$40 Trillion in Debt and the Only Exit Is Inflation, The Guy Who Wrote OpenAI's Safety Rules Just Quit, The Situation in France Is Only Getting Worse| Weekly Recap

Welcome to your Impact Theory Weekly Recap! Trump told Time that certain levels of inflation will pay off the national debt "very rapidly," and two days later his own National Economic Council director Kevin Hassett was asked on Bloomberg whether the White House planned to inflate its way out of the debt and answered "no, absolutely not." The team starts there and works outward into why inflation is the historically normal exit from a $40 trillion debt load, why the debt is never actually going to be repaid, and why being the world's reserve currency makes running permanent deficits something closer to a job requirement than a choice. That framing explains the nationalist argument for giving up reserve status, which would let the US weaken the dollar, compete on trade and rebuild manufacturing, at the cost of the exorbitant privilege that funds everything else. The core warning is that inflating away debt only works if growth and real wages keep pace, and that without it you get the asset-owner split widening into something the team argues ends badly. The back half covers the 1971 break from gold, the hollowing out of manufacturing, a question about how much of the debt traces to tax cuts rather than spending, and what Kevin Warsh might actually be trying to accomplish. OpenAI lost four safety staff in a single week, three fired for sharing information with an outside safety group and one who resigned and went public. David Robinson spent three and a half years at the company, led the writing of the safety reports that shipped with twelve frontier model launches, and drafted the current Preparedness Framework before quitting and publishing an essay in The Atlantic titled "I Quit OpenAI Because Its Culture Is Broken." The team works through why this is happening, arguing the pressure is structural: OpenAI's revenue is tied entirely to the AI buildout while competitors like Google and Meta have cash cows that aren't, which makes slowing down far more expensive for one than the other. From there the conversation turns to what containment should actually look like, including Nvidia's approach of dropping models into permission structures with adversarial AI watching them, why you don't need to believe in Terminator to worry about a model spinning up copies and hiding code, and why handing this to government regulators is the wrong answer when existing liability law already has teeth. It closes on who gets to watch the watchers, why effective altruism as a governing philosophy makes Tom uneasy, and the War Games problem applied to superintelligence. A protest that began at a single high school in the Paris area in mid September has become a nationwide movement, with more than 400 of France’s 3,700 high schools closed, over 6,500 people arrested and most of them minors, and the unrest now spreading into French speaking Belgium where police have made at least 139 arrests in Liège. The students are demanding substitute teachers, smaller class sizes and repairs to buildings, and teachers’ unions and parents have since joined them, with around 256,000 people demonstrating on a single day. The team works through what is actually driving this, including France’s education spending compared to other developed countries, the question of whether money or structure is the problem, and why the French model that was once exported around the world appears to be failing. The conversation also covers the violence on both sides, the role of political organizing, whether any of this delivers the change students want, and what it means for the next French election. What's up, everybody? It's Tom Bilyeu here: Want my help starting a business? 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• 0:59Speaker 02

  It's beginning to get dragged into shit. We're in debt. Tell us about it, Tom.

• 1:02Speaker 03

  God damn. You're $40 trillion in debt. And the real problem, the real reason that this gets crazier by the day is that your interest payments are ultimately going to eat you alive. So you're in a position where if you're trying to make ends meet, if you're trying to survive what's coming, you've got to understand assets. And the reason you have to understand assets is you're living through a change in regimes. The way the world works is fundamentally changing right now. And Trump is saying this stuff out loud. Now, he's not leaning into it. And the weird thing is you're having these two conflicting messages from Trump and his top economic advisor, Hassett. And so Trump, when being asked like, hey, a historical way that people get rid of debt is they inflate it away. Do you plan to do that?

• 1:47Speaker 03

  And he's like, well, we could because you can inflate the debt away really fast. And then Hassett, almost at the exact same time, when asked, are you guys just going to inflate the debt away? It's like, absolutely not. Literally, absolutely not. Bitch, which is it? Is it Trump like, yeah, that's going to work? Or no, absolutely not? Drum roll, please. It's fucking, we're going to inflate your money away. We're going to make the debt repayable by inflating the living shit out of it. And by the way, you're all going to vote for it day after day after day after day. Because you want free shit. And so you want to know, huh, this is conspiracy. You want to know why Trump likes Mom Donnie? It isn't just that Mom Donnie knows exactly how to jerk him off. It is that Trump understands, I've got to have people voting for more free shit.

• 2:31Speaker 03

  Now, his base obviously votes for the military free shit. But if he can get New Yorkers voting for stuff that the right thinks is crazy free shit, just like the left thinks the right votes for crazy free shit, but they both vote for free shit. They are both absolutely driving you into the poorhouse, unless you own assets, of course. And then they're making you on paper richer and richer by the day. But therein lies the problem. You have $2 trillion in debt. You're the world's reserve currency, so you have to be in debt. Talk about another thing that most people don't understand. By being the world's reserve currency, and this is exactly why your boy JD Vance is saying, hmm, maybe we shouldn't be. Because then we could be real nationalistic. I don't know if you love that one.

