Pioneers of AI: Reid Hoffman says the AI race is not a cage match

Anthropic and OpenAI’s plans to go public have set off waves of speculation about the ripple effects, and how they’ll stack up to the SpaceX IPO. What’s really driving the value of these companies? Does the timing of the IPOs matter? How might they impact the AI startup ecosystem? To process all this, Pioneers of AI phones a friend: Reid Hoffman. As co-founder of LinkedIn and Manas AI, a longtime Microsoft board member, investor in OpenAI and Anthropic, and so much more, Reid offers his take on the AI investing landscape. Rana and Reid break down the IPO headlines, sovereign wealth fund proposals for AI, and what’s defensible in AI today. Learn more about Pioneers of AI: http://pioneersof.ai/ Follow Pioneers of AI on all channels: https://linktr.ee/pioneersofai See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

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• 1:45Speaker 01

  When you think about OpenAI and Thropic, well, if you believe that AI has the impact of applying intelligence with the scale and price of electricity across everything, these are going to be two of the major providers of that. We tend to want to tell these stories as cage matches. You know, well, one of them's going to win and the other one's not. And you're like, well, actually, in fact, there's a lot of room for both of them to win incredibly.

• 2:10Speaker 02

  Almost every dinner conversation I'm at, like, the big question is, can you make sense of the valuation of these companies? So what should my answer be?

• 2:18Speaker 01

  Think of it as a little bit like internet valuations. Some of them will have turned out to be insane and go to zero.

• 2:27Speaker 01

  And some of them will have turned out to be way too low and have gone up a lot higher. And then the trick is, which ones?

• 2:35Speaker 02

  Reid Hoffman is one of the leading tech investors of our time, and I'm lucky to call him a mentor and a friend. He's co-founder of LinkedIn and has backed so many influential startups. Plus, he served on the board of Microsoft for a decade. He's recently said he's turning his focus to Manus AI, his AI drug discovery company. With Anthropic and OpenAI on the path to going public, and SpaceX surpassing a $2 trillion valuation after its IPO, I needed a check-in with Reid.

• 3:07Speaker 02

  So we hopped on to talk about what's signal and what's noise in the AI race, and so much more. I'm Rana El Kalubi, and this is Pioneers of AI, a podcast taking you behind the scenes of the AI revolution.

• 3:28Speaker 02

  Hi, Reid. Welcome again to Pioneers of AI.

• 3:32Speaker 01

  My absolute pleasure.

• 3:34Speaker 02

  It is always so great to have you on the show. It's been a while since we last chatted, and as with everything in the AI world, lots of updates. So I'm excited to catch up.

• 3:44Speaker 01

  Likewise.

• 3:45Speaker 02

  So I want to start with some personal updates on your end. So after a decade of serving on the Microsoft board, you departed from the board.

• 3:54Speaker 01

  Actually, I just said I wouldn't stand for reelection, which means I'm on it through the end of the year. But yes.

• 3:59Speaker 02

  Okay, okay, okay. But you largely did that because you are going back to founder mode and focusing on Manus. So tell us more about that. I'm actually really intrigued by that.

• 4:09Speaker 01

  Well, you know, when Ujwal Sid and I had been doing the work in the last couple of months, and we're beginning to see some

• 4:18Speaker 01

  Small molecule proposals from our AI drug discovery engine that our computational chemists are looking at and going, oh, my God, that's really interesting and that could work. And I said, OK, I've really got to make sure that this thing is navigating and, you know, building these things really matters. And so I got to focus on this and, you know, kind of talk to Satya, I said, look, it's been a long time. I'm always a friend and an ally, will continue to help even afterwards, but I'd really like to spend my time more on building, on, you know, being a founder than than essentially, you know, kind of being a governance person. And, you know, I can still help when, you know, matter of fact, you know,

• 5:00Speaker 01

  Satya and I were just on the phone today talking about some piece of of strategy. So.

• 5:06Speaker 02

  Yeah, amazing. As you reflect on the Microsoft board, anything that stands out, any takeaways, any reflections, insights?

