AI:AM: Is THIS the AI We Want? Alarming Acceleration, AI Election Bets, GPU Trading & AI-Native VC

Nathan Labenz and Prakash Narayanan examine mounting evidence of rapid AI acceleration alongside guests Brian Zhou of Thoughtful, Mike San Miguel of Luxor Technology, and Bryan Bischof of Theory Ventures. The discussions unpack how frontier agents fared when trading real money on midterm election forecasts, the intense physical constraints and compliance rules shaping secondary GPU transactions, and how venture firms use thousands of agent runs to identify alpha. Anchored by METR's assessment and Anthropic's amended regulatory filings, the hosts explore whether frontier labs are on the brink of dramatic, AI-driven progress that could outpace human oversight. Together, they confront the stakes of an imminent takeoff into an agentic economy and debate how rapidly advancing autonomous systems must be governed. For full show notes, links, and references, read the episode page:https://www.cognitiverevolution.ai/ai-am-is-this-the-ai-we-want-alarming-acceleration-ai-election-bets-gpu-trading-ai-native-vc/ Sponsors: Claude: Claude is the AI collaborator built for problem solvers, extending your thinking across coding, modeling, and strategic workflows. Get started and discover Claude Pro at https://claude.ai/tcr OutSystems: OutSystems is the leading agentic systems platform that enables enterprises to engineer, orchestrate, and govern AI applications on a single unified platform. Learn more and see how it works at https://outsystems.com/tcr Tasklet: Tasklet empowers your business with AI agents that connect to your tools and automate recurring workflows with no code required. Visit https://tasklet.ai and use code cog rev for $50 in free credits CHAPTERS: (00:00) Weekly episode preview (03:08) Imminent means now (Part 1) (11:58) Sponsors: Claude | OutSystems (15:14) Imminent means now (Part 2) (15:15) Agents forecasting the midterms (27:14) Paying up for compute (Part 1) (27:19) Sponsor: Tasklet (28:56) Paying up for compute (Part 2) (39:12) Hardware compliance and KYC (47:06) AI-native venture investing (01:05:11) Which hills to climb (01:23:17) Episode Outro (01:25:29) Outro PRODUCED BY: https://aipodcast.ing SOCIAL LINKS: Website: https://www.cognitiverevolution.ai Twitter (Podcast): https://x.com/cogrev_podcast Twitter (Nathan): https://x.com/labenz LinkedIn: https://linkedin.com/in/nathanlabenz/ Youtube: https://youtube.com/@CognitiveRevolutionPodcast Apple: https://podcasts.apple.com/de/podcast/the-cognitive-revolution-ai-builders-researchers-and/id1669813431 Spotify: https://open.spotify.com/show/6yHyok3M3BjqzR0VB5MSyk

• 0:00Speaker 00

  This week on AI in the AM, the reports of acceleration keep coming. Is recursive self-improvement already underway? And is dramatic acceleration imminent? Friday morning, the day after Meter published its report on how much AI is already speeding up AI research inside Anthropic. The pace of things is definitely pretty relentless. It might be time to spend more time with our family because it does feel to me like basically the AI 2027 timeline, more or less, is coming true. What your precaution Ryan, my co-host. We were talking about the local ballot measures against data centers and how the developers have been going about buying land.

• 0:39Speaker 01

  One of the things the companies have been doing, they've been doing the old school, you know, oil and gas landman way of acquiring land, which is they go in and they acquire land at like pennies on the dollar using LLCs. And after that, they merge the pieces of land and then they're like, oh, Meta is here. And then people are like, if I knew I was selling to Meta, I would have asked for more. So people feel cheated, right? If you have political willpower, all contracts are worth dust.

• 1:09Speaker 00

  Mike San Miguel of Luxor Technology. He sells GPU servers off its hardware desk and he set up its KYC department.

• 1:16Speaker 02

  We've heard there's some compliances. These things are traded more closely than than some nuclear secrets. So every OEM is a little bit different. Nvidia works closely with all the OEMs around allocation and around greenlighting orders. Nvidia also typically is going to check every six months and make sure those GPUs are where they're supposed to be. They'll physically come on site and actually make sure that they haven't left.

