Chris Dixon on Blockchains, AI, and the Future of the Internet

Chris Dixon believes we're at a pivotal inflection point in the internet's evolution. As a general partner at Andreessen Horowitz and author of Read Write Own, Chris believes the current internet, dominated by large platforms like YouTube and Spotify, has strayed far from its decentralized roots. He argues that the next era—powered by blockchain technology—can restore autonomy to creators, lower barriers for innovation, and shift economic power back to the network's edges. Tyler and Chris discuss the economics of platform dominance, how blockchains merge protocol-based social benefits with corporate-style competitive advantages, the rise of stablecoins as a viable blockchain-based application, whether Bitcoin or AI-created currencies will dominate machine-to-machine payments, why Stack Overflow could be the first of many casualties in an AI-driven web, venture capital's vulnerability to AI disruption, whether open-source AI could preserve national sovereignty, NFTs as digital property rights system for AIs, how Kant's synthetic a priori, Kripke's modal logic, and Heidegger's Dasein sneak into Dixon's term‑sheet thinking, and much more. Read a full transcript https://conversationswithtyler.com/episodes/chris-dixon/ enhanced with helpful links, or watch the full video https://youtu.be/CPwiK0dRFRg. Recorded March 26th, 2025. Help keep the show ad free by donating https://mercatus.donorsupport.co/page/podcastgift?utm_source=cwt+podcast&utm_medium=podcast&utm_campaign=shownotes today! Other ways to connect Follow us on X https://twitter.com/cowenconvos and Instagram https://www.instagram.com/cowenconvos/?hl=en Follow Tyler https://twitter.com/tylercowen on X Follow Chris https://x.com/cdixon on X Sign up for our newsletter https://mercatus.tfaforms.net/5060931 Join our Discord https://discord.gg/JAVWP7vTxt Email us: [email protected] mailto:[email protected] Learn more about Conversations with Tyler and other Mercatus Center podcasts here https://www.mercatus.org/podcasts.

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

• 0:04Tyler Cowen?

  Conversations with Tyler is produced by the Mercatus Center at George Mason University, bridging the gap between academic ideas and real-world problems. Learn more at mercatus.org. For a full transcript of every conversation, enhanced with helpful links, visit conversationswithtyler.com.

• 0:26Tyler Cowen?

  Hello, everyone, and welcome back to Conversations with Tyler. Today, I am chatting with Chris Dixon, who is a general partner at Andreessen Horowitz. He has a longstanding history in the tech field. He started off, in a way, as a blogger, and we now have out the paperback edition of Chris's recent book, a very stimulating and provocative read. It is called Read, Write, Own: Building the Next Era of the Internet. Chris, welcome.

• 0:53Speaker 01

  Thanks for having me.

• 0:54Tyler Cowen?

  Let me ask you a very fundamental question, so people can see where you're coming from. So if I listen to music today, not on my stereo, I'll go to YouTube and Spotify. What's wrong with that arrangement? How is it you think we can make it better?

• 1:09Speaker 01

  Yeah, I mean, so the kind of core thesis of my book, and kind of the core thesis of my career now, is that, you know, the internet began as a decentralized network, which what that meant was that if you created a website, well, let's say you're a musician, and you created a website and you sold your music, you would sell directly to the consumers. And there would be no one sits, no intermediary in between taking money from that transaction. Challenge with things like Spotify and YouTube, and just generally the structure of the modern internet, is that you've had these services pop up, which, you know, are very dominant. It's very consolidated, sort of 90% of the internet traffic runs through, you know, less than 10 services and companies. And they have very high, what we call, take rates on the internet business. A take rate is the percentage of money flowing through the system.

• 1:55Speaker 01

  Taken by the network intermediary, right? So YouTube actually is the most generous of the social networks. They give roughly 50% to the creators and take 50% for themselves. Now, that's, that's actually a low take rate on the internet. In any other area of the economy, as I'm sure you'd know, 50% for an intermediary is a, is generally a very high rate. Spotify is 30%. They also, but then of course musicians, there are, you know, many other layers of fees on top, including the music labels. Spotify's own statistics, it's on their website. They, I guess they're glad about this, the, or they think it's a good stat. Is that it's something like, I think, I don't remember the exact number. It's like 8,000 of the 8 million artists make more than $50,000 a year.

• 2:37Speaker 01

  So a very, very small percentage make something like the average American living. And like, so the question is, is that because people aren't paying for music? That's not, people are paying for music. People are, you know, advertisers are spending a ton of money on YouTube. I mean, you know, Meta and Google and these companies are making a ton of money. The, the problem is primarily, in my mind, primarily economic, that we've now sort of these, and I go through this, by the way, in detail in the first part of my book. I kind of go through the history of the internet and how this happened. But we basically, this, in my mind, and why I got into the internet was it was meant to be, it was a very exciting vision. I mean, of course, it came out of academia and government and things. But this vision that you'd have an internet that's sort of owned and operated by the people that use it. Where sort of if you visualize a network, the money is flowing to the edges of the network.

• 3:18Speaker 01

  There were all these great ideas, like there's a famous blog post by Kevin Kelly called 1,000 True Fans. And the idea was because you're removing intermediaries, you know, musicians and creative people can now make a living with only 1,000, 1,000 customers. If you do the math, if someone's paying $10 a month and you have 1,000 of them, that's 10 grand a month. That's 120 grand a year. That's a pretty good living for, you know, somebody doing something they love. That was always the vision. That's what I got excited. I got started in the internet in the 90s, you know, and, and the internet was like that in the 90s and it was like that in much of the 2000s. And then, and I go through this, and I think because of the incentives of the way these, these services were set up because of venture capital, because of a bunch of things.

• 3:59Speaker 01

  You essentially had a bunch of incentives to consolidate and, and network effects, of course, that these services get more valuable, the more people that are on it, which has a winner take all effect. And we ended up in a place, you know, you look around about 10 years ago, and we got to a place where there's roughly five to 10 services that are dominating the internet, taking all the money, taking all the- Economics and also have control, that's a whole separate topic. This is, you know, going to the topics of like deplatforming and rules. And if you go on YouTube, there's all these debates around demonetization. So in the book, I go through this, it's kind of the history of the internet, how this happened. And then what are the effects? There's economic effects, there's governance or control effects, you know? And I think more broadly, this, what it does is, for example, as you mentioned YouTube and Spotify,

• 4:42Speaker 01

  it creates real challenges for creative people. Now throw in artificial intelligence, you know, which I think is obviously an amazing technology and incredibly powerful. And I generally very excited about what it will do. But I think left unchecked, you know, on its current trajectory will likely lead to even further consolidation. It rewards companies with large amounts of data and capital and things like this. And so the reason that I'm involved with, you know, blockchains and crypto is I see blockchains as a potential counterbalancing force to those consolidation trends.

• 5:11Tyler Cowen?

  But there is a reason why the older internet dwindled, right? For me as a listener, Google, Alphabet, they've upgraded YouTube in some very significant ways. The search function is amazing. The algorithm to me is useful. It used to be you had to, you know, download a YouTube video and then you'd watch it much later. And now it's all seamless and great. Why aren't I just better off in this new world? And I left the decentralized internet behind and my music listening today is much better than it was 20 years ago.

• 5:41Speaker 01

  So kind of my argument just structurally is kind of a thesis, antithesis, synthesis. So the first, and that's read, write, own. The first era of the internet were what you're referring to, a protocol network. So that was the worldwide web and email. These were decentralized networks with no company behind them, not owned by anyone. They're really just kind of standards, sort of like a language is a standard. And actually, the case study I use in the book is RSS and sort of the fall of RSS. Like why did RSS, I mean, RSS is still around, but in a very niche way. But at one point it was, let's call it 2008, I was there, I was blogging about this at the time. It was a legitimate kind of contender like you could have imagined a world where you were getting your YouTube and other kind of, you know, and Twitter and all these other services through a decentralized protocol, not RSS as you imagine it like just like a, you know,

• 6:26Speaker 01

  bad visual interface, but as the underlying structure and then you build graphics and streaming and all these other things in it. So why didn't that happen? And I think to your point, it didn't happen because it wasn't good enough. It wasn't, it didn't offer the same user experience. And so you're absolutely right about that. Like they, these services won because they were, they were better. And look, one of the big reasons they were better was, and I have again, a case study of this in the book is subsidization. So YouTube for a very long time and, and to this day in some areas is subsidizing video hosting costs, which is very expensive. I mean, so I look, I've seen this from the other side. I've, you know, I work in venture capital for, for, I've now worked in it for, I don't know, I've been investing for almost 20 years. And, and these companies like YouTube and Twitter, they raise a lot of money. What do they spend that money on? A lot of it is

• 7:09Speaker 01

  for subsidizing the hosting costs because the basic idea, right, is these are winner take all markets. They have network effects. And so what you do is you subsidize along the way. Let's imagine 2000, you know, YouTube came out 2005, you're sitting there in 2007, you're a video blogger and you have two choices. You can set up RSS and pay hosting costs or you can go to YouTube and do it for free. Right? And that was one of the big value propositions of YouTube early on. And if you used it back then, I did. And, and that subsidization is something that those protocol networks, they're just, there, there's no company behind it. They can't offer subsidy, RSS couldn't offer subsidies. It's like a, there's no.

