lot. You know, you've got to admit, like, California's had some problems. San Francisco, we've had our problems. Yet despite all of that, this is still the place where people came to think the impossible. And this is where they're setting their companies up.

• 7:26Kara Swisher?

  Why is that, from your, I was thinking about this last night. We had a reunion of our Recode staff, but I really did say that same thing. What is your reasoning for it? What creates the current AI boom? And what is the worry you have around, obviously, the inflated, possibly inflated valuations, etc.?

• 7:42Speaker 02

  Well, there's a lot to be worried about with AI.

• 7:44Kara Swisher?

  We're going to talk more detail.

• 7:45Speaker 02

  But I think this is still a place where you come up with a crazy idea, people are not going to talk you out of it, or talk about how stupid it is. Every idea I've ever had, and I talk to my friends around here, and it's like, "Oh, right on, go for it. That sounds awesome." And that matters, actually. And then I think the other thing is you have a lot of sort of veterans, who've been, how many cycles now, who stayed here even after they made their fortunes, because it's a wonderful place to live. And there is a notion of sort of paying it back, right? So like, I had a lot of mentors that helped me, that wouldn't be here if it wasn't for one sentence a couple of people said at the right time. And I think we all remember that, and then you try to help the next group that are coming around.

• 8:30Speaker 02

  So even if you're not involved with AI, which is, you know, a lot of young folks are just doing incredible work, you might be involved just from sharing your experience or sharing your encouragement. That's a, that's a very hard thing to replicate as well.

• 8:46Kara Swisher?

  In a place. In a place. So let's go through some stuff that you've been involved in as an entrepreneur. And we're going to through a whole range of different things, from cryptocurrency to politics. But let's start with some news. The Digital Asset Market Clarity Act, which the White House says will provide a regulatory framework for cryptocurrencies, is set to have a procedural vote in the Senate later this month, September 15th, actually. President Trump has been putting a lot of pressure on lawmakers to get this passed. Talk about where you are on this. Obviously, the Trump administration has been friendly towards cryptocurrency and friendly to himself, in terms of benefiting himself, rather. He's just a good businessman, people.

• 9:28Speaker 02

  Obviously, we've been very involved with crypto policy going back, it's going 13 years now, since 2012 is when we started out. There was nothing on the books there. We were all paranoid. We were always going to be arrested at any moment, right, for sort of counterfeiting or whatever, a million different worries that you could have. Man, some, you know, some progress was made over the years, but then we had the Biden administration. I was a big backer of Biden and Kamala for president, but they really screwed up here. They really screwed up. They were supposed to be a sort of a moderate governing, you know, regime, and they outsourced their financial regulation to the Elizabeth Warren wing and Gary Gensler, who were determined to block any regulation specifically designed for

• 10:12Speaker 02

  the industry, which is a completely novel industry, didn't fit into anything that we had. And they went after this sort of regulation by enforcement lawsuit approach, I think, designed to hobble the industry or destroy the industry. They just got it in their heads that this was all bad. And obviously, lots of just bad stuff happens in any technology boom, but there's a lot of great stuff here in modernizing the world's financial infrastructure, tokenizing assets to make them cheaper to trade globally, lots of great stuff, and they didn't go in that direction at all. So we had a very anti, you know, crypto regime. As you know, we were sued by the Biden administration, Gary Gensler. We had a four-year battle. It

• 10:55Speaker 02

  was brutal. We were lucky we survived it. We spent $150 million defending ourselves. We ended up winning, like, right after I saw you last on your show in 2023, maybe a week after that. We did get a favorable ruling, but it was brutal. And if we didn't have a lot of money, we were a small startup, we would have been finished. And that's just not right. So we wanted new regulations that were specific to the industry. This administration obviously been very pro and wants to be the crypto, you know, leaders of the world. And they have so far gotten through one bill, the Genius Act, that regulates stable coins. That's a really important development. So that's now clear. But we need this market

• 11:40Speaker 02

  structure bill, kind of maybe even the more important bill called the Clarity Act, which has been negotiated here now for a long time. It's been really tough, but I think there is bipartisan support. We're hopeful we get it through because we need to get this official, you know, really official rules so that people know what to do, so consumers know what to expect. It's better to have more regulation that's clear than no regulation. And that's what we want.

• 12:08Kara Swisher?

  Where do you expect it to pass? Or where is it at this point?

• 12:11Speaker 02

  It's still tough. There's still some tricky areas around ethics that the Dems want to see happen. I get why they want that to happen. I just hope we can get a compromise that that works because no bill is actually worst for, you know, how ethics go forward. It would be better to have as strong a bill as we can possibly get.

• 12:34Kara Swisher?

  What's the most important part of this bill from your perspective?

• 12:36Speaker 02

  The most important part of it is defining what is a commodity, what is a security. That's always been

• 12:42Kara Swisher?

  It's always been the issue.

• 12:43Speaker 02

  Always been the hang up. And we got clarity in our court decision, but most of the other players don't have that. And if you don't have that clarity, I think the problem is, could be, from one administration to the other, you're just whipsawing back and forth. And that's just no way to have a market

• 12:59Kara Swisher?

  Which won't grow. And of course, the crypto industry hit back hard against Democrats. Sherrod Brown was sort of widely derided by the crypto industry and loss. He looks like he's going to be back.