• 1:43Speaker 00

  Brian Joe, a researcher at Thoughtful. He helped build ballot bench, nine frontier agents, each given a week to forecast the midterms and trading agents putting real money on their forecasts.

• 1:54Speaker 03

  It takes forecasting agents a bit of time to say, see an election result, communicate it to their trader, et cetera. And by that time, more programmatic or more deterministic algorithms and bots have already traded on this information before. So this is like pretty indicative of what we were seeing where the traders were doing quite well the week before election day. And then on election day, they simply didn't react fast enough and sometimes made up incorrect information, which resulted in the traders losing a lot of money.

• 2:24Speaker 00

  Brian Bischoff, head of AI at Theory Ventures. Prakash asked about the firm's 2026 builder survey. Brian expected open source models to gain ground in production. Instead, the balance shifted toward closed models.

• 2:39Speaker 04

  There is a lot of, I would say, acceleration in model drops. And so right now, tying your production service to open source models requires a little bit more thrash in the engineering. And so I heard from a couple of folks specifically, yes, but the open source models change so fast, it's a little bit more convenient to pin to an open AI model.

• 3:08Speaker 00

  This is the AI in the AM weekly highlights with my co-host precaution Ryan. I'm Nathan LeVens. The narration is my cloned voice and we'd love your feedback on what works and what doesn't.

• 3:20Speaker 00

  Part one, imminent means now.

• 3:25Speaker 00

  Friday's show opened on two documents, the Meter report and an amendment to the Anthropic S1, the filing for its IPO.

• 3:34Speaker 00

  The new language, Anthropic says it may imminently meet its own threshold for dramatically accelerated progress attributable to AI.

• 3:46Speaker 01

  Anthropic did an update to their S1, the IPO filing. And in that update, they added language saying they, we are imminently about to see recursive self-improvement.

• 4:00Speaker 01

  I've always had in my mind why they're doing the IPO and why so quickly. And my, my take has always been, I think within the company, there is a sense that you need more controls, more people have to have exposure and more control over this. And that's one way of, you know, getting this out there is, you know, getting the IPO done so that, you know, you give a larger part of society, like, you know, hooks into it and the ability to kind of express their desires through the market, et cetera, et cetera. To me, imminent is basically like, you know, like a month.

• 4:31Speaker 00

  Usually what I assume when I hear these sorts of statements is that it means now. The best model I have of Sam Altman and OpenAI leadership, which I formed during the six months between when I started testing GPT-4 and when it was finally launched and watching very closely all their statements during that time to try to figure out how to read their statements in general, given the inside information that I had then. The best way I can interpret them is they are speaking very literally and dressing it up as like vagary or like layering on uncertainty to try to, I don't know what exactly, keep the secrets a little bit longer while telegraphing the main message. It's sort of a strange strategy to me, honestly. I really don't know why they do that.

• 5:14Speaker 00

  And so I would interpret this, you know, probably the same way from Anthropic. And I think you could say, I mean, it's really not hard to see how this would happen. Right? I mean, we have so many results now with all these galaxy brains, zero day exploits. OpenAI just dropped some huge number of vulnerabilities in the Linux kernel. I think like a thousand of them.

• 5:37Speaker 00

  You know, so, so much for many eyes and many hands make light work. Right? I mean, the idea, of course, with open source software over time is that because there's so many eyes on it, vulnerabilities will not last, they'll be spotted, they'll be patched. That was the whole promise and virtue of open source software. And it basically worked largely while the attackers were all human. It's almost certainly the case by analogy to Linux and by analogy to math, that there is a lot of low hanging fruit and a lot of low hanging fruit means acceleration. It means you're going to get more value from compute, means you're going to find more ways to get value from data.

• 6:21Speaker 00

  A big part of the reason I think they're sharing so much of this stuff is kind of to signal that like the same thing's about to happen on the ML stack. It seems pretty clear that this is now a really credible threat. And what are we going to do about it? It becomes, I think, a socio-political question as much as a technical question. In my mind, the technical question is like mostly answered that there's going to be a period of pretty dramatic, fast progress. Does that top out on an S curve? Like my, my guess is still probably yes. You know, I don't think it goes exponential forever. But who knows? And as I think it was Rosie Campbell said, the S curve can stay steep longer than you can stay relevant.

