The Silicon Valley Election, Goldman’s AI Worries, Using AI To Talk To Animals

Ranjan Roy from Margins is back for our weekly discussion of the latest tech news. We cover 1) VCs and Elon going to Trump 2) The policy issues swinging VCs to Trump 3) The case for an against big tech acquisitions 4) Electric vehicle policy as a flashpoint 5) Anti-woke common ground between VCs and Trump 6) Is it a good bet? 7) Goldman Sachs pours some cold water on the GenAI hype and spending 8) Anthropic starts a new venture fund 9) Warner Bros. Discovery potential spinoff plan 10) Using AI to talk to animals. 11) Is a squirrel the next Einstein? --- Enjoying Big Technology Podcast? Please rate us five stars ⭐⭐⭐⭐⭐ in your podcast app of choice. For weekly updates on the show, sign up for the pod newsletter on LinkedIn: https://www.linkedin.com/newsletters/6901970121829801984/ Want a discount for Big Technology on Substack? Here’s 40% off for the first year: https://tinyurl.com/bigtechnology Questions? Feedback? Write to: [email protected] Learn more about your ad choices. Visit megaphone.fm/adchoices

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

• 0:00Alex Kantrowitz?

  VCs go for Trump as Silicon Valley is doing all it can to influence the 2024 election. Will it work in their favor? Goldman questions whether AI spending is ever going to pay off? And can we use AI to talk to animals? Yes. All that and more is coming up on a Big Technology Podcast Friday edition, right after this. This episode is brought to you by Genesis. What does it actually take to put Agentic AI to work across an entire enterprise? I recently spoke with Genesis Chairman and CEO Tony Bates about why orchestration is emerging as a competitive advantage in customer experience, and what companies need to get right in the AI era. Then, I sat down with Adam Mitchell, Head of Enterprise Business Solutions at Voya Financial, to go inside a large-scale

• 0:45Alex Kantrowitz?

  Agentic CX transformation, including the business decisions, trade-offs, and lessons along the way. You can watch both conversations now on my YouTube channel today. It's never been more challenging to get Frontier Compute. How do you know where to look, who to trust, or how much to pay? Akash is an open cloud that provides easy access, flexibility, and peace of mind. That's how companies like Razer were able to cut their inference cost by 15 times. Visit akash.network/alex for a free consultation. That's akash.network/alex for a free consultation.

• 1:23Alex Kantrowitz?

  Welcome to Big Technology Podcast Friday Edition, where we break down the news in our traditional cool-headed and nuanced format. We have a lot of news to speak with you about this week. And of course, we're finally going to get into some of the 2024 election. So, joining me to do it, as always, is Ron John Roy. Ron John, welcome back to the show.

• 1:41Speaker 01

  I'm in Paris right now, in the basement of a WeWork with a bright pink pop filter on my microphone that anyone, any of our streaming guests can see right now. So, my travels are almost over and I'll be back to New York next week. But great to be here.

• 1:59Alex Kantrowitz?

  I think it's just the perfect setting to talk about US politics is in the basement with a pink pop filter. So before we jump in, just a quick little discussion about us talking about politics. This is not a political podcast. I think if you're listening, you know that at this point. So we're not here to tell you to think a certain way. We're not here to tell you to vote for a certain candidate. We are probably going to still make some mistakes as we talk through this. So don't come down on us too hard. Give us a little bit of space to have this discussion because we want to have discussion and we have to have this discussion about politics. Because today or this week, really Silicon Valley jumped in the race and I think what might be an unprecedented way for the tech community and to ignore it would be a dereliction

• 2:44Alex Kantrowitz?

  of duty. I do hope that our approach to talking about politics lives up to the mission of the show, meaning that it's cool headed, it's nuanced, it's balanced. With that being said, a lot happened this week and it was a huge week in the political world. So first of all, Donald Trump goes through an attempted assassination over the weekend. Basically, as soon as it happens, lots of tech executives come out and endorse Trump, including Elon Musk, who endorses him basically immediately after the shooting. And this is from Eric Newcomer. So Derek David Sacks, the VC at Craft Ventures and also the All In Podcast Guy. He speaks at the RNC convention. He accused Biden of provoking the war in Ukraine. Joe Lonsdale is a Palantir

• 3:26Alex Kantrowitz?

  co-founder, is going to head up a pro-Trump super PAC and Sequoia's Doug Leona and Sean McGuire, two VCs are going to back it. Marc Andreessen and Ben Horowitz, meanwhile, are also going to back a pro-Trump PAC. And of course, Peter Thiel's protege, J.D. Vance, was named the vice president. He's the next, he's the second VC named as a, or running in a major election since Mitt Romney, I believe. So, but the fact that he has this Thiel connection and came up through Thiel is, I think, quite meaningful. So Ranjan, why don't we just take a step back and just discuss, is this major or is it being blown out of proportion? Because Silicon Valley has always been political, always had an ideology, and

• 4:10Alex Kantrowitz?

  a lot of it has largely been Democrat. So is this move anything out of the ordinary?

• 4:17Speaker 01

  I don't think it's out of the ordinary, as you said, like Reid Hoffman and others have been very publicly pro-Democrat over in past election cycles. I do think it is out of the ordinary, just everything in the last week has been very, very weird. And I think the next few months are only going to get weirder. And whatever seemed normal a few days ago might seem ordinary by November 5. I think the significant part about this to me is what it means for the actual tech community in terms of the business of tech. Because honestly, I've been so surprised, because I understand in some ideological

• 4:57Speaker 01

  ways, this draw towards Trump. But I actually went on a trip down memory lane, and I was like, do you remember the business council that came out at the beginning of the first Trump administration?

• 5:09Alex Kantrowitz?