• 5:14Speaker 01

  It's been a couple of things. I mean, one of the things is obviously the LinkedIn acquisitions, one of the epic M and A of history.

• 5:22Speaker 02

  Yeah.

• 5:23Speaker 01

  Terms of, you know, growth and impact and revenue, you know, having higher operating margin, et cetera.

• 5:31Speaker 02

  Also continuing to be successful, right? A lot of, a lot, you know, LinkedIn is thriving still, right? And that's not to be taken for granted. So.

• 5:40Speaker 01

  Exactly. Yeah. And then, you know, kind of helping, you know, the, you know, kind of navigate the organization to buying GitHub, which, you know, was bought, you know, well over revenue in terms of comparable prices, but the strategic part of it and how that plays into the whole coding revolution now and so forth is really key. You know, facilitating conversations of trust between OpenAI and Microsoft, you know, those are some fun highlights.

• 6:08Speaker 02

  Yeah, so incredible. Okay, so I want to spend a little bit of time on the big news in AI. So the SpaceX IPO was on June 12th. Like, it was only in February when SpaceX and XAI merged, right? And a big part of SpaceX's IPO story is actually an AI strategy and AI narrative. And it seems that they want to like vertically own and integrate the AI supply chain, whether it's compute, data centers, you know, the model, Grok, Cursers acquisition, which, as we record this, it was announced just 48 hours ago. I would love your take on what that all means.

• 6:44Speaker 01

  Well, in a sense SpaceX talking about itself as an AI company is somewhat honest by the fact that, well, we bought XAI and what we're going to do is use our market cap to try to buy our way into being an AI company is essentially what it's trying to do. And so it's not surprising that, you know, you know, whatever it is, X days after the IPO, we're using our market cap to buy Cursor. And I wouldn't be surprised if there were others as well, because SpaceX isn't an AI company. XAI is, as Elon himself has described, it's a complete train wreck for its, you know, kind of building of foundational models and other kinds of things. And, you know, all of the founders are left. It's on its third restart, et cetera. And so what if you look at the revenue in SpaceX, it's

• 7:29Speaker 01

  the, oh, we're going to be charging Anthropic a lot for compute. Right? So you're like, oh, you're a, you're a premium priced core weave. I get it, which is not an AI company. But the reason why they're saying they're an AI company is because they're going to go buy a bunch to try to become an AI company. And I think what investors are buying or holding on in this was that, you know, they're going to go spend a lot of equity capital on buying a bunch of AI assets and seeing if they can be cobbled together. You could almost think of it as the IAC of AI in terms of how it's playing. So I'd say it's TBD, watch this space, but use the market cap to buy AI companies and try to buy your way into relevance.

• 8:09Speaker 02

  So Anthropic and OpenAI have also both filed for IPO with the SEC and both are expected to also be historically giant offerings. Now, you're an investor in both of these companies. So I think my first question for you is, do you, do you think the order and the timing of these IPOs, both of them are important in relation to each other?

• 8:31Speaker 01

  I'm sure the two companies do, right? There's definitely a lot of rivalry between the companies, you know, and there's the theory of, you know, who gets out first? And do you absorb the capital? I don't think it matters. I actually think there's a lot of room for both. I think they naturally have categories that they're very strong in. There's obviously everything that's going on with code and its applications. And Anthropic's clearly testing the waters on expanding and design and legal and whatnot. And OpenAI with ChatGPT is clearly the front end search Google kind of equivalent. And is also testing the waters on other things and is coming up strong on.

• 9:13Speaker 01

  Codex is actually insufficiently talked about as a really compelling coding product. As a matter of fact, it's kind of stunning how much it's Claude Code and Codex. Like, one of the questions in the SpaceX acquisition of Cursor is like, Cursor seems to be had its bright star some number of months ago and seems to be fading over the horizon. So what the theory is that it doesn't completely fade over the horizon is an interesting one. But we tend to want to tell these stories as cage matches. You know, well, one of them's gonna win and the other one's not. And you're like, well, actually, in fact, there's a lot of room for both of them to win incredibly.