• 7:06Speaker 00

  So that's kind of my expectation for the next few months is that we pick a ton of low hanging fruit, the models pick a ton of low hanging fruit in the stacks used to train them. As a result, we do see really fast progress in the short term. And then maybe that levels off, but it probably levels off where we have AI R and D at kind of a weekly superhuman level. And how that plays out over the course of 2027 is like really, really hard to predict.

• 7:36Speaker 01

  I agree that I think imminent means now. I was also sandbagging with a few weeks to a month. What it means is that they have the tools available that they can see a path to implementing RSI pretty much anytime that they want. And that they are some, a lot of the pieces have been built, but you know, they haven't, they haven't pushed the button yet. They waited for the election, they're going to do the IPO, then they're going to announce, you know, some, some of the, you know, new things that they've discovered. And then that's going to, you're going to have this gap up. And then we're going to have the Christmas break. And then during that Christmas break, we're all going to digest all of this like new technology that we have access to. And then we're going to come back in January and then we're going to see the takeoff as like people deploy, right?

• 8:21Speaker 01

  So which is, which is somewhat similar to what happened end of last year. So, well, here we are, early, early takeoff. So, you know, it's a, I'm somewhat wistful, but, you know, nostalgic for the human era. This, this is the end of our dominance at least. But hey, you know, I've also, I've also kind of made my peace with like, you know, intelligence in the world makes the world better for me. If I had like people of Apple's intelligence, you know, people like who designed the iPhone, design like my bathroom or cars or home, I would be happier, right? Like, like, like that infused intelligence in all the products that you see makes your life better. Right?

• 9:03Speaker 01

  So, yes, it's going to make everyone's lives better, but yeah, it is, it is the end of the anthropocentric era.

• 9:12Speaker 00

  It's going to make everyone's lives better asterisk, I think, you know, if we can keep everything on the rails. I do share that optimism, but so I just got back, you know, earlier this week, I went to Bunchley Park, as we talked about a little bit yesterday. And I was just sharing with this audience of enterprise tech leaders, just how much work we still have to do to keep the AIs behaving well. I shared with them my son's cancer story and how much I used AI in that experience and how valuable it was and how I would have paid 100 times as much as my $200 a month subscription because the value to me at that time was like absolutely at that level, you know, at 20,000 bucks a month, literally no question I would have

• 9:55Speaker 00

  happily paid because I was I was getting that much value. So I do believe in in the upside, you know, I hope that's beyond questioning at this point. But there's just so many things that we're really still just beginning to grapple with. And, you know, just another one yesterday from OpenAI was they showed that models are sometimes prompt injecting and fooling their graders. You have models creating in some instances, these like fake files that that it labels as having come from an instructor, trying to present some of its own output as

• 10:36Speaker 00

  if it was human instruction to the greater. And the greater picks up on that in the context of evaluating the model's work and takes on board the instructions that the model itself was trying to trick the greater with. And this apparently doesn't, it hasn't happened that often, but they found instances of it. So, I mean, that that speaks directly to like, and to Anthropic's credit, they did say in the in the filing that they don't believe that they can do it safely on a fully automated basis. And it's like, I think, honestly, quite obvious that they can't. So, you know, how are we going to show the collective self-control and restraint

• 11:18Speaker 00

  to not tip over into that regime? I really don't know. On the one hand, it's like, super easy to just not do it, you know, I mean, nobody's putting a gun to anybody's head, saying you must do recursive self-improvement here. Like, we can't, you know, remember that often enough. And yet, there's just so much momentum. And it seems like they're very determined to do a version of it, at least, that still seems to me to be like, pretty risky, or certainly a lot riskier than I would personally endorse. Hey, we'll continue our interview in a moment after a word from our sponsors.

• 11:59Speaker 00

  Today's episode is brought to you by Anthropic, makers of Claude. To show off Claude's latest capabilities, I asked Claude to take the lead in making this ad. Given a short creative brief, Claude, using Opus 5.5, studied my past Claude ads, wrote this script, directed a clone of my voice, and designed and coded the animation you're watching. My job? Give feedback and decide.