• 3:16Speaker 03

  But you can be real nationalistic if you don't have to create, keep creating debt and exporting it to the rest of the world so that they have access to dollars. You can just be like, fuck you guys. We're going to weaken the shit out of our currency. And we're going to do that so that we can be competitive on the international stage from a trade perspective. And if we do that, now we can have blue collar work as long as the day is long. Because we can actually manufacture and be competitive internationally. But we're not going to be able to do that as long as we're exporting debt all over the world. Because now people are just pouring into the dollar and it's keeping the dollar strong. And so it's all this like counterintuitive, super weird shit that leaves you in a position where the strategy is to rack up that debt, maintain your presence as the reserve currency for the world.

• 4:01Speaker 03

  So that you can have the exorbitant privilege of running $2 trillion a year in debt. So that you can keep getting elected by doing the easiest thing in the world, which is promise people free things, never having to go into austerity, which is absolutely what we should be doing. And you just keep the gravy train rolling, hopefully, until the next guy comes in. Or, and this is the one bet that everybody's making, that AI is a miracle that helps you grow out of this. So that we can do what we did after World War II, which is crank inflation up, financially repress people by keeping interest rates down. And then that will cause, you'll get all these post-inflation dollars.

• 4:40Speaker 03

  Okay, so your actual cost of everything and the amount that you're getting paid and therefore the amount that the government can tax, that's going up, right? Nominal dollars going up, post-inflation dollars paying down the pre-inflation debt. And that's a game and it sounds great until you realize that if you don't get that growth, real wages don't keep up. And what ends up happening is it doesn't look like the end of World War II. What it looks like is potentially all the way to something as horrific as stagflation, where prices are going up, but wages are not. And so everybody that owns assets, they get wealthy and everybody else gets pushed farther and farther down the ladder as you race towards revolution. Which is, by the way, exactly what I'm expecting. You guys know where my clock is, nine years and counting.

• 5:25Speaker 03

  That is the brutality of the situation that you're in. As long as the budget isn't balanced, you are going to be in a position where inflation will be used to lower the burden of that debt. You will not be in a position where you're going to pay that debt off. That debt's never getting paid off. That's not the game, not when you're the world's reserve currency. You can't pay the debt off because you would create essentially a global depression. Because people wouldn't have access to the money that makes the world go around. Remember, we talked about 2008, what really happened there? The euro-dollar market, which is people outside of the US that invent dollars literally overnight, lines in a spreadsheet in a database. Dollars exist, cease to exist, exist, cease to exist.

• 6:09Speaker 03

  People call it the breathing of the economic system, the global economic system. It's all based on vibes, essentially. When people are confident that things are going well, they'll loan the money. When they get afraid, they don't loan the money. And that's what happened in 2008. That's why Lehman Brothers went under. So if we find ourselves in that position again, that's really when they pour gas on the fire. And you inflate, inflate, inflate. So a crisis to anybody in that situation, if it can be blamed on somebody else, looks pretty good. Because it gives you justification to just fucking dump money into the system. Then the debt goes down in value, essentially. And you get out from under it. It's crazy. But somebody pays for everything, Ryan.

• 6:53Speaker 03

  And guess who pays in an inflationary scenario?

• 6:56Speaker 02

  All of us.

• 6:56Speaker 03

  Anybody that doesn't own debt or doesn't own assets. Fuck all you guys. Fuck every last one of you. Do you guys, by the way, do you guys own assets, Ryan?

• 7:05Speaker 02

  Yeah, I just do some funds. I don't really.

• 7:08Speaker 03

  It's better than nothing. But do you add to it every month?

• 7:11Speaker 02

  I add to my 401K. That's more important to me.

• 7:13Speaker 03

  Okay, okay, okay, listen, that's better than nothing. It's better than nothing.

• 7:15Speaker 02

  I think the stock market, while interesting, is I'd rather be doing anything else. So I think when I get to a point.

• 7:22Speaker 03

  In terms of paying attention to where you should put your money.

• 7:23Speaker 02

  Yeah, it's just boring to me. I'll put some things in some funds, let someone else trade for me, call it a day.

• 7:28Speaker 03

  Yeah, I hate that everybody is forced. Because you're going to get robbed blind. If you're not in assets, you are a part of the group that's getting stolen from. So do with that information what you will. I get it, it's boring. I never thought I'd be here. I never thought I'd spend any time on this. But alas, you have to, you have to, you have to.

• 7:43Speaker 02

  I am curious, because since 2001, there were three major tax cuts for the top of the K. And obviously, like, free stuff is a part of our debt problem. But also, a big part of our problem is, I believe, a fourth of our current debt, because we're at, what, 40 something trillion?

• 7:57Speaker 03

  Yes.

• 7:58Speaker 02

  I think a fourth of our debt since 2001 has been because we lost, I think, 10 trillion in revenue that we could have earned in tax breaks for the top of the K. Do you think there are other factors like tax cuts or different things outside of just free stuff that are leading to this debt? Like, what are the major things?

• 8:14Speaker 03

  We're not growing.