  Oh, definitely. Was that the Tim Apple moment?

• 5:11Speaker 01

  Yeah, and everyone would have to kind of sit there and just nod and smile. And then Trump would easily turn on and have policies completely anathema to and what any of these executives supported. I mean, going after Jeff Bezos and just on a personal level, and then Amazon, and then what, how much personal feelings mix with actual tech policy and from the administration. Like, to me, how wholeheartedly the David Sacks and Elon Musk and Joe Lonsdale kind of like group is supporting Trump and going pro-Trump right now, I think is going to be a mistake. And I think it's going to be a mistake in

• 5:51Speaker 01

  terms of will Trump be pro-technology, pro-high-skilled immigration, any of these things for the next four years, if he is elected, I think absolutely no way.

• 6:02Alex Kantrowitz?

  Okay, so we should talk a little bit about like, why specifically they are coming out to support him. And this is from the newcomer article. But before we get there, just like a bit of context here, The Information did a survey of its readers, and they found that more than, by a more than two to one margin, they supported Biden as opposed to Trump. So 59% Biden, 27% Trump.

• 6:27Alex Kantrowitz?

  10% Robert F Kennedy Jr., which is probably his sort of biggest pocket of support. Look, it's it's still overwhelming towards Biden, but it is a shift. I tweeted this and like a lot of people pointed out like this is not normal for Silicon Valley. So the fact that they are more toward more much more toward the Republican than they've been in the past. And especially Trump is a break, at least directionally from the sort of liberal Democrat ethos. Okay, so going back to like, why everybody, why these big tech VCs are supporting Trump? I sort of broke newcomer's story down into about four categories. So I'll just read them quickly. First is vibe. He says, Trump is signaling via the Republican platform that he's friendly to crypto and space investment

• 7:12Alex Kantrowitz?

  and hostile to artificial intelligence regulation. And that he's also going to extend his 2017 tax cut. Then there's pragmatism, basically the fact that Biden is most likely going to lose if he stays in. And so newcomer says from a pure pragmatic standpoint, cozing up to Trump has logic to it. Then there's the acquisitions thing, and I think this is big and worth discussing, right? So this is what newcomer talks about. The Biden administration's crackdown on big tech acquisitions has been brutal for startups. And while Trump's new VP has been hostile to big tech and has supported FTC Chair Lina Khan's strict anti-trust review, it's hard to believe the trust administration could be any more unfriendly to acquisitions than the current administration.

• 7:55Alex Kantrowitz?

  And then the fourth is taxes. Trump seems much less interested in raising capital gains taxes or taxing unrealized gains to fairly existential issues for Silicon Valley's investor class. On the taxes issue in particular, that's what Marc Andreessen said swung him basically into the Trump camp was he was like, any discussion of taxing unrealized gains is a nonstarter for him. And the Biden administration is discussing this. So those are the four reasons. Now, given that, you know, those four seem somewhat logical. If you've put up, if you put away, put aside, let's say, sort of the behavior of the man. If you put aside the questioning of the 2020 election, which you really can't.

• 8:38Alex Kantrowitz?

  But like, let's isolate that for now and think about just the business reasons. You're still skeptical of this? You think that's going to come back to bite them?

• 8:46Speaker 01

  I think even isolating, and we should isolate the 20 January 6th, any other issue, but solely Trump vis a vis business. To me, what you see always happen is even I would take crypto as a perfect example, is there will be these moments of, you know, Trump will just say he's pro crypto. What that actually means in terms of policy, no one is sure how that's actually going to play out. There's no really clear, you know, program of initiatives that are on the roadmap that will be coming down and related to these kind of things. And but it will draw enough people in based on that promise, given the

• 9:26Speaker 01

  current administration is very anti crypto, anti M and A from big tech, just enough to draw people in. But I think working backwards, taxes, this is the one thing that yes, I think it's unquestionable and it actually makes complete sense. You especially wealthy people will likely have lower taxes under a Trump administration. I mean, this is kind of like the most classic bread and butter Republican versus Democrat thing. So I think that makes complete sense. The acquisitions part, especially for big tech acquisitions, I think is the most fascinating part of this entire story and my favorite part because I kind of like J D Vance and his stance on that slightly economically populist, slightly

• 10:10Speaker 01

  anti big tech. I mean, I saw Matt Stoller tweeting all these comments from J D Vance. I know J D Vance came out and said he loves Lena Khan and the FTC and what she's done with it. I mean, he, his whole brand has been economic populism. And I think the idea that it will be, I agree with you that it won't be any less friendly. Like, you know, the Biden administration has been very unfriendly, but I do think that That that tension between will a second Trump administration, if elected, be economically populist or unabashedly pro-business?

• 10:52Speaker 01

  I think it will always lean more economically populist. And I think him selecting J D Vance, it's such a nuanced weird one because, you know, he's a Peter Thiel acolyte. He's been, he was funded by Thiel. He's been a V C himself. But I still think when it comes to like being politically savvy, they will take money, raise funds from this whole group, but then become economically populist the moment it's convenient and politically expedient.

• 11:22Alex Kantrowitz?

  And so I thought you were, so you went straight into policy. I thought you were going to go right to vibes, uh, which is that if the Trump administration and Trump himself has this sort of anti-elitist bend, then sort of all the elites going on the bandwagon and thinking their interests are going to be taken care of when Trump is promising something else to the United States is where there could be a clash. What do you think about that?

• 11:48Speaker 01

  I think the vibes argument is, it's always a tough one because again, like, what do vibes actually mean, Alex? Come on.

• 11:56Alex Kantrowitz?

  They mean everything, Ron, John.

