Fable Ban Reversed + Dr. Dana Suskind on Parenting With A.I. + Prediction Market Drama

What we learned from the government’s biggest attempt yet to control who can gain access to the most powerful new A. I. models.

• 0:00Speaker 00

  Support for this podcast comes from Dell Technologies. It's time to put AI to work. Is your business ready? The challenge isn't getting started with AI. It's scaling beyond pilots while maintaining control of your data, governance, infrastructure, and costs. Dell AI Factory provides the integrated foundation you need to scale AI securely and efficiently with one trusted partner, Dell, AI on your terms. From idea to impact. Learn more at dell.com/yourwaytoAI. That's dell.com/yourwaytoAI.

• 0:35Speaker 01

  So Casey, we are back in the office after vacation, and I was going through my mail this morning, which is usually just junk and books that people send me.

• 0:43Speaker 02

  Letters from prisoners.

• 0:44Speaker 01

  Letters from prisoners. But today, I got a letter that was neither a book nor from a prisoner. It came from a seventh grader who wrote to us. He said, Dear Casey and Kevin, I am Nathan Herrick, and I'm a seventh grader at St. Peter's School in Cambridge. He says some very nice things about the show.

• 1:03Speaker 02

  Well, let's hear it in full.

• 1:04Speaker 01

  Okay. He says, I wanted to inform you how helpful your podcast is for me. Before listening to your podcast, I always felt behind in tech. All my friends were talking about things in tech that I didn't understand. It made me feel isolated and alone from them. But your podcast helped me rejoin my friend group with more confidence about technology. He said, thank you for creating Hard Fork, or as my sister calls it, Hard Dork.

• 1:30Speaker 02

  Brutal. And by the way, that is such a sister comment.

• 1:33Speaker 01

  It is. Nathan, don't listen to your sister.

• 1:36Speaker 02

  Oh, not, do not listen to her.

• 1:37Speaker 01

  But do listen to Hard Fork.

• 1:38Speaker 02

  Absolutely.

• 1:39Speaker 01

  We're so glad to have you. And I'll just say it. If you're a seventh grader and you're writing paper letters and sending them in the mail to podcasts, you're going to make it in life.

• 1:49Speaker 02

  The idea that like you're so far behind in tech news that it was like harming your relationship with other 12-year-olds.

• 1:57Speaker 01

  What are they talking about?

• 1:59Speaker 02

  What are these like nuclear physicists he's hanging out with on the playground?

• 2:02Speaker 01

  They're running agentic loops.

• 2:05Speaker 02

  Exactly.

• 2:06Speaker 01

  Doing their social studies homework.

• 2:07Speaker 02

  A seventh grader with a clod swarm is a terrifying thing to consider.

• 2:18Speaker 01

  I'm Kevin Reeves, a tech columnist at The New York Times.

• 2:20Speaker 02

  I'm Casey Noon from Platformer.

• 2:21Speaker 01

  And this is Hard For.

• 2:22Speaker 02

  This week. The Trump administration lifts its restrictions on Anthropic's most powerful models. What have we learned about how the government wants to regulate AI? Then pediatric surgeon Dana Suskind stops by to discuss her new book on parenting in the age of AI. And finally, it's our new segment about prediction markets against all odds. And the odds that you'll like it? They're pretty high.

• 2:53Speaker 01

  Well, we've had some big news out of Washington in the past few weeks. We are in the middle of something truly insane and unprecedented that is happening between the frontier AI companies, including OpenAI and Anthropic, and the federal government, which has decided all of a sudden with basically no rhyme or reason that it wants to start picking and choosing which customers are allowed to use the frontier models.

• 3:19Speaker 02

  Yeah, when this happened, many listeners reached out to us and asked us if we would consider doing an emergency episode. And I'm happy to say that the emergency lasted so long that we're able to get to this now on our regular schedule.

• 3:31Speaker 01

  Yeah, it's sort of a rolling emergency. It's sort of like a permanent crisis, if you will.

• 3:37Speaker 02

  Exactly.

• 3:37Speaker 01

  So before we get into Fable, since it does involve AI, we should make our disclosures. I work for The New York Times, we're just doing OpenAI, Microsoft, and perplexity.

• 3:46Speaker 02

  And my boy, no.

• 3:51Speaker 02

  Downgrade. And my fiance works for Anthropic.

• 3:54Speaker 01

  Let's just explain what's been happening and then we can talk a little bit about what we think about it. So the first sort of salvo in this dispute was on June 12th, which was the day that we officially left for our break. Very good timing by the US government, when the Commerce Department issued an export control directive shutting down access to Fable 5 and Mythos 5, the most powerful versions of Anthropic's models. Fable in particular had just been released a couple of days earlier. And And basically, the government said, no one is allowed to use this. If you're a foreign national, including an employee of Anthropic, inside or outside the US, you are not allowed to use this model.

• 4:38Speaker 01

  That basically shut down access for all customers everywhere. Anthropic basically had to pull the model because it had no way to do sort of user by user citizenship verification. And as its reason for doing this, the federal government said, well, we received some notifications from a trusted partner that there was this jailbreak issue on Fable specifically.

• 5:01Speaker 02

  And who was this trusted partner, Kevin?

• 5:03Speaker 01

  Well, we believe it was Amazon, which, based on some reporting from The Information, Andy Jassy, the CEO of Amazon, had gotten in touch with administration officials after researchers at Amazon had discovered this jailbreak, this way of getting supposedly restricted information that could be used in cyber attacks. Based on some reporting from The Wall Street Journal, we believe that Andy Jassy sort of tells the Commerce Department about this. They freak out and say, we've got to, you know, we've got to get this model off the market.

• 5:34Speaker 02

  Okay, so let's zoom in as far as we can here because I think it's really important to get clear on what was the thing that this model did that gave the Trump administration the heebie jeebies? My understanding, Kevin, is that when other security researchers have reviewed what we believe the issue was here, it was a fairly standard back and forth and was the sort of interaction that you would expect a cyber defender to have with a model, to try to get it to identify and fix a bug. So what do we know exactly about what was going on here?

• 6:10Speaker 01

  We don't know exactly what Amazon's researchers discovered that made them so concerned. One cybersecurity expert who reviewed Amazon's work said in a blog post that these concerns were basically not a big deal, that this was something that defenders who are trying to patch systems from cyber attacks need, basically asking AI to find and fix the bugs in a given file. And I guess Amazon's researchers determined that that same technique could be used to exploit a piece of software or find vulnerabilities, which of course is the whole advertised purpose of giving Mythos and similar frontier models to cybersecurity defenders ahead of the general public.

• 6:51Speaker 02

  Right. Anthropic had launched this program called Project Glasswing where it had shared Mythos with a relatively small number of partners in an effort to harden the defenses of a lot of the critical infrastructure in this country and in allies before similar capabilities were found in other models. And as soon as the government stepped in and said, you know, effectively we're placing export controls on this technology, all that stopped.

• 7:13Speaker 01

  Yeah. And so it's now been a couple of weeks since this, these export controls went into effect. Last Friday, Anthropic and the Trump administration reached a sort of tentative deal allowing Anthropic to restore access to Mythos for some clients. And then on Tuesday night, news broke that the Commerce Department was lifting those export controls and restrictions on Anthropic's models. Commerce Secretary Howard Lutnick sent a letter to Anthropic saying that the company had taken steps to address the risks associated with these models. And on Wednesday, Anthropic announced that Fable 5 is back, that it is again available

• 7:53Speaker 01

  to users around the world. Mythos 5, still not publicly available, but is going to be restored to a set of US organizations and they will sort of coordinate with the government to expand that more broadly. Casey, what did you make of the government's reversal here?