• 7:44Tyler Cowen?

  But isn't there some a priori reason to expect the centralized service to spend more innovating and innovate more rapidly than the decentralized service precisely because there is some monopoly profit there?

• 7:57Speaker 01

  Well, I think there's a couple of things. I think if I could get to maybe just briefly to blockchain. So I think what I think of blockchains are as a new architecture for building internet services where there is no intermediary. Decentralized is another way for saying no intermediary. Where you have very low take rates and you have sort of what I, the way I think of blockchains is the benefits of protocol networks of the old networks like, you know, the societal benefits in that the money flows to the edges, the control is by the community. But blockchains are able to do some of the things you're describing. So a blockchain can offer incentives. A blockchain can have a treasury, right? This is, this is the architecture of a blockchain. They have a thing called smart contracts and a smart contract. This is something that's sort of hard for people to get their heads around, but it's not a company or a person. It's literally a piece of code that owns

• 8:40Speaker 01

  tokens and money and can use that money to do things like the YouTube subsidization. My kind of core argument is that protocol networks are better for society. Corporate networks, as I call them, like YouTube are, have a lot of advantages, as you're describing, like competitive advantages. And blockchain networks done right can ideally be the best of both worlds. They can have the societal benefits of protocol networks, but the competitive advantages of, of these corporate networks. Now, to your point, anything that's decentralized, there are some coordination costs. And I think like a good case study there would be Linux versus Windows, right? So, you know, Linux is now, I don't know what the percentages are, but I think it's well about 90% of the operating systems are Linux.

• 9:21Speaker 01

  If you rewind to the nineties, when it was starting out, it was, you know, it was a kind of a mess. It was like on a listserv and a bunch of discord, you know, uncoordinated people. Now, you did have a very important kind of leader, bully pulpit leader in Linus. But it was sort of an uncoordinated mess. And you're right, there is overhead and coordination costs. You don't have hierarchical management structure that can be very efficient. The flip side, and why I think Linux won, is that open source benefits from what's known as composability. And that's the idea that anyone in the world can write a piece of software once, put it on GitHub as a public resource. And then anyone else can use that as a Lego brick to build another thing. I say in the book that composability is the, is to software as compounding interest is to finance.

• 10:03Speaker 01

  You know, it's the, it's this thing where like you basically just keep, you know, one person builds something and you never have to build it again and you reuse it and you build the Lego bricks up. And I, and I think that's one of the main reasons that open source has. You know, taking 90% plus market share, AWS, every embedded device you have, every data center, Android devices and so forth. So you're right, there's a different set of trade offs. Like it's tougher to coordinate building a decentralized protocol or a blockchain protocol. On the flip side, you have other benefits. You have lower take rates, you can offer incentives through tokens, you can benefit from composability, sort of everything is open source and reusable.

• 10:41Tyler Cowen?

  But there is legal free entry in this sector and people can go to Andreessen Horowitz, they can go to you personally and ask for VC money to do something. Like I recall a bunch of people told me I should try Mastodon, which was decentralized. I did, I didn't like it. Most people didn't like it. That's now a bunch of years ago. No one has come to me in at least five years and said, oh, Tyler, you need to try this new decentralized service. Like, why isn't that happening? What's the benefit the service might be offering me that's like concrete?

• 11:15Speaker 01

  Yeah, I have a section on Mastodon. I mean, I think there's architectural flaws in the whole thing. And it's, you know, so for example, if you've used it, there's this whole concept of servers and you have this very challenging problem of coordinating across servers and it's very fragmented. So that might be a separate topic. Look, I think, I think a broader thing is that let's talk about is when I think about where blockchains are getting adopted, if you look at where they're successful right now, it's mostly in financial applications. So stable coins, for example, I think that the numbers are kind of shockingly high. If you Google Visa, stablecoin dashboard, Visa is I think a pretty neutral party. They have a dashboard that tracks it. It's $3.5 trillion in stablecoin transactions last month, right? And that's been steadily going up. You know, these are people sending, so a stablecoin, just for your audience, is a, something like it could

• 11:57Speaker 01

  be a dollar or euro, but it's backed by an asset in the bank. So there's Tether, USDC. There's a bill that just made it through, passed the Senate Finance Committee and is going to be voted on the House, hopefully in the next six weeks and hopefully passed that will, that will, is congressional legislation to. Put, you know, full rules around stable coins. And I think we'll, you know, all of this growth has been happening before there was that kind of clarity. And I think that could really accelerate it. So, but the reason I'm getting saying this is that, look, I mean, so it may just be, I think there's really interesting things you can do with blockchains and social networks, but the reality is in 2025, it could just be that we have social networks, the network effects are strong, and the areas to focus on when you have new architectures like blockchains, maybe other areas. And, you know, in software, there's

• 12:42Speaker 01

  a phrase, greenfield, brownfield, right? Greenfield is, do you go after, you have some breakthrough AI or crypto or whatever, do you go after existing use cases and make them better? Or do you go after new use cases? And so what you're describing is more brownfield. Like, look, it may just be that some of the wars are fought and they're over. You know, there's 3 billion people using Facebook apps. And like, at some point, the network effects are so strong that even if you come up with something that's much better, it may just be a challenge. I'm sure some of your challenge on something like Mastodon is just that your friends aren't there, you know, network effects. So I guess to your question, I mean, I'm very excited, obviously, about blockchains in this new architecture. And I think, you know, we make investments in a lot of different areas because we like to, you know, experiment

• 13:23Speaker 01

  and try and sort of try a bunch of things. But I think, right now, the most likely areas where we're going to see increased adoption are in these areas where things are kind of more broken. And I would say that's in sort of payments, financial services. And then I think there's a lot of interesting stuff happening also at the intersection of crypto, blockchains and AI.

• 13:42Tyler Cowen?

  Well, with stable coins, once the Trump people are no longer in office, it's four years from now, but what do you think their regulatory counter reaction will be like? Because stable coin issuers, they are subject to runs, right? There's nominally 100% reserves, but there's no guarantee.

• 14:01Speaker 01

  There are 100% reserves for, in the legislation and in the USDC has 100% reserves. Tether is debated because they're not audited in the US and people don't know. They say they do, but, but the bill, the bill would actually require 100% reserves.

• 14:13Tyler Cowen?

  But why isn't the equilibrium that I have my stable coins overseas where they're not regulated? And de facto, the sector is not 100% reserves and there's a lot of runs? Why isn't that what ends up happening?

• 14:27Speaker 01

  Well, what we're hoping to do is that, I mean, in the bill, there'll be all sorts of things. So for example, if you go to Coinbase, there'll be, you know, there'll be restrictions on offering unregistered stablecoins.

• 14:37Tyler Cowen?

  But that's a US-based firm, right? There'll always be foreign firms, Estonia, Argentina, wherever.

• 14:42Speaker 01

  Sure.

• 14:43Tyler Cowen?

  That will offer me a better deal, precisely because they're not 100% backed. It'll be a higher return. I won't care about the social risk I generate by putting my funds into a more run-prone firm. Why don't we have to worry about that?

