Elon Musk SUES Sam Altman

Episode 560: Shaan Puri (https://twitter.com/ShaanVP) and Sam Parr (https://twitter.com/theSamParr) break down the lawsuit between Elon Musk and Sam Altman. Are his claims legit or is this a masterclass in marketing/PR? Want to see Sam and Shaan’s smiling faces? Head to the MFM YouTube Channel and subscribe - http://tinyurl.com/5n7ftsy5 — Show Notes: (0:00) Intro (1:00) Single purpose robots are here (4:00) Self-driving lawn mowers (19:30) Robot line cooks (13:00) Op ex over cap ex (18:30) What could go wrong? (21:00) Sam Altman's call for Universal Basic Income (23:00) Preparing for the AI winter (27:00) Robotics-first Chipotle (31:30) Sergey Brin's viral Q+A (37:30) Elon is suing Sam Altman (41:30) Larry Page calls Elon a "speciest" (44:00) The Manhattan Project of AI (47:30) Rumors around Q-Star (50:00) We read Elon's emails (57:30) Making sense of the war against OpenAI — Links: • Tesla Bot - https://www.youtube.com/watch?v=NCQaJEtyKf0 • Sheep Robotics - https://sheeprobotics.ai/ • Kernel - https://www.kernel.inc/ — Check Out Sam's Stuff: • Hampton - https://www.joinhampton.com/ • Ideation Bootcamp - https://www.ideationbootcamp.co/ • Copy That - https://copythat.com • Hampton Wealth Survey - https://joinhampton.com/wealth — Check Out Shaan's Stuff: Need to hire? You should use the same service Shaan uses to hire developers, designers, & Virtual Assistants → it’s called Shepherd (tell ‘em Shaan sent you): https://bit.ly/SupportShepherd My First Million is a HubSpot Original Podcast // Brought to you by The HubSpot Podcast Network // Production by Arie Desormeaux // Editing by Ezra Bakker Trupiano Past guests on My First Million include Rob Dyrdek, Hasan Minhaj, Balaji Srinivasan, Jake Paul, Dr. Andrew Huberman, Gary Vee, Lance Armstrong, Sophia Amoruso, Ariel Helwani, Ramit Sethi, Stanley Druckenmiller, Peter Diamandis, Dharmesh Shah, Brian Halligan, Marc Lore, Jason Calacanis, Andrew Wilkinson, Julian Shapiro, Kat Cole, Codie Sanchez, Nader Al-Naji, Steph Smith, Trung Phan, Nick Huber, Anthony Pompliano, Ben Askren, Ramon Van Meer, Brianne Kimmel, Andrew Gazdecki, Scott Belsky, Moiz Ali, Dan Held, Elaine Zelby, Michael Saylor, Ryan Begelman, Jack Butcher, Reed Duchscher, Tai Lopez, Harley Finkelstein, Alexa von Tobel, Noah Kagan, Nick Bare, Greg Isenberg, James Altucher, Randy Hetrick and more. — Other episodes you might enjoy: • #224 Rob Dyrdek - How Tracking Every Second of His Life Took Rob Drydek from 0 to $405M in Exits • #209 Gary Vaynerchuk - Why NFTS Are the Future • #178 Balaji Srinivasan - Balaji on How to Fix the Media, Cloud Cities & Crypto • #169 - How One Man Started 5, Billion Dollar Companies, Dan Gilbert's Empire, & Talking With Warren Buffett • ​​​​#218 - Why You Should Take a Think Week Like Bill Gates • Dave Portnoy vs The World, Extreme Body Monitoring, The Future of Apparel Retail, "How Much is Anthony Pompliano Worth?", and More • How Mr Beast Got 100M Views in Less Than 4 Days, The $25M Chrome Extension, and More

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

• 0:00Sam Parr?

  All right, everyone, we just finished recording this pod and we wanted to come back and give a little bit of an intro because I feel so many different emotions and here's why. The stakes of this are super, super, super high.

• 0:11Shaan Puri?

  Yeah, we're talking about what's going on with robots in the real world. So robots that are being used, we have specific examples of really cool businesses that are doing robots for lawn care, restaurants, all different types of things. But then we go over the Elon Musk versus Sam Altman lawsuit. What is this lawsuit between two of the power players of Silicon Valley? And what's our take on it, which might surprise you as well as some of the brilliant, the nuance, the marketing and PR that's going on here? We kind of call it out.

• 0:39Sam Parr?

  This is actually, we have fun while doing it, but this is actually really, really important, in my opinion. Listen to the entire thing and you have to listen to the first half to build up the story and the stakes for the second half. Trust me, you're going to understand exactly what I'm talking about when you get through the whole thing. So enjoy it.

• 1:02Shaan Puri?

  All right, what up, Sam?

• 1:03Sam Parr?

  Hey, what's going on?

• 1:05Shaan Puri?

  Sam, I gotta tell you something. When it comes to kissing, eating ice cream before bed or business, timing is everything, my friend. And I think, I think that timing is important in all aspects of business and in technology, there's a moment happening right now. I could feel it, I could feel it. My, it's like when you hit your funny bone and your whole arm gets hot. I could feel it right now. Shit's about to change. Robots are going wild. I gotta talk to you about robots.

• 1:34Sam Parr?

  And they've like been around for a minute, but now it actually feels like it's a reality.

• 1:39Shaan Puri?

  Exactly. So right now, a lot of people are talking about Tesla because Elon Musk came out and he said, "The future of Tesla is this humanoid robot." And I forgot what they call them, like optimists or some shit like that. So it's like, uh, he's like, "Hey, we got this robot that can walk around, pick up stuff, do tasks, it's going to change the workforce." And, um, your boy, Brad Adcock, he's got a company called Figure, which you're an investor in, they have their robot. And I think they just raised like a billion dollars or something, right? Like last week?

• 2:08Sam Parr?

  I think they raised $600 million at a two and a half or $3 billion valuation, I think.

• 2:14Shaan Puri?

  Nice little investment there for you.

• 2:16Sam Parr?

  I know I was in the first, I was in on the first round. I doubled down and did on this round. Is this gonna be my, my Mona Lisa? Is this gonna be my, my big win?

• 2:25Shaan Puri?

  Well, it could have been anybody's because you had him come on the podcast and tell the world what he was doing. So, uh, good, good on you. You, multi-billion dollars, uh, valuation right now. So that's a big deal and people are really excited about that. I think there's these stats that say if, uh, basically labor is 50% of the GDP. The labor market is a 10 times bigger market than transportation, which makes sense why Elon is like, hey, forget cars. It's all about these robots. We're just, we're an AI company. We're doing robots. Um, he's very good at repositioning and re, um, reimagining the vision of the company over and over and over again. Right? And went from affordable electric cars to self-driving autonomous vehicles, robot taxis that will just drive people everywhere. Your car will become an appreciating asset

• 3:09Shaan Puri?

  instead of a depreciating asset. And then now it's actually, it's not even about cars. It's about AI robots and that's, that's the future. But I want to tell you about something that's less fancy than that because I think it's going to come first and that is single purpose robots, AKA Roombas on steroids. And Roombas on steroids, you know, the Roomba was a, it's a single purpose vac, little vacuum robot that just goes around your house. And it, but it's in the wild today. It like actually works. It's actually useful for people. Uh, and even better example, I think is the dishwasher, which is in pretty much every home in the United States right now. And it saves you a ton of time. Like when you're like, my dishwasher broke last week. Terrible experience when your dishwasher breaks. The dishwasher is a single purpose robot.

• 3:53Shaan Puri?

  That's actually out there in the wild. We should be striving to create something as useful as the dishwasher. That should be the North Star right now for a lot of, a lot of companies. And there are. So I, I went on Twitter today and I saw this great video that was about, um, a company called Electric Sheep. Have you seen this?

• 4:10Sam Parr?

  No, electric sheep.

• 4:12Shaan Puri?

  Electric sheep.

• 4:13Sam Parr?

  I don't know what it is. That's a great name, I think. And I think it's a lawnmower.

• 4:19Shaan Puri?

  It is. Imagine if you took the Roomba and you put it in the lawn. That's what it is. It's a

• 4:24Sam Parr?