• 8:10Speaker 02

  Well, I mean, to me, the reversal seemed inevitable and it still concerns me how little was said about the process behind this. I was probably more interested in Anthropic's response because they put out a blog post that effectively put the industry on blast and said that GPT 5.5, KIMI K2.7, and several other models could find the same vulnerabilities that had resulted in Fable being banned. So effectively Anthropic said, hey, you know, we like added another safeguard, but like really this is an industry thing. Don't point fingers at us about this.

• 8:45Speaker 01

  Yes, and speaking of other models, let's talk about what is going on with OpenAI and GPT 5.6. So last week, as OpenAI prepared to release their newest GPT 5.6 models, Sam Altman told the staff that they would not be rolling it out to the public right away. They would release it first to a limited group of partners that would be approved by the government and that the Trump administration had asked the company not to release the model more broadly than that. And he didn't sound happy about it. This was clearly not the way that OpenAI and Sam Altman had wanted to release GPT 5.6, but the way that he phrased it made it seem like this was sort of pressure that had been applied to him from the Trump administration.

• 9:28Speaker 01

  So this new business that the government is in of telling AI companies, you can't release this model or you can only release it to a list of customers that we approve beforehand, seems to be applied to at least two companies now. And this seems to be coalescing into something more of a broader strategy and not just a single targeted act of retribution.

• 9:48Speaker 02

  Yes, and what we have said before on this subject is that this is the exact state of affairs that the people who are now running AI policy in the Trump administration were apoplectic about during the Biden administration, right? They were warning, you know, they're going to create a licensing scheme and they're going to start picking winners. And only a handful of the administration's favored labs are going to be able to release any models. And that's why we've got to get rid of this Biden executive order. Fast forward to today, they have implemented a de facto licensing regime. And because it's the Trump administration, there are no known rules. There's no transparency whatsoever. We have no idea what makes a model considered safe to ship or unsafe to ship.

• 10:30Speaker 02

  We're truly just in this like authoritarian limbo where until a few people decide that, you know, Fable or GPT 5.6 are safe to use, we're out of luck.

• 10:38Speaker 01

  Yes, AI is now being regulated by vibes.

• 10:41Speaker 02

  Yeah.

• 10:41Speaker 01

  And that is a state of affairs that I think both you and I were worried about, which is why, you know, several years ago, when these kind of pre-deployment testing regimes were proposed as part of these AI safety bills, we said, well, This is probably a good idea to have something like this in place. So that you don't just have this kind of slapdash chaotic approach.

• 11:03Speaker 02

  Yes.

• 11:03Speaker 01

  Where like models with really scary capabilities start coming out. And then the the federal government has to scramble and try to figure out what the models are even capable of. And then take some, you know, fast action on that basis. Rather than having something that is actually thought through and planned from the start.

• 11:19Speaker 02

  Yes, and let me say, I think the government should be able to prevent the release of large language models. I do believe that. I even think that after a model has been released, if it does something really dangerous. I think the government should be able to come in and say, hey, we actually need you to place a pause on that. I just think that it should be done with a set of clear rules. I think the company should have due process. I think there should be a process for fixing those models and getting them into public shape. And getting some sort of consensus on when it can be released. You know, just sort of like basic good government stuff. And we are just so far from that world.

• 11:50Speaker 01

  I mean, I want to return to the point that you made about the hypocrisy of the people, especially on the tech right.

• 11:56Speaker 02

  Yeah.

• 11:56Speaker 01

  Who made opposition to AI regulation and licensing their entire personalities several years ago. You know, Marc Andreessen has credited this, I think, non-existent meeting. I have tried to back up through reporting. The facts of this alleged meeting that Marc Andreessen says happened with officials from the Biden administration. Where they basically said, according to Marc Andreessen, that they were essentially going to pick winners and losers in the AI industry. And that their favored labs would be able to develop and release powerful models. And that no one else, including open source developers, would be able to. Again, I have tried to back this up. I have tried to find, I've talked to many people who would have been in a meeting like this. No one remembers it happening like this.

• 12:39Speaker 01

  So this may be a convenient fiction that Marc Andreessen has decided to tell. But this was their whole personality for years. They said, we are becoming a socialist Soviet style state where the government's going to tell private companies what they're allowed to do. David Sacks, the former AI czar, famously said that the private sector should be allowed to cook. And now we have, just a couple of years later, a what you call the de facto. Licensing regime and they're picking winners and losers. They're saying this company can release their models. This other company can't. They seem to have no clear criteria. They're going on these reports from random, you know, companies that are testing these models.

• 13:21Speaker 01

  And it does not seem like they have any interest in in sort of formalizing that or making it any easier for AI companies to navigate.

• 13:26Speaker 02

  Yeah, I mean, you say they're picking winners and losers. Really, they're just picking losers, right? They're saying, uh, this model's too good. You can't release it. Sorry, loser, right?

• 13:33Speaker 01

  Yep.

• 13:34Speaker 02

  You know, so there's a, it's unclear. What what is the way to win here?

• 13:37Speaker 01

  I mean, the way to win is by becoming a political actor, right? Like that, that is sort of the the downside here is that like now deploying models, if you're an AI company, is a political process.

• 13:48Speaker 02

  Well, look, I mean, you know, I would love to ask Greg Brockman over at OpenAI how he feels about his $25 million donation to the Trump people, right? Because that didn't seem to buy them a lot of goodwill when it came to GPT 5.6. So I don't know that, you know, sucking up to the Trump administration will even get your model out the door right now.

• 14:05Speaker 01

  It it won't get it out the door right now, but I think they are going to, if I had to predict, they're going to have an easier time over at OpenAI releasing these models in the future. I think the big shift that is really weird right now that all the labs are trying to process is I think they just moved from a sort of default yes environment where like the assumption was if you trained a really good model, you could release it. And now I think they're in a default no environment where if you build a model that is more capable than Claude, Mythos, or GPT 5.6, your assumption has to be that the government of the United States is not going to let you release it, at least not right away, and at least not to everyone.

• 14:41Speaker 02

  Yeah.

• 14:41Speaker 01

  So I think that is a huge shift in the sort of structure of the AI industry that has happened more or less overnight.

• 14:50Speaker 02

  Yeah, I mean, and this is just another moment where I wish that we had a Congress that was taking this seriously. This is a clear moment where we need a legislative framework for how these companies should be regulated that does govern how and when models can be released and governs how and when they are taken off the market over safety concerns, right? We know what to do here. We just have a government that is not doing.

• 15:15Speaker 01

  Yes, and Dean Ball, former Hard Fork guest, former Trump administration AI advisor, soon to be OpenAI employee, had a great post about all of this just a few days ago, where he made the point, which I thought was reasonable, that like the government should have some role. It's reasonable to expect that in the future, when these models are very powerful and have very scary capabilities, that the government will want to take an active role in deciding what can and can't be sold. That seems reasonable.

• 15:44Speaker 02

  Yeah, and I think there's a good argument that that moment is now, that the models are now capable enough and scary enough that the government has an interest in addressing it.

• 15:51Speaker 01

  Totally, but Dean made the point that you actually need technical experts in government to make that happen. You need people who are capable of evaluating and running the safety tests on unreleased models to determine what they are and aren't capable of. And right now, at least according to Dean, we don't have that.