• 13:10Speaker 02

  Yeah, I love Sherrod. And that was unfortunate. I think, again, his staff went in the wrong direction. I don't think it was him. He was more of an Elizabeth Warren-type influence on his staff.

• 13:22Kara Swisher?

  So you like her, Elizabeth, right?

• 13:23Speaker 02

  I used to. I really did. But I don't like what she's been doing lately. She kind of leaned into the anti-tech, anti-innovation.

• 13:31Kara Swisher?

  Yeah. But you do have these problems. You talked about this ethics issue. White House disclosure forms show President Trump made more than $1.5 billion from crypto investments last year. Should there be some laws in place to prevent government officials from profiting off of cyber currency?

• 13:46Speaker 02

  I think no question. Same with stock trading. We see that in both parties. But absolutely, we need a lot of, there's a lot of work to be done there as far as how our government works.

• 13:55Kara Swisher?

  And then what, what does it do for the citizens that are worried about corruption or, you know, crime? And there are legitimate issues.

• 14:05Speaker 02

  There are, but it's still, it's a pretty regulated business already, right? I mean, finance, fintech, I always think is very different from, let's say, communications, right? Communications, you have First Amendment, so it's much harder to regulate. And you have these problems with the social, you know, media companies on that score. But financial transactions, you don't have a First Amendment on, right? So you don't have the freedom to do a lot of things you see in traditional data companies. So it's already heavily regulated. But this just makes it clear in, in this specific industry, which I think the big thing here is it's making the traditional financial industry embrace it and modernize some of their systems and make them faster, cheaper, more global.

• 14:48Kara Swisher?

  Which they seem eager to get into. They do seem.

• 14:50Speaker 02

  I think it's this notion of an internet of value. We have an internet of information. The world works better if you have an internet of value. Value is different than information for all kinds of reasons. That's a good thing for the world. And you need the clarity of regulation for the big guys to really step in. They're, they're in pretty good right now, but this would really settle a lot of questions and give them the confidence to invest, you know, a decade out.

• 15:16Kara Swisher?

  But you would be for a stipulation that government officials shouldn't be profiting?

• 15:20Speaker 02

  It sounds good to me. Yeah. I don't think they should be able to trade stocks or any of this stuff. And you see a lot of that going on. It doesn't make sense to me.

• 15:27Kara Swisher?

  Yeah, absolutely. We probably should pay them more than

• 15:30Speaker 02

  I agree with you on that one. Yeah. And here in San Francisco, too, it's crazy the responsibility they have and how little they make. And I think that just sets up all kinds of problems.

• 15:39Kara Swisher?

  We'll be back in a minute.

• 15:42Speaker 03

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• 16:18Kara Swisher?

  So last time we were on stage together, we talked a lot about the balance between surveillance and civil liberties. And recently, the debate was brought right to your front door. In the past few years, you've helped fund an extensive surveillance network throughout San Francisco that now allows police to monitor residents in real time. The goal is catching suspects, as you noted. You've said you have bright lines around surveillance or no facial recognition and profiling and no stop and frisk. Talk a little about this. There are people, you talked backstage, my son is worried about it, yours. So talk a little bit about this, because part of, part of, immediately when I see your name, I was like, oh, the surveillance guy. I'm like, it's a little more complex than that. And then I don't

• 16:59Kara Swisher?

  want, I get exhausted trying to explain it. But there are legitimate worries about surveillance, given it could go a very different and very ugly way. You just have to look to China, you have to look to a lot of the authoritarian countries. Talk a little bit about this.

• 17:13Speaker 02

  Yeah, it's almost the issue of our day. And you're right. I talked to my son about that. He's 19, and he always gives me a hard time. I can't, you're doing the surveillance thing. What are you doing? And I was like, well, we cut down on crime, you know, 70% smash and grab. He said, I'd rather have the crime than the surveillance. Like, oh, you know, so I get it. You know, this is, this is, this is a tough issue. It's a really tough issue. You know, but in 24, that's when the voters of San Francisco approved Prop. That's what allowed the police to have these tools for the first time. And again, it was a game changer. It's incredible to think that's only two years ago. So the world has changed so much. And, you know, even last year, there wasn't a lot of opposition. Now it's tremendous opposition.

• 17:53Kara Swisher?

  Right.

• 17:54Speaker 02

  Last year, and certainly in 24, I think people saw flock cameras as a tool. Oh, great. Sounds good. We're going to catch the, all these smash and grabbers. Now, huge opposition, right? It's called deflock movement, literally.

• 18:06Kara Swisher?

  Right. Well, because, well, there's a reason for it. Let me just, the flock cameras, for people who don't know, it's automatic license plate readers. They've been getting a lot of Brad Press. There have been multiple reports across the country of police officers using flock cameras to stalk people, including ex-wives and girlfriends. A lot of common sense oversight tools like requiring officers to enter a case number for running a place just don't exist now. A feature has become mandatory on January 1. My whole premise of a lot of this stuff is that if it's become a tool, it can become a weapon instantly.

• 18:37Speaker 02

  For sure. And, yeah.

• 18:38Kara Swisher?

  And anticipation of that never happens.