• 11:57Speaker 01

  That term has been, I, I, I'm going to say it here. The term vibes has been used and beaten into the ground at such a, such a high degree. But I'm going to still answer the question.

• 12:09Alex Kantrowitz?

  Okay.

• 12:09Speaker 01

  I think, I think the idea right now, I think there has been this, you know, the anti-elitist sentiment, anti-woke sentiment that Elon Musk or David Sacks and the All In Podcast has been very, very public about, which clearly aligns with Donald Trump's overall vibe in terms of his campaign. I think that's the, that's the most kind of like common bond between these two groups. But that's why the policy part is so interesting to me because I do think. Other than just cutting taxes, that the policy directions that Trump, at least in 2016,

• 12:51Speaker 01

  campaigned on, that his administration, again, other than taxes, operated around are just completely different. And I think that's why you had so many Rex Tillerson types, you know, either leaving or, you know, in a memoir, whatever, leaking some story after the fact. So, so I think even if the vibes are matching right now, I think it's still, from a policy perspective, not going to work out.

• 13:19Alex Kantrowitz?

  And I think with the VCs, like, what they're saying when making this move is basically like, from a business standpoint, we don't really have any choice, and we're gonna just kind of cross our fingers and hope that this works.

• 13:30Speaker 01

  Well, but one part that was interesting about this to me is the big tech versus little tech distinction. Because I think, like, again, now VC is almost by definition, or should be more little tech, and the idea of like, competing against the Googles and the Metas and the Amazons and everyone else in the world to have the next generation of startups. And that's why, I don't know, like, to me, it still doesn't make sense as necessarily the savviest move. I think just being as anti-Biden as possible is probably the right move, not tying yourself too strongly, maybe even going all in RFK at some point. But, I don't know, do you, do you think this is the right move? Do you think this is the right move from Elon Musk and David Sacks?

• 14:15Alex Kantrowitz?

  Well, here's the thing, like, long term, so this big tech versus little tech conversation is really interesting, because you can't really, I don't think you can really separate the two, right? Like, everyone's basically putting forward an agenda that they believe lifts both. Think about it this way, with the acquisitions, right? So you have two, there's two different philosophies on acquisitions. One is, you believe that by enabling startups to sell to big tech companies, you're providing exits and you're going to create more innovation. The other argument would be that allowing these exits basically means that all the gains accrue to big tech companies, and they end up killing the small companies. So you'd be better off Letting those small companies develop into big companies outside of big tech companies

• 14:59Alex Kantrowitz?

  and then forcing competition, that would make everybody innovate. So this idea that it's like little tech versus big tech, to me, is kind of a little bit of a head fake or just like not really seeing the issue the right way because ultimately all policy is geared to make both of those grow and it's just a difference of opinion in terms of like what the best thing to do. And I think in the long term, you know, you might actually see like preventing some of these acquisitions leading to, uh, leading to a stronger economy, but that's no sure thing. And in the meantime, the VCs won't see quick exits that they're used to. So it's like natural that they're against it.

• 15:37Speaker 01

  Yeah, it's natural they're against the having acquisitions present, uh, prevented. And I think that's the most straightforward part of all this, but, but to me, there's so many, you know, kind of like corollary issues again, like H1BV, the visa program, which Trump tightened completely in his last administration. Every single tech leader, I would assume, at least from what I see as well, that, you know, supports high skilled immigration and Trump did not significantly at all. And in fact, went to the opposite direction in the last administration. Like, I think those kind of juxtapositions are where there's going to be a lot of problems. Oh, electric vehicles as well.

• 16:20Speaker 01

  That's another great one in this when Trump is just, just hates EVs.

• 16:26Alex Kantrowitz?

  Right. Which is interesting that Elon endorsed him on that front because even JD was like, we should scrap the, uh, the subsidy that you get for electric cars and give it to internal combustion engines. What did you make of that?

• 16:38Speaker 01

  That is JD Vance post 2022 senatorial campaign, I feel. And, uh, I feel a few years ago, he would have been all pro EV. But, but actually EVs are one of the most, I think, central things in how to read just how confusing this moment is in tech because again, like Trump was vehemently against them in his last administration. They were this symbol for a while oddly of kind of like liberal, progressive elitism. And then now it's Elon Musk. Owns Tesla and is coming from a very different angle. So where they fit in all this, no one even quite understands. And that's why I think, I don't know, it's going to get weirder

• 17:23Speaker 01

  and more interesting in the weeks and months to come.

• 17:26Alex Kantrowitz?

  Can I like throw an idea out there? And that is that Silicon Valley just likes to go to the winner? And that, so I'll unpack that a bit. I mean,

• 17:34Speaker 01

  Yeah.

• 17:36Alex Kantrowitz?

  They obviously saw what was going to happen with Obama against McCain. Like it just became clear at a certain point that Obama was going to win and he brought like a fresh attitude to the country, or at least campaigned on it. And Silicon Valley said, okay, we're going to help him do this and then sort of help build the technology and a lot of tech folks went over to the Obama administration. And then Silicon Valley was squarely behind Hillary Clinton in 2020 because again, it was assumed that she was going to win. And if you back the winner, there's a good chance that the winner will shift and sort of enact policies that you want. And then we're coming now and it's clear that Trump is going to win, at least if Biden stays in the race. We don't know what's going to happen if Biden leaves.

• 18:20Alex Kantrowitz?

  And again, it's a back the winner attitude to try to sort of get on their good side and then have the policies that Silicon Valley wants enacted. So like, maybe we're underrating the pragmatism side here.