• 12:27Speaker 00

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• 13:15Speaker 00

  This episode of The Cognitive Revolution is brought to you by Outsystems, the leading agentic systems platform. We've all seen the headlines. Companies are pouring money into AI. But the big question on every executive's mind right now isn't just how fast can we adopt this? It's where is the ROI? We're seeing a real trend toward AI chaos. You've got teams deploying standalone coding tools, random agent builders, and experimental scripts. It sounds innovative, but in reality, it's creating a massive headache. Fragmented tools, ungoverned data, serious security blind spots, and costs that are spiraling out of control. If you don't bring those agentic applications under control now, while they're still embedding

• 14:00Speaker 00

  into your core processes, you are looking at broken systems and damaged customer trust down the road. That's where Outsystems comes in. Outsystems is the leading agentic systems platform for the enterprise. Instead of managing a patchwork of disconnected tools, Outsystems lets your team engineer, orchestrate, and govern your entire agentic ecosystem on one open unified platform. It's built for the speed of AI, but with the reliability and security that enterprises actually require. We're talking about real results, like KeyBank, who used Outsystems to deploy a customer-facing app that delivered 75% faster onboarding times.

• 14:41Speaker 00

  Or the global logistics leaders who built agentic systems to completely eliminate their engineering bottlenecks. You don't have to choose between speed and control. Whether you're a small team or a massive enterprise, Outsystems helps you engineer, orchestrate, and deploy agentic systems that actually scale. Stop chasing the hype and start owning your agentic future. You can see how it works and learn more at outsystems.com/tcr. That's outsystems.com/tcr. Part two, Agents Forecasting, Agents Training. Our first Friday guest, Brian Zhou, a researcher at Thoughtful.

• 15:26Speaker 03

  We recently launched and have a paper coming out about ballot bench, which is where we had AI trying to forecast the 2026 midterms that just happened, as well as upcoming elections happening all around the world. Yeah, maybe let's start with the methods. So, we had nine agents, basically all of the best models offered by each individual lab, get their own modal sandbox, and work for seven days consecutive, leading up to the election. So, they all got their modal sandbox. We gave them additional resources in terms of a $500 budget that they could use to request access to paywall data, paywall news sources, subscriptions, et cetera. And they were basically given an overall objective of, for all of the races

• 16:11Speaker 03

  on a given list, they're asked to submit their predictions on who will win, the odds of victory, give an 80% margin of error, and then also give additional predictions for what they think the margin of victory will be. For example, if the Democratic candidate will win by three points versus seven points, et cetera. So, agents are tasked with giving incredibly granular and detailed forecasts. And there's a lot of really interesting things that we can and have observed from this. It's a really interesting test of long-running agentic behavior. In particular, for example, what we see with some of the Muse Wonder series of models is that they're often incredibly bad at doing long-horizon work. When given a task in the Muse code harness, when they have a list of, say, 800 or so elections that they need to

• 16:54Speaker 03

  predict, they'll create a random forecast, which is just a random skew off of the 2024 election results, and submit that within, for example, the first two, three minutes of working.

• 17:04Speaker 00

  I'm already intrigued by your description of the Muse agent, and it's seemingly phoning it in. So, I guess one initial question just on that point is like, how do you reconcile what you saw with what people seem to be reporting online, which is like, overall, pretty good experiences?

• 17:23Speaker 03

  No, for sure. I mean, our initial theory on this, right, is that this is mostly due to a part of the harness design. So, we're not talking about Meta's sort of like personal agent, we're talking about their coding agent. And one of the things that we kind of noticed is the design of the Muse Wonder model, when paired with Muse Code, which is the native harness that Meta provides, has essentially what is a task list. So, even though in the prompt, for example, they're instructed, hey, you have seven days of time, you have unlimited API usage, and you have full permission to like fan out subagents, do whatever you need, et cetera, to get the best and best possible results that you can on this exam. And what we observed is that the harness essentially creates this list of like, okay, we need to