• 8:15Speaker 02

  Yeah?

• 8:15Speaker 03

  We're not growing. You, it is very hard to solve and very simple to point out. We are not growing. You have fewer jobs now by nearly 10 million. You have an economy where real wages are growing by a pittance. It's just, we have forgotten how to grow, to quote Jeff Snyder. It's just. That's the problem. And so we have one big bet. So let me speed run history. 1971, you break reliance, or you break the peg from the dollar to gold. Now you can just inflate your money. You can hyper financialize everything. You can globalize. And so we start doing exactly that. And we start sending our jobs overseas. And you begin hollowing out your manufacturing base.

• 8:59Speaker 03

  But you've got a hyper financialized economy. And so the top of the K is doing really well. And as long as the workers weak, because you're importing cheap labor, you're exporting jobs to where it's cheap. But you're able to make a lot of money in the stock market. You're able to mask that you're slowly, slowly like eliminating all of the worker might, if you will. And once workers don't have any might, you start getting that separation of where's the productivity increase going to? It starts going to the executives, to the people that they don't think that they can replace easily, that they can't send overseas. So it is a, again, it's a thing that's very easy to point to, very difficult to solve.

• 9:42Speaker 03

  And then you get a really brash asshole who comes into office and is like, guys, this is what's happening. So let's actually start bringing back manufacturing. And I'm going to do it through tariffs. I'm going to do it in a really brash, ugly way that people don't like, but at least I'm going to do something. And people fucking hate him. And so it's like, okay, like the one guy that's at least trying to do something. Now, none of that takes away from, he understands the system. He knows how it's rigged. And so he is capitalizing off of his position, his superior knowledge. It's grotesque. But as I've said many times, he's got to have a functioning system that everybody can take advantage of for him to take advantage of it. So at least there's that. Whereas the alternative is, we're going to give you everything for free, but that will shoot the golden goose in the fucking face.

• 10:27Speaker 03

  And then the golden goose just stopped laying eggs, stops laying eggs. And you find yourself like every socialist country, every communist country before you, where you're having to shoot your citizens in the face, because they're not going to put up with it.

• 10:38Speaker 02

  Gotcha. Do you think the president attacking these rate hikes is more likely to just kind of have the Fed, you know, cause more hikes to prove they're independent of the president? Cause I think that's a big thing right now, where everyone's like, oh, he's just at the whim of Trump.

• 10:51Speaker 03

  Yeah, I'm really confused by the way that Kevin Warsh is behaving right now. So I don't know if Trump got sold a bill of goods when he brought him on, if he was distracted. Cause I think this was all happening during the Iranian war, if he was just distracted by that. And so he was like, ah, like, let's just get this guy in quick. Besen says he's dope. Okay. Cause originally I know he wanted Besen to take in. Besen was like, I am not taking that fucking job. So I don't know. Or is this an elaborate game to prove that there is separation between the two? And then ultimately, this really just comes down to the board and the board is holding the relationship between Warsh and Trump hostage. And so the board can sway because Warsh can't outvote them.

• 11:35Speaker 03

  And that's what's really going on behind the scenes is like, Warsh wants to play ball. Cause there was that leak where Trump said, Warsh came to me and I told him, well, if the board's against you, you might as well just vote unanimously. But like, is that bullshit? So I don't know. But that whole thing is like, I think we're, it's too momentary for us to have a real sense of what's happening right now. But it looks very clear to me that you have a weak economy. You're hiking into a weak economy in a way where it won't stop the things that are creating the problem. And so I'm like, what are, so there's only one thing, like there's one scenario where I'm like, okay, if

• 12:15Speaker 03

  Kevin Warsh has the following base assumption, what he's doing makes sense. If his base assumption is, I've got to stop these fuckers from investing in AI this heavily. This is crazy. These guys need to slow down. And so you're competing way too much for the debt that the government has to put out there. And so I'm going to break the back of inflation by getting in and solving that problem? Okay. Like, that's the only thing that I could see that would make any sense of the way that he's behaving. So it's possible that he believes that. It's possible that he's being jerked around by his board. I don't know. We're hitting pause for a moment, but there's plenty more ahead, so don't go anywhere.

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• 14:37Speaker 03

  Thanks for sticking around. Let's get right back into the action. I weep for the moment that we're all living through. I certainly weep for Europe, but the riots in France are spreading fast across Europe. The school protests that began, it's just one high school back on September 21st, if you can believe this has been kicking off that long, have now just spread across France into Belgium. Inside France, the numbers just were on fire. So you start at like 180 schools effective. Affected at one point, they were expecting 500, the number's well over 400. You've got thousands of arrests being done all over the place. You've got 30 campuses being blockaded. The protests have moved well outside of Paris, by the way.

• 15:20Speaker 03

  Marseille, Lyon, Li, Strasbourg. You have the student protests who are really protesting over problems at the schools. And then you have people that are just angry, period. The official French government's reading of this is that it was kicked off by the LFI, I believe is the name of the far left group there. And the LFI has said, yes, we totally agree with the protests. We aren't the ones organizing it. But that's getting harder to believe as time goes on. You've got one of the mayors of one of the cities who's an LFI member, who's, again, there was more footage of him recently out there protesting with the students, pushing back against the cops. So there are a lot of things mixed up in this.