• 16:08Speaker 02

  Well, Kevin, I have some great news, because on Monday, none other than Marc Andreessen himself joined the US Defense Policy Board, which will put him in regular conversation with Pete Hegseth and other government officials. And so now Marc can finally get to the bottom of this and demand that the government drop this de facto licensing regime.

• 16:30Speaker 01

  Do you think he'll be running any of the safety evaluations himself?

• 16:33Speaker 02

  I'm terrified to find out.

• 16:36Speaker 01

  So there's one other twist of this story, and it's something I'm really interested to get your take on, which is the whole China angle, because the other backdrop of these discussions between the US government and the US AI labs is that these Chinese models are getting pretty good. So recently, we saw a new model out from the Chinese company ZAI called GLM 5.2. You know, people are saying that this is, you know, one of the best open source models out there. There's been a little bit of what I would consider overheated reporting that suggests that it's as good or better than some of the frontier models from the AI companies in the US. I don't think that is probably true, but it is at least in the sort of same tier of consideration. And so there are people who

• 17:21Speaker 01

  are saying, well, this is going to be a big Problem because at the same time, the US government is pulling American models off the market that are very powerful. We now have these Chinese open source models that customers, big businesses can use for much cheaper, that are just as capable and that are not in danger of being clawed back by the US government. What do you make of this?

• 17:44Speaker 02

  I think this is basically BS. Like, I do. I think it feels like a lobbying tactic from people who want to get the American models back into production. I have seen no credible reporting that the Chinese models have kept up, even when I have read the reporting that we've seen over the past week out of the Wall Street Journal and others. There aren't numbers in there that would lend credence to it. What there are is a handful of people saying these models are really good. And look, I'm sure these models are pretty capable. I'm sure they're more capable than the open source and Chinese models of a year ago. But we learned during the DeepSeek freakout that a reliable way to get attention in AI discourse is to wave your hands and say the Chinese are catching up, the Chinese are catching up, and everyone will pay attention to you.

• 18:27Speaker 02

  But when you look at how the Chinese are building these models, the theory just doesn't hold because you have to keep in mind these, what these Chinese companies are doing is distilling American models.

• 18:37Speaker 01

  Yes.

• 18:38Speaker 02

  They're getting in there and they are scraping the responses of these chatbots and they're using those to make their own chatbots. So the best Chinese models are kind of like American models once removed.

• 18:48Speaker 01

  Yes.

• 18:48Speaker 02

  And that is why they're always going to be at least a little bit behind the frontier. And let me say one more thing, Kevin, while I'm all worked up. Which is, I'm increasingly coming to think about like the whole AI market in, as like two, like, systems. There's the frontier and there's everything else. Okay? And if you're, if you're truly at the frontier, we will know because you can see it in the benchmarks. You can see it in the revenue figures of the companies that are selling this stuff. That is where the actual value is. And then there's everything else, which is the million little open source models, the distilled models, the Chinese models. And they're just a step behind. And look at the revenues of those companies. There's an insane amount of competition and it's not as good as the best.

• 19:33Speaker 02

  And so, in my view, these Chinese Companies that we're talking about right now, they're firmly in the everything else camp. That's not to say they aren't getting better over time because they are. But if you're going to tell me right now that this is as good as a Mythos, I'm going to need to see the damn numbers.

• 19:46Speaker 01

  Right. I, I think that's right, but I, I'm also like, I'm not as quite as skeptical of this fear of China catching up as you are in part because I think these distillation tactics appear to work. You get a model that is almost as good as the original. If the Chinese companies are able to keep doing that, I think there's a plausible case that they will shrink the time, the sort of gap between the American frontier and the, the sort of open source frontier. Maybe it's nine months now, maybe in the future that becomes six months or three months. I think that sounds plausible to me. I also think that there are a lot of businesses right now who are really freaked out about what is happening with Fable and with GPT 5.6.

• 20:30Speaker 01

  And they are saying to themselves, well, if we were to sort of go with the latest American models at all times, not only are we paying a premium for that, but it could be yanked away by the government with no explanation and no due process. And it would totally screw up all of our workflows and all the software that we're building on top of those tools. So I, I did actually talk to someone recently who works at a, an American tech company, not one of the AI labs, but like a, a solid, big American tech company, who is saying that they're actually spending a lot more time with these open source Chinese models. Not because they're as good as the frontier models, but because you can download them, you can run them on your own hardware, and they're pretty good for a lot of tasks that don't need the absolute capability frontier

• 21:15Speaker 01

  that you would get from a Mythos or a GPT 5.6. So I think that in this moment where there's so much uncertainty coming out of Washington, I think a lot of companies that rely on these tools are going to take a hard look at the Chinese models and see whether they might be good enough for some percentage of what they're doing.

• 21:32Speaker 02

  Yeah, that makes sense. You know, like the American economy has been so strong for so long in part because the, the government has mostly been safe, boring and predictable. And the Trump government is not those things, right? We saw this during tariffs, right? Where like the American businesses were having similar problems because they couldn't predict how expensive their products were going to be on any given day, based on what the tariff of the day was, right? And now we have the LLM restriction of the day and it's causing similar havoc in the economy.

• 21:59Speaker 01

  So I think one obvious link between the actions of the US government and the China subplot here is that maybe there's a possibility that the US government restricting access to these frontier models from American companies actually doesn't allow China to catch up. Maybe it slows China down because if they are so reliant on distilling from Claude and the GPT series and other leading American models, maybe not having access to those models will hurt them. So is there any sense in which you think this action by the Trump administration could actually widen the gap between the US capabilities frontier and the Chinese open source frontier?

• 22:40Speaker 02

  I mean, maybe, but that is an extremely ham-fisted tactic for accomplishing that goal. The United States government has many levers it can pull if it feels like Chinese companies are attacking its companies. For example, they could sanction companies that they believe have caught distilling. They can prevent them from selling their wares in America. They can get allies to do the same thing. We saw Anthropic the other day send a letter complaining that Alibaba has apparently been doing wide-scale distilling of Claude, and the hope there is that the government will intervene. So that is how these things are traditionally done. While it is true, I suppose, that this is going to make it harder for Chinese companies to distill the next models, there are still all of these other reasons why, at least for

• 23:23Speaker 02

  me, that's the worst way to go about it.

• 23:26Speaker 01

  Right, that makes sense to me. The argument that I would make against that point is like, what matters is not just the capabilities frontier of the internal models that the companies in each country have. What matters is the deployment frontier. And for a society to really harness the benefits of AI, you have to be able to use the models. You have to be able to deploy them inside big companies. You have to be able to deploy them inside consumer products. People have to be able to use them. It is not just like which lab has in their basement the most capable model that nobody else can use.

• 24:03Speaker 02

  Right, and all of this happened at a time when companies and government institutions around the world were Using these very powerful models to improve their cybersecurity defenses. Right? I mean, like, that's one of the reasons why this issue feels really urgent is that there was an ongoing project to protect the critical infrastructure of the United States and its allies, and that was yanked away while at the same time we're selling advanced chips to the Chinese to help them catch up.

• 24:27Speaker 01

  So I think there's one silver lining to this story for me is that for years now, you and I have been sort of hoping against hope that the US government would would stop just sort of talking about AI as this unalloyed good that was just a normal technology that was going to supercharge the economy, that they would actually start to pay some attention to the risks of these powerful AI systems. That is happening now, for better or for worse. The government is now firmly aware that these models do pose risks. They are sort of thinking about cybersecurity, but I imagine they are also thinking about bio risk and other types of risk.