• 14:56Speaker 01

  What my hope is and what often happens, right, is so first of all, I'm not, I mean, I'm not an expert on every aspect of the proposed stablecoin bill, but there are reciprocation kind of requirements. So if other countries want to access them and participate in our financial services and KYC and AML, they are expected to have similar rules that historically our financial services regulations tend to propagate to a lot of other countries. So my hope, like my hope would be that the US does something here and a lot of other countries follow that lead and that becomes the norm. And there'll be rules, like you can't call something a stablecoin, you can't get it on a registered exchange. And so that would be my hope. In crypto, there's no question there are scams and there are bad things and I'm sure there will be in the future.

• 15:37Speaker 01

  I think that the best solution to it is to have smart regulation that incentivizes or requires things to be built in the proper way, in a way that avoids things like bankruns. Now, by the way, the bankrun thing, like, just to be clear, like, there were a bunch of stablecoins in the past, like Terra Luna, which had a bankrun and collapsed. That was not asset-backed by dollars. That was a sort of circular thing that was backed by its own token and it had a bankrun thing. So that has happened, as you say, the, the hope would be that the, you know, this sort of, these existing ones and the new ones and the regulations around them would require full one-to-one asset-backed and then therefore make bankruns impossible.

• 16:14Tyler Cowen?

  But circa 2025, we've seen a lot of international cooperation break down. So the WTO basically doesn't work. The UN, I would say, has not worked in some while. Intellectual property law, that still works. Agreements on, you know, trying to end various wars, those are not working. So it seems unlikely to me that the US could convince the world, in essence, to copy our stablecoin regulation. Even if we tried to use SWIFT, you know, we've pushed the SWIFT incentive on countries very hard. It's shown its limits. Again, why don't we just end up with these significant corners where the most profitable stablecoins are outside of what the US wants to do with them?

• 16:55Speaker 01

  Well, I think it's partly also what do you want to do with the stablecoin? Like, who's using the stablecoin? So like, I'll just give you an example, like the Stripe founders, you know, I think of Stripe as a very smart financial services firm, and who, by the way, were not particular, like, they had done crypto like 10 years ago, and then I really soured on it. I think you know Patrick and John pretty well. Sure. They had actually really soured on it, and when I saw them would say, oh, you know, crypto, so they are, you know, like, go watch them. I just watched them on the All In Podcast a few weeks ago. They acquired this company called Bridge, the stablecoin company, and they're, and they'd actually, in their annual letter, they just put out, they called stablecoins the room temperature superconductor, right? Which, of course, is like a holy grail kind of thing. They're using it for, as a, like, I don't know, I don't have, you know, their financial statements in the thing, but as they describe it, they're using it for things like treasury management.

• 17:40Speaker 01

  So I believe this example they gave was SpaceX moving money from, you know, one jurisdiction to another. A very popular use case is international invoicing. You know, you're an importer and you have to send out 50 invoices to various countries. You can now do it in a fully digital way with very low fees and very quickly. The Stripe founders, one of the interesting things they said is it's not just the lower fees. So just to give you a sense on the fees, this is as of a year and a half ago, basically, because the infrastructure in crypto has gotten better. You now, basically, on things like Base, which is an L2, and Solana, have hit the, what we've thought of as long time as a target, which is one second, one penny to transfer things, right? That's where we kind of are now, technically. If you go, your viewers, if they know, if they want to check me, they can go download

• 18:23Speaker 01

  the Coinbase wallet and try it, and you can see it. And so, you know, one of the big benefits the Stripe founders talked about is the fact that you can now, because it's fully digital, end to end, sort of like email, you can fully automate the whole thing. So like, a big problem, for example, with invoicing is invoice fraud. People send you an invoice and it's like a fake, you know, place to wire to. Now, you just, it's fully digital. Stripe has effectively what's like a reputation network. You know, one computer sends a request to the other, the other one checks it, it checks it against Stripe's database, is this a whitelisted address? And does the whole thing end to end, low fees internationally. So to your question, like, sure, will there be people at the fringes who do, who want to maximize yield? Sure, there's always that kind of behavior, probably. It's the internet, like, the internet has edges. The question is, can we marginalize it?

• 19:08Speaker 01

  And can we and will these legitimate companies like Stripe and look what I'm hoping stablecoin bill passes, you know, I think Visa will enter, Mastercard will enter PayPal will enter fidelity has already said they're going to enter Bank of America said there's going to enter. I think you're going to have every bank probably issuing, I hope, a stable coin, the way you have them issuing credit cards. You know, these all have users and customers. The banks will have a button that says send a stable coin. So what I'm hoping is that there's enough legitimate actors around this who create a network effect that to your point that yes, there will be that stuff, but it will be marginalized. Right.

• 19:38Tyler Cowen?

  In that world, should we infer that the Federal Reserve loses control of the money supply, create a stable coin, it's backed by a T bill in a funny way. It's like a private open market operation. Right. And I'm fine with that. I'm not sure the Fed controls the money supply today, but does that become a macro issue?

• 19:58Speaker 01

  Yeah, I feel like I'm talking to a famous economist. I'm on your, I'm on your territory now. It's dangerous because I'm not an economist.

• 20:06Tyler Cowen?

  But I haven't figured this out myself either. To be clear, I'm genuinely asking various people. I asked Austin Goolsbee the same question because I don't know.

• 20:14Speaker 01

  Yeah, I mean, it's like, I mean, like, I think I believe that the last stat I saw stable coins are 4% of they hold 4% of treasuries, right? So if this grows a lot, it will be, you know, it will be meaning it already is kind of meaningful, but it will be meaningful. One is I think of it more in terms of payments and all the things, you know, payments and then all the adjacent things you can do around payments versus a bank account, right? And sort of replacing, you know, folks like banks and the Federal Reserve that control the money supply. So, you know, that's kind of at least how I where I think kind of the focus should be and not like I believe in the current draft of the bill is you can't offer yield to the consumers. And I think that's something the banks are fighting for as so this anyway, this is still a political thing going on, but they don't want that because they think if you can offer, you know, essentially a treasury bill, like a

• 20:59Speaker 01

  yield and the consumer gets the yield that that will become more attractive than bank accounts. I think this will also, you know, be a question is sort of is this optimized more around payments or more around kind of savings use cases? I would also say just on a, I would also argue the other kind of national security interest here. And you've had others write about this in various editorials is it's another way to popularize a dollar. Right? It's a way, you know, it's already, we've seen the demand for it. And if we legitimize it, it presumably will make, hopefully, the dollar more popular and increase its status or maintain its status as a reserve currency. Fractional banking stuff, I probably have to defer to that as I can speculate a little bit, but it's from an amateur perspective.

• 21:41Tyler Cowen?

  When the AIs trade with each other, do you think they'll prefer Bitcoin or stable coins?

• 21:47Speaker 01

  It's a good question. We actually just made an investment. It's a, it's a agent sort of stablecoin infrastructure for AI agents. We haven't, we haven't like officially announced it yet, but I guess I can talk about a little bit. And the idea is sort of, you know, a lot of things with AI, right, is, is there's the technical side, but there's also the legal side. Like, how do you deal with KIC, AML, and liability and all those kinds? You know, there's a lot of questions that come up if you have an AI going out and doing stuff and spending money. And so that's actually turns out to be a really interesting area of innovation. And the person we just invested in is sort of a, you know, a veteran of that world of sort of the regulatory money world. Yeah, but to your point, I mean, if you're, if you're transact, you know, one of the knocks on Bitcoin as a payment system, right, is the volatility. You don't want to, you know, have something that, that

• 22:29Speaker 01

  changes value a lot when you're paying for something. But if it's a machine, a machine, presumably they can do that in milliseconds or microseconds and volatility becomes a moot issue. There's a, there's a guy, David Marcus, who was the, he ran the Lieber project at Facebook and spun out. And we funded his startup. It's called Lightspark. It's doing exactly what you're describing, which is sort of a, a payment system built on top of Bitcoin. And his argument is Bitcoin's preferable because it's, because it's not the dollar that a lot of countries will want some. It's sort of the only crypto asset that is credibly globally neutral, that no country sort of sees as the, you know, sort of a US thing or some other country thing, and therefore should be kind of the currency of the internet. Right? And I think that's an interesting argument.

• 23:12Tyler Cowen?

  I wonder sometimes if the AIs won't create their own crypto tokens and say, well, basically, the seniorage from Bitcoin has gone to early humans. You know, we can design one better because they're already smart, but they're going to be really smart. And we'll have to learn how to trade their stuff.