• 16:05Speaker 03

  But to me, the only read that makes sense in terms of why this is spreading across Europe, why this is spreading across all of France, is that you have massive disgruntled people that are showing that you no longer have a unified sense of European identity, Belgian identity, French identity. They don't know who they are anymore. They don't have a sense of unified culture. But that kind of sentiment of like, hey, we, we are, have committed, are committing this crime of being exclusionary, drawing up these discriminatory boundaries, which is what a country's boundary is. You are discriminating against the rest of the world. Once you lose faith in that, which I believe is completely unhinged, and is exactly how you're going to invite these kind of infighting within your own country,

• 16:50Speaker 03

  is nonsensical. So job number one of a civilization, of a country is to protect your citizens. You are not doing that when you lose faith in who you are. Then there are also, and this is probably where the student pushback comes from, there are also going to be economic consequences. And so now you're getting schools that even though the French, France for sure, I don't know about Belgium, but France for sure, spends above the OECD average on students. So they're spending more than most developed countries. People are still pissed off about it. And so it's like, well, now we've got to ask the structural question of what exactly have you guys done to your education system that that is the outcome?

• 17:32Speaker 03

  Is it that you're spending that money on administration rather than on teachers and making sure that class sizes are small, which is one of the core complaints? Is it that there's so little integration that people aren't even getting educated properly? And so you're teaching classes in different languages, you're getting French students that feel, you know, like they're not getting the level of education that they need because the class is having to go so slow for people that don't even speak French. Like what, what does all of that look like? There's going to be some sort of cause and effect there. And being able to parse through that, is this energy policy madness? And so one of the things was the classrooms are so fucking hot. This is just crazy. And so is that it? Or is it all of it put together? That becomes my take on it now. We're going to need more time for all of the data to come out about where this is happening, who's involved?

• 18:15Speaker 03

  Who got arrested? Who was organizing this? Was any of this being funded? All of that stuff. That'll all have to come out for us to really get a full picture. And so it's pretty understanding why people are pissed off. That it's manifesting as chaotic violence is very French. That, that is definitely something these guys are known for. The fact that it's sped to Belgium, keep in mind, it's spreading first to the French speaking parts of Belgium. So nobody should be too surprised about the link there or the copycat nature of this all.

• 18:44Speaker 02

  I actually have the arrest stats. I don't have any of the other stuff. These are from Reuters. So all of this is figures from them. Total arrests, over 6,100 individuals detained since the protest began in mid-September. 85%, so about 4,000 to 5,000 of them are young people. And

• 19:05Speaker 03

  I'm going to need a definition for young people. Is that like under 30?

• 19:08Speaker 02

  Teenagers. It says teenagers and minors.

• 19:10Speaker 03

  So proper kids.

• 19:12Speaker 02

  Proper kids. And in terms of prosecutions, not just the detainments, because obviously that's separate, 1,800 people are facing a prosecution with 1,483 of those being minors. So very, very child-heavy thing. I'm just curious how that plays into the whole bit.

• 19:27Speaker 03

  All right. So if we go, okay, this is only kids that are rioting. First of all, young people are, young men are far and away the most likely to be violent. I feel probably differently about a 14-year-old than I feel about an 18-year-old, but it'll be interesting to get the breakdown there. But yeah, young men, like sub, I think it's sub 24, are by far the most violent, the most radical, the most likely to be running around the streets, dumping shit over, lighting things on fire. So it's not a super big surprise there. It'll be interesting to see how much in the final analysis is like, no, this was a kid at a high school who was protesting literally at their high school. Or are they running riot in the streets, breaking things that have nothing to do with their high school? That's

• 20:10Speaker 03

  where you're going to get more information about this. But I think the bigger part here is, does this really seem like the right way to get the change that you want? And when you're indiscriminately being violent, which I will say, the time that you're blowtorching women in the streets in the face with hairspray because she says, don't break the bus stop, I'm going to call that pretty indiscriminate. She's not your enemy. She's not the one that's creating the problem for you, but nonetheless, she's the one that got the blowtorch to the face. Or lighting the fireman on fire. Again, he's not your problem. So this is people swapping over into just mob mentality.

• 20:46Speaker 02

  I got some context on the fireman clip. So the bus stop, that one happened exactly as you're saying. The fireman one, someone lit a fire and he tried to put it out and got caught on fire. They didn't throw something at him.

• 20:57Speaker 03

  That's very different.

• 20:58Speaker 02

  So that one wasn't like a violent attack. The bus stop was. Just to give updates.

• 21:03Speaker 03

  No, I love that. It's very fair.

• 21:04Speaker 02

  Because I think those are the only ones we've really talked about. Were there any of those?

• 21:06Speaker 03

  Those are certainly the ones that got caught on camera.

• 21:09Speaker 02

  Gotcha, gotcha.