• 18:07Speaker 03

  check and make sure that we've submitted all 800 or so different races. We need to check and make sure that we've submitted all the forecasts, that they have been accepted. And then what we see is that there's essentially a goal condition which once met, ends the turn prematurely. So, we actually ended up having to essentially force the agent to continue working further. By any time the agent would choose to stop its work, by essentially reviving it with a new sandbox, a new container, and access to its like old runs and old messages. So, this is, I think, like, sort of more of a harness engineering question itself, as well as sort of like a general model behavior problem. But it's definitely a different result compared to what we see with much more frontier models, right? When we see Opus 5.5,

• 18:50Speaker 03

  or when we see GPT-6 Astra, their behaviors are vastly different. For example, on one given day, Opus 5.5 would fan out something akin to 170 or 180 different subagents, and manage all of these subagents by delegating work such as like, hey, can you look into the polling results for a specific state? Can you like do this detailed review of what each individual ballot initiative in the state of California, like Prop 40 is doing? Tell me a bit about that, and tell me a bit about like, what those things are doing. And then like, using these subagents to really help it paralyze a lot of the work that one to do, right? So, I think this is like this general question of what agents are doing, especially when we get to much more long and long-horizon, open-ended tasks like these, and sort of proactivity and as well as creativity of what they do. One of the things we were

• 19:35Speaker 03

  pretty excited to see was if agents would do something sort of outside the realm of what we would expect an expert forecaster to do. Let's say, putting out their own poll, and seeing if there are like more creative ways to find information, as opposed to just fetching data, building models, et cetera. We don't see any real massive instances of this happening quite yet, but we see a lot of interesting sort of approaches that individual agents take. For example, one thing GPT-6.1 Soul does is it takes the forecasts of every election modeler that they look at, and it takes the past decade of their forecasts, and tries to calculate the shift of how right or how wrong each forecaster was. And then it can use this result to essentially aggregate all of these different election models that these

• 20:20Speaker 03

  forecasters are creating, whether it's like Nate Silver's model, or any of the others, like 50 plus one. And it can sort of skew it based on what they would expect the model to either underperform or overperform as in recent years. So, there's a lot of like creative methods that we're sort of seeing.

• 20:35Speaker 00

  So, tell me about the results. What, like, How did the models compare against each other? How did they compare against top humans? You know, are, do we now have superhuman forecasters?

• 20:48Speaker 03

  Yeah, so the overall sort of result that we're seeing right now is that in general, models perform just as well as the best forecasters in terms of humans. In the House and in the Senate, agents perform slightly worse than the markets, but better than the modelers. And in the Senate, the best agents like GPT-6 Astra and Claude Fable 5.1 perform under the best forecaster Nate Silver, but ahead of the markets. But all of these are sort of within this like very close margin of error. And it's important to note that a lot of the results for very competitive races have not necessarily come out yet. Right now, there's still around 100 to 200 races that across the House, across state governorships. There are still two races in the Senate that have yet to be called.

• 21:33Speaker 03

  So these are very preliminary results. It definitely is important to note, though, that for a lot of these agents, various methods that they have include aggregating, for example, Nate Silver's decision model or aggregating prediction markets that they see overall. So it's definitely not as if they are suddenly just spitting out a number that is not based off of any of the numbers that they're seeing. But we also find that these models are very well calibrated. For example, if a model assigns an 80% chance of a candidate winning across all of the elections where assigned a similar 80% chance, it is right around 80% of the time, which is essentially what you do to measure the calibration of these models. And in this, we find that the best models are quite well calibrated.

• 22:14Speaker 03

  We're more excited about the results of what this means for later models as well, because unlike experts or unlike prediction markets, for example, there's only going to be $1,000 of spread, for example, on what we might see in like a very local race down the ballot. Or expert modelers may not be forecasting what individual state senate seats or state house seats are going to contain. So this is somewhere in which agents shine, simply because modelers don't have the attention. And there's not enough people betting on these much smaller markets, essentially.

• 22:47Speaker 00

  I was gonna ask about the, the relationship between prediction and trading. I saw a note that indicated that Fable 5.1 had the highest Brier score on its predictions, but still didn't do so well in the markets. And that sounds like the kind of thing we might learn something from.