• 18:41Speaker 02

  Yeah. And I think the thing that's really changed, two things. One, I think the AI arms race, I think, is so unpopular. It's caused so much mistrust. That's one thing. And then, of course, we have this disaster with ICE, where literally Americans are being killed and people are being scooped up and put in god knows where. That's not what voters signed up for. I think those two things, together with new surveillance tools, that's what's making people upset.

• 19:08Kara Swisher?

  Nervous.

• 19:09Speaker 02

  Nervous. Rightfully, I totally get it. So I think

• 19:12Kara Swisher?

  I mean, I have no question in my mind that Mark Wayne Mullen would use these tools to abuse citizens. No question at this point.

• 19:19Speaker 02

  You know, I totally get it. I think this is going to be the issue of the day though, because this is, it's a trade-off, always, public safety and privacy and, you know, just being able to not be seen. Where is that line? I think the line is going to be moving. I think what it says, though, is that governments, including San Francisco, San Francisco's really good on this, right? So their use of these tools, by the way, are incident-based. So they're not just doing surveillance and looking everywhere and trying to see if somebody's doing something wrong. It's when you get a report of a smash and grab incident or a strong arm robbery, then a drone is going to be sent over there. That's what they do, but I get it. You know, people are still uncomfortable because it could

• 20:00Speaker 02

  change. But again, I think San Francisco could do, needs to do a better job. San Francisco keeps flock information for a year. That's way more than the average. The average is about 30 days. And flock, just because they know they're under pressure, changed their default setting to seven days. And to go even further, New Hampshire has a law now that says flock information can only be kept for three minutes. So three minutes to see if that matches a crime, and then you have to get rid of it. Another thing, when I, you know, what's new is we've never had so many drones in the air. They're super effective, right? This is, drone is first responder. It's a huge force multiplier for the police. But we've never had 100 drones in the air owned by the government. We do now.

• 20:45Speaker 02

  Now, if you're on the street, you don't really have an, you know, you're in public lands. That's one, that's, that's one thing. You, you, you can never pick up audio in, in our systems. That's important, right? Ring cameras do, for example. But you can pick up people's backyards from a drone. I would like to see those, uh, those technologies blacking out people's backyards, uh, blacking out people's decks, places that are private. So that, because again, I think people are bothered by this, right?

• 21:15Kara Swisher?

  So, so people are bothered. Demonstrators with Sunrise Movement gathered outside your house to protest your support of these tools. Um, this backlash, are you, it, it, it has to do with a lot of abuse that is, that no one thought of. And I saw Facebook Live for the first time. I was sitting in a room and I said, okay, what are you going to do about bullies, murderers, suicides? Um, uh, someone strapping a GoPro on their helmet and shooting a church or a synagogue. I was like, what are your tools to deal with this if this happens? And literally the tech said to me, you're a bummer. And I was like, yeah, I'm a bummer. So is the human race. So I don't know what to tell you. Why isn't there

• 21:59Kara Swisher?

  any kind of transparency around the consequences for people to decide on? Because voters, I know they approved it, but if they understood, how, how do we make it so that it's deeply transparent? So they can make the trade offs they want to?

• 22:13Speaker 02

  Yeah. And, and San Francisco does have multiple layers of approval on, you know, how these things are deployed. There are audits of them, but obviously we have to do more because the, the temperature and the anger. Again, I think people are putting all of these tools and data centers are the expression of a great amount of anger and angst about this whole AI revolution we're living in right now.

• 22:38Kara Swisher?

  I was talking to some of the people who are building these data centers and they had me in and they said, uh, we'd really love your thoughts on why people are, uh, feeling this way. And I said, they hate you. You're, and you're hateable. Like, I don't know. Like, you know, there's an expression, a punchable face. I'm like, tech has a punchable face right now in a way that deservedly kind of thing. And so, so these are all linked together and data centers, as you're right, is a proxy for having these AI companies tell us they're going to take all our jobs. They're going to kill us. They're going to, what, what are you doing here, human? Still, you're still here bothering me. Um, how do you, how does it, because at the same time, I just interviewed the mayor of Lansing, Michigan,

• 23:21Kara Swisher?

  which I talk about a lot because it was really striking. He put together a data center deal that was all the right things. Uh, closed loop water, uh, payments to the, to the citizens, long-term property taxes. They had to pay the difference in any electrical problems so that rates wouldn't go up. How, everything, the total transparency, that there was no NDAs. The citizens rejected it.

• 23:44Speaker 02

  Yeah.

• 23:45Kara Swisher?

  Rejected it.

• 23:46Speaker 02

  Yeah.

• 23:47Kara Swisher?

  So there's no, no amount of money or promises were believed in any way. So why should we believe you? Not you, but you know, why should we believe tech at this point? When that happens, when there's things that are beneficial, like you're talking about?