• 18:32Speaker 01

  I disagree because I still think the anti-woke vibe is the common thread. Again, that's the one where we have seen this over the last three, four years, get louder and louder and louder. And that's something that's completely shared together between these two groups. So I think that that's, that's like, they're getting the common bind that brings them together. And then beyond that, the assumption is it's kind of a dance around each other. Like, are we going to be pro crypto? Are we going to be pro M and A and less anti-trust? I think all that stuff, but, but the anti-woke thread is strong. So

• 19:11Speaker 01

  versus if Biden was shown to be winning, given how aggressively anti, at least in their perception, big business and tech, his administration has been, I don't think they would be wholeheartedly supporting him, speaking at the DNC, or I don't think they would be invited either.

• 19:33Alex Kantrowitz?

  Yeah, that's interesting. So what do you think about this, given your stance on the culture war thing? There was this guy on Twitter, Rohit Krishnan, he said, "The level to which random journalist tech hatred drove the whole Silicon Valley into Trump's arms shouldn't be underrated."

• 19:49Speaker 01

  Yeah, I saw that comment and I was, again, that could actually fall into the same common thread. And I think, I actually think that's not an unreasonable comment, because it's like hatred of the media, hatred of elite, like, we're both unfairly bashed by the quote-unquote mainstream media, the left-wing media. I think we have talked about that plenty on this podcast, like, that idea that's permeated all of Silicon Valley, or at least tech in general. I think we've talked about, or we've seen, and obviously, Trump was the original fake news guy. So I think, even seeing the terms he used, like,

• 20:28Speaker 01

  fake news, mainstream media, he brought these terms to the general public. And watching within tech, if someone didn't like a story about their company, the CEO tweeting, "This is fake news, this is the mainstream media, this is biased and hatred against tech." So we actually saw a lot of that same playbook make it into tech already. So I actually think that's, even if that's, that's just more indicative of the problem, or the current moment, rather than necessarily insightful, but...

• 21:00Alex Kantrowitz?

  So a couple of questions as we end this. Is there anything the Biden administration could have done to have kept Silicon Valley? And even if it could have, would that have mattered?

• 21:09Speaker 01

  I didn't, I don't think they're, they could have by being far less aggressively antitrust, far less aggressively big tech. I mean, they've been very open about the agenda. I mean, it's the headline of the agenda. And if Biden was out there campaigning right now properly, they would be singing the praise of actually being successful on this. So I think that this was, this was inevitable. I mean, and it's, it's a pretty, again, it's interesting to me, because it feels like on the extremes, because everything feels on the extremes. But in reality, this is like the most classic... Republicans in business versus Democrats and labor thing that's been happening for the

• 21:52Speaker 01

  last 60 years. So in that way, it's actually pretty consistent rather than anything surprising. In reality, like the Obama mid 2010s was the outlier.

• 22:05Alex Kantrowitz?

  Correct. And this whole like, you know, anti-big tech thing, I mean, both administrations have been anti-big tech, although the Biden administration did appoint Lina Khan and like, put it, the acquisition thing is, I think, what matters most, especially with these loud VC voices.

• 22:21Speaker 01

  Do you think, do you think this is the right bet for David Sacks or Elon Musk?

• 22:26Alex Kantrowitz?

  I just think it's impossible to tell. It has, it's a riskier bet, I think, than like staying out of it. That's for sure. It's risky because a few things could happen. One is, we could see, we could see instability in the country under Trump. Like, everybody, I think, acknowledges that's possible. We saw it at the end of his last term. And then, do you want that if you're a business person? Like, businesses rely on stability. So I think that's one risk. And then the other risk, and I kind of think, I don't know if this is such a huge risk, but Benedict Evans, former Andreessen Horowitz guy, and he wrote on, we talked about him at length last week, he said, "Wondering about the incentive structures of a company taking polarizing positions when it

• 23:07Alex Kantrowitz?

  depends on inbound deal flow and indeed built its whole model on being the place that entrepreneurs choose." So you could eventually, you could potentially lose some sway with startup founders, although I think that it's going to take a lot to make them not want to take Andreessen Horowitz's money. I don't know. What do you think?

• 23:25Speaker 01

  I think this is part of the, this is almost the additional sad part about this. And I almost feel a little Brian Armstrong from Coinbase about leaving politics outside the workplace.

• 23:36Alex Kantrowitz?

  Yeah, what happened to that, huh?

• 23:37Speaker 01

  I don't know. Yeah, what happened to that one. But, but in reality, though, I can see a world, the more polarizing the Andreessen or Horowitz is, they will then attract a more polarized type of founder. And you already see this kind of group thing happening anyways. And then it just kind of isolates people among similarly thinking people and radicalizes them even more. And I think that's actually pretty sad around just the overall tech and startup ecosystem, because to me... Your political leanings should not affect your, uh, your, who you're taking as a founder. I mean, ideally, those conversations would be left out of the actual business conversation.

• 24:21Speaker 01

  But you're right, now that, those days are gone. Now it's all in on, uh, politics.

• 24:28Alex Kantrowitz?

  Okay, but that being said, like, let's say they, uh, they back Trump. Trump crushes whoever the Democrat is. This idea of taxing unrealized gains is sort of swept into the dustbin of history. Then, then the bet pays off.

• 24:44Speaker 01

  Yeah, I think, but again, going back, if we're, if we're, if we're putting on our VC hats and making a risk calculus decision right here, the chances of a actual tax on unrealized gains is so small from passing, like, it's been brought up almost, uh, they can't even get rid of the, you know, preference over carried interest, like, they, the, the idea of the, the mechanics of taxing unrealized gains is so complex that the idea that it'll pass is so small that to make this entire bet off of that, I think is, versus the risk that it does present, which you outlined, I think, I think that would be a bad bet. What about you?

• 25:27Alex Kantrowitz?