• 9:48Speaker 02

  Like, almost every dinner conversation I'm at, like, the big question is, oh, how can you make sense of the valuation of these companies? So what should my answer be when I get asked this question?

• 9:59Speaker 01

  Well, think of it as a little bit like internet valuations. Some of them will have turned out to be insane and go to zero. And some of them will have turned out to be way too low and have gone up a lot higher. And this is what happens when you have high growth, fast-moving tech companies, of which the AI is most of it. And so, you know, it's like, you know, look at what Google became from being an internet company. And then other things bombed for being too early and other things. And so I think there'll be a number of these valuations that'll just be like, oh, yeah, you paid a lot for that and that turned into zero. But I think there will be others, for example, when you think about OpenAI and Anthropic. So why should it be valued in the same trillion-dollar company that these others are?

• 10:44Speaker 01

  And the answer is, well, if you believe that AI has the impact of applying intelligence with the scale and price of electricity across everything, and these are going to be two of the major providers of that. And what's more, you can already see some of the revenue really, really well. And frequently, the revenue comes later, like in the OpenAI category, you know, like advertising, because like, for example, Google's early theory of revenue was we're going to sell enterprise servers. And it's like, well, that didn't work. And then it's like, oh, AdWords, you know, thus far best business model invented in human history. So, you know, if you're like, all evaluations are crazy, you're wrong.

• 11:28Speaker 01

  If you said some of the valuations are crazy, you're right. And then the trick is, which ones?

• 11:32Speaker 02

  Which ones? Yeah. I think the other question that comes up a lot is, do we care whether these companies are profitable or not? Is venture at the moment, and maybe eventually the public markets, are we subsidizing the cost of AI and the cost of tokens? Like, how do you make sense of that?

• 11:52Speaker 01

  Well, we're definitely subsidizing it for growing. You know, kind of a modern exemplar, speaking of, you know, trillion dollar companies, is Amazon, which was unprofitable and barely profitable for a very long time, and yet has an amazing strategic position and continues to be that. So it doesn't matter if they're profitable to IPO. It does matter that companies become profitable and then eventually become, you know, seriously profitable. But, you know, part of valuations, which most people don't appreciate, is like, it's future expected terminal value. So you go, well, this thing is so strategically important, it's going to exist for a very, very long time and continue to grow and have a important market position.

• 12:35Speaker 01

  Even if its revenues are modest or its profitability is wobbly, that still makes a very valuable company.

• 12:43Speaker 02

  I guess the learning too is you're not always able to predict what these revenue models or business models are going to look like anyway, right?

• 12:50Speaker 01

  Yes.

• 12:50Speaker 02

  It's going to evolve. It is evolving. Yeah.

• 12:52Speaker 01

  Yeah. Part of the thing is, is there some possibility, like, because if you said there's a 3% possibility becomes an AdWords, that's huge.

• 13:01Speaker 02

  I'll be right back with more of my conversation with Reid Hoffman.

• 13:24Speaker 00

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• 15:12Speaker 02

  All right, so let's talk about what this all means for early-stage AI startups. Do you think, back to kind of these IPOs and where this is going, how does this change how we think about both how we evaluate defensibility in these AI innovation ecosystems and also what should we be looking for?

• 15:32Speaker 01

  The change of defensibility and the change of what kinds of things lead to sustaining value, people tend to be overly dramatic and say it all goes out the window. And that is certainly not the case. But on the other hand, a bunch of things that used to be strong defensive moats don't. And so part of the reason why people were talking about this SaaS apocalypse is because they went, well, the previous dynamic with SaaS companies was, you know, it ultimately cost a billion dollars to build the baseline tech that everyone would use. You chip away and eventually get an ecosystem and customer base. And then challengers, it's very expensive to come to because you're continuing to grow your customer base while they have to spend a billion dollars and then get the first, you know, couple of customers. And then you go, well, if all of a sudden it doesn't cost a billion dollars to make

• 16:16Speaker 01

  one of these things, the product feature set of what's useful to them may change radically because individual companies may want things deeply personalized in ways that they can do it with the coding agents themselves. And then, so therefore, the economic model, which was, I could be, you know, have a high operating margin because switching is very expensive. It's like, I don't want to pay you that operating margin anymore and competitors can come in. And hence, SaaS apocalypse. Now, the reason why this SaaS apocalypse is overly stated and it kind of plays the defensive moat question that you have. The real question is not short all SaaS. The real question is short any SaaS that's not aggressive and driven, committed to becoming AI-native and buy the SaaS that is as a direction.