• 24:04Speaker 02

  Yeah. It almost separated tech from the AI arms race. And there is an AI arms race that's completely out of control. It's all gas, no brake, no steering. And of course, that's going to end badly. And I would say that's AI insanity, yet it continues. And when you have companies, I mean, they're so wealthy. Um, but when you have them telling you, hey, we invented fire, we invented nuclear, you know, energy, um, you know, uh, and this is really dangerous and it's going to destroy jobs and it's going to hurt, you know, kids and take over humanity. And then 20 minutes later, they're releasing the new super powerful model. Uh, you know, I just don't know how you reconcile that. And then I think everybody

• 24:47Speaker 02

  understands like, that's not good. Um, so I think the data center, um, opposition, which is staggering. Uh, maybe that's healthy. That's the way to sort of stop it, slow it down or force regulation, you know, in that industry. Cause the other thing the industry is doing is they sort of tried to take a reverse page out of the crypto industry, setting up super PACs, but to crush anybody that dared come up with any guardrails. And you saw this in the Alex Boris race, right? Um, that doesn't make any sense, right? So you actually need people now to be, um, really leaders, to be smart and to be working on these guardrails and maybe even slowing it down.

• 25:30Kara Swisher?

  I mean, Don Trump told people they were stupid and poor if they didn't go along with it. Howard Lutnick said, no water would be involved. He's such a moron.

• 25:39Speaker 02

  Well, the, the weird thing about that is, uh, which I don't get is the MAGA movement is actually pretty aligned on this.

• 25:46Kara Swisher?

  They are.

• 25:46Speaker 02

  And they don't trust these companies.

• 25:48Kara Swisher?

  They do not.

• 25:48Speaker 02

  Yeah. They are very concerned about kids and families and loss of jobs. I mean, that's exactly what we talk about here.

• 25:53Kara Swisher?

  Well, that's where you see Marjorie Taylor Greene, Elizabeth Warren coming together in a big blob. It's really interesting and strange.

• 25:59Speaker 02

  And you saw some of the child protection folks getting together. Steve Bannon on this issue.

• 26:02Kara Swisher?

  Yeah.

• 26:03Speaker 02

  And by the way, I think that's good news. This is maybe one area we can find.

• 26:06Kara Swisher?

  Nothing with Steve Bannon is good news, but that's fine. All right. Sure. Something came up in our last conversation that democracy is messy. We talked about it and why, uh, why you said you'd rather vomit blood out of your eyeballs. I don't know how you would do that than run for office.

• 26:19Speaker 02

  Still true.

• 26:20Kara Swisher?

  But there is the worry about billionaires, you know, using your money to, to just fund it. Like using your money to fund these agencies to do fast track adoption, um, without having enough people coming in on it, like enough citizens being able to do that.

• 26:37Speaker 02

  Yeah. For sure. Look, there's way too much money in politics. The Supreme Court made a huge mistake with Citizens United and with Jeremy Nandering. Uh, that should be the top two things that we try to change and hopefully our next administration, if we can do that. Um, but it is the rules of the game. So, I mean, if you want to get involved in policy, you have to play that, uh, that game. Unfortunately, um, we can't let the oil industry sort of dictate energy price, uh, policy and then have the solar folks, for example, sit back and go, oh, look at our lovely product. I hope everybody loves it. No, it doesn't work that way. You gotta get out there and fight. You know, this is politics. It's not a, it's not a pillow fight.

• 27:17Kara Swisher?

  Speaking of that, according to New York Times, that you spent about $3.5 million on Alex Boris, who's, who was under attack from OpenAI for his AI safety advocacy. Um, why was that fight? I wasn't surprised you were there, but others were like that you were there.

• 27:31Speaker 02

  Well, it was just this totally obnoxious fucking thing from this Greg Brockman, like 50 million bucks is going to drop on Alex's head for him to dare to come up with any kind of guideline.

• 27:42Kara Swisher?

  One of the, one of the, one of the top executives at OpenAI.

• 27:44Speaker 02

  President, president. And they tried to say, no, that wasn't OpenAI. Of course it was. It was, it was a strategy. And so that was just wrong. And, um, you know, we wanted to show that people that, you know, like Alex and, um, obviously Scott Wiener here and Manny, uh, Rutinell in Colorado, who did win, we put a million bucks into that race, that they're going to have, we're going to have their backs. And we're going to support you to defy this big money. And we're talking about big money in AI. It's so big now.

• 28:14Kara Swisher?

  It is.

• 28:15Speaker 02

  It's, it's so scary what could be coming down the pike here. Um, but money doesn't always buy results when you have that much opposition.

• 28:24Kara Swisher?

  Right.

• 28:24Speaker 02

  Um, so I think that was important. You know, obviously Alex didn't win, but he came pretty close.

• 28:29Kara Swisher?

  Right. But you just talked about money. The Guardrails Alliance, the new super PAC backed by tech workers, labor unions and other rank and file workers backed Boris, uh, they were up against leading the future, which is, as you noted, funded by OpenAI's president, Greg Brockman. It is an operating budget of a hundred million dollars compared to Guardrails' goal to raise $15 million. You told the Times, OpenAI was quote, "trying to destroy, intimidate and send a clear message that if you do come up with clear guardrails, we're going to crush you." So talk a little bit about this.

• 29:00Speaker 02

  No, I mean, that's.

• 29:00Kara Swisher?

  And just let, I'm sorry, let me do one thing. You're an investor in Anthropic, which is OpenAI's main rival.

• 29:05Speaker 02

  Well, no, this is actually not true. I mean, it is true. I mean, I have indirect investments in OpenAI, Anthropic and SpaceX.

• 29:13Kara Swisher?

  Okay.

• 29:14Speaker 02

  So all the same.

• 29:15Kara Swisher?