• 25:06Speaker 01

  So I think that there is a sort of way to spin this whole saga as a clunky, ill-advised first step on a good path, which is like, the government is waking up. These models are very powerful. They can be very dangerous. They're going to get more powerful and more potentially dangerous as time goes on. And so I think what we're seeing now is sort of a fumbling attempt to kind of do something. And I think they will come up with better ways of doing this over time, I hope, anyway, that that that they will. This is not sort of the permanent structure of the AI licensing regime in the United States. But at least they are not just pretending that this is just a normal technology anymore.

• 25:50Speaker 02

  That is true, and I'm glad that it's the case. But at the same time, this same administration has been pushing to allow the export of more and more advanced chips to China, which will allow China to train more powerful models over time. And they're doing that at the same time as they are preventing good models from being used by our allies like Britain and other countries. So there is still an extreme level of incoherence in the administration's position, in my opinion.

• 26:15Speaker 01

  Well, you can't win them all.

• 26:16Speaker 02

  That's true.

• 26:21Speaker 01

  When we come back, a conversation about AI and parenting. Do you know where your children are?

• 26:26Speaker 02

  I have children.

• 26:56Speaker 00

  Support for this podcast comes from Dell Technologies. It's time to put AI to work. Is your business ready? The challenge isn't getting started with AI. It's scaling beyond pilots while maintaining control of your data, governance, infrastructure, and costs. Dell AI Factory provides the integrated foundation you need to scale AI securely and efficiently with one trusted partner. Dell, AI on your terms. From idea to impact. Learn more at dell.com/yourwaytoAI. That's dell.com/yourwaytoAI.

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• 28:34Speaker 01

  Well, Casey, I'm very excited for our guest today, who is an expert on the intersection of parenting and AI. This is a topic that I've been wanting to explore on the show for a while now, in part because it's just become a big part of my social life, is talking with other parents about how we are or aren't exposing our kids to technology, including AI and chatbots. So today, we have on the show our guest, Dr. Dana Suskin. She's a pediatric surgeon and childhood development expert. She's a professor at the University of Chicago and the founder and co-director of the TMW Center for Early Learning and Public Health. She's also an author, and she has a book coming out soon called,

• 29:16Speaker 01

  "Human Raised: Nurturing Connection, Curiosity, and Lifelong Learning in the Age of AI." And when I heard about this book, I thought, this is just the person we need to tell us slash me how we should or shouldn't be using AI with our children.

• 29:32Speaker 02

  Absolutely, because in addition to all of that, Kevin, Dr. Suskin is a parent to eight children who are now all grown up. So this is somebody who has a lot of expertise in this subject.

• 29:44Speaker 01

  Yes. So I think this is an important conversation today, but I think it's about to become much more important because there are just a lot of AI products and tools aimed at young kids that are making their way to the market and are going to become, I predict, more popular in the next few years. So already, we've seen Miko and Luna, which are two AI-powered robots that are designed for kids. And we've got all these sort of child-specific companions and chatbots with names like Asky and Hello and Hey Otto. And we're just starting to see a lot more products using AI that are aimed at children. And I think for a lot of parents, that is creating a lot of anxiety because how the heck are we supposed to know which of these things are going to, you know, help our kids grow and develop

• 30:28Speaker 01

  and which are going to turn them into glorified slop cannons?

• 30:31Speaker 02

  Yeah, and that's what you don't want is a slop cannon child.

• 30:36Speaker 01

  Yeah, heaven forbid.

• 30:38Speaker 02

  But here's what I'll say. If your child is a slop cannon, you need to read this book.

• 30:41Speaker 01

  That's true. Let's bring her in.

• 30:49Speaker 01

  Dr. Dana Suskind, welcome to Hard Fork.

• 30:51Speaker 04

  Thanks so much for having me.

• 30:53Speaker 01

  So you've got this new book coming out, Human Raised, which is about parenting and sort of child development in the age of AI. And I was so excited when I heard that this book was coming out because as the parent of a now four-year-old, I see this issue coming for me in a way that makes me quite nervous. And so I was so happy when I heard that you were starting to do the research about what we as parents should think about our children potentially using AI, which I think is going to be a bigger issue for me as my kid gets a little older, but is already an issue for a lot of parents I know. So first of all, like, what made you want to pursue this topic as someone who's long been interested in childhood development?

• 31:39Speaker 04

  Yeah, so I'm a cochlear implant surgeon. And you may say, well, why exactly are you on this or even thinking about this issue? But early in my career, I started noticing profound differences in the outcomes of my own patients. So you, I would do the same surgeries, same technology, same parents loving them. And the outcomes of the children were so profoundly different, with some of them being able to develop language and others not. So that experience actually brought me into this incredible world of brain development and neuroscience that shows that human connection is not just a nice to have. It is the foundations of how we learn and how we learn to be human. And so my whole career has been focused on that

• 32:24Speaker 04

  and supporting parents and caregivers in that important role. And then suddenly, AI comes onto the scene. For the first time in human history, we have technology that can actually mimic that interaction that has traditionally wired our children's brains. And now I'm like, oh. We need to probably step back and really think about what is happening in our children's worlds, because the choices that we make at this moment is going to determine what our species look like.

• 32:52Speaker 01

  Dr. Suskind, can I run some scenarios by you from my own parenting journey and you tell me whether I'm being a bad father or not?

• 33:01Speaker 04

  There's no such thing.

• 33:03Speaker 01

  The two primary ways that I'm using AI with my four-year-old right now, one is to just like answer random questions that he asks. We're in like a big question phase right now. So the other day, he, you know, he asked me, where does wind come from? And I realized, I actually don't know the answer.

• 33:19Speaker 02

  Yeah, I have to say, that's like a hard question.

• 33:22Speaker 01

  Yeah, so I pull up, I pull up an AI model and I ask, and you know, I get back this answer and it's about like, you know, air pressure and I'm like, okay, this is for a four-year-old, could you like, you know, dumb it down a little bit? And it gives me a great answer, you know, we tell him the answer and, and he has the answer to his question, now he gets to like, repeat it to all his friends. That's, that's, you know, option one.

• 33:41Speaker 02

  By the way, yeah, on his playground, the kids are obsessed with where wind comes from. It's a hot topic over there.

• 33:46Speaker 01

  It's made him quite popular at preschool.

• 33:47Speaker 02

  Yeah.

• 33:48Speaker 01

  So the other way is just like, creating stories for him. So, you know, one of the things that these models are quite good at is like, you give it some, you know, guidance, I want a story about a kid this age who has a best friend who's a dinosaur and they go off and they play soccer together, or whatever it is.

• 34:04Speaker 02

  I would do one where his best friend is the wind. I think that could really hit, I could land cleanly with him right now.

• 34:10Speaker 01

  So are either of those examples of AI use in parenting of a young child going to harm my son?

• 34:18Speaker 04

  Absolutely not. So, so first of all, those are great examples and, you know, I put in this book, I tried to really also give grounded and practical frameworks. And one of the frameworks that I give parents to sort of think about AI in general is sort of an evergreen, I call it H. H is human connection is irreplaceable. It is what we need to protect and double down on. But O is owning your imperfections. As I said, kids don't grow through perfection, they grow through, I don't know about you, but I was a very, I am a very imperfect parent, but now I know it's really good for my kids. P is protecting the early years. Those first years, when you get 85% of the physical brain being built, we've got to

• 35:02Speaker 04

  be extra careful about what we let in. But lastly is E. If you're going to use it, use it to enhance, not replace. You're really using this technology to enhance your relationship, fill in the gaps of knowledge that you may or may not have. And that's a great way. This book, in my view, is not at all anti-tech. I'm an implant surgeon. I build AI tech. I'm all about it. But how do we use it to deepen our relationships and support us in this important role?