• 16:58Speaker 01

  And that then kind of gives you some code to also what moats might be. There's a bunch of this kind of standard defenses that I think will continue in the current age. Now, the interesting question is which things will add in? And I wouldn't be surprised if there were new kinds of moats. You know, people have speculated, will there be data moats? Maybe, especially on things that are like real-time oriented or like you can only serve the product if you have this particular data versus training data moats, which I tend to think be a little bit more skeptical of. You know, how do network effects play in? You know, how does that work? I think there's a set of different questions there. There's the kind of like, in some senses... Brand and trust matters a whole lot more.

• 17:42Speaker 01

  So if you've established a brand and trust and gotten through the noise, you know, how does that matter? So I think there's a stack of things that matter there. I do think it's one of the things that you and I love about both being founders and investors is that, hey, when you're throwing up all the cards in the air, it takes taking intelligent probability, risk-adjusted bets, working with speed, you know, kind of making it happen. And, you know, that's fun.

• 18:07Speaker 02

  Yeah, that is fun. But, you know, we still believe that there is a lot of potential in vertical AI startups. So like startups that are coming in with deep domain expertise to solve and reimagine workflows in, I don't know, antiquated industries. But, or maybe it's an and, I think of, you know, let's take the legal industry, for example. Three, four years ago, we saw a whole bunch of legal AI companies, and they've been quite successful. But then recently Anthropic just released their legal agents, essentially, which is essentially what these companies were doing. And so I don't know if I would invest in a legal AI startup today, right? And I think that applies to a lot of these vertical industries.

• 18:52Speaker 02

  So that is definitely kind of a question mark.

• 18:55Speaker 01

  Well, I think you have to ask a couple of questions because if it's just like, your company is a thin wrapper on a model, you know, you're basically just waiting around until the model company, you know, kind of decides to go first party. And they may still allow you to run and all the rest. And maybe you'll switch to, oh, I'll be using a Chinese open source, you know, Kimi as a way of doing this, which, you know, is kind of what Cursor ended up doing off Claude Code. But it's not as good. And by the way, part of the reason why these startups are so valuable, whether it's, you know, coding or legal, is because they're dealing in very high economic value. And so the difference is you say, well, you know, Kimi's almost as good. It's 85% as good as like in high economic value things, 85% kind of rounds to zero.

• 19:39Speaker 01

  Right, so it really has to be something that is not.

• 19:43Speaker 02

  A non-obvious problem to be solved or?

• 19:45Speaker 01

  Well, it has to be something that it isn't just that the model company can just literally almost kind of tell its model. Go close the loop and learn everything about this and then just offer the product. Right. It could be that you're integrating data sources that's fundamentally not really available to anybody, including the model companies. And so, for example, you know, even if Anthropic decided, I'm going to start doing Airbnb, it couldn't do that. Right. And so, take what Sid, Ujwal and I are doing with Monus. It's like, no, you can't just go, now Claude, tell us about biological molecules that might actually

• 20:26Speaker 01

  in fact detect and prevent and/or cure leukemia. It don't work that way.

• 20:32Speaker 02

  Right. And actually, this is also, this is my thesis anyway, but I'd love your take. I'm very excited about world models because I don't see Anthropic and OpenAI and kind of the big LLMs going into, they could with enough funding, but it's just, it's such a different play for now, anyway. Which is why we're excited about the physical AI space and the world model space.