• 23:30Speaker 01

  People have done experiments like that, but yeah, like, once they have sort of emergent capabilities, I guess it all depends on, you know, what we allow them to do and what systems we plug them into.

• 23:40Tyler Cowen?

  But if there's anything where there's a clear cookbook, right, and you can do it digitally online, no one built crypto for the AIs, but if you had wanted to build a money for the AIs, I'm not sure you could have done much better than crypto.

• 23:52Speaker 01

  I think that's right.

• 23:53Tyler Cowen?

  How will AI change how the web is organized? Will it just be totally different in five years?

• 23:58Speaker 01

  That's a great question. A couple of things I'll say on that. And all of this, obviously, in the context of, you know, like, our firm does a lot of AI investment. I'm very, I think it's generally a great thing. The technology is amazing and impressive, and every day you see new, new amazing things. And, you know, there's these debates around whether it's going to slow down. I, my guess is it's not going to slow down, just there's so many smart people and so much money and so many different ways in which it can improve, you know? It was pre-training and now it looks like it's reasoning. And, and so, you know, it's like, and they'll probably come up with some other method in a year that, that does that. And, you know, we haven't even begun to scratch the surface around like humanoid robots and, and haven't gone deep on video and other, other forms of media modalities. I think, one, one thing I think a lot about though is the sort of economics of the internet.

• 24:43Speaker 01

  And specifically, I have a chapter in the book on this. I, I think of the internet as having kind of an implicit covenant right now between, so you have these five to 10 companies, Facebook, Google, you know, Amazon, et cetera, who control most, it's like 90% plus of the traffic and the money. And, and just to take Google as an example, there's sort of, then there's the rest of the internet, the sort of long tail of the internet. There's, you know, my blog, your blog, a cooking site, a travel site, whatever it might be. For 25 years or so, there's been this implicit covenant between the kind of distribution centers like Google and the kind of content providers like us, right? And that, and that covenant is, hey, you let us sort of fair use, you let us take a snippet of your content, you know, index it, put it in our search results and, you know, and we'll sort of,

• 25:27Speaker 01

  or let us, let people share it on my social network or whatever it might be. But the, you know, and the trade is we'll put a link there and you'll get some traffic back. And then you can have ads or subscriptions or make it free or whatever you choose to do. Right? So that's been kind of the equilibrium state that evolved, you know, that didn't, it wasn't like if people sat down and decided that, but it evolved into that. And it's worked reasonably well, I think. You know, it's worked more to the favor of the distribution side to the Googles of the world. And you see that in like, you know, Rupert Murdoch, Fox sued Google over it. A bunch of, I think Facebook just removed news in Canada because they're upset about it. So it's not, it's not that happy, but it sort of worked. Okay. What happens in a world where you just get the answer and there's no need for a link? Right. Which is kind of the world we're in now. I don't know.

• 26:08Tyler Cowen?

  Right.

• 26:08Speaker 01

  But I'm using, I'm probably using, you know, Claude and ChatGPT and all these things more than I'm using Google and.

• 26:14Tyler Cowen?

  I read fewer books also. It's not just media sites. Why read a book when you can ask for a 10-page printed report on the history of Edward III?

• 26:22Speaker 01

  Yeah, exactly. Books are a whole nother thing, but, but just the, the rest of the internet. Like, if I'm not going to click, like, why am I going to click through? I mean, look at Stack Overflow. I actually used to be on the, the board of Stack Overflow. They got acquired and I, I love the service. And so Stack Overflow is a, is a programmer Q and A site, right? And it, it, the traffic is down, I think, I don't know, 80% now, you know, because of these new. Because what basically happened is the AIs went out, trained on Stack Overflow on GitHub, and then created these amazing services like Copilot and Cursor, right? Which, which are, by the way, amazing. I actually, I use these on the weekends and stuff. I, I use Cursor. It's an unbelievable product. It, you can, you know, type a English sentence and get code out of it. But it, it obviates the need to go to these websites, right? And the traffic is down.

• 27:04Speaker 01

  And my concern is Stack Overflow is the canary in the coalmine, right? This is the first thing to go.

• 27:10Tyler Cowen?

  Of course.

• 27:10Speaker 01

  But what if, you know, what are we, in five years, are we ending up with just sort of the rest of the internet atrophying? And we have five to 10 services and, you know, look, and this is all, it will all, like, I, I love the AI stuff. It's better. I use it. But I worry that we're going to sort of look around in five years and realize we just recreated sort of a structure that looks like, you know, I don't know, broadcast TV in the 1970s. You have four channels, right? And sort of the beauty of the web, the serendipity, the diversity, the ability for somebody to just spin up a blog and, you know, this is like how a lot of my career got started. I think you did, you've been blogging for what, 20 years or something every day? You know, is that kind of the ability to do that going to be lost?

• 27:53Speaker 01

  Because there's now no way to sort of get discovered anymore because links aren't really needed, right? So I mean, on the one hand, look, it's great for people. I'm not, you know, I'm by no means anti-AI or technology. But I do think. We need to think about, and I'm a little bit surprised more people aren't thinking about, you know, what kind of internet do we want? And are we creating the right incentive systems to maintain that? And like what, and by the way, more broadly, like, look at these, this just today, the new chat GPT, was it four O image thing came out, which looks amazing.

• 28:20Tyler Cowen?

  Gorgeous, yes.

• 28:21Speaker 01

  And there's going to be, I'm sure, more great stuff like that. Like, what are we, you know, I mean, look, I, it's again, it's great, but like, what's our plan for graphic designers? What's, maybe it'll be emergent and new jobs will pop up. And what's our plan, you know, in two years, we're going to have the ability to make a Hollywood movie, one person. You know, what's our, what's our plan for all of these other, you know, jobs, parts of the internet, parts of the, you just mentioned books, like, look, I agree with you too. It's, it's easier to get that thing on Henry the third. On the other hand, you want to, you know, do we want a shrinking book industry? I think it's already kind of shrinking too much, in my opinion, book, the book industry. And do we want that to go further? I don't know.

• 28:57Tyler Cowen?

  Let's say a media company calls you in somewhere like Atlantic, The Economist, New Yorker. I'm sure you know these products, of course. And they say, well, this is happening. We'd like some commercial advice from someone who knows the sector. I mean, what, what would you tell them to do?

• 29:14Speaker 01

  Yeah, I mean, it's hard because it's, I think it's a systems problem. It's a tech, it's a tech problem and a systems problem. I'm not sure that a single node in the system, like the Atlantic. So it's really a structural, I, yeah, it's, it's a, I mean, like, I think.

• 29:24Tyler Cowen?

  But does personality driven content survive? Like, is that the innovation rather than so-called facts?

• 29:31Speaker 01

  Well, okay, like one very common pattern with technology is death of the middle barbelling. Right? And so just to give you, give you, maybe you probably know this, but to give your listeners context. What that means is, you know, you have, so the internet pops up. And before the internet, you had a lot of midsize retailers like JCPenney and Sears and other sort of, you know, those kinds of things. Internet pops up and what happens is you get this barbelling effect where you either want to be really, really big, like Amazon and Walmart, and take advantage of scale. Or you want to be boutique, high-touch, high-brand value, Gucci.