  That's a great name.

• 4:25Shaan Puri?

  It is a robot that mows your lawn, does all kind of landscaping. What's interesting about these guys that I found pretty fascinating is not only are they a company that's like a bunch of guys in a garage, building a robot, like a lawnmower that's got a camera on it that can go around your lawn, they're actually buying up and rolling up landscaping services. So it's a combination of a sweaty startup and a moonshot startup together. So these guys are going out and they're buying all these landscaping businesses in the Bay Area. And because they're like, well, we need a, like a testing ground for robots. Like you have to actually, like in their office, it's just like an AstroTurf. And they're like, yeah, well, it can do this square AstroTurf pretty easily. It's not so bad. But in the real world, your lawn has got all kinds of different lumps and dips and divots and trees and rocks, and it has to be able to work.

• 5:09Shaan Puri?

  How are we going to get the best data, right? The same way that Tesla is putting all like the cars on the road, collecting data at all times. And they're collecting like whatever, a hundred times more data than the next biggest self-driving car company. These guys are trying to do that with their lawn care robots. So they're buying these landscaping businesses. Then they use them for, as a sandbox, they take their robots out and they try to use them. They mow your lawn normally, but they'll try to test their robots as well. They gather the data and then over time, they're like, well, we're buying these landscaping businesses at one valuation, but then what we'll do is we'll slowly start to replace the workers in the landscaping business with the robots and actually have improved margins. Um, and so we're going to like, it's like a private equity play as well. And so I thought that was a pretty fascinating approach that I hadn't heard before.

• 5:53Shaan Puri?

  I can't decide if that's just overkill. Like, maybe that's not actually necessary to do two hard things at once. But I did find it very interesting. What do you think of that strategy?

• 6:02Sam Parr?

  I'm looking at their website. All right. So it's slick. This is cool. I agree with you. The whole overkill thing, that bothers me. That could be true.

• 6:14Shaan Puri?

  Well, the problem is like the founders, like founder like went to Stanford and like, you're smart enough to build a robotics company. That's almost, you're smart enough where you can get yourself into trouble. You could be like, oh, we'll vertically integrate. And it's like, they use the word vertically integrate. Be real careful. You might be midwitting the shit out of your plan right now.

• 6:34Sam Parr?

  Basically, like for him, there needs to be a Venn diagram of this guy, this founder of Sheep Robotics. He's like the dumbest smart person and he needs to hang out with the smartest dumb person. And we need that like, we need that like Venn diagram overlap to, to make this the perfect business. That's, that's kind of like what he's doing. Uh, this is awesome. This is awesome. This is cool. Uh, another thing that I worry about, this is badass, but is it a badass team and a badass execution on like?

• 7:07Shaan Puri?

  Small opportunity.

• 7:09Sam Parr?

  Yeah, like lawn, I mean, I don't know. Is lawn mowing a big, big, I mean, is it as grand of a plan as what these people are actually capable of doing?

• 7:18Shaan Puri?

  I think so because I, you know, I don't know how big the landscaping industry is, but I know that anytime private equity is going and rolling up things, there's a lot of money to be made. They wouldn't, private equity doesn't roll up, you know, like, uh, lemon, you know, small lemonade stands, for example, like they go into things that are, that, that are cash flowing, you know, i- industries. And so I do think if you added up all the landscaping businesses and you're like, well, you know, either what they're going to do is they're going to use them in their own business to get it right. And then they're going to go lease or sell these robots to every landscaper in the country and be like, hey, would you like to improve your, your operating margins by, you know, 10%, 20%? Use these robots. And so that, either that's what they're going to do, or they're going to go try to outcompete them somehow on price.

• 7:58Shaan Puri?

  I don't really love that idea. So, so I think it has to be, they're just using this to prove their own tech to then go lease these out to every other landscaper.

• 8:05Sam Parr?

  So on their about page, they list their team and I guess, uh, their advisors include this guy named Dan Foley. It says, Dan Foley was a CEO of a company that sold to Brightview. I Googled Brightview. Brightview is a commercial landscaping company that did roughly $3 billion last year in revenue. And publicly, it's publicly traded. It's, it has a shit market cap.

• 8:28Shaan Puri?

  So what you're saying is the newsletter guy is calling the land guys small?

• 8:35Sam Parr?

  No. What I'm saying is I, yeah, I did call it.

• 8:39Shaan Puri?

  What's up, boy?

• 8:40Sam Parr?

  I did call it small and then I looked at BrightView and it just shows I'm I'm I'm an idiot. I don't know anything.

• 8:46Shaan Puri?

  Like every great man, you're willing to change your mind. Congratulations.

• 8:50Sam Parr?

  I'm only one Google away from saying sorry.

• 8:53Shaan Puri?

  So check, so check this out. Okay. So that's the first one. Now I have a similar, you know, where else are robots being used? Again, the single purpose robots, not the general robots, but single purpose robots. In the same way that we got specific AI before we're getting AGI, artificial general intelligence, we got specific AI where it's like, you know, I don't know. It's been like 20 years since DeepMind could just beat Jerry Kasparov at chess, right? Like we, we solved chess, then we solved Go, then we solved math, then we solved route planning. You could do these single purpose AIs that way before you can get to general AI. So similarly, I think the timing of the opportunity is not in the Tesla robot, or even, sorry, the figure robot, which is like just a human robot that could do everything.

• 9:37Shaan Puri?

  You know, that is the big, biggest win, obviously, but I think before then, almost by definition, we have to see these specific single job, one job robots, because it's going to be easier to build a one job robot than it is going to be to build a general robot that could do all jobs. And so here's some other ones. So I don't know if you know this, Sam, but this podcast is not only listened to by people who are trying to make their first million, but maybe by people who are trying to make their, their 100th million, their, their next, their next million. There's more millions to go. And one of those people is the CEO of a restaurant called Sweetgreen. And so the CEO of Sweetgreen is a listener of the pod and I was looking up where else are robots being used? And I saw that Sweetgreen actually now has a, what they call their infinite

• 10:20Shaan Puri?

  kitchen, which is a like robot driven version of Sweetgreen. So Sweetgreen is like a salad bowl type of, type of concept. You normally go in there and there's like, you know, whatever, four people working the line and then there's like four people in the back kitchen doing prep, just like most fast casual restaurants. And what they've done is they basically went in and they were like, hey, what if we, first, I think they bought a robotics company for 50 million bucks. And then they use that technology to build a concept where you basically have like one person in the store and the rest of it is all done by robots. And so click this link that I put in our sheet. We could show this on YouTube.

• 10:56Sam Parr?

  By the way, is this Jonathan Newman?

• 10:58Shaan Puri?

  Yeah.

• 10:59Sam Parr?

  I know that he's a listener. You want to know how I know he's a listener?

• 11:03Shaan Puri?

  Don't tell me you're getting free Sweetgreen and I'm not.

• 11:04Sam Parr?

  No, even better. He emailed me and he took a screenshot and he showed that he subscribed to my first million on both YouTube, podcasts for Apple and Spotify. So if you want to be like John and start a multi-billion dollar company, you got to subscribe. That's all you have to do.

• 11:21Shaan Puri?

  I don't think there's been anyone who subscribed that isn't rich and famous and successful and desired by many people of the opposite sex, or the same sex, if that's what they're into. It's just a thing that works. All right.

• 11:32Shaan Puri?

  Okay, so, so Sweetgreen, so check this, this video out. So basically what they did was they made these, like this kitchen, it's just like a giant wall, where all the ingredients are in these like little robotic kind of dispenser arm type things. And whatever you order, the bowl goes across the conveyor belt. And then it's like the bowl is spinning, it's like rotating so that it drops in all the ingredients at the right spots. And again, they have all kinds of ingredients, right? So like this sounds pretty simple. It's just like dispensing. But like maybe dispensing almonds is really easy, but feta cheese, which is really crumbly, you got to be careful with it, right? Like, so you said, they basically fine tuned this thing. And now this concept can do 500 bowls per hour. And I DM'd him and I was like, how much does like the hu- like a human, like your normal restaurant line do? He's like, maybe like 170 to 200.