• 20:57Speaker 01

  So I think the good thing is the physical model space is that there's a whole bunch of stuff that's pretty unique that's outside of the data sets that OpenAI and Anthropic are doing.

• 21:08Speaker 02

  Including getting your own data for the physical AI world, right?

• 21:12Speaker 01

  Exactly. Right. So the data for the physical world, what kind of actually in fact, you know, compute fabric you need for that, what compute fabric works in the right kind of timeframe, you know, LLMs are still pretty bad at quote unquote, real time. Right? I mean, they try to hack it in various ways. So there may be a whole bunch of stuff there that creates something, but there's a reason why a lot of smart people are doing it. It's a good bet because like, well, here's a new area that's different than LLMs that could be really interesting. It's a risk adjusted bet.

• 21:45Speaker 02

  Yeah, absolutely. I want to talk about the huge influx of capital that will happen with all these IPOs. So with the employees of these AI companies get a windfall from the IPOs, what does that mean again for early stage investing? What does it mean for funds like ours? What does it mean for, like, will we see a whole new slew of AI startups in the way that the PayPal mafia, right, kind of created? What do you think will happen as a ripple effect?

• 22:17Speaker 01

  So I don't really know what fully what the ripple effect is. It does tend to be that when people make a pile of money, they tend to go into some philanthropy, which is a whole bunch of things, and some investing. And one of the things that I think has been not told as loudly as it should about kind of how the ecosystem still kind of got both so broad and deep is because when you had successful people, they stayed there and then they've turned into angel investors and advisors, the next thing. And then eventually the compounds, compounds, compounds. And so when, you know, my PayPal colleagues and I came out,

• 22:59Speaker 01

  we were like talking to each other, investing in things, starting things, et cetera. And so that will certainly happen because it's not just, obviously, the founders of each of these companies. But what happens is all the executives and everyone else tends to make a bunch of money. And the really interesting question is, well, what happens when you're like getting pitched ideas? Let's just be a little bit fanciful on this.

• 23:23Speaker 02

  Okay.

• 23:24Speaker 01

  An AI is pitching you for their business idea. And they're going to go execute this with a whole bunch of different compute fabric. And, you know, either you or you plus an AI or an AI is making the capital allocation decisions. Because by the way, compute allocations will be capital allocation decisions, compute capable part of it. My guess is like, for example, in that universe, there's some deeply utility things about there being firms. Because the firms are running, you know, kind of competent specialized AI with with data and all the rest and all that. This is all similar to the startup landscape becoming highly variable. We now, of course, have the investing landscape changing shape too.

• 24:09Speaker 02

  Yeah. Well, you touched on this with your conversation with Satya Nadella, the CEO of Microsoft. You talk about this idea of a hybrid human AI organization. One question that I have is how do we decide what work gets done by humans and what work gets done by AI? And also in this like hybrid organization, how do you build things like trust and culture and mission and values that are so important to the success of of any organization?

• 24:41Speaker 01

  Well, part of what has made capitalism so essential and so successful to humanity, to all the societies, has been that the allocation of resource decision tends to go to the things that drive quality up, price down, et cetera. And so the answer of like, how does work get allocated is like, well, where does the work get done at a certain amount of quality at a low price? Now, that being said, humans will always be, I think, central participants in this. And so the question will be is, well, how do we feel that we are in a collective market

• 25:21Speaker 01

  game that benefits enough of us in this game that we will all hold ourselves to this game? And so, you know, the kind of notion that human beings will say, well, okay, we're just less effective at everything, the AIs are more effective at everything, they should do everything, is like, well, but we still have to have roles and have to participate. And so we'll be looking for those. But I think we will create the markets that enable that. Now, you mentioned legal before. I think one of the funny things is, and I don't think they should, but I think they will, I think lawyers will go, well, if it's law without a lawyer, it's not law. And so you, we have to be there, right?

• 26:02Speaker 02

  Yeah. I spoke at this, it was like a partner event for a law firm, and I was talking about AI, obviously, which is why they invited me. But I was intrigued because I think there are lawyers who are like rethinking what a law firm looks like in the first place, and they're building it with a whole bunch of AI agents, and it's very interesting, right? They're just rethinking it from the ground up.