  Right. Okay. So all different people that were doing it. Okay. So talk a little bit about this money differential because it's vast and there's plenty more coming.

• 29:23Speaker 02

  It is, but I think the good news here is when you have that much opposition to what's going on and it's clear you do, um, I think it's kind of ineffective. And you compare that to the crypto industry where you really didn't have a lot of opponents. You had sort of an Elizabeth Warren wing, but there isn't really sort of a populist that was sort of anti. And on the other side, you had 50 million Americans trading crypto. That was, that was a big plus. That's not the case in, in the AI thing. The AI thing is different. It's, this is not Airbnb. This is not Uber. It's not crypto. All of those had lots of policy implications, lots of political action committees, but those are like incremental things in how the world works. AI is like an existential threat to

• 30:04Speaker 02

  like human existence, right? This is a different thing. I mean, it is fire. Like they invented fire and then they're trying to say, oh, we don't need fire stations or fireproofing or, you know, it's just crazy. So it's a whole different beast. And I think the money isn't working. And if it, if it had been working, you wouldn't have this kind of backlash.

• 30:23Kara Swisher?

  Right. And now they're trying to unbacklash.

• 30:25Speaker 02

  They're backing off. Right. They're trying to talk about how all the positives. And there are positives. Don't get me wrong.

• 30:31Kara Swisher?

  Right.

• 30:31Speaker 02

  This is a potentially a fantastic, you know, future that we could be living in, but only if we take the very, very difficult middle path between this AI insanity we're on now, this, this unmitigated arms race, which by the way, you know, Anthropic and Dara, they're, they're doing better, but they're still in the arms race. They're still releasing another powerful model with, okay, it seems to be fine. Um, and warning about, about all the dangers that will happen. So we can't be on that path and we can't be on the Bernie Sanders, shut it all down, you just walk away from it path. It's as Tristan Harris and Center for Human Technology, they did great work on this.

• 31:12Kara Swisher?

  Yeah. He's about to come out with some new stuff.

• 31:13Speaker 02

  He's so good. Um, but like he says, this is a very difficult middle path we need to walk. That means you need extraordinary, you know, brave political leaders who are knowledgeable and you need a lot of, I think the people in tech to stand up and to push back on the folks that are in the arms race bubble. They, they, they don't even. Some evil people, mostly good people, doing really good work.

• 31:37Kara Swisher?

  I think just one evil person is not good, and we know which one that is.

• 31:40Speaker 02

  You can do a lot of damage, right?

• 31:42Kara Swisher?

  Yeah.

• 31:42Speaker 02

  But they're in a bubble, though. They're not seeing this.

• 31:45Kara Swisher?

  So why, why aren't they seeing this?

• 31:47Speaker 02

  Well, I mean, a couple of things. I think many of them have. I mean, if you look at people that donated to Alex Boris, let me give some props to a lot of the OpenAI employees. Like, their leaders were doing one thing, but the employees were actually backing the Alex Boris's. And if you look at a lot of the Anthropic employees, Anthropic, I think, does a much better job across the board. What is it now? They're involved in this Alaska race? Because backing the candidate who's really good on AI regulation? That's encouraging. So maybe it's the leaders are in a bubble, but the employees see the power and the danger of these things.

• 32:22Kara Swisher?

  Well, you know what? You know them. Why do you think they're this way?

• 32:28Speaker 02

  I mean, I do think you get in a bubble with anything. It's super exciting work. You know, just the reaction of the world. I mean, in like, what, four years? It's the only thing we talk about. It's pretty intoxicating, I'm sure. And they're also super working, probably nonstop, probably no time to sleep, right? You do, I think you do get in a bubble.

• 32:50Kara Swisher?

  You get in a bubble.

• 32:51Speaker 02

  They probably don't meet a lot of folks in places that are really concerned about this stuff.

• 32:56Kara Swisher?

  Yeah, they, they don't. They don't, that's for sure. They go from their planes to their houses to their...

• 33:01Speaker 02

  But one thing I would say, I think the social media mess, I mean, that, we let that get away from us, right? I think that actually is some good news, because we've seen this movie before.

• 33:12Kara Swisher?

  Right.

• 33:12Speaker 02

  And so it's pretty hard to, to pitch all that BS. It's all good.

• 33:18Kara Swisher?

  And you're seeing that in these cases, these social media cases, which are going their way and using product liability versus Section 230 or free speech. They're now losing. And you saw this giant settlement, which is small, but it's bigger than, than I expected.

• 33:35Speaker 02

  It's a good development.

• 33:36Kara Swisher?

  It's a good development, and it's still not over.

• 33:38Speaker 02

  I think that's right. I think that's exactly right.

• 33:40Kara Swisher?

  So do you, switching gears in this thing, you're against the billionaires' tax? Because people are mad at billionaires. I don't know if you know that, but they are.

• 33:49Kara Swisher?

  Even people who like money, like myself, are mad at billionaires, right?

• 33:52Speaker 02

  I can't wait to get back to 900 million. I could be a good person again.

• 33:55Kara Swisher?

  Okay, all right.

• 33:59Kara Swisher?

  That's a good billionaire joke.

• 34:02Kara Swisher?

  And there's not that many, I can tell you. But, but talk about this, because one, that's, I think, the issue. And the one-time 5% tax, what's the big deal?