• 30:06Speaker 01

  You know, Hermes and so forth. And in fact, the two, right, the two sort of biggest winners of this era from a stock perspective were Amazon and LVMH, which is a private equity style roll up of those high end brands, right? And what and who lost? It was the people in the middle, right? It was Kmart, Sears, all those sort of companies that went bankrupt. Why does that happen? Because technology tends to unbundle like, because basically they were Kmart and Sears were kind of this artificial bundle in a sense of distribution, merchandising, you know, you had, you, you, you could bring this stuff to them, but not all the way to them, the way Amazon does. And you had a little bit of service and you had sort of all this stuff in the middle, right? And once you had this new tech, you could kind of unbundle this and you can go all scale or all high touch, right? I think the same thing has happened in media. We've had a bar belling effect and the winners have

• 30:51Speaker 01

  been either like 30 second dopamine hits of Tik Tok and Instagram reels or three hour, you know, podcasts, right? Or high end, you know, severance and high end, long form content, right? And what, and what suffered generally has been the 30 minute sitcom, the, the middle, right? The 30 minute, you know, game show, the, right? So it's either, and that, and that matches human needs, right? Like you're in line for, to buy something and you want a couple dopamine hits and you watch Tik Tok and then you're, you know, want to lean back and get something and you want a three hour, I think that surprised a lot of people how popular three hour podcasts are like Joe Rogan, Alex Friedman, right? And that's because that sort of, that's the other kind of need. And this turned out these 30 minute things were just there kind of artificially because of the constraints of the medium of TV and

• 31:33Speaker 01

  things. So I think to your question, like I haven't, I don't have like deep thoughts on this, but I think that my default answer for media would be, would be you're going to have a bar belling effect. You're going to have highly automated, scaled out, AI driven content, you know? And so somebody comes up with a, you know, new Star Wars thing and you have a whole, you know, Reddit community and they're all like building these AI created, you know, serial movies and things, right? My expectation is you'll have, on the flip side, you'll have rising demand for, for very kind of bespoke human things. That could be, you know, live, like we've seen this, like live concerts have become more popular. The sphere, right? Of machine creative music, you know, fine art, like bespoke and crafted books, you know, like, I don't know, like, right? I mean, you know, this, people say this all

• 32:17Speaker 01

  the time, that chess is now more popular than ever, even though AI is, you know, better than humans in chess. Like there is, in the end, we're monkeys who like other monkeys and like, you know, like there is this sort of fundamental human nature that doesn't change. Machines can do very powerful things and can be useful, but I think, you know, That would be my naive default assumption is that is that I think like I think the other really interesting thing with media that I think about. So when film came along, like the first cameras and photography, you know, there was these famous essays like art in the age of mechanical reproduction, but Benjamin and like, there was all this kind of discussion of like, what is the future of art now that we can take a picture like, where's the, what's the role of the artist, the representational artist? And of course,

• 32:59Speaker 01

  you know, that the rise of photography coincided with art becoming abstract and, you know, all those sort of modern art movements. And so in some sense, the camera did replace, did replace the representational art. But another thing happened, right? Which is a new medium was formed, which is a, you take a photo and you take a series of photos and you make a film, right? And so you had two things happen when the camera, when the camera developed, right? You had the old medium get sort of replaced and, and of course, high art then sort of pivoted into, into abstract art. But then you had a brand new medium that simply couldn't exist before, right? And that was film. And a whole industry created around it. So like, one thing I like to think about is when I think about

• 33:40Speaker 01

  media is, you know, so maybe AI will be like the camera and it will replace it. It'll replace illustration. The role of the illustrator will go away and AI will replace it. But on the flip side, maybe it will enable a new sort of AI native form of media that couldn't have existed before.

• 33:56Tyler Cowen?

  What will AI competition for A16Z look like? You have an AI competitor. What are they like?

• 34:03Speaker 01

  Yeah, well, it's funny. It's a good point. I mean, like, I think, well, what is venture capital, right? Venture, I mean, that's a good sort of question. Like, there's, there's, there's different sort of venture capital today is a bundle of services. It's a, there's obviously the sort of choosing, well, we raise money and then we go sort of there's some picking aspect of like choosing what to invest in. And I think in that picking aspect, I think AI could do a very, very good job and probably beat humans in a lot of ways in the near future. There's another aspect, and this is, I think, one of the smart things about, about what, you know, my, the founders of the firm Ben, Ben and Mark did, is there's a very human aspect to what we do, right? There's a high touch human aspect. So a lot of what we do is, and a lot of how we think we succeed is we create a culture and a group of people where

• 34:47Speaker 01

  Entrepreneurs decide they want to work with us. Again, we provide all these sort of, we spend a lot of our fees that we make instead of on our own salaries on a set of people that help them, right? And so

• 34:56Tyler Cowen?

  But can't AIs do that? They're great therapists, right?

• 34:58Speaker 01

  They can, but at some point you always need, like I said, you're always going to need some, somebody to, to design and, or at least for some foreseeable future, you're presumably going to need someone to help you build and design the robots and think of us as playing the role of advisors to the people that are, that are building the robots. And hopefully there will be some role for that, at least for some period of time.

• 35:18Tyler Cowen?

  If an AI applied for funding, let, let's say it was legal in terms of the bank transfers. I mean, would you consider the proposal?

• 35:26Speaker 01

  I think, I think right now they're limited and they can't, they just can't do stuff like they can't open a bank account. They can't send money. But yeah, I think it's, I think it's

• 35:34Tyler Cowen?

  Well, they'll do it with crypto, right? And maybe this is in two years from now, you'll get a proposal from an AI and you'll get the AI quote unquote on the phone, the Zoom call. I don't even know how you would do it. Maybe you just refer to your AI.

• 35:48Speaker 01

  No, we've been, I mean, we've been actually talking about it semi-seriously. Like, I mean, we haven't done anything yet. I also had this, like Mark and Drissa and I were talking about, you know, should you, you know, should there be like a nonprofit that's built on a blockchain that, you know, is sort of like what, were you involved with the Fast Grants thing?

• 36:04Tyler Cowen?

  Yeah.

• 36:04Speaker 01

  Yeah. Yeah. So like I, I thought that was really interesting and inspired by that, but imagine Fast Grants, but it's a blockchain version that uses AI to give out the grants as an example. Like that's actually something that we were just, I mean, it was just like a brainstorm. I'm not, it's like a serious idea, but, but that type of thing, right? Like,

• 36:18Tyler Cowen?

  You could call it Faster Grants, right?

• 36:21Speaker 01

  Yeah. No, I thought what you did was really inspiring and like, you know, I had this, I had this whole, I actually wrote out a business plan. I haven't done it, but I, and it was like you, you have a Dow. So this is a, like a entity on a blockchain, sort of an autonomous entity on a blockchain. And it's sort of like, think of it like an endowment does. So if you go to like Yale or Ford Foundation endowments, like I, first time I learned this is when I raised venture capital. I walk in there and I'm like Ford Foundation, aren't they this, this organization that gives away money? Well, they have this other side, right? Which invest money. So, so endowments are sort of two things, right? There's invest the money and give away the money. And they're very different and like the invest the money, they wear suits and give away the money. They don't. And it's just like two different organizations. And so the idea was could we create a blockchain autonomous AI entity that is like an endowment? And so half of it is like investing

• 37:04Speaker 01

  and you're investing in tokens and this and that. And the other half is giving the money away, à la Fast Grants, right? So that's actually an idea. I think it's pretty cool. And if someone did it, I'd be excited to help out. I haven't gotten around to it, but I do think that might be like a future thing. And so, and the idea, right? What's cool about an endowment is if it invests well, it can, it kind of just snowball and just get, have more and more money. And then you use the kind of some portion of the returns every year to give that out. And hopefully it just becomes this kind of self sustaining thing, the way that like university endowments have.

• 37:33Tyler Cowen?

  If I ask you, how will AI change politics? What's the most confident prediction you have?

• 37:39Speaker 01

  Well, you know, generally, I mean, I'd love to ask your question on this. I like, I say, well, a couple of things, like, one, I think there's going to be a lot of political drama around AI in the next couple of years. First of all, and this is, this is not AI changing politics, it's politics potentially changing AI. Maybe it's a little bit of a different question. Like, I think that you're going to be issues around copyright, safety. I think these, I, I believe these are not going to be settled in the court. They will be settled in Congress, like they are too important. I just sort of went through this with crypto, like we just had four years of kind of regulatory struggles in the courts. And now it's going to probably be decided in Congress. And I think ultimately the same thing will happen in AI because it's just too important. So I just think that that's, that's one topic.

• 38:18Speaker 01

  I guess I would say another thing is I would say is I'm, I wonder, one thing I think about is how many problems in the world are intelligence problems? Versus political or coordination or regulatory problems. All right. So like, you know, building housing is a hot topic right now. Is, does more intelligence help us build better housing?

• 38:36Tyler Cowen?

  Probably the opposite because the smarter people lobby harder to stop it.

• 38:40Speaker 01

  So I, I would argue, right, housing is more of a regulatory, or you could argue a collective action problem, probably collect, would you say collective action?

• 38:48Tyler Cowen?

  Sure, yeah.