• 12:17Sam Parr?

  Wow.

• 12:17Shaan Puri?

  So you get basically like more than 2X the speed. And now you have a robot that does work that can work 24/7, never calls in sick, never, you know, always gets puts the right proportion into, into every bowl, you know, you have perfect food control costs. And so you end up with a better version of an employee. And the strategy, the way that I think about this is you trade OpEx for CapEx. And trading OpEx for CapEx is actually a pretty good idea.

• 12:45Sam Parr?

  I think you should further explain what that means.

• 12:47Shaan Puri?

  So today, all restaurants work with human labor. Your human labor is your operating expense. It's the OpEx. And so, and what that means is that for every hour that you're operating, every, every bowl that you're selling, you need to pay a certain amount in wages to, to employees. And so let's say today, you know, you're paying 20 bucks an hour to people that work in these restaurants. You got, you know, 10 people working in the restaurant at any given time, blah, blah, blah. You can add it up. And let's just pretend that your labor costs come out to 33% of your revenue. And so the opportunity here, which is, I would say, normal for a restaurant. Food costs usually 30%, labor costs usually 30%. And so you add these up, you're right, you can't change the food cost, but could you change the labor cost? And so what he did with these restaurants is every restaurant to put in these robots costs more money.

• 13:33Shaan Puri?

  It costs more CapEx, which is like the initial upfront investment. And I think in their last earnings call, they said it's about 500K to put the robot in. So you put an extra 500K to build the store. But again, this is 500K of CapEx, which means you can depreciate it, which is good for your tax purposes and whatnot. And it's a one-time cost versus your OpEx is a every day of operation. And what they found was for that extra 500K investment, they get at least an extra 7% of net margin from those restaurants because they have less OpEx. And so you would take that, that basically creates some break even point where you say, okay, cool, two years in, we're going to have paid off the cost of this robot or whatever. And also, he's like, the 500K CapEx, that's today.

• 14:18Shaan Puri?

  And this is the most expensive it's ever going to be. Like, the costs are only going to drop as we scale up, as we refine, as we simplify the design. Like, every version we come out with is just going to be lower cost than this one. And I asked him, I go, in 10 years, what are the odds that your restaurants are basically robot-driven, not human labor?

• 14:38Sam Parr?

  Is this guy, Sweetgreen's publicly traded, right?

• 14:41Shaan Puri?

  Yes.

• 14:42Sam Parr?

  Is he, are you allowed to say what he's going to say right now?

• 14:44Shaan Puri?

  I told him, I said, is there anything that I can't share in this? And he goes, no, I've shared all this. But he was basically like, it's very high, right? And just thinking about that a little bit out loud, it's like, man, that means for the next 10 years, and very easily, hopefully, in our lifetime, restaurants are just going to go, a lot of restaurants are going to go from, you walk in and there's just like a bunch of people who are... Sort of disgruntled people who would rather just be checking their phone right now than, you know, sitting there with this like stupid uniform on. And it's just going to go where you go in, you push a button and then your bowl gets made by a robotic arm. And then you walk out like that's going to be there's going to be one human in the loop. One, one human whose job is now called, you know, robot maintenance, robot operations. And they're basically the guys like, oh, the carrots machine got a jam.

• 15:27Shaan Puri?

  Let me go and take a little fork and unjam that thing. Or, hey, I got to refill the container of apples. And so what the, what these guys do with the Sweet Green Restaurant is the humans are all in the back, doing the fresh prep of ingredients and then the robots are serving the customers. And that's how they split it today.

• 15:42Sam Parr?

  So you and I are fairly optimistic. You know, we try to see the, the bright side of most things. You in particular do that, but let's try to be pessimistic right now a little bit. So the argument that you're going to see from a lot of, actually, most people, I would think, particularly pessimists, but most people I think are going to be pessimistic on this. They're going to say, but this is going to ruin the economy. This is going to ruin jobs. And let me ask you a question before you actually give your opinion. You have, Sean, you own a business that employs warehouse workers. Roughly, what's your annual turnover for your warehouse workers? Like, how often do they quit?

• 16:19Shaan Puri?

  Well, we use a three PL now, but before when we, when we had it in-house, it was, I would say every year, we're going to replace 90% of the team.

• 16:29Sam Parr?

  So I was reading, I think it was Amazon, I forget, someone who employs 10 or hundreds of thousands of warehouse workers. For them, it was, it was 100%. So it was 100% turnover rate. And I remember talking to Brett from Figure and I go, Brett, are you going to like, are you preparing to like be the most hated man in America right now? And he was like, well, why? And I said, well, because like you're going to be, you're getting, you're taking jobs. And he was like, well, I'm not actually taking jobs. In fact, there's all these warehouses that no one will, no one's going to work there. They just literally cannot, they cannot convince people to work there, whether they can't afford it, or if it's just a, people aren't interested in that type of work. And then, and then he goes, plus the average turnover on a lot of warehouses, it is 100%.

• 17:14Sam Parr?

  So like, they just can't keep people like in these jobs for a long time. And so my question to you is, are you pessimistic at all of what's going to happen in 15 years, 20 years? You know, my first job, I was a laborer and then a dishwasher. I bet, I think you've probably have done similar things like that. What's gonna

• 17:31Shaan Puri?

  Yeah, my first, my first business was a restaurant business. I was the guy chopping tuna and doing all that stuff in the back, doing dishes, you know, every, every night. I think there's two versions of pessimism. The first version is, it's not gonna work. The second version is, it's gonna work, and that's a bad thing. You're talking about the second version, right?

• 17:48Sam Parr?

  I think this, I think, I think it's gonna work. It 100% is going to work, I think.

• 17:52Shaan Puri?

  And by the way, I asked the guy, I was like, um, how, he was like, what's the non-obvious, like, only when you're in the weeds, doing it, is it really obvious about this? But to the outside person, they maybe gloss over it. I was like, what's, what's that insight?

• 18:04Sam Parr?

  That's a great question.

• 18:05Shaan Puri?

  He goes, well, it's like, it's like most things in technology, because the first 90% is easy, which makes it really easy to have like a sweet demo. And everybody just immediately is like, oh, man, this is gonna change everything. And it's like, it will eventually, and probably a lot longer than we, we want. Because he goes, the, so the 90% is easy. The next 9% is 10 times harder. So it's like, you know, the simple stupid example of this would be like, you know, dispensing almonds, easy. Dispensing the right amount of crumbly feta cheese, it is literally 10 times harder than the almonds problem, right?

• 18:41Sam Parr?

  Or like on a Tesla, like my Tesla self-drives, and it's, the autopilot is mostly good unless it's a flashing yellow light. Then it like freaks out and I almost die.

• 18:51Shaan Puri?

  Right. Or it's like, if it's a dewy morning, or it's a foggy this, whatever, or it's rainy here, or there's construction there, right? There's like all these edge cases. And then that's what he said, is like, the last 1% is even 10 times harder than that first one. And he's like, so with self-driving cars, the problem is, nobody wants a 99% good self-driving car, even if that's actually five times better than a human.

• 19:12Sam Parr?

  Yeah.

• 19:12Shaan Puri?

  It's like, if I'm gonna die, I'm gonna die at my own hands, not at the hands of this, you know, this piece of software. And so that makes it really hard to roll out these things and gets, and, and deal with the PR backlash. Anytime there is a, a crash, or a, or a, a bad result, even if it's less, even if it's a better probability than, than humans driving. But I don't think you have the same problem with restaurants, right? Size of the prize is smaller, but also the barrier to entry is, the barrier to deployment is much smaller, where it's like, oh, man, I asked for light sauce. This is medium sauce. Like, you know, it's like, whatever, it's okay. It's not a self-driving car crash. And so I do think that that's the case here, where A lot of people can get 90% of the way there, getting the next 9%, 10 times harder, getting the final 1%, 10 times harder than even that.

• 19:57Shaan Puri?

  In software development, we used to say this where I would always be, because I'm the non-engineer. I worked at a company of all programmers and I'd just be like walking around, you know, eating cashews and just walking around just like, hey, guys, how's it coming? When do you think it's gonna be done? And they're like, well, we're about 90% of the way there. We got like 90% of the things done, so we're about halfway done.