• 34:15Speaker 02

  Well, look...

• 34:15Kara Swisher?

  Also, we need your money. Thank you. Just give it to us.

• 34:19Speaker 02

  Okay, everybody hates billionaires. If you wanna, if you wanna get even with the billionaires, make them stay in California, where they pay 13% and they don't get capital gains breaks.

• 34:26Kara Swisher?

  Now, make them stay. It's such a terrible place to live, but go ahead.

• 34:29Speaker 02

  Well, I mean, it's good for the state, you know.

• 34:31Kara Swisher?

  All right, okay.

• 34:32Speaker 02

  You know, that's one thing. But, yeah. Look, it's a terribly designed bill. And I think Mark Cuban has made this point, right? We both know, in tech and in many small businesses, most of your wealth is paper wealth. And, you know, we both lived through the dot-com crash, right? You know, I think most of those stocks went, they were down 99% within a year. So imagine if the day they set your tax bill was pre-crash, and then you had to pay it post-crash. The tax bill would be five times bigger than your net wealth, net worth, and you'd have no liquidity to pay it. And so in that reality, and, you know, that would apply to the AI folks right now. A lot of paper wealth. You have another AI crash. It could happen anytime. Same situation.

• 35:14Speaker 02

  I mean, entrepreneurs, they would never set up in California. Why would you risk that? You could just go across the border to Nevada, or Arizona, or Texas, or Florida, and you wouldn't have that situation. That will drain money out of the general fund. And that hurts, that hurts most workers in California, including teachers, firefighters. That's why they're against it. Look, this, this structure was designed by Dave Reagan from one of these local SCIU unions. That's what it's, it was designed to give more resources to those union members, right? So it's, it's not fair. It's not well-structured. And I think Dave Reagan never meant this to go on the ballot. His MO is to shake down the state government

• 35:59Speaker 02

  with these really painful propositions, and then negotiate a way for some other benefits. Luckily, this time, Governor Newsom didn't go for it. And this thing is on the ballot. It's terrible, and we need to defeat it.

• 36:13Kara Swisher?

  At the very time, people really don't like billionaires. Do you think that is the case? Is it going to be defeated? And if it's not, what happens?

• 36:20Speaker 02

  I mean, you never know with the mood here. I think if you care about Silicon Valley, people here, get involved in the opposition. There's, there's other ways to fix the income disparity, and we have to.

• 36:31Kara Swisher?

  And billionaires like Peter Thiel slip out of all manner of payments by manners of tricks. Like, Scott Galloway has proposed an alternative minimum tax or some other way to do this. But most people feel, I pay more taxes than Elon Musk. This is insane, like, on a per capita basis. So why, why not figure out something that is fair? Because they block that, too.

• 36:56Speaker 02

  Yeah, I don't buy the studies that show, like, the secretary's paying more than billionaires. Like, we're paying a lot of money into... If you're here in California, you're paying a ton of taxes. But, look, this has to be fixed at the federal level. Look, you know, we have a $2 trillion annual deficit now, 40 trillion in debt. Obviously, we need to tax the wealthy more. But again, at the federal level, and do it on income? Because, again, wealth taxes don't work. You had 15 countries, I think it was, in Europe. They had this in the 90s. They've almost all done away with it, because it just doesn't work. So income is cash. That's the way to tax. But do away with the capital gains taxes federally. We don't need it. And then I think in an AI world,

• 37:39Speaker 02

  look, we gotta stop valuing capital over people. And right now, you know, you can write off a private jet in one year. It's ridiculous. So you have to do away with that stuff. Maybe, you know, allow people to write off 10 years of employing a person. That'd be a better way to go. And so we really gotta redo our tax structure. But, look, the only way you're gonna get there is you gotta get a Democrat in the White House. And that's what we should be working for. And by the way, harder way of doing that is making sure that California is a problem-solving state and not creating more problems like this, this tax would create.

• 38:12Kara Swisher?

  So where do you imagine this going now? You, billionaires, of course, have been threatening to leave New York City for more than 20 years over similar taxes, and they never do. Do you think this would happen in San Francisco?

• 38:24Speaker 02

  Oh, people will leave for sure. People already are leaving. But, yeah, again, you wouldn't, you wouldn't be here in a structure like that. It's too risky. It just wouldn't work. But, look, I, I think you have sort of the worst of the worst on this thing if it passed, because I think it's tied up in the courts forever. I think the Supreme Court throws it out. Looks very unconstitutional to me. But, so you'd have the worst of the narrative, people leaving, just in case. You'd never get a dollar out of it, because it probably overturned at the Supreme Court. Again, it's, it was never designed, I think, as a solution for this problem. We have to solve this problem.

• 38:58Kara Swisher?

  So your solution is the federal government reforms the tax system?

• 39:02Speaker 02

  Well, you gotta get a Democrat in the White House. And then we've, you know, we've gotta maybe get rid of the filibuster so you can get this through, depending on what happens with Congress. But, yeah, we have to completely redo our tax system.

• 39:15Kara Swisher?

  We'll be back in a minute.

• 39:23Speaker 03

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• 39:53Kara Swisher?

  I want to finish up talking about solutions. One of the things is tax reputation is really, the polls are really quite clear about that. But what could happen to turn that around, from your perspective?