• 38:49Speaker 01

  I think it's a collective action problem, right? You know, does AI help with that? Maybe, you know, I don't know. I, I like, I think AI can do a lot of really, really interesting things. I do think a lot of the most challenging things we have in the world right now, and a lot of the kind of gating factors to productivity growth, economic growth are actually, and just human well being, I believe, are kind of collective action problems, coordination problems, getting people to agree on something. You know, AI could look at the internet, how did the internet change politics? The internet changed politics by changing the way information flows, right? And I think we're only beginning to see the effects of that. I think one way to think about the internet is like, technology always has sort of first order and second order effects, right? So like the first order effect of the automobile was you can get from point A to point B faster.

• 39:34Speaker 01

  The second order effect was suburbs, trucking, highway system, you know, sort of all the next 50 years, right? The first order was like, go somewhere faster, that's 1900 to 1930 or something, and then, I don't know when it was. And then like, the next era was like, all of the sort of second order things, right? So I think with the internet, the first order thing with social media, I can tell people I had a burrito for lunch or something like this. The second order is, you suddenly have a whole different political dynamic, right? You can have an insurgent political movement, like Trump or Bernie Sanders or something that comes, you know, that that sort of bucks the system and counters the establishment. You can have a whole narrative universe that counters, you know, you have COVID and you have the establishment's world, and then you have the podcasting version of it. And it, you know, it restructured how information flows, and you, people obviously will debate

• 40:19Speaker 01

  whether that's a good or bad thing, but it's clearly had that, and I think we're in the very beginning of that, of how the, you know, my view is like, we're probably, you know, really, the social media didn't become a mainstream thing until smartphones probably, I mean, mainstream is in the sense of like, 3 billion people, probably until 2012 or something. So we're still, you know, relatively early in that, in that development. Now, AI, I think a big question, like, for example, maybe, you know, it's very possible in five years that people get all their news and political information from an AI. You know, who created that AI? Was it created by, you know, someone with a political agenda? Was it open source? Like, I think, I think AI, open source AI, if I, you know, if I can pick one issue that will make the AI future better, my own belief is that, that we have very strong open source

• 41:03Speaker 01

  AI, so that we can have, it can be, you know, people can have a choice, it can be audited, it can be open, our kids will be top AI, the news will be formed by AI. So to your question on politics, I mean, politics is downstream of culture and information flows, and AI will, will reshape that. And, and who, who controls that reshaping? To me, seems like the key question.

• 41:28Tyler Cowen?

  As you know, not many countries have serious AI companies, and even those in Europe may or may not last, right? They're not obviously mega profitable. So let's say you're the government of Peru, and you can turn over your education system to some foreign, maybe American AIs, you can turn over how your treasury is managed to the AIs, you can turn over your national defense to the AIs, and none of these are Peruvian companies, most likely.

• 41:56Tyler Cowen?

  In the final analysis, are we even left with the government of Peru? Or is it in some sense been pseudo-privatized to the companies that are running the structures? And indeed, to the AI itself?

• 42:07Speaker 01

  Well, this goes to open source, right? I think it's, I think you're answering the question.

• 42:10Tyler Cowen?

  But even open source is managed by someone, right? Like, a version of DeepSeek is embedded in Perplexity. That's worked great. It's still someone's company.

• 42:20Speaker 01

  I think you have a great question. I do, I do think it's different if they can get the open weights of DeepSeek and, and the Peruvian people and government can, you know, fine tune or change those weights and decide on. I do think that matters. So just, you know, I'm not trying to dodge your question, but I do think that architecture there really matters, right? Are you getting, or do you have, maybe, maybe not every country has the ability to do that.

• 42:41Tyler Cowen?

  But maybe without open source, we only have two countries left in the world, US and China.

• 42:45Speaker 01

  Yeah.

• 42:45Tyler Cowen?

  It's possible.

• 42:47Speaker 01

  Look, I think.

• 42:47Tyler Cowen?

  If you want an argument for open source.

• 42:50Speaker 01

  Economic planning seems like an obvious thing that you would, that you would involve AI in, right? I mean, that's just seems like a first, and one of the first things you'd want to do in government eventually is have AI do, you know, set your interest rates and your, to the extent your central planned economy, decide on your, you know, production schedules and pricing and such. You know, if you bought an AI, an economic planning AI module off the shelf, presumably it would be pretty opinionated on how to do that. And the person who creates those opinions would have immense influence. Again, though, I think those countries will insist, I think that one of the reasons that open source will eventually be a dominant, one of the two dominant model, it will be, it will be competitive with proprietary AI is partly because of the questions like this. I think these governments and a lot of companies will demand open source.

• 43:34Tyler Cowen?

  But even then, it seems there's room for intermediaries. So if you just passed DeepSeek or Lama over to a relatively poor government, you know, again, take the case of Peru, they need a McKinsey-like entity, which is maybe the AI company itself, to come in, tell them how to use it, how to integrate it with their systems. Does this mean American soft power has just won? Like, it's either America or China?

• 44:05Speaker 01

  Look, I think there's a, I think there's a.

• 44:08Tyler Cowen?

  It might be a good thing, too. You know, if everything in Peru is run by American AI companies, the quality of life will be much higher. I think they may not like it.

• 44:17Speaker 01

  I do, you know, I think Peter Thiel said crypto is, what did he say? Crypto is libertarian and, and AI is, is, you know, socialist or communist. I think what he meant was.

• 44:27Tyler Cowen?

  I don't think either of those is right.

• 44:29Speaker 01

  I think, I think the, I think the twist I would put on it is AI is tends to be centralizing. It tends to be consolidating power, I do think. And, and I think you're making that point, which is the people that produce these things, if they're very powerful things that, that manage much of the world, being one of the countries and companies that produces them seems to give you immense power. I think that's what makes like the China move into deep seeking thing very interesting, right? I mean, well, I mean, there's a number of interesting things about that. Like one is the fact that they are so competitive so quickly and with a relatively small team and all the other things. I mean, I guess we shouldn't be surprised. There's a lot of brilliant people there. But the second one is the strategy. It seems like, you know, sort of taking this kind of, this kind of counter strategy of doing open source and we'll see if that lasts. And like what we haven't seen yet, I would expect India is

• 45:13Speaker 01

  going to have some interesting stuff, you know, Russia. I mean, there's a lot of smart people in the world and the fact that DeepSeek with what is it like 150 people? I mean, it may be, and look, it may also be, there's another, I think another thing which we may be trending towards, which is AI is incredibly important, but it's also just kind of a commodity. The foundation models, you know, it doesn't mean there won't be businesses. There'll be businesses at the, I think that, I think actually the emerging consensus sort of in, at least the people I talked to, is that the value, you know, you're going to have cloud providers like AWS and such, and you're going to have, you know, of course, like end user applications like, you know, Cursor and whatever, some lawyer will have their law firm thing and, you know, every sort of vertical will have their product. But it may just be

• 45:56Speaker 01

  the foundation models end up being like, you know, PyTorch or whatever, like, you know, math libraries. It's essentially, it's large scale statistics. It requires heavy engineering, of course, to do the training. But the sort of tricks and secrets end up propagating and a bunch of people know them. You know, it's sort of, it's, it sort of becomes kind of very large scale statistical analysis of, of data source sets. Right. And just a lot of people have it. It may be.

• 46:22Tyler Cowen?

  What do you, if that comes about, what do you think is then the dimension that determines which companies dominate? So one argument could be, well, Meta and Elon, they just have a lot of resources. They can be in this for a long time. Another argument is, well, OpenAI has the most powerful brand name with ChatGPT and so on. But what's your commercial intuition on what other factors steps into play?

• 46:44Speaker 01

  One framing I would say is, so if you compare the internet to mobile, right? Both were smartphones, right? The, the rise of the internet in the nineties, the rise of smartphones, late 2000s, early 2010s. Both were massively important technical movements. A big difference was with the internet, I would say, you know, something like 90% of the net new value, sort of market cap value, went to startups, went to new organizations that didn't exist before the internet. Amazon, Google and such, right? With mobile, night, on the flip side, 90%, I, something like 90%, I haven't done the exact study, went to incumbents. Right. The biggest sort of pure mobile startup is probably Uber. I think it's like 100, whatever it is, 150 billion dollars.