  Yeah, well, I, I think it's, what's interesting is that this is totally outside of the typical VC risk calculation. And that's something newcomer hinted at, but like, the type of risk that VC takes is spreading risk across a number of companies and being okay if, like, most of them fail and one wins. I don't think they're, they're used to like all or nothing type bets or like basically bets that you cannot average out with a bunch of others.

• 25:52Speaker 01

  Yeah, the best line in our prep document Alex put in was the VCs are also used to early-stage investing, and this is the ultimate late-stage investment.

• 26:02Alex Kantrowitz?

  Yes, from M G C.

• 26:04Speaker 01

  Yeah.

• 26:05Alex Kantrowitz?

  Yeah, but that is, that's the thing. It's just a very different perspective, a very different risk.

• 26:10Speaker 01

  This is a Series G, 700 million, but it takes some early-stage preferences off the table. This is late-stage.

• 26:19Alex Kantrowitz?

  I don't know. We'll see what happens if the Democrats switch the candidate.

• 26:24Speaker 01

  Yeah.

• 26:24Alex Kantrowitz?

  Which seems like it's going to happen.

• 26:27Speaker 01

  I'm telling you, whatever we're talking about today, even in two weeks, will have forgotten by, and two months, we'll, we'll be talking about something completely different. But I'm glad we're talking about this because this, the election story is not going anywhere, and there's going to be more and more of a tech angle, and we got to talk about it.

• 26:48Alex Kantrowitz?

  So, that's our politics segment. If you have any thoughts on the politics segment, write in, [email protected]. Would be eager to hear from you, the audience, what we missed, what we got right, whether you want to see more segments like this, whether we should, you know, quote-unquote, "stick to sports." Your feedback matters a lot. We definitely appreciate the five-star reviews if you're willing to give them, and any constructive criticism or feedback coming into [email protected] is, is much appreciated. All right, why don't we take a break and come back and talk a little bit about Goldman Sachs asking too much spend, too little benefit on generative AI. We'll be back right after this.

• 27:29Alex Kantrowitz?

  This episode is brought to you by AppPoint. Everyone's racing to roll out AI right now. Co-pilots, chatbots, agents doing real work. But here's the part nobody loves talking about. All that AI runs on your data, and most teams have no single way to see it, secure it, and prove it's under control. That's exactly what AppPoint does. For 25 years, they've been the trusted layer beneath the world's most demanding data, now extended across your entire AI estate. Your data, your cloud, and the agents acting on your behalf. It's how more than 28,000 organizations deploy AI with confidence, so innovation

• 28:08Alex Kantrowitz?

  scales without scaling risk. AppPoint, the unifying trust layer for AI. Head to apppoint.com to see how enterprises deploy AI with confidence. Learn more at avpt.co/bigtechnologypodcast. That's avpt.co/bigtechnologypodcast.

• 28:29Alex Kantrowitz?

  Violent threats against executives are growing at an alarming rate. When a company experiences backlash, executives are the first people blamed. When their address and other personal details are sitting online, this backlash can lead right to their front door. The team at Ironwell knows this better than anyone. They've protected some of the most targeted executives and individuals on the planet for almost two decades. As a wide-glove enterprise security service, they protect your people with continuous personal data removal, proactive prevention tools, and human-led emergency support. So when someone goes looking for your executives, Ironwell ensures they hit a dead end. So here's what to do. Go to ironwall.com/bigtechnology, fill in the quick form, and request your free risk assessment. Their team will show you just how exposed your executives are

• 29:15Alex Kantrowitz?

  and how to lock it down before a threat reaches their front door. That's ironwall.com/bigtechnology. Learn how to stop online threats before they become real-world attacks. The link's in the show notes.

• 29:29Alex Kantrowitz?

  And we're back here on Big Technology Podcast Friday Edition. I'm here with Ron John Roy, as always, on Fridays. And there was a very interesting paper that came out of Goldman Sachs, a very unusual newsletter to come from a bank, I thought, where basically the bank is very bullish on what's going to happen with generative AI. And they brought in some experts who question whether there's going to be that benefit. So this is the lead-in to the newsletter. "The promise of generative AI technology to transform companies, industries, and societies continues to be touted. Leading tech giants, other companies, and utilities to spend an estimated $1 trillion on CapEx in the coming years, including significant investments in data centers, chips, other AI infrastructure, and the power grid."

• 30:14Alex Kantrowitz?

  Okay, basically, that's all the canes in the stock market this year. However, it says, "But this spending has little to show for it so far beyond reports of efficiency gains among developers." And it goes on to lead off with a Q and A with labor historian slash economist Daron Ajemolu from MIT, where he says, basically, "Listen, Goldman Sachs, a lot of your estimates of the efficiency gains here are totally overblown." So, Ranjan, I'm curious what you thought. It seemed extraordinary to me that, basically, a bank such as Goldman Sachs would come out and publish a pamphlet effectively saying, "The smartest guy or one of the smartest people on this stuff thinks that we are way too optimistic," and then distribute it publicly.

• 30:58Speaker 01

  Free speech.

• 30:59Alex Kantrowitz?

  For a bank, for a bank to do this.

• 31:01Speaker 01

  Free speech is not dead.

• 31:04Alex Kantrowitz?

  But there has to be some strategy behind distributing.