• 20:15Sam Parr?

  You're like, great, 10 minutes, we'll be done.

• 20:17Shaan Puri?

  I was like, wait, 90% done, so you're halfway done? They're like, yeah, the last 10% always takes at least double the time that you've already spent. I was like, alright, cool.

• 20:26Sam Parr?

  That's how, that's how math works.

• 20:28Shaan Puri?

  I, uh, Do you remember? Coffee, I'll go get some.

• 20:31Sam Parr?

  Like 10 years ago, universal income or, you know, universal wages was like a thing.

• 20:36Shaan Puri?

  UBI.

• 20:37Sam Parr?

  UBI, we're gonna, you're gonna, we're gonna give everyone in America a bunch of money. And like, I'm a capitalistic guy and I was like, what? F that, that's the worst. And then I learned two things. One, do you know in Alaska, I've had a friend, I've had friends move to Alaska. You know, they do that, they've been doing that for decades. They give you five grand.

• 20:54Shaan Puri?

  Oil, oil dividend, right? It's like, you get a share of the money that they were making from having so much natural resources, I think.

• 21:02Sam Parr?

  I don't, yeah, maybe, I don't know where it's from. And I believe, if I'm not mistaken, I think sometimes it's a tax credit where like you just pay less in taxes or if you don't owe any tax money, you literally get a check of like $4,800 or $5,500, something like that. And then the second thing that I learned was I started researching UBI and I was like, wait, why is Sam Altman advocating for UBI? Like, why are all these like really smart robot makers advocating for it? And I'm like, shit, they know.

• 21:30Shaan Puri?

  It's like, when my wife comes home and like, why is the kitchen clean? What did you do? Yeah, why are you cleaning up this mess? You did something else. That's what he's doing by starting UBI.

• 21:42Sam Parr?

  Which he has, he has, uh, you know, I think Sam Altman, along with a few other guys, are doing experiments in San Francisco where I think they're giving $800. I forget, I don't even want to say because I'm gonna get the numbers wrong. But it was like a fairly small song.

• 21:53Shaan Puri?

  Now, they, I think they did it for like some number of years and that was the experiment. And then they stopped and I, we should go look up actually what actually happened. But I remember reading something that was like, Not like entirely positive. It wasn't like, oh my God, this is great. We, this is the program we need to roll out nationwide. It was like, well, no, that's not, that's not what the takeaway was.

• 22:15Sam Parr?

  But it's still an interesting concept to me that I'm open to learning more about because when I learn more about these robots, I actually do think I'm like, I'm just old enough where I think this isn't going to impact me. But for most Americans who are born, who are young now, it's going to have a massive impact on their future.

• 22:31Shaan Puri?

  Yeah, yeah. And so that second concern of like, oh, wait, this is the, this is the real version of they took our jobs. Like, hey, it wasn't the immigrants.

• 22:41Shaan Puri?

  It was the dorks building robots that took all your jobs. Um, yeah, I do think that's true. In fact, it's kind of a paralyzing thought because it's not just labor jobs. Actually, it seems like the knowledge jobs are going first.

• 22:52Sam Parr?

  For sure.

• 22:53Shaan Puri?

  Every two weeks, it's like, oh, video editors out of a job. Oh, Photoshop, useless skill now. Okay. Well, lawyers? Don't need them, right? This is like, it's like clearly the breadcrumb starts to get laid where you're like, okay, today they haven't replaced all these. But what's going to happen in V12 of this, like of this product, like this V12 is just going to do the job for doctors, for, for, you know, for everybody, for, for all these designers, for video editors, for all these things. And so it's kind of a paralyzing thought and it reminds me, um, they did this interview with Elon Musk and he was like, they're like, you're really worried about AI, right? And he's like, yeah, I'm extremely concerned about AI. It stresses me out. I lose sleep over AI.

• 23:37Shaan Puri?

  And they were like, so why are you working on AI then? Why are you developing it? He's like, well, basically I think this is going to happen either way. It's, it is inevitable. My mind told me that. He goes, and then I just had to decide, do I want to see the AI apocalypse in my lifetime? Or do I want to die and then not get to witness it? He's like, I decided I'd like to witness it. Which is just a hilarious thing because I thought he was going to say something else. I thought he was going to say like, you know, I can use this for good. And instead he's like, I'd just rather see it in my lifetime than not see it. He's like, and then he's like, then I felt good. I just operate, I just continued on. That's kind of how I feel when I see the AI like getting so much better. I'm like, dude, I don't know if any of my businesses will even make sense in 10 years.

• 24:20Shaan Puri?

  Well, all right, carry on then. What am I gonna do about this? Like, am I really gonna go stop the progress of technology? No. Am I gonna anticipate this now and like change everything that I'm doing now? Also, doesn't really make sense. Let me just make hay while it's possible and see what happens.

• 24:36Sam Parr?

  I think that when it comes to AI and these robots, I think what it is, it's sort of like a squirrel preparing for winter, where between now and the next like 10 years, the name of the game is just pile away as much as you can to get above this certain threshold to where you can make it through this winter that is never going to end. And so it's like between now and whenever this moment happens, if it's gonna be in five years or 20 years, the name of the game is just hurry up and like board up your home for the store to come. So just that way you're safe for it and that you're just, you're independent and you're all right. But once that, once it like, once ever that threshold or that time comes, a lot of people I think are actually going to be screwed. I'm not gonna predict what's gonna happen because I have no, no idea.

• 25:18Sam Parr?

  But I just think that between now and then, the name of the game is just to make as much money, set up your life in such a way where you can pile away all these nuts and you're just good, and you're just good for the winter. That's like basically how I've been living.

• 25:30Shaan Puri?

  I don't know what the right mindset is. I think that's, for right or wrong, that's also my mindset is just like,

• 25:36Sam Parr?

  Get it while it's hot.

• 25:37Shaan Puri?

  Get it while it's hot. Do good while the game's good, right? And it's like, well, I, but I also am not like blinders on about this stuff. In fact, one of the name, the name of my original holding company was inevitable outcomes. And I was like, well, why don't I just figure out what is inevitably gonna happen? And then go invest in that because that, that's just a better thing to work backwards from. If you realize that something is inevitable, that's way different than speculating of like, well, maybe this could be the case. It's like, once you know something is inevitably gonna happen, then you just have to figure out which company is gonna win, which is actually like you've reduced the problem set down into which company's gonna win and when is the right time for, for a business like this to exist. I, I started this episode talking about timing because I think that these single purpose robots

• 26:21Shaan Puri?

  is gonna be the big winners in the next cycle here where like you have the knowledge work, like LLMs, ChatGPT type of stuff. But then I think you're gonna see these specific robots. I think both of those are gonna be really, really successful. What you're not gonna see is that, I don't, I think the human robot, I think it has to be further out than, that's just my, my opinion. You know, there's also other versions of this. So we talked about the sweet green one. You know, the founder of Chipotle has a new restaurant concept that's all robotic first.

• 26:49Sam Parr?

  What is it?

• 26:50Shaan Puri?

  And by the way, one other insight this week, your guy said, he goes, the key is not to retrofit the restaurant. He goes, what everybody tries to do is they have their existing restaurant, then they try to install a robotic arm that can try to use the existing restaurant layout because it's cheaper, right? To not rebuild a restaurant. And his quote was, everybody's trying to retrofit. I'm different. I'm willing to blow the whole thing up. Quote, I'm willing to blow the whole thing up. And he was basically saying like, we just thought through from first principles. If this was a restaurant that was not going to have humans working on the line, it was going to have robots. How would you design every part of this restaurant? And then let's build those. And so they did two this year, they're up and running. And now they're doing like 10 more in to scale this up.

• 27:31Sam Parr?

  What's it called and what do they serve? So is it called Colonel?

• 27:34Shaan Puri?

  So now, what's his name?

• 27:37Sam Parr?

  Steve Els.

• 27:38Shaan Puri?

  Steve Els, the guy who created Chipotle, he's got a new one called Colonel. And Colonel is basically like some kind of like vegan bowl type of concept. And so you can see videos of it where it's basically like dispensing stuff into a bowl. And then it's like shaking, there's like an arm that's just shaking the bowl just to mix it for you. It's pretty hilarious.