• 26:24Speaker 01

  Exactly. And by the way, that's what I think should happen. I think the notion that we like, you know, a little bit like the Pope's great encyclical, it should be like, hey, be focused on what humanity at the center means. It just doesn't mean historic humanity at the center. It means a good role at the center and how the future is evolving.

• 26:45Speaker 02

  I'll be right back after this quick break.

• 27:08Speaker 00

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• 28:51Speaker 03

  Humans will never be more intelligent than AI.

• 28:54Speaker 04

  There's going to be two types of companies. Those are great at AI and those that went out of business because they weren't.

• 28:59Speaker 05

  How do we build a future that is human centered?

• 29:04Speaker 02

  I'm Rana Elkhayubi, and on my podcast, Pioneers of AI, we answer that question and so many more. As an AI scientist, entrepreneur, and investor, I know what it takes to build AI that works for everyone. Every week, I sit down with the pioneers shaping our future, and we take you behind the scenes of the AI that's transforming our lives.

• 29:29Speaker 02

  Find Pioneers of AI wherever you tune in.

• 29:37Speaker 02

  Okay, so I want to switch focus here, and I want to talk about politics. And I will timestamp this to say we had, you know, we're having this conversation on June 17th because politics is also moving fast these days, right?

• 29:51Speaker 01

  Or at least chaotic, since we love, they seem to love volatility.

• 29:55Speaker 02

  Yes, so I want to touch on this idea of a US sovereign wealth fund for AI. Anytime Bernie Sanders and President Trump seem to be agreeing even a little, I'm like, okay, this must be interesting. So I would love your take on kind of Bernie Sanders' proposal, this idea of a sovereign wealth fund overseen by an independent source to tax some of the largest AI companies, and then Trump's proposal, this idea of the United States taking a stake in some select number of AI businesses. What do you think? What do you make of this?

• 30:32Speaker 01

  So, one, I think sovereign wealth funds are a good idea. I think they've been executed in good ways in a number of places in the world, and it's one of the things the US is behind on. You could look at the Singapore fund, you could look at the Norwegian fund. There's just tons of these that are good. Then I think it gets down to, so well, how do you get the sovereign wealth fund started? How does it go? What's in it? And I think a little bit of the question comes down to is, I'll put this in kind of classic, you know, American Wild West libertarian.

• 31:01Speaker 01

  We're going to go steal some property from some people in order to put it in, right? Like, we're just going to go appropriate X percentage. So, you know, that, I think, is very alarming and is destructive to the entire system. Now, if you said something in between the two, and you said, okay, look, it's, this is going to have a huge amount of economic growth, we're going to have civil disruption because of questions of how jobs and industry changes. So we're going to go do something intermediate and say, hey, companies X, Y, and Z, you have to accept investment from us at the same price that you had been priced by the market most recently. And we're going to invest a bunch and own a bunch, and then you can use the capital to grow your business, and that's part of the benefit of being here. And you had some, you know, relatively

• 31:46Speaker 01

  equitable way. I'd prefer it wasn't forced to incent it to happen. Then that's more like, okay, we'll have some economic basis of this. Now, you know, part of it is, I think that there's been a bunch of investment in Anthropic and OpenAI from a number of funds that oversee, you know, pensions, 401Ks, all the rest. There's already a certain amount of public participation in it. So those are all some early reflections, but I do think sovereign wealth funds are a good thing. I'm not sure anywhere in the world we've made state-owned enterprises kind of equivalent functional entities. Right? I don't know if I've ever seen that. I've seen sovereign wealth funds work amazingly well, kind of as venture firms.

• 32:30Speaker 01

  But the, oh, it's a state-owned enterprise. I mean, like, for example, utilities companies, just about anywhere, kind of a problem, anyway.