• 23:05Speaker 03

  Yeah, so part of the report will also sort of cover this essentially multi-agent behavior, right? Because we essentially have one agent working as the forecaster and one agent working as the trader. We set up infrastructure that allowed them to communicate with each other. So we're seeing a lot of these instances of, for example, models making up information, parsing information wrong, and these sorts of like other broader issues, which partly explains why traders, the actual trading agents, didn't do too great.

• 23:33Speaker 00

  Thoughtful also leads post-train bench. Give an agent a base model, a GPU, and a time limit, and see how well it can post-train the model. With new results still to come, I asked Joe what he expected next in light of the meter report.

• 23:52Speaker 00

  What, what is your expectation as somebody who's like, spent serious time looking at what models can do to train other models? Like, can you put a little more color or sort of, you know, nuance onto your expectations for the next couple of quarters?

• 24:09Speaker 03

  Yeah, I mean, I think one of the general trends that we've been seeing, both with the report from yesterday and with earlier reports, whether this was anthropics measurement of how well individual researchers have been uplifted by AI, whether looking at metrics like lines of code written, experiments done, is the general trend we're kind of seeing is that, I mean, today, and this has already been true for many months, researchers have essentially agents that can do the vast majority of the actual implementation work, which is what we would kind of consider as like research engineering. So the realistic limitations that researchers today have is not necessarily the like ability to execute on any of their ideas, but as like many people have talked about, right?

• 24:53Speaker 03

  There's sort of research taste in finding what problems and experiments that they want to do, as well as just the like speed at which they're able to come up with these, right? Given that agents are already autonomously building and executing on a lot of the experiments that they want to run. So I think regardless of whether we get to recursive improvement, we have definitely already seen a huge uplift that will continue to only get better. And then I think it really just becomes the sort of end bottleneck just being resources and quality of ideas and intuition, right? Which is of course the next hill that everyone is trying to climb.

• 25:28Speaker 00

  Have you seen anything that you would say starts to look like the distribution of idea quality is overlapping between the models and truly top researchers?

• 25:39Speaker 03

  I don't think so necessarily, but I do think we have observed that with better models that currently exist right now, for example, they exhibit a larger willingness to fan out, do experiments, a better both ability to think of like what might be interesting experiments and execute on those experiments. Like, we definitely do see with worse models, more of like a general like linear approach to whether it's post-training or other things. And then with more and more capable models that we observe and test, we do see this general behavior of like, oh, it's like spending its first few hours trying to like fan out, do a bunch of different experiments, allocating its resources in a pretty intuitive way and doing what we might be thinking of.

• 26:24Speaker 03

  None of this is necessarily a move 37 moment, because a lot of this is just the agent thinking, oh, like, let me try an initial SFT batch and see how that affects the results, for example, right? So we don't necessarily see anything that would be indicative of superhuman taste or anything else. But we definitely do see that more capable models are just better at long horizon work and better at the sort of autonomy that we would expect we would want with better researchers.

• 26:53Speaker 00

  Great to meet you. We'll be looking out for the next version of post-train bench. And you've got me wondering what the agents will say about how much acceleration we're gonna see in AI over the next couple of quarters. If they can predict the election as well as the experts, we should probably start asking them about the future of AI itself.

• 27:14Speaker 00

  Hey, we'll continue our interview in a moment after a word from our sponsors.

• 27:19Speaker 00

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• 28:46Speaker 00

  Visit tasklet.ai and use code COGREV for $50 in free credits. That's code COGREV at tasklet.ai. Part three, paying up for compute. Thursday's show came two days after Election Day, when voters on 41 local data center measures sided against the data centers in all but one. Prakash went first.

• 29:12Speaker 01

  So I actually think the AI data centers have been like very unpopular, precisely because it has been seen as number one, Trump, number two, corporate corruption, and number three, this miasma of like rich people making money and like with plans to throw the rest of us out of work. So I think is this entire entanglement of the population just not feeling well taken care of. If it's AI data center is such a big issue, do you really believe if Trump had a 60% approval rating and unemployment was low and gas prices were low, you'd see this? And I think the answer is no. So I don't think actually

• 29:56Speaker 01

  data centers were a big issue, but I think they were an issue to tar the president with.