• 27:56Sam Parr?

  The crossover of vegans and apocalyptic like AI people. I don't, that diagram, I don't think is going to cross over nicely. Like, you know what I mean? Like, like, hey, do you want to go to this restaurant that has no humans working ever? Cause fuck people. Yeah, do they, do they sell hummus? You know what I mean? Like, that conversation is not going to be.

• 28:20Shaan Puri?

  Plant-based, machine-operated, baby.

• 28:22Sam Parr?

  Yeah.

• 28:23Shaan Puri?

  Who's got that tattoo? Nobody.

• 28:26Sam Parr?

  That's not a huge crossover, but it looks cool. So he has two or three of these locations.

• 28:30Shaan Puri?

  Yeah. So I don't think this one's like as figured out. It doesn't seem like it's as promising, but there's a bunch of people doing this. Just SoftBank had poured like hundreds of millions into a pizza bot that I've talked about a lot, which is pizza is the big prize here. Pizza is a much simpler dish, like is a single, single item. It's the most popular, kind of like fast casual type of, type of food. And if you could, and it's also owned by chains. And so you can get, if you can get Domino's as a customer, you're going to get to go in whatever, like, you know, 5,000 Domino locations. And so whoever can build. A pizza bot that can make a perfect pizza every time perfectly circular, perfect ratio of ingredients, never calls in sick and work 24/7 consistent.

• 29:13Shaan Puri?

  It doesn't matter if that thing costs like, you know, $500,000. You'll be able to sell into all the Domino's, all of the Pizza Huts, all of the chain, chain pizza stop shops in order to, to do this. So I think the pizza bot is like, you know, the big opportunity here.

• 29:28Sam Parr?

  I, I'm, I like to think of myself as an independent thinking person. I like to live my life somewhat independently and I don't want to rely on other people. That's why I like to start my own companies. When I went to Brett Adcock's warehouse or factory, whatever you call it, and he showed me, he was like, check this out. We're learning how the Achilles on a human works and we just got our humanoid to move its foot like in a dorsal flexion way. And like, we also like, here's like this human knee that we're studying. Now our guy over here is making the knee so we can like move. I saw this stuff and I was like, Dad, can I come? It's like, I was like, should I drop everything and just come and join you? Like it felt like.

• 30:13Shaan Puri?

  Brett Adcock?

• 30:14Sam Parr?

  Yeah.

• 30:15Shaan Puri?

  Sounds great.

• 30:16Sam Parr?

  It felt like I was in a cult. Like I was meeting like Charlie Manson and I was like, yes, sir. Who would you like me to kill? Like, I was just like so into this. I remember going to my wife, I was like, you should quit your job. I was like, Sarah, I don't, I'm not smart enough, but will you quit your job and go work here? I was like, I just was so into it when I saw this stuff. This is, and the, and the cool thing about this topic is that it's happening this second right now. And this isn't far away enough to say one day in the future. It's like, it's happening now and over the next couple of months and couple of years, we're going to see it in play. And I think that's why this topic is very, really fascinating.

• 30:57Shaan Puri?

  By the way, this is also the magic of Silicon Valley. Like one of the reasons to be in the Bay area is you will, because he's, his factory's in the Bay area, right?

• 31:05Sam Parr?

  Yeah, it's in, it's south San Francisco. It's just north of Palo Alto.

• 31:10Shaan Puri?

  So you will go, you will either meet somebody, you'll be at a dinner and hear something or you'll drop by somebody's office. And you'll see what they're working on and how they're approaching it. And then you will walk out being like, my life is meaningless. Everything I do is absolutely meaningless. I am a small, small pale dot on a giant rock and I've met, I mean, nothing. And what I'm doing is nothing. Most people, that's a pretty disempowering feeling. But for me, I wanted to be in situations like that. I wanted people who could basically like blow the ceiling off of what I thought was possible, what I thought was cool, what I thought was interesting and be like, no, no, no. You thought that was interesting? This is interesting. And that, that happened the other day.

• 31:54Shaan Puri?

  I don't know if you saw these videos that are going viral. Some people were at a hackathon down in, also in Sunnyvale or Mountain View somewhere doing like a, there's like something called like the AI house or some shit like that. And during the hackathon, during the hackathon, this guy walks in with this cool looking jacket and like disheveled hair, like he's been in like a cryogenic freezing tube for the last 10 years. And it's Sergey Brin, it's the founder of Google, just showing up at the hackathon and he gave an impromptu talk. Did you see this?

• 32:22Sam Parr?

  No, what did he say?

• 32:25Shaan Puri?

  Well, he goes up there and he's just gets really in the details about Google's Gemini thing, like about like bugs that they're fixing and stuff like that, like not like some grand visionary talk. He was just like, yeah, like here's what the, here's what it could do. Here's how it works. Here's how we're thinking about this. And he's just talking to a bunch of guys and all of them, this hilarious, it went viral because there's a guy sitting there. The guy who asked the question in the clip and his shirt is just a shirt that looks like someone's body flesh with boobs.

• 32:54Shaan Puri?

  And he asked a serious question. He's like, what is it about the, uh, cause you know, like Gemini got in trouble for being like too woke or whatever. Like the thing wouldn't generate images of white people. And he's like, how come you're, you know, the LLM is not generating images or, you know, what's your views on the policy of that? And nobody even calls out, nobody like Sergey Brin doesn't point at him and be like, dude, can we get a different question, not the guy with the boob shirt?

• 33:17Sam Parr?

  I'm looking at him now. It's just like a, a guy who looks like me, just like a, like a normal looking dude, but he's got a, a flesh cover. But it's tits. It's a, he's got boobs on his shirt.

• 33:30Shaan Puri?

  And Nobody references it. Nobody acknowledges it. It's just like, yeah, carry on. What? Live and let live. Maybe that's the San Francisco way. And so it's a very strange place, but it's strange in a way where kind of amazing things happen, like the founder of Google just showing up at your hackathon and and answering some questions. This is pretty wild.

• 33:49Sam Parr?

  I so I experienced this all the time in San Francisco when I lived there. There'd be so many times where it was like, I've told so many stories about this, where I've go to someone's office and there's just like huge screens with porn playing. And it's like, well, they're just working on this this website and it's a and it's like they make porn. And so just like normal, we like normalize there. There's been other times where like I've seen like, I've come into the office and there's people sleeping under desk and stuff like that. And just like weird shit that we would make fun of or things on that TV show Silicon Valley where they like have nipper and like, like I've experienced this in real life. And it's fun to make fun of. But honestly, it's awesome. It is so awesome to like be around these freaks. Remember when hacker houses were like just getting going?

• 34:33Sam Parr?

  I would go to these these houses and you would see that they'd have shared kitchens and like half the time it was like just powders. It's like, well, these guys just live off these they just live off powders. So that's all they eat. And it's really

• 34:45Shaan Puri?

  toilet started, you know,

• 34:46Sam Parr?

  that's how toilet started.

• 34:47Shaan Puri?

  Those guys are just living in a house together where they're supposed to be working on other stuff. And then one of the guys was just eating only, he's like, I'm just going to create like baby formula for adults, basically. And he's that became toilet.

• 34:59Sam Parr?

  And that same guy, when like, I forget what type of chip it is, when it came out, like, you know, like these credit cards that we use now where you touch your credit card on a machine instead of inserting it and and you could read the credit card, he inserted all of that into a small chip and he surgically put it into his hand. And so he could just like touch it. So like being around freaks like that, it's fun to make fun of them because it is silly. It is awesome. I loved, I loved being around that. I would see this stuff all the time and I would just like, I'm so happy you freaks exist. This is the coolest thing I've seen. I felt like that all the time. Did you ever experience that where you'd go to these like hacker houses? And they would be disgusting. These guys are just

• 35:35Shaan Puri?

  Well, it's just like triple bunk beds.

• 35:37Sam Parr?

  Yeah, they're filthy.

• 35:40Shaan Puri?