• 35:31Speaker 01

  Yeah, that makes a lot of sense to me. And it is compatible with, I guess, my own sort of vague optimism about AI in the lives of kids. And I see a lot of parents right now with a lot of anxiety about AI that seems like it is borrowed from this earlier era of the screen time debates or the debates about addictive social media platforms for kids. And to me, it just feels fundamentally different, what AI is as a technology and what it is capable of doing for children. I just think back to my own childhood. And I was a nerdy kid who loved to learn stuff. And if I had had a chatbot that could have taught me

• 36:12Speaker 01

  about the Bernoulli effect in a way that was enjoyable and entertaining to me, I would have done that. And I would have been happier than going to my world book encyclopedia and looking up that fact. So I think for the curious kids out there, my sense is, and please tell me if you agree with this, that this could be an incredibly enriching technology for them if it is designed well and if parents are in the loop of how their kids are using it.

• 36:39Speaker 04

  I mean, 100% I agree with you. I think to your point, people go to the social media as the best analogy, and I get it. But I think a better analogy is actually processed food. Processed food is a continuum, right? There's whole wheat bread, which is processed, but it's still nourishing. And then you've got the ultra-processed variety, the Doritos and Twinkies, which are good occasionally. But the truth is, is that in the same way, AI is a huge spectrum. I mean, not only being able to provide answers as a chatbot, but lifting invisible labor. Off of parents and teachers to diagnostics. You know, I come from the world of medicine where it's transformative.

• 37:22Speaker 04

  I think people are really focused on the AI companions, which I get, which I am concerned about in terms of crowding out that necessary human connection. But that's a really, that's a small part of what AI is. I mean, you can have socially assistive robots that help children with autism learn to read, you know, social cues to better connect with other humans. That's an amazing example. So I think to your point, it is a spectrum and it's not a monolith.

• 37:53Speaker 01

  I'm curious, though, like where, if anywhere, are you like drawing the bright lines? Like, where are you saying, like, you know, do this, don't do that?

• 38:00Speaker 04

  Yeah, that's pretty easy right now. We are at the very beginning of this tech revolution. And AI companions in the, you know, AI toys that, you know, claim to be better alternatives to screen time, that feels like a pretty hard no. You've got to, you know, I, I think the thing that we can learn from social media is that, you know, we need to take a precautionary principle. You've got to show me it's safe before I'm going to let it into the developmental sanctuaries of, of our kids, because the stakes are just way too high, even higher than social media, in my opinion.

• 38:41Speaker 01

  Yeah. What about like smart devices that are not meant to be plush toys? But like my, you know, my kid loves talking to Alexa and, and asking for various children's songs that are intolerable to adults, but that he loves to play on repeat. Like, is that the same thing? Or is that different because it's not pretending to be a companion or a stuffed animal?

• 39:05Speaker 04

  I mean, I think it's.

• 39:08Speaker 04

  It's how how much I mean, it's a slippery slope. But I think we can all agree that, you know, Alexa playing songs when you're around or even if you're not around is probably a fine thing. It's at this point, it's more just the crowding out of the human interaction that I'm very concerned about.

• 39:28Speaker 02

  Yeah, my kid would otherwise be asking me to play the blippy garbage truck song 400 times, so I'm somewhat sympathetic to that. You know, you've mentioned that we're pretty early in many ways in the development of this technology, but I also know that, you know, you're really concerned with with some of the things that you're seeing. Is this a moment where you feel like the government has a role to play in regulating the technology? And if so, what do you think that role should be?

• 39:55Speaker 04

  No, absolutely. I think we know in Norway, they've actually set out a law that there's no gen AI in the school system in the early years. And in the same way, I think we're seeing that in the US. I mean, in some ways, this really mirrors the industrial food revolution. When the food revolution happened, you know, initially there was no guardrails and eventually we started the Pure Food and Drug Act. And then eventually we got, you know, the little, what is it called?

• 40:29Speaker 02

  Nutritional labels.

• 40:31Speaker 04

  The nutrition labels. I mean, these are the things that, you know, are going to happen. It just we're just at the very beginning, but hopefully we'll start seeing it.

• 40:39Speaker 02

  What do you think of the Norway approach? Like, does it seem wise to say like, hey, until we've done a little bit more research, we're going to keep like kids under 16 from using ChatGPT in schools for any reasons? Does that does that seem wise?

• 40:52Speaker 04

  I mean, I think it's taking a scientific approach. I don't think they're saying, no, never. I think they're saying, wow, this is happening so fast. Let's take a step back. We know what works. I mean, look, if we didn't know how to educate humans, I would get it. But I think they're just taking a prudent approach. And I'm a scientist who is about innovation. I just, you know, I think about what happens in medicine and we're much more, you know. Thoughtful, when we have a new drug on the market, it's not like we have to say, ooh, I wonder what's going to happen to my child if I give them this new medication. I'm not sure why, you know, this new technology,

• 41:37Speaker 04

  which is so incredibly powerful. It's amazing, right? But we have to acknowledge that it's a powerful technology, that we need to understand what happens to us. I think the story of AI is as much about technology as it is about understanding what it does to humans. And I think that's what Norway is saying.

• 41:58Speaker 02

  Well, let's try to give parents some practical advice. You suggest that when parents are trying to figure out whether a particular AI tool or product is suitable for them, they should ask themselves six questions. So what are the questions that parents should be asking?

• 42:15Speaker 04

  Sure. So because I'm a surgeon and I love acronyms, it's called DETECT. So what is the DETECT method? D is design. You know, what is this tool designed for? You know, is it interacting directly with your child? Or is it helping you? Do you really need it? E is, was it ethically trained? T is, were there any troubles with this technology in children? E is, what is the evidence? Does it really do what it's supposed to do? C is confidentiality. What happens to your child data? And lastly is T, what is it teaching from a value standpoint? And that DETECT method is used so that parents can quickly and easily figure out,

• 42:58Speaker 04

  is this something that they want in their child's life?

• 43:01Speaker 02

  All right. So I want to see if we can apply your DETECT framework to like an actual AI thing that is in the market right now. There is something called CradleWise, which I learned about from a tweet by Sam Altman, the CEO of OpenAI. And he has a baby. And he tweeted that they had bought, quote, "A lot of silly baby things that we haven't needed, but definitely I recommend a CradleWise crib and a lot more burp racks than you think you could possibly need." As for the CradleWise, though, this is apparently a smart crib that uses AI to detect early signs of a baby waking up and automatically starts a gentle bouncing motion and soothing track to get them back to sleep. So if we were to use your framework, doctor, how would we rate CradleWise?

• 43:46Speaker 04

  All I can say is I wish I had been there when I had one.

• 43:49Speaker 02

  Yeah.

• 43:49Speaker 04

  Now I have my children. So what is it designed to do? In some ways, it's designed to support the parents by helping the child sleep. E, how is it trained? I think it's probably ethically trained. Is there any evidence that it kids have had trouble?

• 44:05Speaker 02

  Not that I'm aware of, but I haven't so much as Googled it yet. But that would be a thing to do would be to sort of investigate whether there have been any problems with the device.