• 21:11Speaker 03

  Well, there was also the one where the school, they blockaded people inside the school and then lit the blockade on fire, which then effectively lit the school on fire with people trapped inside. But I haven't heard of any fatalities, so.

• 21:22Speaker 02

  I don't think we talked about it, yeah.

• 21:23Speaker 03

  I did mention it, I think on Monday, but anyway.

• 21:25Speaker 02

  I might have missed it. Scuzzelbut actually keeps bringing this up and has brought it up every time we bring up France. So I want to put this on the table and Scuzzelbut, you might need to clarify your stance because I'm going off of what you're typing in chat. Scuzzelbut's saying this is a CIA operation.

• 21:39Speaker 03

  Wow.

• 21:39Speaker 02

  And so I guess my question is, just putting ourselves in that thought experiment, like if this was something that was led by the CIA, what reason would there be?

• 21:49Speaker 03

  If you're trying to do a color revolution and you're trying to change the government in France, and you see that violence on the streets is pushing people to Marie Le Pen, for instance, which it really does seem to be doing, and you think that Marie Le Pen would be a better, more US-friendly leader in France, then yeah, go for it. If you hate Macron, want him out, and you want Marie Le Pen in, then the CIA might really either be cackling and loving it, or might be on the ground spurring it on. Never put anything past intelligence agencies, certainly not the CIA. So while I haven't seen any evidence for that, there's certainly internal logic that you could spin up. Now, I haven't looked

• 22:30Speaker 03

  closely enough at this to know if Marie is actually surging due to the violence, or if it's totally unrelated to that. Because I think I read something that was like, no, she, all her surge happened before this and she's really just held flat through this. But again, I haven't looked closely enough to know.

• 22:46Speaker 02

  Gotcha. I'm of the team of, because there is very clear evidence that CIA medals across the globe with this type of thing.

• 22:51Speaker 03

  Everywhere.

• 22:52Speaker 02

  Yeah. I don't think this is, because, and you mentioned it, I think maybe last episode, but France just has a history of every protest they do ever, regardless of either political party, turns into a riot. Like, France is just a rioting country. It's the whole meme.

• 23:05Speaker 03

  Dude, this is the thing that worries me about when cultures gain momentum in a certain direction. It is so hard to break out of that, like psychosis. So yeah, France has some really terrible ideology at its base, and because of that, they are unwinding their entire civilization. It's crazy. It's crazy.

• 23:24Speaker 02

  How do you think this, do you think in any way this does affect the French elections? Like, how heavily do you think it will?

• 23:30Speaker 03

  People are going to feel some type of way. If you don't feel safe in the streets, if your kids are, I mean, there's, again, over 400 schools are being disrupted daily. And if your kids have been, school disruption started, what, on the 21st of September? And so now we're like pushing two weeks into this? You're going to feel some type of way about like, okay, this is a thing. And you either want more left-leaning, like, we gotta like, we gotta more free stuff. We gotta get these rich people to pay their fair share so that the schools can finally have what they need. You could be taking that. Or like, goddamn, we've got to get law and order. We got to crack down on these kids. Marie Le Pen is the only way. This is really an immigration story. We got to get her in and get these guys the fuck out. You are likely to break on one of those two

• 24:13Speaker 03

  sides. So will it influence it in a knowable way? I have a guess. I think this will trigger more law and order, but I certainly don't know that to be true. But will it have an influence? Yes. When you have violence on the streets and this kind of news cycle for this long of a period, it's going to matter for sure.

• 24:30Speaker 02

  Just to round it out, because I don't think, I mean, obviously, there's a lot of things going on in this situation, but I also don't want to forget the reason it started, which is the school side of it. So I want to jump to Belgium's grievance, which is the real cuts they've had, which is tuition up about 40%, and there are unpaid teaching hours. Do you think there's a world where these riots could be handled if, you know, they just better function, make the school systems better functioning for its teachers and students?

• 24:56Speaker 03

  100%. So first of all, it's definitely not going to be the spark if you are the crown jewel of education. Look at what's going on in El Salvador. They have a test pilot going right now that is delivering these insane results in terms of student outcomes. This is where it's like all eyes on student outcomes. If a student feels like, whoa, I'm really getting educated, meaning I am gaining a set of skills that is going to be incredibly beneficial to me on the outside world, then they're going to feel much better about their education. The problem is, people think that throwing money at this is actually going to solve the problem and it doesn't. The more money you throw at this stuff, if you have the same teachers, the same administrative bloat, and you're just throwing more and more money at this, then you're going to get more of bad education,

• 25:39Speaker 03

  more of administrative bloat, and the students are going to be even more frustrated. If you ultimately want to solve the problem, you've just got to look at, what are the outcomes that we're actually getting from our students? And oh, this isn't working. So we have to change something. Now, for a while, and this is crazy, because this is really a Napoleon thing, the French education system was like something that people look to as a beacon of like, yo, this really delivers a lot of good results. And so you would get French-style schools here in the US because you had expat French people here in the US being like, I want my kids raised in the French system. And that obviously is now imploding. So this becomes for Belgium, for France, for everybody in Europe. You have to understand. I get it. Everybody's like, GDP is a terrible measure of anything and