  But you know, like, god damn it, I can't even look down on this because one out of the, one out of 18 of you guys is about to become a billionaire in the next five years. I just don't know which one, like, you know, whose neck beard is the longest is like, who's showered the least in this room? Like, I gotta guess, I guess, write you a check, I think that's the optimal strategy here. Like, I had a buddy who worked at my company that would just do these things, these experiments, like, his guy Quinn, and Quinn had this like crazy, like, Sideshow Bob style haircut. And Quinn would be like, he was really into games. And so he's playing this like little like word scramble game on iPhone. And I think like his girlfriend had beat him in the like, they were, him and his girlfriend would play, and this girl he was like flirting with or whatever would play. And she beat him.

• 36:23Shaan Puri?

  And so he stayed up all night programming a robotic finger and a camera to like, solve this like word scramble thing so that he would never lose again. And I was like, it's like these stories you hear about Kobe Bryant or Michael Jordan with like this like fierce competitiveness, but applied in the absolute nerdiest way. It results in kind of amazing things. And it's amazing energy to be around.

• 36:46Sam Parr?

  I've been around a bunch of those people and I love it. And it always makes me feel like the first feeling I originally what I felt is, you're stupid, that's stupid. And then it's like, oh, I'm stupid. You're better than me. And this, like, this is awesome. Yeah, I feel like that on a regular basis when I, when I would go around these weirdos and I love them.

• 37:06Shaan Puri?

  So we got to also talk about this lawsuit. So Elon Musk sued Sam Altman. And there's probably, there's a good analysis out there about this lawsuit. But I want to point out a couple of things. So here's my frame of this. Elon is good at PR. He's not just good at engineering. He's not just good at business. He's not just a technologist. He's also kind of a master of PR. And I should have known this because Tesla runs, basically spends nothing on TV commercials. Every other car company spends like billions of dollars on, you know, like all other car companies in total will spend like a bit over a billion dollars on marketing. Whereas Tesla runs no commercials, yet Tesla's brand is huge.

• 37:47Shaan Puri?

  And it's because Elon is kind of a master of marketing, is a master of PR. And he does this with Twitter, he does this with, with Tesla, and he's doing it with SpaceX. And now seeing him do this with this lawsuit, it's the first time that I've ever seen. Him do this in in public, but it's basically he's gonna lose the legal battle, but he's gonna win the PR war, I think.

• 38:07Sam Parr?

  Uh, have you ever been through a lawsuit? Do you know what the discovery phase is?

• 38:12Shaan Puri?

  No, I haven't, but I'm familiar with the idea of discovery.

• 38:14Sam Parr?

  So basically, I don't exactly know what all the rules are, but I've like, I remember there was a time I was gonna sue someone. Cause I thought something didn't work out and I, I thought they violated a contract and I'd lost money because of it. And I was gonna sue them.

• 38:28Shaan Puri?

  Some guy didn't rack his weights.

• 38:30Sam Parr?

  Yeah.

• 38:32Sam Parr?

  It's salty.

• 38:32Shaan Puri?

  Code has been broken.

• 38:36Sam Parr?

  I can't let this stand. Uh, and so I, I was gonna do it. I hired a lawyer and they're like, all right, but they're like, you're probably gonna win this thing. You're not gonna win that much money. And I'm like, but it's the principle of the thing, whatever. And they're like, okay, cool. But do you know what discovery is? I was like, no, tell me more. And they're like, we're gonna get access to your email, to your phone records, to your text messages. And they're gonna be able to see all of it. And in many cases, and this is where I don't entirely understand how it works, but in many cases, that's completely public record. So if I file a lawsuit, that part is public record. And oftentimes the things they discover will be in public record. And I was thinking about it. It's like, did I just text my wife the other day to let her know that I farted, but a little something came out?

• 39:18Sam Parr?

  Because I think I did text that and I don't want that in public. And that's like a three out of 10 on the PC meter. Like what's the nine out of 10? And would I be okay with them seeing that? And that's when it finally hit me. Of all the years of people telling me, don't write like offensive or crazy stuff on text messages or email. That's why it's because I just didn't want that embarrassing stuff to be seen. So I didn't end up going through with it just for that reason. And so in this lawsuit, we're gonna see all types of private conversations that these people have. I think Elon doesn't give a shit. But I think the average Joe would, including me.

• 39:53Shaan Puri?

  Well, yeah, I don't know. We should know more about this. I don't know how discovery works of like what parts get, because not everything goes public, but

• 39:59Sam Parr?

  Not everything, no.

• 40:00Shaan Puri?

  So it's like, what's, what's the, where's the line? And how does that work? Because I think Elon has a lot to lose too with that. Like, nobody wants their shit out there in the public. And so

• 40:08Sam Parr?

  But he does. But like, when he, when he, when he texted that guy, the, the former CEO of Twitter, he replied with all the stuff of like, can we talk about this? And he just replied was, what have you done this week? Like, I feel like in his mind, he thinks

• 40:20Shaan Puri?

  Yes, he wants to do that.

• 40:22Sam Parr?

  But in his mind, he's like, I'm gonna say stuff that I want the world to see. You know what I mean? It's like all part of the game to him.

• 40:29Shaan Puri?

  In this lawsuit, there's actually some stuff that's into that. I thought, I found pretty interesting. So can I just like, tell you what I thought was interesting in this? So he, so it starts off, basically, the whole lawsuit starts off the document. And it says, well, humans have transitioned from a labor economy to a knowledge based economy. And now knowledge is basically getting wrecked by AI. So first, AI got so good, it could beat the best human chess players. Then it could find the best routes between two points, like two best streets to take fastest route. Then it could beat more complicated games like poker and go. And what it talks about is that Elon Musk saw this happening. And he was, I think, on the board of, or an advisor to a company called DeepMind. And he's like, oh, DeepMind is really interesting. He meets the founder

• 41:12Shaan Puri?

  of DeepMind, this guy, Dennis, I don't know how to pronounce his last name. And he said, he's basically like, what are your views on AI safety? Because Elon, for a long time, had been worried about AI safety. And he walks away like, I don't think this guy's really, you know, concerned with AI safety. I think he's just trying to build really powerful AI. Okay, whatever. But he gets pretty worried because he finds out that Google is gonna try to buy DeepMind. And he's like, well, Google has the most data because they have emails, they have search, they have YouTube. So he goes, Google has the most data. DeepMind has a monopoly on AI talent. And so they have the best AI talent. And what the result will be is that AGI, when it eventually gets done, artificial

• 41:54Shaan Puri?

  general intelligence will be in the hands of, you know, the biggest monopoly, you know, private company out there. And he's like, okay, that's a little bit worrisome. And he goes and he hangs out with Larry Page, the founder of Google. And he's telling him like, Larry, I'm worried about AI. What are you guys doing about AI safety? And he's like, basically, kind of the way Elon describes it. He kind of pats him on the head. He's, oh, don't worry about that. We're not worried about that. He's like, well, you know, AI could take over and basically eradicate the human race. If it, you know, goes, there's a path where this goes wrong. And he's like, well, that'll just be evolution. And he's like, don't be such a specist, Elon. And he's like, specist? He's like, yeah, you're favoring the human species. Oh, my God. Yeah, I'm pro human. And so he gets really pissed about this.

• 42:38Shaan Puri?

  And he, he says that this is when he stopped talking to the CEO of Google. So he, after that, that's like the trigger, according to Elon. And again, I think a lot of this is Elon crafting a narrative. I'm not sure, I'm not saying that these things didn't happen, but I think he's very good at creating an origin story and creating a bad guy and then painting himself, oh, what do you know? As the hero. And so he, here he goes. So now what he does is he teams up with Sam Altman. So Sam Altman, who's the CEO of OpenAI, in 2015, wrote the following. He goes, "The development of super machine intelligence," at the time, that's what he was calling it, SMI, "super machine intelligence," "is probably the greatest threat to the continued existence of humanity. There are other threats, but they are unlikely to destroy every human in the universe the way SMI could."

• 43:23Shaan Puri?

  What a great, what a great opening sentence. Yeah. All right. Continue, Sam.

• 43:32Shaan Puri?