• 44:12Speaker 04

  Problems?

• 44:13Speaker 02

  Yeah.

• 44:13Speaker 04

  Yeah, so and what the evidence were. And probably some researchers have looked to see, does it keep kids asleep? Do they have any problems? And I mean, I think long and short of it, I think that that feels very aligned with using technology to enhance, not replace Sam Altman's parenting. Allow him to have a good night's sleep, let the baby sleep. So just hearing it very, you know,

• 44:40Speaker 02

  Yeah.

• 44:40Speaker 04

  For the first time, it sounds like a good thing.

• 44:42Speaker 02

  It seems OK. I'd say I would take a bed that would actually gently bounce me and rock me back to sleep when I wake up in the middle of the night. Because whatever I'm doing now is not working for me.

• 44:50Speaker 01

  You just have to update the firmware on your eight sleep.

• 44:53Speaker 02

  Yeah.

• 44:53Speaker 01

  I'm Googling this right now. And it seems like there have not been serious problems with the CradleWise Smart Bassinet, although it does say that they it has proprietary linens. You cannot buy cheap third-party crib sheets because the mattress is a non-standard shape.

• 45:09Speaker 02

  You know, CradleWise was one of my favorite songs in The Sound of Music.

• 45:12Speaker 01

  Those eight ways. Oh, yeah. Anyway.

• 45:15Speaker 04

  Hey, listen, it's either that or like me, my late husband and I had three kids in our bed at one time. And I don't know, if I had CradleWise, we might have had more sleep.

• 45:25Speaker 01

  Yeah, that's wild.

• 45:27Speaker 02

  That is heroic.

• 45:28Speaker 01

  Yeah, seriously. I think this falls for me into the category of like, it makes you a better parent. It does actually make you a better parent to get six hours of sleep in a night.

• 45:39Speaker 02

  Here's what I'm going to say. Do not overclock your CradleWise so it starts shaking incredibly quickly. Even if it seems like it would be kind of funny, don't do it.

• 45:48Speaker 01

  I mean, I do think eventually we will need some kind of like a TV rating system for AI products. And I'm curious whether you've heard anyone suggest that or whether you have any ideas about how that could be implemented.

• 46:04Speaker 04

  Yeah, 100%. Actually, I talk about the good housekeeping seal of approval, which actually came out of the industrial food revolution and suggests that we actually need something similar. And I've heard of different groups talking about doing it. Common sense media, I think, is thinking about it and others. Maybe you all should be doing it.

• 46:26Speaker 02

  The hard fork seal of approval.

• 46:30Speaker 01

  Yeah, I mean, I think one of the hardest things is that these models are generally useful. Like, they can do amazing things that are very good for kids. They can teach them science. They can teach them to read. They can, you know, give them creative outlets. And they can addict them or become, you know, harmful companions or shut out the rest of their human friends because it's just so fun to talk to the AI companion. So I just think like I want the AI companies thinking more about parental controls and visibility. Because I think parents should know what their kids are talking about. But I think as with screen time, I think there's this sort of dangerous tendency to flatten every product into a single verdict, which is like, you know, it really matters what your kid

• 47:15Speaker 01

  is watching on their screen. It also really matters what your kid is talking to AI about. And I think the more that parents can be aware of and respond to that, rather than just saying like, this product is okay and this product is bad, the better off kids will be.

• 47:29Speaker 02

  Well, and you know, Kevin, that actually brings up something interesting, which is that, you know, earlier during this interview, you brought up the Bernoulli effect.

• 47:35Speaker 01

  Yeah.

• 47:36Speaker 02

  And I thought that I could imagine a lot of children listening to this and racing to their AI, you know, to find out what it is. So I thought I would take this opportunity as a human who wants human connection with children to share what the Bernoulli effect is. And what it is, and you guys already know this. But it's it's and it honestly, Kevin, it's more commonly called the Bernoulli principle. So I don't want to embarrass you, but it really is sort of known as the principle. And it states that for a fluid such as air or water flowing smoothly, an increase in the fluid speed is accompanied by a decrease in its pressure. So children, I hope that you heard that and have internalized that and are not going to ask AI about it.

• 48:13Speaker 01

  It's what allows airplanes to fly.

• 48:15Speaker 02

  Exactly.

• 48:16Speaker 01

  Didn't you learn that in middle school science?

• 48:18Speaker 02

  Yeah.

• 48:19Speaker 01

  Okay, let's get back to Dr. Suskind here.

• 48:23Speaker 02

  I just had to say that.

• 48:24Speaker 01

  We just like to do our little bits and just force our guests to suffer through them. Okay.

• 48:28Speaker 04

  Well, you want me to tell you an interesting story?

• 48:31Speaker 01

  Yes.

• 48:31Speaker 04

  Related to knowledge?

• 48:32Speaker 01

  Yes.

• 48:33Speaker 04

  So so in in our center, we've built this really cool computer adaptive tool that measures what parents know about child development in all domains. It's a it's very predictive of what parents do and child outcomes. So we use it in lots of research. So recently, we haven't published it yet. We had Claude take the it's called the speak to see how Claude would do. And so I'm going to ask you all, do you think Claude did really well? Mediocre or not so great on its knowledge of child development?

• 49:06Speaker 01

  Really well.

• 49:06Speaker 02

  I would say well, yeah.

• 49:08Speaker 04

  You're right.

• 49:09Speaker 01

  It aced it?

• 49:10Speaker 04

  Claude did incredibly Claude aced it. And so because we didn't want the story to be, oh, you know what? Now Claude can parent because that's not the the the message. The message is Claude can obviously be a resource. So when parents have a question, oh, you know, X, Y, and Z about child development, it can confidently, they can confidently ask Claude and Claude will give a right answer.

• 49:37Speaker 01

  I mean, that tracks 100% with my own experience of these tools, which is that they are often more seasoned and more confident about parenting advice than than I am and that they've been a very good resource for for me when I'm feeling stuck or I'm trying to deal with some like behavioral thing that I don't know how to deal with, or I just need a little backup. I can I can just go to Claude or Gemini or ChatGPT and ask the question. Usually the answer it gives back is pretty good. Dr. Suskin, I want to ask you about the title of your book, which is essentially a provocation, as I read it, that says that basically as AI tools become more normalized, this idea

• 50:20Speaker 01

  of being human raised, this is going to become rare and maybe something of a luxury where like if you are born into a family with a certain level of security and privilege, you will get sort of the human experience of having human parents. And if you are not, you will be raised by the machines. Am I reading that right? And is that what you think is likely to happen?

• 50:46Speaker 04

  Well, I'm writing this book so that hopefully it will not happen. But yes, so in the same way as 100 plus years ago, you never questioned if the food on your table was organic or farm raised. And then suddenly, you know, fast forward with the rise of ultra processed food and suddenly organic was that for children with privilege. In the same way, my concern is that artificial alternatives will become the cheap calories of brain nutrition and human raised and human connection will become a luxury item. And we just can't allow

• 51:26Speaker 04

  that to happen. Every child deserves to have parents and caregivers who love them, raising them. Not to say that AI can't support those parents and support, you know, some of the development, but I think we need to be very careful because we've seen this story before.

• 51:44Speaker 01

  Well, Dr. Suskin, thank you so much for coming on and for your great book, Human Raised. I think this is a topic that a lot of parents are really interested in right now. And so I predict we'll do pretty well.

• 51:55Speaker 04

  Thank you so much.

• 51:57Speaker 01

  Thanks so much. Thanks for coming.