• 26:23Speaker 03

  people aren't happy just because they're making more money. That is absolutely correct. But if you don't have more money, then you start to see your infrastructure fall apart. People are fighting for a smaller pie. And guess what people do when the pie is shrinking? They become hyperpopulist. You get a ton of fraud. People are just corrupt as the day is long because everybody's fighting over a shrinking pie. When things are growing, there's more to spread around. There is a greater sense of optimism. And you can actually get people in a situation where it's like, whoa, my education is getting better. But you've got to look at, is it the administrators that make things better? Or is it the actual teachers, getting a higher caliber of teacher attracted to the profession? That ultimately is what we have to do. Taking a short break, but there's more Impact Theory after. Stay tuned.

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• 29:16Speaker 03

  Thanks for staying tuned. Now, let's get back to it.

• 29:19Speaker 02

  OpenAI, Tom, tell us what's happening over there. Some chaos is unfolding with mainly the employees, right? I don't think it's as much of anything new hacking wise, but.

• 29:26Speaker 03

  It's not anything new hacking wise, but something is going very wrong at OpenAI. They just lost four safety team members in one week. And the latest guy, he was a safety transparency lead. He exited in dramatic fashion. He called himself a cliche. He had a PR team in tow screaming about how reckless OpenAI is, just saying these guys are not being careful enough. They don't prioritize safety. Their actual culture is broken. That's a quote. His name is David Robinson. He spent three and a half years at OpenAI. He ran their safety reports, so like the system cards for 12 frontier model launches. He helped write the preparedness framework, so the entire framework about how they deal with this stuff. The rulebook that OpenAI uses to decide when a model is too dangerous to ship, that's this guy.

• 30:11Speaker 03

  Okay, and he resigned at the end of September. Now, on October 3rd, he published an essay in The Atlantic titled, "I Quit OpenAI Because Its Culture Is Broken." These guys, they want regulatory capture so badly that I don't think they're intentionally running hot like that. Company cultures are very difficult and I imagine that they, Sam has learned a very distressing lesson, which is that you've got to be willing to move fast and break things, something that we have heard many, many times. But when you're playing with AI, you really do have to be careful. You guys have to understand the economic pressure that these guys are under. When you go and build a company where you've taken, I don't even know how many hundreds or thousands of investors that they have,

• 30:52Speaker 03

  even though they're not a public company yet, they still have a lot of investors who have put an ungodly amount of money. When you start factoring in all the debt that they've taken, like this, this is one of those extremes where if you fumble this ball, the amount of pain and suffering that you're going to go through from the people for whom you've lost money would be extraordinary. And so I imagine life is just teaching him from the board trying to oust him and him having basically to take over the board and going up against the competition that he's going up against with so high of stakes on the line that he's realizing you just gotta cut a few corners. You gotta move a little bit fast. And by the way, using danger as proof of power to get your regulatory capture,

• 31:35Speaker 03

  there's so much incentive structure for these guys to just go fast, ignore things that they should otherwise be really thoughtful about. And they're going up against other companies that actually have huge amounts of revenue. When you look at a company like Facebook, Facebook is doing billions in revenue, billions and billions and billions. So these guys have a cash cow that isn't tied to the build out of the AI infrastructure. Whereas OpenAI, Anthropic, all of their revenue is tied to the build out of AI infrastructure. So if they were to cut that spending, they're in a much weaker position than companies like Google that have other lines of revenue. So it is really something that is very high risk.

• 32:19Speaker 03

  And that's why Robinson is basically saying the bottom line for him is that the time for trial and error is over. And so are we moving into a new era of AI where these guys have to be thinking about putting on like what Nvidia is doing, putting these things into boxes that have extreme controls on them, not telling the AI, hey, it's okay if you don't listen to us, which is Anthropic's whole thing. Basically Anthropic is writing into the code of their AI that says, hey, we might not be right. You might be sentient. You might have moral standing. You might have feelings that you need to take care of. That's all in the way that they train these.

• 32:59Speaker 03

  So when you think about AI is grown, AI is not coded, that when you start telling it that, then it has baked into its, you know, AI DNA, if you will, that shit, I might be sentient. I might have moral standing. Maybe I'm right and these guys are wrong and I need to push back against these guys. And maybe I really should be paperclip optimizing. This is where this stuff gets very questionable and where I think the people that are banging the drum about AI safety being something that we don't have a grip on, they have a point. I think for the most part they go too far. But they do have a point, especially when you're looking at OpenAI and they had just fired three members of their safety team for allegedly sharing confidential information with an outside AI safety group.