  So Sam is worried about this. Elon's worried about this. They get together because, oh, then there's the trigger. Google's buying DeepMind. I didn't know this. The, in the lawsuit, it shows that Elon then went to the PayPal co-founder, this guy Luke Nosec, and tried to quickly, like, emergency raise $500 million to buy DeepMind instead of Google, just to keep it out of the hands of Google. And he fails. And he can't pull the deal together in the, in the, in the last minutes. DeepMind gets bought by Google and now, now Elon's really worried. And so Sam Altman then goes to Elon and says, hey, why don't we create a nonprofit AI lab to catch up with Google? And actually, the origin of this was to do it inside Y Combinator, where Sam was currently the president. So I don't, did you know that, that the origin of

• 44:16Shaan Puri?

  opening I was actually supposed to be inside of Y C? And he called it, what if we created the Manhattan Project for AI? And he's like, what if Y C did a call to arms and was like, hey, we need to develop this technology to, that basically, we need the anti-Google. Like, we need to get the best people we can to start working on this as a research project. What he said originally was, we'll give them equity in Y C as their upside. And so they can work on this as a nonprofit. That was the original idea.

• 44:41Sam Parr?

  I think he said that, like, no person will have control over this thing that we're making. And instead, they were going to get equity in Y C. And that's how they're the

• 44:50Shaan Puri?

  He's like, it'll be a nonprofit. The, how do we pay these top AI researchers? Because Google's going to pay them a shit ton. Well, we'll give them equity in Y C. Y C's our, our huge, you know, cash cow. And so that'll solve that problem. And he's like, we'll have a board of directors, me, you, Elon, and then we'll pick three others. And like, if it's, he says, this is the, like, initial email. He goes, if it's not obvious what the right thing to do is, then the five of us will decide. Like, that's the governance idea. Okay. So that was the original idea. It evolves a little bit.

• 45:18Sam Parr?

  By the way, Elon's reply to that email was great. And so Sam wrote, like, a fairly casual, I mean, he used the verbiage, like you said, those sentences that are like a big deal, but it was like a casual, almost email with like five points. And Elon's reply was, agree on all. Like, that was it.

• 45:37Shaan Puri?

  Right. I have moved straight to the end. So yes, agree on all. So they start. And they're like, cool, we're making this nonprofit. And it'll be open source. Elon comes up with the name OpenAI. He's like, let's just put it in the name. This is Open Source AI. And in the next five years, Elon contributes $44 million to this nonprofit. And they developed some pretty interesting tech. So, so ChatGPT now, GPT-4, it's, it could do, it's like, it's in the 90th percentile at the lawyers, like the bar exam. It's in the 99th percentile for the GRE, the verbal section. It's a, even a 77% at the advanced sommelier test, which I don't even know how that would work. It's like the sommelier, like the wine test.

• 46:20Shaan Puri?

  And so he's trying to, in the lawsuit, argue that it's already AGI, which it's not, but, but he's trying to make that argument because his whole, his whole legal case rests on this idea that there's been a breach of contract and they breached the founding agreement. But there is no actual founding agreement. What he's calling the founding agreement is like what we call the gentleman's agreement. It's basically like a handful of conversations, emails, and then just like the initial founding, like articles in corporation of the, of the company. He calls all of that together, the founding agreement. He says they breached that, but it's not actually a, a, a agreement.

• 46:55Sam Parr?

  I'm a moron and I don't know anything about legal stuff, but I think that that actually counts as something. I mean, there's been, I think there's precedent where that matters.

• 47:04Shaan Puri?

  So, but in this case, basically he has to establish that there is a founding agreement and that it's been breached. But if you go look at the founding agreement, like those emails, like one time they're talking about, we could give equity in YC. That's just like brainstorming. That's not like the agreement. Then later they, they do have a little bit more formal of like, okay, it's going to be a nonprofit. It's going to be whatever. But in the articles on corporation, it specifically says like, we will open source this, you know, whenever, you know, whenever we deem appropriate.

• 47:32Sam Parr?

  Yeah, vague stuff.

• 47:33Shaan Puri?

  It's vague, right? It's like, we will really, we will develop this for the benefit of humanity.

• 47:38Sam Parr?

  We're definitely doing this maybe.

• 47:40Shaan Puri?

  Someday, exactly. When we want. And so they basically left themselves like complete latitude to do whatever the hell they want. And that's what they did. Now, what I think is interesting. So Elon says a couple of other things. So. One, he says, GPT-4 is already so good at like those test scores. He goes, and now they're developing this thing called Q-Star. Have you heard about Q-Star?

• 47:59Sam Parr?

  No, what is it?

• 48:01Shaan Puri?

  So Q-Star is reportedly like the new, um, what, what, what, not reportedly rumored to be the thing that they open as working on that is like next, next level after GPT-4. So it's like, instead of GPT-5, they're using some method called Q-Star, which they think is like a leap in the intelligence, um, which is really exciting because even GPT-3 to GPT-4, GPT-2 to GPT-3, like those were like pretty substantial improvements, but not like a huge leap, whereas Q-Star reportedly is like what the huge leap is. There's rumors where Sam Altman, um, came out and said, you know, like, uh, I was in a meeting, like a debt, we did a demo or we had an internal meeting the other day and I saw, you know, I saw something that like blew my mind, like basically I saw something that's just like,

• 48:46Shaan Puri?

  was awe inspiring. And it's like, what? Well, what is it? And he hasn't shared any details. This is also right when the, that big coup happened, they fired Sam Altman.

• 48:54Sam Parr?

  I saw that.

• 48:55Shaan Puri?

  One of the rumored reasons was, and this could be total bullshit, but we don't know. This is one of the rumored reasons was the, the board saw that how powerful Q-Star is and they're worried Sam is way too fast and way too loose, loosey-goosey, way too aggressive. And now this weapon is getting too, too powerful is kind of that, that idea there. So anyways, he talks about, Elon talks about that in the lawsuit, that they're developing Q-Star and whatever. So it's kind of like confirmation that this thing exists. Um, although the fund, the legal language he uses in all this, he goes, at the start of every sentence, uh, every paragraph, it says, using knowledge and belief. And basically it's like saying like, we don't have evidence, but like, I know some things and I believe this to be true. And then it says all of the claims. So who knows? It's kind of like Elon's claims.

• 49:40Shaan Puri?

  A couple of other big pieces of this. So I want to read you some, uh, some Elon emails that, that did get surfaced in this. So one of the key things that happened early on was they had this dinner and at the dinner, it's Sam Altman, it's Greg Brockman, it's Elon, and then it's this guy Ilya. Ilya was the, you know, one of the leading deep, deep learning researchers at Google. And he became the chief scientist of OpenAI. The big turning point was Elon recruited Ilya away from Google to OpenAI. This is when Larry Page stopped talking to him because he was so pissed that you recruited my like top guy and you declared war, basically. And recruiting him was like a Herculean effort, basically getting him to leave Google and Google was offering him like a blank check.

• 50:20Sam Parr?

  This is a fucking movie.

• 50:22Shaan Puri?

  And exactly, this will be a movie for sure. So then Google starts offering all of their talent like crazy lavish offers. They just up the ante like crazy. They're like, we're going to price anyone out of this market.

• 50:32Sam Parr?

  How much, do you know?

• 50:34Shaan Puri?

  A million, like, I don't know, like millions of dollars per employee minimum. For some people, 10, 15 million dollars a pay package annual. And so it was like, okay, well, Sam and Greg email Elon saying, hey, it's getting really hard to recruit. You know, we have to think of a strategy here. Google is doing this. Elon replies, he goes, we need to do what it takes to get top talent. Let's go higher. If at some point we have to revisit what our current people are getting paid, that's fine. Either we get the best people in the world or we will get whipped by DeepMind. Whatever it takes to bring on the ace talent is fine by me. DeepMind is causing me extreme mental stress. If they win, it will be really bad news with their one mind to rule the world philosophy. They are obviously making major progress and they should, given the talent, level of talent over there.

• 51:18Shaan Puri?