• 31:07Speaker 01

  Okay, so I, I think this is a very, very, very important moment in the generative AI hype cycle. I read, I devoured the entire report. And as someone, and we've talked a lot on this show about it, who genuinely believes generative AI is a transformative technology and is concerned about the hype cycle and thinks it's counterproductive to the actual development of the technology, I am so happy this was written because I, I actually, I agree with a lot of the, the concerns from Ajay Mollu and from Jim Cavolo and from some of the other Goldman analysts. But I also agree with some of the bull cases that were

• 31:50Speaker 01

  presented in other parts of the report. And I think the best part about the fact that they released it is it's going to actually create this conversation about concern. Are we, where are we in the hype cycle? We've talked about this a lot, that there's gonna be a trough of disillusionment. I think they were smart to release this because they know it's coming, we know it's coming, and they're kicking off the conversation and to all of their clients, when every other bank and every other analyst is still in the la di da stage of like, everything's gonna change instantly, and every valuation is gonna go up, and GDP is gonna rise 7% global GDP, which is what Goldman Sachs said last year in April. I think the fact that they are leading the next phase of this conversation, I thought was brilliant.

• 32:36Alex Kantrowitz?

  Right. And I mean, some of the stuff that Ajay Mollu says there is like true heresy to anybody who's like watching generative AI. And I, I just enjoyed reading it and seeing that he would go on a, on a limb, go on a limb, saying some of these things. He says on the scaling law, "I would challenge this in several ways. What does it mean to double AI's capabilities? For open-ended tasks like customer service or understanding a summarizing text, no clear metric exists to demonstrate that the output is twice as good. Similarly, what does a doubling of data really mean and what can achieve it? Including twice as much data from Reddit into the next version of GPT may improve its ability to predict the next word when engaging in an informal conversation." But it wouldn't necessarily improve a customer service representative's ability

• 33:20Alex Kantrowitz?

  to help a customer troubleshoot problems with their video service, which is like so interesting. So I'm curious what you think about first about Ajamol's assertion there. And then more broadly, can this just become a self fulfilling prophecy? Because as Goldman admits, there hasn't been much to show so far outside of some coding improvements. And by the way, listeners, we're going to have the CEO of GitHub coming up on the podcast, I think, next week. So stay tuned for that, speaking of the coding stuff. But I'm curious, yeah, to hear your perspective on this scaling law, questioning the scaling law. And then whether this is just, you know, these things have a way of becoming a meme themselves, spiraling and building momentum. And is Goldman basically opening the door for that?

• 34:02Speaker 01

  I think the question of the scaling law first, I think it's fair to try to apply Moore's law to any other new type of technology, just because it worked really well there. And try to say and extrapolate that to generative AI. So I actually think that's a valid concern. And I think it's tough because on one hand, how fast these models have improved over the last year and a half or two, which we have been, has just been insane, the pace of progress. I was just using Runway's Gen three alpha to create video and cannot believe where that is versus a year and a half ago, trying to use mid journey to create real looking people. So the speed is moving and the scaling laws feel like they are moving in the right direction,

• 34:46Speaker 01

  but it could stop, it could easily stop. And I think that's a reason why we can't extrapolate out growth the way people are unquestioningly right now. To me, the one problem I had with this that I thought was interesting was like Jim Cavolo and Ajamol, they both make it seem like there is no benefit other than coding assistance right now. Or there's no real benefit to analyzing large corpuses of data or even creating content.

• 35:14Speaker 01

  And for anyone who listened to the Klarna CEO here on Big Technology the other day, I actually thought he had a really good handle that mirrored the work I've done and the approach we've had, is there's a lot of small parts of your overall workflows and processes that are boring that you can already replace. And I have, they are, whether there's a little bit of bombast and saying it's 700 people are being replaced or whatever, I mean, that's where the self-promotion comes in, but that work is-

• 35:45Alex Kantrowitz?

  Which he admitted to.

• 35:46Speaker 01

  Which he admitted to. And he said it's a bit of self-promotion. And again, that's good and bad because it draws attention to this, but then it puts expectations too high. To me, like, again, anyone who has used any of these tools and anyone who's sitting there, you know, comparing an old-school Google search against perplexity or has not uploaded a ton of documents into Claude and then questioned them and seen how brilliant and amazing this technology is, everyone knows this is going to go somewhere. And it will. But I think the Goldman, I don't think it's going to be a self-filling prophecy. I think it will be the catalyst that does knock off some market caps and some valuation

• 36:30Speaker 01

  somewhere and starts getting us to that trough of disillusionment faster. So we can get to, I can't remember what the next stage of the Gardner hype cycle is now, but the good one that comes after the trough.

• 36:44Alex Kantrowitz?

  The path of productivity. I'm just making that up. Maybe. I don't know. So that being said, do you think there's going to be an impact to investments here? I mean, is it gonna, is the fact that investors are gonna start to question this gonna basically, is there a chance that like hampers, you know, Google's ability, for instance, to throw like a ton of GPUs toward its next training round? Or how does this have a practical impact?

• 37:11Speaker 01

  Yes, yes, and yes. I think it's going to definitely have an impact. And also just note, I looked up, it goes from the trough of disillusionment to the slope of enlightenment, and then the plateau of productivity. So we'll get to the slope of enlightenment soon. And that's because Google will have to actually be smarter around where it invests, not just throw the kitchen sink at anything with generative AI. We've talked about this a lot on the show. When companies, it comes time for renewals of different AI services, do they actually pay that money? Or do they actually say, no, we're not seeing and realizing the value? And just being smarter about the overall thing. And I think the reason I'm hoping

• 37:54Speaker 01

  this happens, and I actually think overall it's good for the health of the ecosystem, is it's what you said. It could be a self fulfilling prophecy that creates like a downward spiral that maybe destroys the technology, maybe any real chance of true innovation happening and transformation happening. And I always do wonder that about that with crypto. And I've written about this plenty, like, was there promise to the technology itself that was just hyped away? And then that caused the like, the downturn that that caused in expectations is why there's a strong lull, and maybe it comes back, and maybe we realize it at some point. But I think that's more negative to the potential of the technology.