• 47:27Speaker 01

  There was Snapchat, you know, Instagram got bought for a billion. But the vast majority of market cap kind of value actually went to incumbents. If you look over that, what it did for, you know, Apple, Google, Facebook and all the other, Amazon, they all did fine in that era. They created mobile apps, they leaned into it. And their user base went from whatever desktop was at the time, you know, home desktop, let's call it 400 million to 4 billion. So a 10x. And if you look at the stock, by the way, the best, it's very hard. Almost no venture firms over the 2010s beat the strategy of buying Apple stock.

• 48:00Tyler Cowen?

  Or the Boston Celtics.

• 48:02Speaker 01

  Yeah. So like that turned out to be the winner of the mobile era with the incumbents. And so I think one, one way to frame your question is. Will AI be like mobile or like the internet? Will it be a techno, you know? And so, and like, the concern would be, the concern, quote unquote, I work in venture capital, I'm biased, right? The concern, I've invested in small companies. The concern would be, it's more like mobile. And that it just ends up reinforcing the strengths of the big companies. Google and Microsoft and Facebook, they have more data, they have more money for the training, they have the infrastructure, they have the distribution. Right, they, you know, how, how is somebody going to create a competitor Facebook? They'll just make, you know, Lama's already great and they'll pump it through all their channels. And so will Google and they have more data and so, so forth.

• 48:44Speaker 01

  But that, that would be the sort of the, I don't know, the degenerate outcome from the, from the venture capitalist perspective is like. Look, it could be great for the world, though. You know, it could be, I, I think it's, I think it's, the consume, a lot of this will be consumer benefit, consumer surplus, I think. And that's good and I'm happy about that. And if, you know, and we'll, we'll always find things to, you know, there'll always be some vertical thing or some other thing for VCs to invest in. So I think that might actually be a really good societal outcome.

• 49:09Tyler Cowen?

  Do NFTs have a future?

• 49:11Speaker 01

  One of the things a blockchain allows you to do is to create digital assets. Right, this is sort of one of the unique things is you can create a, you know, Bitcoin is a digital asset that, that exists on a, on a blockchain. And those digital assets can be either fungible or non-fungible. Fungible means, you know, interchangeable, it's like a currency, any Bitcoin can be exchanged for another. Non-fungible means it's a distinct asset. And so, do, you know, do blockchains have a future? Of course, I believe yes. And then on those blockchains, will you have some assets that are fungible and some that are not? I think definitely. When people think NFTs, they think, you know, people buying JPEGs. That may or may not come back. The idea that people will have, you know, digital assets that, for example, could represent a movie ticket, an NFT.

• 49:55Speaker 01

  It can represent a physical, a lot of people are doing, a lot of people are doing this now where they represent like a pair of tennis shoes or a piece of fine art or some other, you know, housing deed or some other. If we have a future, which I'm, I hope for and I'm pushing for of, of. You know, people transacting with digital assets on blockchains, I think very much that some of those will be non-fungible. And I think some of them will be also purely digital. Like we're seeing a bunch of these people doing like make video games and you have a, you know, sword or a gun you can buy and it's NFT and you can resell it and do other things. And so as the digital world becomes more and more important, you have, you know, you'll have virtual worlds, you'll have metaverses, you'll have these kind of worlds like Roblox and, and many more variations of things like that. You will have, I think, digital assets

• 50:40Speaker 01

  in those worlds and some of those, and I think a better, you can have those either locked inside of the game owned by the game maker, or you can have them on a blockchain where the user can move them around and control them. I think that's a better architecture. So the answer is yes, but, but in the, in the true sense of NFT, not in the kind of caricatured sense that ever, that people think about associating with the kind of 2021 bull market.

• 51:02Tyler Cowen?

  Won't NFTs become the property rights system for the AIs?

• 51:06Speaker 01

  I, I think that's, I think that would be a good outcome. I think it's the right way to do, it's basically what, the reason my book's called Read, Write, Own is, is that read, sort of read and write is a common phrase referring to the first two years of the internet. And my argument is that if this era, if blockchains are successful, this era will be about ownership, digital ownership. And so blockchains enable digital ownership and that ownership can be something digital, something that's digital that represents something non-digital, like a, I mean, non-digital, like I was gonna say a stablecoin, whatever, like something in a, something off blockchains, like in a bank, maybe something in the purely digital world. I think it's the right way to do, to represent digital ownership. One way to think about the internet today is it's sort of this world in which, you know, it's sort of like imagine the offline world where you could never own something and every

• 51:48Speaker 01

  time you go to a new venue, you have to change clothes and use all their stuff and you can't take it anywhere else. It's this weird structure on the internet now. You go to Twitter and you gain followers and yet they own your followers and they, you can't take them with you and you go to play a game and everything's stuck inside that game. And the idea sort of, the, one of the ideas with the, in the blockchain world is we can, we can shift that power back and the user can actually sort of have this persistent inventory of things that they own and control. That's what a crypto wallet is. And you can take that to different services and you unbundle the ownership of the data from the provision of the service.

• 52:21Tyler Cowen?

  What's your favorite book in philosophy?

• 52:24Speaker 01

  I've actually been getting back into philosophy lately. I did it philosophy years ago in grad school. Favorite book, man. Do you read? Are you into philosophy?

• 52:31Tyler Cowen?

  Of course. Yeah. Plato's Dialogues, Quine, Word and Object, Parfit, Reasons and Persons, Nozick. Those are what come to my mind right away.

• 52:40Speaker 01

  Yeah, so I did analytic. I did analytic philosophy. I actually was in a grad school program and dropped out. I did analytic philosophy. So actually, Quine was one of my favorites. And that Word and Object and like two dogmas of empiricism, all those kinds of things. I like Donald Davidson, Nozick, I love Anarchy State and Utopia. Reading that with Rawls is a great pairing. I used to love Wittgenstein. So you know, both early and later.

• 53:02Tyler Cowen?

  Both, yeah.

• 53:02Speaker 01

  Yeah, I was into logic. So like Fraga, Russell. But now, this was a grad school. Now, I'm actually, I'm trying to finally understand continental philosophy. I never understood it. And I've actually spent the last three months is sort of in a philosophy phase. I've been watching a lot of videos. Highly recommend. You know, Brian McGee, amazing.

• 53:18Tyler Cowen?

  Sure, yes.

• 53:18Speaker 01

  I watched all of his videos. This guy, Michael Segru, is a Princeton professor. Great videos in continental philosophy. I've been reading, that's a town pretentious. Like, I'm not saying I understand this, or I'm an expert on it, but I'm struggling in reading it. I'm trying to read Being in Time right now with Heidegger. And so I could say when I did analytic, I mean, probably like Wittgenstein. I really like Kripke. I follow Kripke. I liked his books a lot. Nelson Goodman was one of my favorites. Fact Fiction Forecast. Funny enough, I just bought it again. Fact Fiction Forecast. Kripke, there's a Naming and Necessities is kind of legendary book on reference and language.

• 53:51Tyler Cowen?

  I've never been persuaded by that one. It always felt like sleight of hand to me. He's very, very smart. He might be the sharpest philosopher. But I like the book on Wittgenstein better.

• 54:01Speaker 01

  He basically invented modal logic. I don't know if you know that story. He was like in high school.

• 54:05Tyler Cowen?

  He was 15 years old, I've heard, yes.

• 54:07Speaker 01

  He's like a true prodigy. Well, Naming and Necessity, I mean, like a lot of philosophy, you have to take it in the context. Like Naming and Necessity.

• 54:16Speaker 01

  I think of it as a response. Gosh, I'm forgetting all the whole history of it. But it was kind of a, as I recall, it was a response to the descriptive theory of reference, like Russell, you know, so you would have anyways. And so it's kind of like you have to re, I think you have to take these things in a pairing. I was just actually last night, I was with a group of people, a guy, a lecturer on philosophy. And it was great because he went through, it was Hume, Kant, Hegel, Nietzsche. And like, I don't want to go too much into a lot, but I, but like, I've always struggled with Kant. And, and then he, then he went into Hegel and explained this sort of Hegel kind of struggled with Kant in the same way that I did, and then improved on it. And so for me, these are always, and I'm not trying to go into

• 54:58Speaker 01

  the details of this, it's too much. But the point is, for me, a lot of it has to be taken in like, as a, as a dialogue between thinkers over multiple periods. And so

• 55:06Tyler Cowen?