• 32:41Speaker 02

  Okay, I want to talk about AI safety. So, again, at the time we recorded this conversation, Anthropic was forced to pull its fable and mythos models off the market over US security concerns, which, by the way, Anthropic, they had initially raised these concerns as well. I've always been an advocate for thoughtful regulation of AI, even back when I was running Afectiva. And I don't know how to feel about this one.

• 33:06Speaker 01

  Maybe it's mixed news. I think it's probably bad news, but there's probably some good elements to it. The bad news part of it is it doesn't look like there's anything that's a particular principled, you know, here's the way that we're navigating through things, apply kind of a rule of law and predictability. It's more like, hey, we kind of had some contentious interactions with this company anyway. So we're going to hit them with a stick and we're not justifying why we're hitting them with a stick, but not OpenAI or others and so forth, there's ways of doing this. They say, well, those models aren't the same. It's like, okay, it's not uncredible relative to the cybersecurity particular issues, although I think that Anthropic was putting real energy into making sure even in their general lease, this thing didn't create any problems for key industries.

• 33:51Speaker 01

  So it's a little unclear and, and, and a kind of a, a, you know, call it autocratic, willy nilly way of applying it is very suboptimum. Now, the good part of it is, look, I think we should be paying attention to major threats, cybersecurity, bioterrorism, et cetera, and should intervene when we need to on that. And, you know, at least that's potentially a positive case of that.

• 34:15Speaker 02

  Yeah, yeah. Okay. Last couple of questions. I am curious, what category of AI do you think is most undervalued by the market right now and what is maybe overvalued? And what are you tracking, even if you're not invested yet? Again, asking, asking for a friend.

• 34:35Speaker 01

  Asking for a friend. Well, as an investor in your fund, you know, I'd say, you know,

• 34:42Speaker 02

  Yeah, don't share all the secrets on here.

• 34:44Speaker 01

  Yes, exactly. So, um, look, I mean, it's obvious that I think that the biopharma stuff is pretty important. I don't think there's going to be room for only one with Monus, but, you know, one of the funny things about the Monus pitch deck is we have a, we are an AI drug discovery factory for creating monopolies and you're allowed to say monopolies in your pitch deck because that's essentially what the IP is for drugs, right? We're not making any antitrust violations or anything else. And, you know, it's perfectly fine for it to be discoverable. Yes, yes, this was our pitch deck, right? Because of that. And so I think, you know, there's a whole bunch of different stuff on that. I think one of the maybe more uncomfortable areas, but will be huge is a bunch of stuff going

• 35:26Speaker 01

  on in defense tech, because I think we are in a time of more war and conflict. So I think that that area will be another one. I think the question's about where the AI can be embedded in something else that has a really big moat is, I think, interesting. I'll say one thing that's kind of not, I don't think per se economic is like, what does AI mean for the reinvention of universities? Has been one of the things that I've been, you know, kind of paying attention to, and I don't think it's a economic thing, although I do know of one for-profit university in the UK that's going heavily in that path. Anyway, so those are some random comments.

• 36:03Speaker 02

  That's great. Yeah. Do you have an anti-AI thesis where as everybody doubles down on AI, we will be craving more and more human experiences and human connections and what that could look like and whether AI has a role in scaling these endeavors kind of thing?

• 36:21Speaker 01

  I think for sure, it goes all the way back to John Nysbet's mega trends from, I think it was the 70s, which is high-tech, high-touch. I think for sure as we get high-tech, we want more human on a ride of things. The question really is, like, what does it mean for investing? And so like, for example, just a couple of weeks ago was in Japan and the kind of the focus on tea ceremonies and, you know, human experiences. I think there'll be a lot of desire for those kinds of things. Which of those things are interesting economic things at small scale or at large scale, I think are TBD. But I think the intense demand for the human will be very high. And so it has like, where does the the buy-side

• 37:01Speaker 01

  demand match up with the supply-side pricing? That's part of the reason why I think, you know, when people are think about like, well, what happens when we get to an AGI universe? And they say, live entertainment and hospitality and so forth. You say, okay, well, You know, what's the particular way to bet on that in a way that gets amplified? I don't know. But you know, those, those kinds of things like I think it's one of the reasons why a lot of people say, ah, sports teams, no one's ever going to want to watch robots playing basketball.