• 40:06Speaker 02

  So, look, it just, you just have different situations in different parts of the country. Obviously, in Washington, the unions don't have much power. In California, the government unions have too much power, and SCIU as well. And, look, our, our budget is up, even though our population is flat. So we definitely are not being very efficient. We, it can't just always be a revenue issue. And I think people will support higher taxes. I would. I'll pay more if I know it's being used efficiently. But I don't think we're there yet. And I think the reason is Sacramento is too dominated by a couple of government unions and by SCIU. And they're there every single day threatening legislatures. And we need to stand up a permanent sort of pushback

• 40:51Speaker 02

  by the business community, not the tech community. It's not even about tech policy. It's just about being problem solvers. And, look, we know the problems in California are housing, right? The energy's too expensive. It's too hard to build stuff. Those are the problems people want solved. If you deal with that, I think you get, you get majority support.

• 41:12Kara Swisher?

  I just interviewed Steve Hilton, for example.

• 41:14Speaker 02

  For governor?

• 41:15Kara Swisher?

  Yes. I, Becerra will not do an interview with me.

• 41:18Speaker 02

  Yeah, we just said yesterday we're supporting Becerra. We have had a number of meetings with him. I like him. And we were meeting specifically on climate policy. I spend most of my time on climate change work. But the climate folks, look, we failed. Like, we're kinda, we need a reset. Like, we're all stuck. The, the climate folks, we've been advocating for too many things that are expensive, the green premium. And that's not working for working people. And that's why you get the backlash, right? I think the oil and gas industry, they're stuck. Like, they're fighting us on every front, but they've gotta start making sustainable fuels. And we're big believers, you need a lot of electrification, obviously, although we've lost that race to China. But, look, we don't necessarily have an internal combustion engine problem. We have a sustainable fuels problem.

• 42:03Speaker 02

  And the oil industry could make fuels from renewable energy. You can make fuel from solar panels, nuclear, wind. You can absolutely do that. It's not economic today, but solar was not economic 10 years ago. It's the cheapest form of energy today. And they also have to figure out ways of sucking carbon out of the air. They're not going to do that because they're nice guys. But they're going to do that under pressure. And there's a lot of pressure points going on, including the insurance crisis, which we love that issue. I mean, it's a terrible thing going on, but because it is a direct result of too much carbon in the air and that's warming the earth and this extreme weather. I mean, every day you turn around and there's like, oh, another act of God, right?

• 42:47Speaker 02

  No, it's because of too much carbon in the air, right? So they're responsible for that. And I think there will be a moment of some kind of grand settlement where the damages will be in the trillions, will be a tobacco moment. But you don't, you're not going to kill the oil and gas industry. We've been trying to kill it and that's not working. But if they started changing the way they make fuels or sucking the carbon out of the air, that can work. And by the way, there are a billion and a half internal combustion vehicles in the world. I mean, what are we going to do? We're going to throw it on the ocean? I mean, that's just not going to work. And again, China has sort of taken over all of the EV industry. We can't, we probably can't compete with them anymore. We can probably compete on internal combustion engines with sustainable fuels. America's pretty good at that.

• 43:32Speaker 02

  But we can't have a situation where, you know, there's 10 million cars being exported from China now. It's crazy how big that has grown. We can't get into a situation where all of your cars are made in China and they're self-driving and you lose all the jobs of making the cars and all the jobs of driving the cars. We are fucking not going to let that happen. Can't let that happen.

• 43:53Kara Swisher?

  All right. Wow. Okay. Okay. So I was going to ask about China, like what's happening there. And you're absolutely right. You go there and what they're doing in cars has been astonishing. If you go anywhere in the world, BYD cars are everywhere, a lot of Chinese vehicles, robotics, innovative, electrification, innovative. How do you look at the challenges from China? Because they are also ahead in climate stuff, like climate and capture and things.

• 44:21Speaker 02

  Except for carbon capture.

• 44:23Kara Swisher?

  Carbon capture.

• 44:23Speaker 02

  We can own that.

• 44:24Kara Swisher?

  Right, but they're adding a lot of stuff that's towards sustainable because they see the problem themselves.

• 44:30Speaker 02

  Yeah, I think it's less for climate and more for energy security.

• 44:34Kara Swisher?

  That's right.

• 44:34Speaker 02

  Different objective. That's probably why they haven't gone into CDR, carbon dioxide removal. And we can own that and we need to. And the oil and gas industry is pretty good at molecules. They've got to figure out how to do that. But yeah, the us versus China, we're going to lose to China in the AI thing. It's a red herring. It's, that's not right. We can't think that way. They're operating in a whole different reality and we can't compete in that reality because we don't want that reality. That said, there's lots of stuff we can be doing together. Like we've got to get together on the really scary stuff on AI, like biological war. I've just read that book, Biological War, a scenario scary as hell, worse than a nuclear holocaust.

• 45:19Speaker 02

  We've got to work together on that. On EVs, I just mentioned, you know, we can't lose all the job. However, you know, the BYD Seagull, $10,000 car, fabulous car. We should be letting that into California, at least for our low income folks. Right now, we have these crazy high gas prices, 70%.

• 45:37Kara Swisher?

  Yep, we won't.