  Are you getting anything out of Heidegger? Because I sometimes say, I've looked at every page of that book, but I'm not sure I've read it.

• 55:13Speaker 01

  It's a good question. And I have a friend who's really into it. And we spent, we've been spending time together and he's trying to teach me. Yeah, I guess, I would also, if you want, I'll send you some videos that I think are really good.

• 55:23Tyler Cowen?

  That'd be great.

• 55:24Speaker 01

  So that they've helped me a lot. I like, I've always got it from like, an intellectual history point of view. Like, if you want to follow kind of the history of postmodernism, so like, there's like Heidegger, and then Derrida, and just sort of, you know, what's going on in the academy today with, you know, relativism, and, you know, discourse and hermeneutics, and just like, you know, I think it's modern political implications too, that were really probably kicked off by Nietzsche and then Heidegger, right? And so I've always sort of understood in that sense. I think what I struggle with, and I understand him as a theory of psychology, I think of like, describing the experience of the design and being in the world. And like, to me, it's an interesting theory of psychology, sort of how do I experience, like, you're thrown into the world, you don't know, this whole

• 56:06Speaker 01

  idea is very appealing to me, like, and then just that whole kind of story he tells, you're thrown into the world, ready at hand versus present at hand. I think this idea of like, knowing how versus knowing that, sort of different kinds of knowledge is a very interesting idea. Do you, do you watch John Vervake?

• 56:22Tyler Cowen?

  No.

• 56:22Speaker 01

  I highly recommend, he's got his 50 part video, 50, 5, 0. You'd like him. He's a philosopher, cognitive science, really smart guy. And he's got a 50 part video on the It's called Awakening from the Meaning Crisis. I've watched like thirty of them or something. And the idea is sort of, you know, that modern, in the modern world, we sort of lost religion and lost philosophy. And now people are seeking meaning in their lives and they're, they're finding it through drugs and I don't know what video games and whatever. And that we should go back and look at all the great thinkers and see what, how do we find meaning and sort of is this mission of it. But he's very, he's very sophisticated on the philosophy stuff. And he goes through the fifty parts as like Aristotle, Plato, you know, Buddha, Jesus.

• 57:06Speaker 01

  Like it's just like literally every great thinker. And how do they think about how you find meaning in life? Very, very interesting. Oh, and so a big part of his thinking is sort of, there's many different ways of knowing. And one of the things that we've done in the modern world is we've forgotten that there's more than just propositional knowledge, more than just knowing that. There's knowing how, right? There's no, and like religious traditions are very good at knowing, at, at embracing multiple kinds of knowledge. That's why you don't just have, right? Like this is the mistake that the Redditor makes about analyzing Christianity. Look at it as a set of propositions, when in fact it's a way of, it's a form of life. It's about a community, a community co-development and meaning rituals and like, you know, so I, I think the Heidegger stuff's very interesting on those topics of like different kinds of knowledge.

• 57:48Speaker 01

  And I, I guess I just am very interested in like, in, you know, we, we all, you and I am sure have this sort of default naturalistic, physicalist, scientific worldview. And, and I'm interested in sophisticated thinkers who have a different worldview and trying to understand it. And I think, I think about, you know, John von Neumann had this great phrase. He's like, you don't, someone asked him about set theory. He said, you never understand set theory, you just get used to it. And I think that's true of a lot of these other alternative philosophies is like, like it's not like there's gonna be like one argument you're gonna read in Heidegger and you're gonna be like, oh my God, I, I, my worldview changed. Like you just kind of have to submerge yourself in it. And that's what I'm trying to do of like a year, that you just kind of keep, keep seeing it from different angles. And then hopefully you eventually get kind of a good Schultze switch and you start to see the world maybe through a different lens.

• 58:34Tyler Cowen?

  And if you had to say, not what you like in philosophy as philosophy, but what in philosophy has stuck with you when you make venture capital decisions, what would you cite?

• 58:45Speaker 01

  One thing I like about philosophy is like the move, just like the, literally the moves they make. It's almost like a chess game, right? Like they're just very like nuanced argument style, you know, like, like I only recently hesitated. I don't know how much you want me to go down this path, but like.

• 58:59Tyler Cowen?

  No, BBs nerdy as you are.

• 59:00Speaker 01

  Well, like Kant's, uh, can you, are you familiar with the Kant's synthetic a priori?

• 59:05Tyler Cowen?

  Sure, yeah.

• 59:05Speaker 01

  Right, okay, so like, like this is just a really interesting, so like, so, so Hume comes along, so actually it was really Locke, but then Hume comes along and says, okay, like, let's, let's analyze how we get knowledge. And he says, there's really just two ways you get knowledge. You get knowledge through what he called relations of ideas or matters of fact. So sort of, you know, math, right? It's just like you can kind of, you could sit in a room and think about the, the numbers and, and decode. Or all bachelors are unmarried is a famous example. Like it's, it's embedded inside of the words that to be a bachelor is to be unmarried. That's relations of ideas. And then there's empirical matters of fact, right? And that's things we go out and, and, and see in the world. And so Hume asked this, you know, the famous skeptical question, okay, well, if that's the case, where does something like induction fit in, right? Where does causality fit in? Where does time and space fit in?

• 59:51Speaker 01

  Because they're neither, you know, purely true based on the relations of ideas. And it would be circular if we learned induction through induction, right? Like, how do we know that, you know, the sun will rise tomorrow? Well, it's always risen in the past. Well, how do we know the future futures will be like future pasts? And kind of goes through the whole skeptical argument, right? And then Kant comes along and says, okay, that's right. But what that means is there, there are other preconditions for knowledge, which is a really interesting move. Because what he's saying is, I mean, this is the, what a transcendental argument is, right? If you're not kind of going from premises to conclusion, you're going from premises to preconditions to those premises.

• 1:00:29Speaker 01

  Right, so I'm just giving you an example, like that move, that, that kind of plasticity of thought, like that is just a very like, like I almost, when I first saw that, I was like, can you do that? Like you can go and like, so he says, look, you can't fit.

• 1:00:41Tyler Cowen?

  I'm not sure you can do it, to be clear.

• 1:00:43Speaker 01

  Well, no, I don't, not either. But he's like, you can't fit causality, this Kant's favorite, I think, but then induction, a whole bunch of things that we just, that are our modes of intuition. You can't fit them into Hume's two buckets. And so then he argues, of course, you know, 300 pages and very nuanced that therefore there must be another bucket, right? There must be this other precondition of thought, the modes of intuition. And then he derives this whole kind of beautiful system outside of, out from that. And then, you know, Hegel comes along and changes that, changes some of the precondition. So I think just the, I just feel like I learned when I did at least in grad school, just like this kind of freedom and I guess I use a plasticity, I don't know, just like the kind of the, like you kind of learned how to do these moves and meta moves, like intellectually that I find really interesting. And it just

• 1:01:28Speaker 01

  forces you to really think, like you can just sit there. I've spent like an hour just sitting there and trying to understand these ideas. And I, sometimes I feel like I don't. And it, and it just really forces kind of intellectual honesty on you. I don't know. I, so it's almost like meta. Like I honestly, I've read philosophy for years and I don't know if I've ever actually gotten any conclusions out of it. I think there's just like, you can sort of see both, so both sides and you can, I could feel like I can argue both sides. I feel like that about a lot of things and, and like politics too and things. I feel like I can argue, I can give a pretty good argument for a bunch of different things. And, you know, I don't know. I think you get better at analyzing and understanding all the things and that philosophy helps you with that. I don't know if you actually get answers.

• 1:02:08Tyler Cowen?

  Before we say goodbye, I'd like to recommend Chris's book again, Read, Write, Own: Building the Next Era of the Internet. Chris Dixon, it's been a pleasure.

• 1:02:17Speaker 01

  Thank you. That was a lot of fun.

• 1:02:22Tyler Cowen?

  Thanks for listening to Conversations with Tyler. You can subscribe to the show on Apple Podcasts, Spotify, or your favorite podcast app. If you like this podcast, please consider giving us a rating and leaving a review. This helps other listeners find the show. On Twitter, I'm at Tyler Cowen and the show is at Cowen convos. Until next time, please keep listening and learning.