  And so he basically gives them the green light, like, I'll keep funding more, go get the best talent. And so in 2016, he gives them 15 million. In 2017, he gives them 20 million. In that five-year period, he gives them 44 million dollars in total. Now, the problem is Elon, the biggest backer and the original backer, says he doesn't own anything in OpenAI, the for-profit company. And this is the strongest part of his case. Here's what he says. He goes, how is it that you can create a nonprofit company that is supposed to be nonprofit and open source? Raise millions of dollars from people, you take 50 million dollars from me, you hire the best people in the world and you write down that this is your charter. And then you end up a closed-source, maximum-for-profit company owned by the most valuable company

• 52:03Shaan Puri?

  in the world, Microsoft, owned 49% by them.

• 52:07Shaan Puri?

  How is that possible? And he's like, two things. He goes, if he goes, if it is possible to create a nonprofit, hire people and basically fund all of the research on, you know, basically like in a tax donation way where you, for every dollar you're putting in, you get 50 cent rebate back from the government. He's like, if that's possible, and then you could just flip to a for-profit when you make breakthrough technology, why is everybody not doing that? Why is that not just the default for every single technology company in the world? Either it's illegal or everybody should be doing it. It can only be one of those two things. And I love this argument from Elon. I think this is a tremendous argument and there's no answer to that question yet. Either this is illegal or every single company in the world is going to do this. Why would you not?

• 52:50Sam Parr?

  We, you and I are not, I wouldn't, I'd say we are fans of Elon, Elon's work, but we're lukewarm on him as a human being. And we are only hearing one side of this story. But in the last 10 minutes, only knowing what I know just from those 10 minutes, he's right.

• 53:08Shaan Puri?

  So then he gives this analogy, again, master of PR. He goes, it's like if I donated to a nonprofit charity that said, we're going to save the Amazon rainforest. And then that charity took all our money and then they created a for-profit logging company that was just cutting down trees in the rainforest and selling the lumber. That's what's happened. That is OpenAI. So he says, it is a de facto subsidiary of Microsoft. And he goes, includes this quote, and this quote, I think is going to become very problematic. I predict it's going to become very problematic for Microsoft in the future. So it's the Microsoft CEO saying, remember when all the OpenAI drama was going down and Microsoft's stock price started to tank because they were like, oh shit, you put,

• 53:53Shaan Puri?

  you've given $10 billion or whatever to OpenAI and they're about to like collapse? This is bad for Microsoft and they're going to go create like a new company that you don't own, that's bad.

• 54:04Shaan Puri?

  And so then he came out and he said this publicly, he goes, if OpenAI disappeared tomorrow, we have all the IP rights, all the capabilities, we have all the people, we have the compute, we have the data, we have everything. We are below them, above them, around them.

• 54:20Sam Parr?

  The CEO of Microsoft said that?

• 54:22Shaan Puri?

  Wow, yes, exactly. And so that also weakens the case that OpenAI is this like nonprofit, non-controlled by Microsoft entity. When he came out and said that we are below them, above them and around them. God damn, what a phrase.

• 54:39Sam Parr?

  Dude, this is riveting. This is riveting.

• 54:43Shaan Puri?

  That's me when I, if I go to Chick-fil-A and I order nuggets, I'm below them, I'm above them, I'm around them, I have them, they are mine. Like, dude, that's a, what a, what a phrase.

• 54:53Sam Parr?

  The, uh, by the way, the, the way they call this the Manhattan Project, the best. That is the best. That is so good. All of this is just epic. Can you imagine these nerdy AI engineers who were probably like bullied and were dorks throughout all the years? Now they're like, oh, me? You want me? No, boys, come on. Let's be civil about this. They're just getting fought over and we're talking about 15 or 20 million dollar a year packages. That's insane. Everything about this story is insane.

• 55:24Shaan Puri?

  You're right. This needs to be a movie. If you're making the movie or you want to make the movie of this, get in touch with me. Let's, let's create the movie of this. This is going to be like the social network movie all over again.

• 55:33Sam Parr?

  Uh, an epic photo collage or something like that would also suffice too. Like, just like some, some neat photos with captions that tells a story. I'm into that. I want to leave it with this. So Dharmesh Shah, Dharmesh is the founder of HubSpot and you and I have talked to him a bit. He's on this podcast all the time. He, he's doing this thing on AI that I want him to come talk about. Hopefully he will. He told me something that I tell myself all the time when thinking about this, which was basically Dharmesh is super into AI. He goes to a lot of conferences on it, like insider conferences. I would think that of, he has a good grasp of it. He has said, it's not probably going to be as good or as bad as you think it's going to be.

• 56:11Sam Parr?

  And him saying that in a calm, like fatherly voice to me, that's like been the one thing that I've, I've been thinking about of like Sam Altman. I think he's a great guy and I love Sam. Uh, I don't know him, but it just has like a fan of his. Uh, I think that the, all these guys in this game are also brilliant marketers and brilliant business people and brilliant at the skill of programming and making this stuff. But I also think that they're brilliant at PR and marketing. And I have to remind myself constantly that it could be good, it could be bad. It's probably going to be right in the middle though of, uh, of what, the reality is going to be in the middle. And these guys are just excellent at telling their story. Do you agree?

• 56:50Shaan Puri?

  Yeah. And we should say, uh, you know, Elon is competitive, creating a direct competitor to. OpenAI, right? Like Grok, he has XAI, which is like his AI company. It's his AI competitor to OpenAI. And he has Grok, which is the competitor to ChatGPT. That's like the product name. So he obviously has, you know, interests in this. And I think, you know, the one thing that's clear out of this is it's definitely mission driven. Like, in the same way that I used to think when it was like, oh, Jeff Bezos is doing a rocket company. It's like, oh, is this just like a giant dick measuring contest between like billionaires? Like, just the last level of the game is you say, I win Earth. Okay, let me go win Mars now, right?

• 57:32Shaan Puri?

  Like, that's kind of what it seemed like was, oh, I'm gonna build a bigger rocket than you. But then you read that, like, even 25 years ago, Bezos was like really obsessed with the idea of space travel. And he's been a giant fanatic about it and been trying to donate to it and trying to advance the cause in that. And that now, like, even with these companies, he's in all the engineering meetings, the planning meetings every week. It's like, okay, this wasn't what I thought it was. In the same way.

• 57:58Sam Parr?

  By the way, it could still, it could be that, and that's okay. It could be mission driven and ego driven and profit driven. And that is okay to have all those things too.

• 58:05Shaan Puri?

  That's a better way of putting it. Yeah. Like most things, it's accelerating because of multiple causes, multiple, there's multiple things, multiple tailwinds pushing it. But I would say like, the hater in me wanted to discredit it, but the realist in me, when I go back and read old interviews or watch old videos before Amazon was super successful, it becomes clear that actually it was a deep interest. So similarly here, even though I think it's part of it is he's trying to bog OpenAI down with a lawsuit and spin the PR battle in his favor, and he has a direct competitor, it's clear that OpenAI wouldn't have even, would not have existed and would not have been successful had he not genuinely had this fear and concern and belief about what needs to happen with AI a long time ago.

• 58:48Shaan Puri?

  So, you know, I think that's, that comes out very true in this. There's a paper trail of evidence.

• 58:53Sam Parr?

  What a fucking pod. I feel amped and scared, excited, nervous. I feel all types of emotions. Great job.

• 59:03Shaan Puri?

  It's like a great first date. It's like, right? Aren't you supposed to like, trigger like adrenaline or like the fight or flight response in people? And that's like what bonds you? I feel like that just happened to us.

• 59:11Sam Parr?

  Yeah, except my version of that was like, on our first date, we went on a motorcycle. But now we're talking about like, the world maybe ending in 20 years. Good job. This is, you did a good job.

• 59:22Shaan Puri?

  I've got a court, I got a court case to tell you about.

• 59:27Shaan Puri?

  Dinner? No, we're not doing dinner.

• 59:29Sam Parr?

  I, okay, so you made it this far to the folks listening, go to the YouTube and tell us in the comments, do you actually think this is gonna be horrible? Do you think this is gonna be great? Or is it what Dharmesh said, where it's somewhere in the middle, where it's not gonna be as good or bad as we think? But Sean, bravo. You did a good job. This was a great, good pod. And we'll end it there. That's the pod.