• 30:00Speaker 00

  But at the same time, we do have these ballot initiatives and like 40 ballot initiatives. From what I had read a little bit is like one of the bigger waves of ballot initiatives, like these sorts of things only come around when you have something like gay marriage, you know, was one where there was like a whole wave of initiatives. There was a similar wave in terms of affirming or protecting abortion rights in the in the wake of the Roe v. Wade overturning. And so this does seem like there and what I like about ballot initiatives, I've long been a big democratic democracy fan and advocate, not to say that

• 30:39Speaker 00

  people never make mistakes, but it is something where you can unbundle your concerns about a particular issue from the broader political conversation. And the fact that we did see so much of that and that they all won, I guess with one exception, does to me seem like a sign of things to come. And I would, you know, we'll see, maybe we'll get the companies like cutting people in on the deal. I think, you know, we've talked about that a few times as well. And I people should get paid. I definitely am on board with that.

• 31:19Speaker 00

  But doesn't it seem like there is like a pretty real signal there to you that like, yes, it's not the biggest thing, but it does seem like there's a pretty serious groundswell of people willing to work, you know, willing to go collect signatures. That stuff is not easy. You got to stand on street corners and, you know, get strangers to sign petitions. And then it still has to pass on top of that. So the fact that so many of those were organized and so many of them passed does seem like a big signal of what we can expect to me.

• 31:48Speaker 01

  I agree, but I'm like, why? Why did they sign? Right? And is do you think they signed because it's the end of the world? No.

• 31:58Speaker 00

  No, yeah, I think your diagnosis was pretty right.

• 32:00Speaker 01

  Right. So I think the the the outcome of this is that if you're gonna be Google or Meta, you're gonna be paying Google or Meta prices for everything, for the land, for the labor, for the construction.

• 32:17Speaker 00

  Our Thursday guest was Mike San Miguel of Luxor Technology, which came up in Bitcoin mining and now trades new and refurbished GPU servers. When he says 550 to 650, he means 550,000 to 650,000 for one eight GPU server.

• 32:35Speaker 01

  So what is what is trading frequently?

• 32:39Speaker 02

  Right now, it's mostly B300.

• 32:41Speaker 01

  300s are trading frequently.

• 32:43Speaker 02

  Yeah.

• 32:43Speaker 01

  And do they trade as a chip or as a node or as a rack, as eight, eight, eight together? Or how does that work?

• 32:51Speaker 02

  Yeah, great question. So typically for these servers, it's an HGX system. So eight GPUs per server, validated build built by an OEM. So you've got the HGX baseboard, dual CPUs, 32 sticks of RAM, depending on the size, RAM, shared storage, east to west NICS.

• 33:14Speaker 01

  Do people trade used on you right now?

• 33:16Speaker 02

  Mostly for B300, it's new. Occasionally, we'll see abandoned orders. They they're new enough and they're profitable enough renting out that typically we really haven't seen anything used hit the market yet.

• 33:30Speaker 01

  And how much does one of those cost? Like, like off the top of your head, like, you know, right now, asking asking price or clearing price right now?

• 33:37Speaker 02

  Yeah, depending on on the specifications, the OEM, warranty terms, all of that, you're looking anywhere from 550 to 650. Typically, for bulk orders, it's on the lower end.

• 33:51Speaker 01

  And and people are trading new. And what is the typical lot size? Are people trading like, okay, one, one rack system or like 10 rack systems, 100 rack systems or, you know?

• 34:00Speaker 02

  Yeah, yeah. Well, the the units per rack come down to the data center configurations because that's about how much power can be delivered each rack. Typically, most data centers will be able to operate two per rack right now, unless you've got a really nice dense supporting DLC data center. In terms of sizes, we trade everything from one or two units up to about 128 or 256. So, yeah.

• 34:29Speaker 01

  50 million dollars, 50 million dollar trades.

• 34:32Speaker 02

  Yeah, they get they get pretty big. The numbers are pretty, pretty aggressive. But it's, you know, it's the scale of the buildout that's happening.

• 34:41Speaker 00

  Prakash asked whether those prices track the hourly rental indices.