• 45:38Speaker 02

  70 cents a gallon, right? And tax, that's the most regressive tax in the world. That's hurting the guy that can't afford to live in Silicon Valley, lives in Modesto, paying a fortune and he can't afford an EV. They're all 50, 50 grand. Let them buy a Chinese BYD Seagull. But maybe it had to be income tested because we're never going to make that stuff, right? So I think it's just complicated. We've got to be working with them, but we've got to also know that they're trying to, they're trying to eliminate our way of life, but there's tons of things we can do together.

• 46:11Kara Swisher?

  Especially around AI safety, 100%.

• 46:13Speaker 02

  That's right.

• 46:14Kara Swisher?

  All right. The last thing is, one of the things, as you've noticed, Chris is all over the map here and it's a really interesting thing. I often find you really interesting and Mark Cuban's very similar in that way. You don't quite know what direction you're going to go. Obviously you have very liberal tendencies. You've been supportive of Democrats. At the same time, you're against the billionaires tax. But how, in this very partisan era where it's really like, ugh, like it's very hard to operate for most people. And if, and especially with the administration who is actively hostile towards lots and lots of people with voting and obviously trying to do all manner of horrors with ICE and everything else, which seems very obvious and the polls are showing that. Nobody's liking what's happening here.

• 46:56Kara Swisher?

  How do you get back to an area of comedy anywhere, like at all, where it's going to, where people are going to get along? Or maybe they won't. Maybe this, we're post America.

• 47:08Speaker 02

  I think we'll get back there. We've had other difficult times in American history, really difficult times.

• 47:13Kara Swisher?

  Well, I always go and people in Washington is like, oh, we can't speak to anyone. I'm like, civil war.

• 47:18Speaker 02

  Yeah, no. We had lots, lots of challenges. I think number one, dump your social media. Just get off that shit. It's just really bad for you and it's ruining our country. I think the other thing is we got to get a notion of fighting really hard for what we believe in. Fight really hard, but then loving your opponents when the fight is over, right? After a football game, you fight really hard, shake hands after. We got to get back to doing stuff like that.

• 47:43Kara Swisher?

  How do you do that? I get that. I get that.

• 47:46Speaker 02

  Right. Well, you got to teach our kids. I mean, that's maybe our generation is too far gone, but you know, it's not our world anymore. So we got to teach our kids to think that way.

• 47:56Kara Swisher?

  So who do you look at that you find, even if you might not agree with them, among the political figures or leaders? I mean, obviously Dolly Parton, but we don't have her anymore.

• 48:05Speaker 02

  Well, point two, I think Tellerico, James Tellerico, we got to know him pretty well. You know, I asked him, if you get to the Senate, you're going to impeach Trump, right? And he's like, no, I'm going to make Trump a winner. I'm going to make him a winner. And you know, Mark Cuban has done the same thing with his drug program. You give Trump the credit. Great. If that works, that's, that's one step. We got to start working with our fellow Americans. Rob Sands, another guy is going to be governor of Iowa, I believe. Same thing. You know, he's a damn in a red state and he's going to win. He's just, he's a problem solver. He's pragmatic. He goes everywhere, talks to everybody. So we got to, we got to start doing that more.

• 48:46Kara Swisher?

  So last words for people here, there are a lot of entrepreneurs, business people. You've obviously had a lot of success. You have a very interesting life. What would be something you would say to entrepreneurs to think about going forward? And this really sort of, it's a moment right now we're in.

• 49:03Speaker 02

  Yeah. Well, something that always helped me, there was somebody before I started my first business and I'd never thought I would have, but he said, cut the lifeboats, right? Don't be afraid. Don't be afraid of failing. Failure is a badge of honor if you do it with grace and, and honor. And you got nothing, nothing to be afraid of. And you have the incredible tool, I think from this conference, right? You have incredible tools now, including, and this is where AI I think is really good. You know, we've never had a higher number of small businesses starting. So I said, you know, go for it and take those risks.

• 49:35Kara Swisher?

  In San Francisco, you're going to stay?

• 49:37Speaker 02

  100%.

• 49:38Kara Swisher?

  100%. All right. All right. Chris, thank you for being here as usual. Incredibly thoughtful conversation and thank you, Odoo, for hosting. We're at the Odoo Experience in San Francisco. Odoo makes an all-in-one suite of business software, everything from sales and accounting to inventory and operations on the theory that you shouldn't need 10 systems to run one company. That's a very good thing. Anyway, thank you so much and thanks to Chris Larsen.

• 50:10Kara Swisher?

  Today's show was produced by Nishat Kurwa, Tracy Hunt, Madeline LaPlante-Duby, Michelle Aloy, Catherine Millsop, and Kalen Lynch. Special thanks to Bradley Sylvester, Lissa Soep, Julia Sharp Levine, and Manola Moreno. And thanks again to Odoo for hosting our conversation. Our engineers are Fernando Arudan Richquan and our theme music is by Trackademics. If you're already following the show, the drones haven't found you yet, yet. If not, what the flock are you doing? Go wherever you listen to podcasts, search for On with Kara Swisher and hit follow. Thanks for listening to On with Kara Swisher from Podium Media, New York Magazine, the Vox Media Podcast Network and us. We'll be back on Thursday with more.

• 50:58Speaker 01

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