• 51:58Speaker 04

  It's great to see you all.

• 52:03Speaker 01

  When we come back, scandals and controversies abound in the world of prediction markets. We'll recap it all on our new segment, Against All Odds.

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• 54:27Speaker 01

  Well, Casey, one of the other stories that keeps on giving are prediction markets. This has been a source of nonstop entertainment and scandal this year. And so we thought we would introduce a new segment where we round up all the latest news and scandals about prediction markets. And we're calling that segment Against All Odds.

• 54:54Speaker 01

  Okay, well, Casey, I think we should start this segment by looking at a recently released ad from the prediction market company Polymarket. And I'm just gonna play this for you.

• 55:09Speaker 06

  If you could ask one question.

• 55:11Speaker 01

  So we start with Rick Rubin.

• 55:15Speaker 06

  Can the US win it all?

• 55:18Speaker 07

  Est-ce que la France retrouverait la gloire? Que vidas, football, soccer?

• 55:22Speaker 08

  La Senegal, mon un choqué at. Pueden las tradiciones sobrevivir? The Dutchland, Kevin.

• 55:27Speaker 01

  Would the war be better off four years from now? Sort of a Benetton ad of gambling.

• 55:33Speaker 01

  A series of questions appears on screens. Will borders matter in 100 years? Do aliens exist? Will Messi win again? Will tradition evolve? Got a Kanye West song in the background, which is a choice.

• 55:52Speaker 06

  The people who never stop asking are the ones who find answers.

• 56:00Speaker 01

  Now, Casey, did that ad make you want to open up an account on an offshore crypto-denominated prediction market and start gambling with your savings?

• 56:08Speaker 02

  I find this ad so offensive. Like, the way that it presents prediction markets as like, first of all, like grounded in concepts of like multiculturalism and togetherness, you know? It's like, it has this sort of, almost like mystical feel of like, if we could just all get in the same room and gamble together, maybe wars wouldn't happen anymore. You know, I mean, like, that's the feeling. And I truly don't get it at all.

• 56:34Speaker 01

  It's very sad that they didn't feature the actual customers of Polymarket, who are like troops on active duty in war zones.

• 56:41Speaker 02

  Or like, middle schoolers.

• 56:42Speaker 01

  Yeah. People in Bad Bunny's Super Bowl entourage.

• 56:47Speaker 02

  Yeah, my like sort of half joke for like the official marketing tagline of any prediction market should just be betray your friends because that's the way to make money out of prediction market. You found out something you're not supposed to know? Get on a prediction market.

• 57:00Speaker 01

  Yeah.

• 57:01Speaker 02

  So that's the ad I want to see is screw over someone close to you.

• 57:05Speaker 01

  Yeah, well, my second question about this is how much do you think they paid Rick Rubin? And do you think they paid him in polymarket credits or in dollars?

• 57:13Speaker 02

  I'm going to guess it was in the millions, Kevin.

• 57:16Speaker 01

  Yeah. You don't think Rick Rubin just did this one for free as a sort of testament to his commitment to craft and creativity and the artist's dream?

• 57:26Speaker 02

  No, Rick Rubin produced the Beastie Boys. He has not had to work in a very long time.

• 57:30Speaker 01

  So these ads from prediction markets are just inescapable. I was watching the World Cup on TV over the break and just like every other ad is now for some kind of prediction market or gambling site. It is wild. But there's also been more than advertising happening in prediction markets. I want to talk about this incredible story that David Siegel at the New York Times recently wrote called "The Donking of a Truth Machine."

• 57:57Speaker 02

  Yes.

• 57:58Speaker 01

  Which is about a very silly but serious at high stakes controversy on polymarket, the very company whose ad we just saw. And it all boils down to this seemingly crazy question. Did a guy in a video say the word dunk? So the backstory here is that there is a professional gamer named Daniel Krychkiewicz, whose nickname is Donk. And back in April, there was an active betting market on polymarket about whether during the broadcast of this video gaming tournament, someone would say the name Donk. Now, crucially, Donk was not participating in this video game tournament.

• 58:42Speaker 02

  Because if he was participating, it would seem very likely that at some point someone would say the word dunk.

• 58:46Speaker 01

  Yes. So this is the kind of sort of silly market that often happens. You know, will this word be uttered during a CEO? Eos earnings call or will the White House press conference say the word, you know, some word and people bet on this. It's, you know, it's a time tested form of gambling on these websites. But this particular market, the donk market went sideways because there was this very long, seven hour long gaming tournament stream and it appeared that donk was not mentioned. But then somebody on this market was like, wait a minute, at one point,

• 59:26Speaker 01

  the commentator doing the play by play on this gaming tournament appeared to stumble over the word don't. And it sounded like donk to this person.

• 59:36Speaker 02

  Now, could you please? No, here's what I'd like you to do. I'd like you to say a sentence where the, say a sentence with the word don't, but make it sound like donk.

• 59:45Speaker 01

  Donk loop back in anger.

• 59:46Speaker 02

  Okay, very good. Thank you. You could go on now.

• 59:52Speaker 01

  So this started a very fierce argument about whether this commentator had actually said donk, or whether this was just a slip and whether an accidental donk is still a donk for the purposes of resolving this. As this big fight occurs and David goes into his, into this fight in very amusing detail in his story. But to boil it down, basically whenever there's a contested market where the resolution isn't clear on polymarket, there is a system called the optimistic oracle where basically the people who hold this special crypto token called Uma can vote on disputed outcomes.

• 1:00:35Speaker 02

  Just at the end of the sentence, I just wanted to jump out a window. I just have to say that. Just learning all of that information, I truly want to forget I've ever learned that information.

• 1:00:45Speaker 01

  None of those words are in the Bible.

• 1:00:46Speaker 02

  Truly.

• 1:00:47Speaker 01

  So basically the way this works is the more of these Uma tokens you have, the more voting power you have in these disputed markets. And basically this is their way of sort of trying to inject some sort of a fair resolution criteria into this.

• 1:01:06Speaker 01

  Into these markets where it's not exactly clear who is supposed to win and who is supposed to lose.

• 1:01:10Speaker 02

  And the fair criteria is whoever amasses the most Uma tokens is the arbiter of truth. What a great system.

• 1:01:19Speaker 01

  Yes, it's a crazy way to run a market. You're essentially like giving the power to resolve these markets and determine who gets paid out or who doesn't to like the richest, you know, people on the platform or at least the people who have spent the most money on this meaningless crypto token. Anyway, so this one resolved in predictable fashion, which was that a company called Uma Rocks amassed a bunch of these tokens and announced that it was going to vote no on this question of whether donk was uttered on this gaming stream, which led to a bunch of follow on no votes. So the no's won out in the end, but it was sort of a rigged resolution.

• 1:01:57Speaker 02

  So there's even like a form of gambling and how this thing gets resolved is what it sounds like.

• 1:02:02Speaker 01

  Yes, you can gamble on the gambling mechanism. It's sort of turtles all the way down.

• 1:02:09Speaker 02

  When I was very, I don't know what it was, but when I was young, I just sort of decided that gambling was not going to be for me. And to watch the way that the world has transformed over the past 20 years to turn absolutely everything into gambling, I just like continuously feel like I'm losing my mind.

• 1:02:23Speaker 01

  Yes.

• 1:02:23Speaker 02

  Here's the thing, you will lose money. Statistically, you will, this is not going to turn out well for you. And yet like now some meaningful portion of our economy is now just people who have decided to lose money that way. Why do you lose money on journalism? Buy a subscription to a publication. At least you'll get something in return other than suffering.