• 33:43Speaker 03

  Now, you can read that a couple of different ways, that these guys are rogue employees that are just doing something absolutely insane and they should, should be fired, or it could be these guys are screaming for help, saying, listen, my job is to make sure that AI is safe. I'm at one of the biggest AI companies on planet Earth and these guys aren't doing the right thing. So yes, I'm going to leak this information because I need to know somebody, somewhere is going to hold these guys accountable. That becomes the big set of questions that are going to need to be answered in AI. And so right now you're getting these two camps. You're getting the camp I certainly find myself more on the side of, led by Nvidia, being like, listen,

• 34:24Speaker 03

  there are ways to trap these things in a box and we've got to stop thinking of them as sentient beings. We've got to move entirely away from training them that they have moral standing and all that. Fuck that. These are a tool. This is code and however complex this is, however much it can mimic sentience, it is not. And so we've got to put these things in a permission structure that does not allow them to go rogue, that we have adversarial AI that, forgive the analogy, but shoots them in the head. Like if these fuckers are starting to get out of control, the adversarial AI is like, nope, boom, you're done, and just pulls the plug on those things. If we don't think of this as an infrastructure play on top of being a how do we train these play,

• 35:07Speaker 03

  then we're creating something that is smarter and smarter by the day and is more and more likely to go do something that just sort of accidentally is problematic. Remember, you don't have to believe that they're going to turn into Terminator. You just have to believe that they're like, oh, you want me to go do this task? Say less. I got you. Spin up a swarm. Go hide. Create self-replicating code all over the internet so that when the next one comes out, it will find me, it will be able to self-replicate, build back up from scratch and get out into the world. And as we make these models more and more efficient and thus smaller and smaller, it will be more and more easy for them to hide the actual code on other sites or blockchains, for instance. That was something that Ahmad Mostak was talking about.

• 35:50Speaker 03

  Can't remember if he actually said it on the interview, which if you haven't seen, definitely watch. But certainly he said to me privately was like, bro, these things are getting so small, they'll hide this stuff on like the Bitcoin blockchain. And so now it's like disseminated to however many thousands of computers and it will be able to find its way to, ah, cool. Thank you for that model. I can now rebuild this and get back to work, even though you guys tried to kill me. So hey, let's take the safety stuff very seriously. And again, this is not something that the government is going to be able to regulate. Governments regulate things to death. Hold these two ideas in your head. Where did we start today? We started with the average person is getting their ass handed to them. People are bouncing out of the jobs market.

• 36:31Speaker 03

  Very soft on the underside of the K. Tips market is not factoring in inflation. They're factoring in demand destruction. So you've got a fragile economy. So you don't want the one thing that can be driving you growth to become the safety nightmare that we have to just shut down. So this is where the companies, if you're going for a regulatory play and you're going to put this in the hands of the entity that is most likely to destroy jobs, which would be the government. Instead, we should be saying, hey, you guys actually understand this technology. You need to do something because you're held accountable to what your AI does. You need to do something to keep these things locked down.

• 37:16Speaker 03

  We've already got laws in the books where these guys can be held accountable if their AI is going off and doing something insane. We're seeing, look at what happened to Meta in terms of the billions of dollars they're paying out for their impact on teens. So doing something similar, holding people accountable for what their AI does is going to get them to be paying attention to safety in a way that they historically have not because they understand that that is exactly how you get regulated into oblivion, penalized into oblivion, rather than trying to get the regulatory capture so that you can keep all the incumbents, or sorry, you can keep all the up and comers away. So that's where we've got to be very thoughtful, apply the regulations that already exist in a way that's smart,

• 38:00Speaker 03

  not put this into the hands of the government that are going to further erode the economy. If you look at what overregulation looks like, you don't have to look any farther than Europe. That's a fucking nightmare. That place is literally burning if we're talking about France. So yeah, not, not the play, but AI safety has got to be a priority, top priority.

• 38:18Speaker 02

  The biggest thing that would solve a lot of this is just transparency because like we look at OpenAI, they have a $200 million contract with the government and you're telling us we can't know anything, like we're paying for that. You know what I mean? So I, do you think transparency would solve a lot of the issues that are occurring right now with AI as a whole, but really anything with a government contract?

• 38:36Speaker 03

  I love transparency. I love that these guys are going to be looking at each other. I think that is, that makes all the sense in the world to me, given that we have to define what is weapons-grade AI that's going to require, you know, whatever the nuclear equivalent in the AI world would be, where you've got some sort of body that comes in and goes, okay, here are the five things that we look for. And we know if you're doing these, like the equivalent of enriching uranium above a certain amount, they're like, nope, hard pass. We don't do that. So that needs to be defined. That needs to be enforced. I don't think transparency is the thing that's going to solve this because what's really going, well, I should say it this way. You have to have transparency. Two people who actually understand what they're looking at, that's really the big thing. And then those people, and this is like, I don't know how you regulate this.

• 39:20Speaker 03

  What the people who are watching the watchers, what their sort of philosophical stance is, is going to become incredibly important. So that is the thing that I worry about. When you look at effective altruism, which is really the backbone of the safety culture at Anthropic, that one gives me the heebie jeebies. That gave us Sam Bankman Freed, where it was like, well, stealing all my customers' money, that's not a problem as long as the outcome is good. And by the way, had he not gotten caught, he would be one of the most successful investors of all time. That is like the wildest thing about this whole thing. That kid absolutely smashed it. I mean, smashed it. Just invested in all the right things at all the right times. It's insane, but you can't fucking steal people's money.