• 38:39Speaker 01

  And it could happen with generative AI if there's not some kind of, at least just temperance of expectations here.

• 38:48Alex Kantrowitz?

  Well, this is not the case, according to Andreessen Horowitz, and who says that crypto was basically regulated out of existence by the Biden administration. And that's why they're so against him, is that they don't want him to regulate AI out of existence.

• 39:02Speaker 01

  I don't even, has crypto, do you think crypto has been overly regulated?

• 39:09Alex Kantrowitz?

  I mean, there's definitely been a wave of regulation recently. But I think the discussion has to focus on why that is. And that's because a lot of these, a lot of these companies took advantage of consumer trust, and took a lot of people's life savings. You know, of course, those people were greedy in some ways. But you can't be the SEC, right? And say, well, these companies are breaking our rules, and people are losing their shirts, and our job is to stand by. Like, what's, I mean, what's your job as regulator if you allow that to happen? I don't know.

• 39:40Speaker 01

  Yeah, that's why I think, and again, going back to our original topic on this around regulation and antitrust, I think it's such a reminder that if there was zero regulation for so long, that even any regulation is now called like regulating out of existence and an existential threat relative because there was zero for so long versus if very early on, there was at least some kind of oversight, then it changes the entire perspective.

• 40:08Alex Kantrowitz?

  Yeah, but that oversight could end up like swaying the industry in unintended ways. So I'm definitely like, I hear the fact that companies and VCs don't want that type of regulation, although I always hold the best way to regulate is just to self-regulate. If you don't want to invest, you know, if you don't want these, you know, regulators on your back, don't do shitty things, but some people can't help themselves.

• 40:32Speaker 01

  I think it Kantrowitz for president 2024.

• 40:36Alex Kantrowitz?

  That's my.

• 40:37Speaker 01

  He's replacing by.

• 40:38Alex Kantrowitz?

  Put me in for.

• 40:39Speaker 01

  Don't do shitty things. Don't do shitty things. Whether in business, whether in life, don't do shitty things.

• 40:47Alex Kantrowitz?

  Can't argue with that.

• 40:48Speaker 01

  I like I it. I'm buying the debate right now.

• 40:52Alex Kantrowitz?

  Anyway, this is why I'm doing tech podcasts. All right, let's talk about Anthropic, which has a $100 million AI fund that is starting with Menlo Ventures. It's actually pretty interesting. So OpenAI, of course, has like a startup fund. So now Anthropic and Menlo are starting a $100 million fund and Menlo will put the cash up and Anthropic will give founders $25,000 in credits towards its large language models. And I guess it will get some sort of percent of the company. I mean, $25,000 in credits does not seem a lot, but it is interesting that this is happening. So clearly there are some people that still believe that AI is worth investing in.

• 41:31Speaker 01

  Yeah, I think it's still, now you say, actually, one thing we didn't even talk about at the potential fallout that gets catalyzed by the Goldman report is, and you know, we've talked about this in the past, the weird funding arrangements that exist in the entire AI ecosystem. What's cash? What are credits? What's being recognized as revenue? I actually think, and again, the fact, yeah, the fact that right here, we have a quote unquote hundred million dollar fund, but then there's $25,000 in credits. Is that part of the fund? Who's rec, is that just to get anthropic revenue when they give out those credits? I think if we, Goldman kicks this off, now the more we're talking about it, I'm kind of hoping

• 42:16Speaker 01

  this Goldman report really is remembered as, as the moment a little wind was let out of the sails of all this. Cause when I'm, when I was reading about this new hundred million dollar AI fund, it all, it read like most of the other hype cycle stuff with generative AI.

• 42:34Alex Kantrowitz?

  Right. And we have one more very hypey AI story I'm excited to get to before the end of the show. But before we do, just very quickly, there was a report today, we're recording on Thursday, that Warner Brothers Discovery is thinking about breaking itself up to boost its stock price. And basically that would mean taking the studios and the streaming platforms and putting them in one, one new company and then taking some of its channels, like pay TV channels, and putting it in another company and saddling it with debt. And Rajan, the reason why I brought this up, or I'm bringing this up, is because there's a fascinating thing that's happening here. So like the pay TV channel company would take on Warner Brothers

• 43:16Alex Kantrowitz?

  Discovery's debt. It has $39 billion in debt and it's worth $21 billion. That's its market cap.

• 43:25Alex Kantrowitz?

  Is it crazy that the company's debt is like almost 2X its valuation? Is that a normal thing?

• 43:32Speaker 01

  I mean, I think, because when they, the merger happened, I know there was a good amount of debt taken on. But I think, I mean, they're, the bankers will be working overtime this summer on this in terms of the financial engineering that's going to be required. But, but I think it is not an unreasonable thing. And let's take the, the bull case on this, that maybe the NBCs versus the Peacocks or Paramount versus CBS, like, like, maybe companies need to separate out their legacy TV networks from their streaming businesses. And maybe it's actually going to be the smart thing in the future, that the legacy TV network slowly dies off, which is always what should have happened.

• 44:16Speaker 01

  And the streaming service is in a better place from the beginning and actually is able to build a healthy business. And maybe they change the name Max back to HBO for the app and I'll be happy. And House of Dragons is still good and, and everyone, and Zaslove gets to still be just rich and powerful.

• 44:36Alex Kantrowitz?

  So let me ask you one question about this. So let's say they spin it off and these channels are their own company and the streamers are their own company. Then do the streamers have to pay the channels to like, stream the content that they're making? Like, I don't know.