• 1:02:43Speaker 01

  But you won't get the satisfaction of amassing Uma tokens in order to resolve the criteria for the market on whether donk was uttered during a video game broadcast. And that's what really counts in today's day and age.

• 1:02:54Speaker 02

  So what else is going on here in Against the Odds, Kevin?

• 1:02:57Speaker 01

  Well, speaking of polymarket, Casey, would you believe we have another polymarket scandal?

• 1:03:01Speaker 02

  I believe it.

• 1:03:01Speaker 01

  So a couple of weeks ago, there was this great investigation in the Wall Street Journal about polymarket and specifically their strategy for social media marketing. They have done for a while now, these social media. Videos where they'll pay a creator to film a video of themselves making a bet on polymarket. And the Journal actually went back and looked at those bets to determine, A, whether they were real, whether these bets actually happened on polymarket, and B, whether if they had been real, the people making these bets would have won or lost money.

• 1:03:35Speaker 02

  Oh, I can't wait to find out.

• 1:03:37Speaker 01

  So they analyzed more than 1,100 videos from 10 creators, and they found that although 70% of these videos showed a bet being placed, none of these bets were real. These were all fake bets. 118 of the videos showed the creators winning, and the videos suggested that these people would have won almost $900,000 in total. But in reality, if those bets had really been placed, these same people would have lost more than $166,000. So it's like, I mean, in some sense, it's like every ad you've ever seen for like a casino, where it's just like people celebrating winning.

• 1:04:14Speaker 02

  Right, just making it rain, tossing $100 bills in the air.

• 1:04:17Speaker 01

  Yes, but it turns out that you do not always win on polymarket, and you are not always happy and tossing money everywhere.

• 1:04:23Speaker 02

  But I love that, first of all, this was a really great story by the Journal, and second of all, what I love about it is that it shows the actual surefire way to make money on polymarket, which is to make a video as a creator in which everyone is lying about everything, and then you'll really rake it in.

• 1:04:40Speaker 01

  The other guaranteed method for making money on polymarket? Insider trading. But that one doesn't play as well on camera. Okay, we have one more prediction markets story this week. This one was broken by our colleagues at The Times, Mike Isaac and David Yaffe Bellany. This one is about Meta. The headline is Mark Zuckerberg Directed Meta to Create a Prediction Markets App. Mike and David report that after seeing the success of prediction markets, Mark Zuckerberg got the bright idea to build his own. Two people with knowledge of the matter at Meta said that Zuckerberg had recently dispatched a small team to create a smartphone app similar to polymarket and Kalshi, where instead of wagering real money, the app would rely on a kind of video game-like fake money point system.

• 1:05:26Speaker 01

  But the company they reported had not ruled out the eventual use of real money betting. The app is internally called Arena and would be functioning independently from Meta's existing social networking apps. Casey, what did you make of the Meta Arena story?

• 1:05:41Speaker 02

  So this was a great scoop and I think the truth is I don't know how big of a reaction I should have to this because Meta does stuff like this all the time. Whenever a hot new thing comes out, they spin up their own version of it. Sometimes it works, like with Instagram Stories or with Reels, which was its answer to TikTok. Many, many other times it just like completely fails and flops. I don't know what is going to happen here because as we've just been talking about, these prediction markets are becoming extremely popular. And I imagine that the version of it where you can't lose real money will be less popular weirdly than the one where you can't lose all your money. But I suspect that if it is successful, one, they will absolutely do real money wagering. I think they're probably salivating over that prospect. And two, it will

• 1:06:26Speaker 02

  come to Meta's social networking apps and you will see, you know, little carousels for this in your Instagram and your Facebook. I just think-

• 1:06:32Speaker 01

  I love this. Like, like imagine you're on Instagram and you see a post of your friend with his new girlfriend and right below it, there's like a market for like, how long will this relationship last?

• 1:06:43Speaker 02

  Totally announcing your engagement and then it's like, what's the two-year odds on this one, gang? Yeah, no, that's, that is so perfect and they would absolutely do it. You know, the ethos at Meta, and I know this from speaking to them, is they believe that if people are doing it, then we should respect that they're doing it and let them do more of it and encourage them to do more of it. And they almost don't care what that thing is. But if you want to make a bet, if you want to make endless bets and there's a chance you'll talk about it on Meta properties where they can show you an ad and maybe even take a cut of your prediction, they're absolutely going to do it.

• 1:07:13Speaker 01

  I just love that this is a company that has been mired in lawsuits about the addictive nature of their platform, especially for young users.

• 1:07:22Speaker 02

  And is currently mired in dozens of these lawsuits around the country.

• 1:07:27Speaker 01

  It's like, you know what sounds like a really great next focus area for us? Gambling.

• 1:07:32Speaker 02

  Gambling!

• 1:07:33Speaker 01

  The famously addictive behavior.

• 1:07:35Speaker 02

  I was laughing though because- Because there was a story, you know, after you guys had the scoop that came out and said that, you know, some Meta employees were really concerned, you know, they were really disheartened to learn that their company was exploring a prediction market app of all things. And I was like, what? Oh, is this somehow going to interrupt you from the important work of sending push notifications to 13 year olds in the middle of the night telling them to check Instagram? Do we really need to protect that from the prediction market?

• 1:08:00Speaker 01

  I'm horrified to learn that there's gambling going on in this establishment.

• 1:08:04Speaker 02

  You know, if kids, you know, spend too much time on these prediction markets, Kevin, they might not have time to get an eating disorder. So we really got to watch the trade offs here.

• 1:08:14Speaker 01

  You are laughing, but that is literally something that the CEO of Kalshi recently said.

• 1:08:20Speaker 02

  Wait, really? Wait, what did he say?

• 1:08:21Speaker 01

  Tariq Muntur, the CEO of Kalshi, recently literally compared gambling on Kalshi and other prediction markets as the cure to Instagram addiction. He said, the way to think about it is, the more that people spend time on Kalshi and prediction markets, the less they're spending time brain rotting on Instagram. And Mark Zuckerberg heard that and he said, porque no lo estás?

• 1:08:48Speaker 02

  The cure to one addiction, Kevin, another addiction.

• 1:08:54Speaker 01

  Anyway, I'm sure this will end well.

• 1:08:57Speaker 02

  Yeah, well, everyone involved, I would just, you know, start your preparing for your testimony to Congress that you'll be giving eventually. Probably not soon, but eventually.

• 1:09:08Speaker 02

  And that's something you truly can bet on, Kevin, but I wouldn't use real money.

• 1:09:13Speaker 01

  All right, that is against all odds, our new and possibly final installment of our prediction markets roundup.

• 1:09:29Speaker 00

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• 1:11:11Speaker 02

  Hard Fork is produced by Whitney Jones and Rachel Cohn. We're edited by Veron Povich. We're fact-checked by Caitlin Love. Today's show was engineered by Alyssa Moxley. Original music by Alicia Maetup, Rowan Nemestow, Alyssa Moxley, and Dan Powell. Video production by Sawyer Roque, Jake Nickel, and Chris Schott. You can watch this whole episode on YouTube at youtube.com/hardfork. Special thanks to Paul Shuman, Puywing Tam, Brooke Minterz, and Dahlia Hadat. You can email us at [email protected] on whether you think we'll say "donk" on next week's episode. Donk.

• 1:11:50Speaker 02

  Jinx.

• 1:12:11Speaker 03

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