• 37:29Speaker 02

  Yeah, my daughter, as you know, Jenna is a food anthropologist, so she's definitely on that side of the spectrum and thinking about businesses in this. And I, and I look at what she's thinking about, I'm like, these are great for humans and humanity, but I don't know if they're venture scale. So I, I wanna like, I'm trying to see if the two worlds can intersect and, um, anyway, still don't have the answer yet.

• 37:50Speaker 01

  Work in progress.

• 37:51Speaker 02

  Work in progress. Okay. So last question, my kids. So Jenna is 23 and Adam is 17. They're actually very different users of AI. Like Jenna does not really use much of AI. Adam uses AI for everything. I am curious what your advice would be for the young generation, not specifically about use of AI, but also broadly how to think about purpose and agency and possibility.

• 38:17Speaker 01

  Well, you know, and as you know, this is part of the reason I wrote super agency, which is, you know, agency is to some degree a mindset. And so I think what's really important is you embrace AI as part of your agency. And you said, this is part of how I learn, how I work, how I live, how I do things and so forth. And it isn't like I sit back and I do whatever the AI tells me to do. It's the AI is my tool, companion, car, et cetera, as I navigate things. And I think it's really important to start iterating and doing that. And it's a little bit of like, one of the things I've been thinking about, you know, kind of writing a essay on has been the kind of mistakes that are made by college graduates

• 38:58Speaker 01

  booing or, you know, otherwise dissing AI. And you're like, look, you guys have the opportunity to be Generation AI, where you're, where you come into the workforce saying, I know this a lot better than all of you. You should be hiring me in order to help you become AI native organizations and so forth. And it should be an opportunity, you know, not a threat. And they say, well, but the entry level jobs market's way down. It's like, yeah, at the moment, it's actually not really because of AI. There may be this, that and the other that is. But it's actually in fact, there's a global turbulence and businesses being unable to figure out how to invest and plan. It's because of basically overhiring in the pandemic and the, hey,

• 39:42Speaker 01

  maybe remote work really does work. Oh, right. Remote work's pretty hard, you know, to make work, you know, as a direction. And so, yeah, it's AI washing of all that stuff. But it's like, it's, it's the embrace it for your agency. The AI cannot, can do a whole bunch of amazing things itself, but is not complete. And humans can add in a lot of significant and important things.

• 40:06Speaker 02

  Okay, so the advice, not just for young people, but I love this advice to have an agency mindset.

• 40:12Speaker 01

  Yes.

• 40:12Speaker 02

  Love that. That's a great way to end our conversation, Reid. As always, such a pleasure.

• 40:17Speaker 01

  Always awesome.

• 40:18Speaker 02

  Thank you for joining us.

• 40:23Speaker 02

  I always get so much out of my conversation with Reid. When there's so much happening in the world, it's great to have a friend and a trusted voice to help unpack it all. Thank you so much for listening. We'll be back next week with a new episode.

• 40:49Speaker 02

  Pioneers of AI is a Wait What original.

• 40:53Speaker 02

  Our executive producer is Eve Trow. This episode was produced by Megan Tan. Video editing by Eric Purcell. Our senior talent executive is Stephanie Stern. Mixing and mastering by Brian Pugh. Original music by Ryan Holiday. Our head of podcasts is Luthal Mulad. You can join the conversation on LinkedIn, Instagram, TikTok, YouTube, and X. Just search for at Pioneers of AI.

• 41:37Speaker 06

  Hey listeners, Bob here. If you listen to Rapid Response on Masters of Scale, you may be missing half the show because every Friday we release a second Rapid Response exclusively in the Rapid Response feed. The guests and topics are just as compelling and timely, from Ford CEO to NASA's administrator to the lessons from the devil wears Prada. It takes about 10 seconds to find. Just search Rapid Response wherever you listen to podcasts and hit follow to make sure you never miss an episode. I hope to see you there.