• 44:53Speaker 01

  That's what it sounded like. And that, that's why I will be really interested if this goes through. And I think we'll be talking about this a lot more because, I mean, it does seem, at least on face, as you described from the beginning, that this is kind of splitting it out, putting all the crap in the legacy TV network company. And then, you know, putting the streaming service on basically letting it start from scratch or from a good place. And, and then can you imagine the conflicts of interest between Max streaming service, paying the studio for the House of Dragons episode and probably getting a good discount? Or I don't know. It's, I think if this goes through, it's going to be an interesting one to dissect.

• 45:39Alex Kantrowitz?

  Okay. So that brings us to our final story of the week, the fun story of the week, going back to a long retired segment, although we try to keep it in spirit that we end these shows. Kind of fun. All right, here's the story. Uh, this is from Semaphore. Communicate with animals win millions inside the wild new world of AI prizes. So the story says a British financier will pay millions to anyone who finds a way for humans to communicate with animals as part of a new generation of AI prizes that represent a fresh incentive to push technology forward. Uh, the investors offering $10 million to whoever can pass a kind of modified interspecies Turing test, uh, examining whether the humans can, um, end up communicating with animals.

• 46:24Alex Kantrowitz?

  Now, there are some like computer programs now, I think, or like some rudimentary things where you can speak with like, um, I think gorillas where they will like press an icon when they want food or something like that. But I think this is really meant to like really decipher animal speech. Does this get you excited? I'm pretty pumped about this.

• 46:44Speaker 01

  This gets me excited. I think for, uh, the state of the world and the first segment on politics and how it intersects with that, this is what I love. I mean, can you, I just, it's so insanely mind blowing to me that if two years from now or five years from now, you act, you actually know what a dog's saying, what a duck is saying, whatever the hell else is like, I mean, it's critically that change. Whale, I think whales have, I feel I've read something about whales being deciphered a little bit already, or maybe they just know what's like a mating call versus like a call of fear or something like that. But, but I mean, think about that just changes all of society, all of like the earth, the

• 47:29Speaker 01

  planet. I don't know that, that I think we, uh, do you think it's going to happen in? Your lifetime in our lifetime, much less, or even like the next decade?

• 47:41Alex Kantrowitz?

  Yeah, I think we're gonna get to the end of the rainbow on that. It's gonna be technically challenging. We've done a little bit about this on the show previously. But basically, you can translate languages with AI because you sort of have the code already and you just teach AI like what the sort of what the answer to the test is and just like give it more and more tests until it starts to get the, you know, the answer at 100% or close to it. But we don't really know what animals mean. So like because of that, it's gonna be a lot more difficult to sort of figure out what they're saying. But you can study them. You can watch different behaviors. You can learn different sounds and then what they correlate to and sort of take your best guess and then eventually I think you can match it to some extent and the technology will help.

• 48:27Alex Kantrowitz?

  However, this is my caveat. I think what we're gonna learn when we get to the end of the rainbow is that animals are just pretty dumb. Just like there's not a lot going on up there with these animals.

• 48:37Speaker 01

  I was just gonna say, imagine someone wins the Call or Do Little Challenge and millions of dollars. And then everyone with a pet finds out that their pet hates them and actually doesn't care about them. And is just wants food and that's it.

• 48:53Alex Kantrowitz?

  I mean, could you imagine hearing from like the zoo animals and stuff like that? But my, my perspective is I don't even think they have those, that level of complex thought. I just think like, you know, like a bark means happy, happy, happy, happy food, food.

• 49:07Speaker 01

  Which would still be kind of fun to get translated.

• 49:10Alex Kantrowitz?

  Yeah, I don't think we're gonna find any Einsteins in those animals.

• 49:15Speaker 01

  I don't know.

• 49:15Alex Kantrowitz?

  If we did, that would be freaking amazing, by the way. That would be super cool.

• 49:20Speaker 01

  Actually, or especially if we find out some animal that we don't expect is brilliant, like squirrels are just like little Einsteins running around New York.

• 49:33Alex Kantrowitz?

  If they, if squirrels possess Einstein level intelligence and they choose to pursue acorn hunting, then I've, there's something very sad about.

• 49:43Speaker 01

  Yeah, but maybe they're also spiritually that advanced as well. And that is the most centered, beautiful way to live life. And they know that the squirrels understand.

• 49:54Alex Kantrowitz?

  Yeah, they're like, they're like truly into Buddhism and they're like, we're eliminating all desire. We're gonna put those acorns in a hole underground and that's all we need.

• 50:04Speaker 01

  Squirrels haven't figured out, man.

• 50:07Alex Kantrowitz?

  Yeah, I would say probably not. That would be the smart money for me would be probably not. But.

• 50:12Speaker 01

  If you're taking a VC level bet here.

• 50:14Alex Kantrowitz?

  Um, yeah, I'm ready to be corrected. All right, Rajan. Great stuff. Thanks for coming on.

• 50:19Speaker 01

  All right. Have a good week. See you next one.

• 50:21Alex Kantrowitz?

  Have a nice weekend. Folks, I hope you enjoyed. Tune in Wednesday. I'll be speaking with the CEO of GitHub about, probably about like whether we're going to see some of the, some of the promised improvements that AI is going to bring in other fields and how, how generalizable is this technology? And then Rajan and I will be back with you again next Friday. All right, everybody. Thanks for watching and thanks for listening. And we'll see you next time on Big Technology Podcast.

• 50:47Speaker 02

  Now, more than ever, we need someone on our side. But Rob Whitman? Whitman's votes drove up costs, cut Medicaid and risked 350,000 Virginians healthcare to pay for tax breaks for himself and his donors. He's not on our side. Shannon Taylor will fight corruption, cut taxes and bring down costs. This November, vote for Shannon Taylor. She's for us. Paid for by HMP, the HouseMajorityPac.com. Not authorized by any candidate or candidate's committee.