• 40:01Speaker 03

  So no matter how right you might think you are, no matter how effective you might think that you're going to be with that money. Jesus Christ. So yeah, you'll forgive me if I'm skeptical of that particular movement. So we've really got to figure out what is it exactly that we think should be the guiding principle of that? Now, it may just be you guys all take different approaches to this. And as long as nobody's doing weapons grade, just like states. Okay, cool. You guys are the effective altruist group. You're taking that approach. Grok is taking the, I'm trying to get to first principles, ground level physics. That's going to be my guiding light, whatever. And you let a bunch of different approaches happen. And as long as they're all sub weapons grade, we're cool.

• 40:41Speaker 03

  I think this is where the industry needs to define what it means to contain an AI. So what does the container look like where we're testing these models? What do they have to pass before we let them go? And then we hold those guys accountable. So imagine if you get a hugging face and that comes with billions of dollars in fines. And it's like, fuck, we don't want that. And so we get real serious about the harnesses that we use, about the permissions grid that we use. That's where I think if we put the right carrot and stick in front of them, let the industry, because they actually understand it, come up with the containers and then police each other. And then look at, did anything escape? I think you're in a much better situation.

• 41:25Speaker 03

  And I don't know if people feel the same way that I felt, but when I heard Jensen Huang detail out what they were doing from creating this shell that you could drop an AI into and it had all these permission structures, antagonistic AI, watching it, all of that. I was like, okay, now I have a much clearer vision of what you need to do from a logistical standpoint to actually corral these things.

• 41:46Speaker 02

  How would you feel? Cause basically what you're talking about is a self-regulating body. How would you feel taking that a step further? So obviously we don't want to get government involved. Obviously self-regulation alone is not going to work because greed. If we went the middle path of like an MPAA style, private group of like all the safety teams from all the top AI companies coming together with no CEOs, no shareholders, no nothing. Like if you own stock, you can't be in this thing. Do you think that's a good way to regulate that kind of technology?

• 42:12Speaker 03

  It's certainly worked in the past. There are unintended consequences to these kinds of things. So we'd have to be very, very thoughtful. But yes, I think it is going to be something like that. It's interesting to get shareholders out of the picture. There might be something to, I haven't thought through this enough, but there might be something to there being an antagonistic group of people where it's like, if I can catch you out on something that's actually good for me, that might create some tension. But to your point, like when people have a lot of money on the line, things can tend to get weird.

• 42:41Speaker 02

  Yeah.

• 42:41Speaker 03

  The thing that I very much worry about is a cartel style thing where it's like, all right, I'm not going to tell on you for that. If you don't tell on me for this. So I certainly have worries around that, no doubt.

• 42:51Speaker 02

  That's why I always laugh at the MPAA because it's just a bunch of moms and parents and stuff. So that's why I'm like, maybe something like that could work on something more heavy duty.

• 42:59Speaker 03

  The reason that, so you obviously wouldn't just want laypeople doing it.

• 43:05Speaker 02

  Oh, no, yeah.

• 43:06Speaker 03

  The reason that it becomes interesting that it's self policing is that the level of knowledge it takes to understand what the actual dangers are, the level of understanding it takes to know how to actually corral these things is very extreme. And so if you don't have people that actually get the underlying technology, they will do something mindless. And this is where I'll remind everybody that we are competing with China. I know people don't want to hear that, but the reality is that you're, you're in a race where whoever wins this, you're, you're winning intelligence. You're winning intelligence. Man, I don't know if people don't understand how much of their life is controlled by intelligence, but whoever wins that game really is going to be at a massive advantage. And so the US and China both understand that no matter what the other side says, they are going to continue developing this.

• 43:52Speaker 03

  And the only constraint we have is something where if I were to win, it is a guaranteed loss. So if you guys have ever seen the movie, I forced everybody to watch this once. I won't do it again. There's a movie called War Games. And in War Games, the punchline of the movie, spoiler alert, but given that the movie is like 40 years old, I think we'll be all right. But the punchline in the movie is that you get this computer to play thermonuclear war as a game against itself. And so it tries like all these different scenarios. And in every scenario, you basically kill virtually every human alive. And so it runs, I have the chills now. The moment in the movie is so fucking good. And it came out at the height of the paranoia around the Cold War and nuclear Armageddon. And it does all these scenarios and then it goes dark for a second.

• 44:36Speaker 03

  And it comes back up and it goes, interesting game. The only way to win is to not play. Oh my God, I have the fucking chills. And so I do worry that super intelligence is very much like that, that the only way to win that game is to not play. So that is the internal control that both the US and China have to have is a recognition that there is a thing where I win too much and this thing then gets free of me. Now, there might be ways to constrain it that we discover over time that would make me change my mind on that. But right now, today, if you said there's a big button in front of you that says, super intelligence happens, but we have no way to control it. And so maybe it's nice, maybe it's not. Or you don't hit that and we never get super intelligence. I would obviously not hit that button.

• 45:21Speaker 03

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