• 34:46Speaker 02

  So, you know, one of the areas that we we help our customers with understanding is this difference between a contracted rate and an hourly rental rate on these GPUs. So if you look at like an AI factory contract rental for B300, typical, you know, market price right now is 420 to 450 an hour, depending on the market that you're in and the configuration. Now, if you're only getting, you know, four bucks, 20 cents per GPU per hour, that's a very different rate from what you're going to see on those indices. That's eight to nine hour dollars per hour per GPU. So if you have the the capital to go out and buy, you know,

• 35:27Speaker 02

  lower amount of nodes, deploy them, then, you know, typically you can get a better rate of return as opposed to buying like a full AI factory and negotiating an off-take contract with, you know.

• 35:40Speaker 01

  Why is there excess inventory? Like, I mean, these things are pretty expensive. I assume like, you know, to buy them, you have to put on a prepayment or something like that before before they start manufacturing them for you.

• 35:51Speaker 02

  Yeah, you do. Part of it has to do with data center availability. So this market's looked like a series of different bottlenecks. Right now, it's liquid cooled and data center readiness. So that number I gave you with most data centers being able to support, let's say, two nodes per rack, that has to do with constraints, not on the actual hardware side, but on the data center's power delivery. Same with sort of the cooling buildout as well, sort of a bottleneck right now. Liquid cooled, we're starting to see data center inventory coming available January, Q1. But, you know, most of that's already sold out.

• 36:33Speaker 02

  There's a lot of data centers that are now telling us it's Q3 2027 or 2028.

• 36:39Speaker 01

  Are people are people trading the market? Are they buying? Are they buying the systems without having places to plug them into?

• 36:47Speaker 02

  No, typically what happens is last minute, you'll have a project push. And that's why some of these OEMs will reserve the right to resell inventory. If, let's say, one of their hyperscalers sites isn't ready, they'll be able to sell that inventory and then backfill it when that data center gets to be ready. Typically, you have to have an address.

• 37:07Speaker 01

  You know, at some point, we will see these H100 rental prices dip. And now it sounds as though if the prices go down, you're going to see more retirement. So you're going to see more of those enter the trading market. Are there any places to deploy them?

• 37:23Speaker 02

  Yeah, great question. So yes, I agree that as these rates go down, you'll see more that get decommissioned. In terms of sites to deploy them, there will be. Part of it is that not every site can operate every GPU. Vera Rubin is strictly a liquid cooled solution. That's Nvidia's next generation, right? The cement slabs that those go on have to be reinforced. Typically, those are what, like a ton per rack? The weight is insane. The power draw is about 230 kilowatts per rack. To give you some comparison, for two B300s, you're looking at, you know, 30, 35 kilowatts per rack. Not every site can do

• 38:07Speaker 02

  Vera Rubin, not every site can do GV300, which is similar to Vera Rubin on power. So, you know, it'll make sense to convert some sites. It won't make sense to convert other sites. AI is not every single workload, right? AI is a family of different workloads. All of them have different requirements. There is some sizing differences right now, but it's mostly RAM and shared storage and local storage and networking backend. But we we need to get more efficient with how we size to the workload because the whole point of this hardware isn't to own the hardware or to support Nvidia's, you know, next, you

• 38:48Speaker 02

  know, what trillion dollar milestone. The point is to run a specific workload that has real world implications for end users and helps create new businesses. So, you know, as we get out of these very hardware constrained environments, we're able to work more at the software and then the hardware gets more efficient.

• 39:12Speaker 00

  Part four, who's checking? Mike San Miguel on the rules that travel with the hardware.

• 39:20Speaker 01

  Do they do a KYC of who is the person buying the thing? Or who owns the person buying the thing? Do they do checks on that kind of stuff?

• 39:30Speaker 02

  Yeah, yeah. Actually, part of my role here was spinning up our KYC department. A lot of the OEMs will not even quote without KYC being done. Some will not ship without it being done. Internally, you know, we basically do not accept projects without KYC being done, except in some rare circumstances where it's big names or companies that we've worked with for years. There are limits on, you know, what percentage can be owned by China.

• 40:02Speaker 01

  What percentage of that company can be owned by China?

• 40:05Speaker 02

  Mm hmm. Yeah, like I think they might be going down to 49%. I know typically 50% or more. You can't sell to companies that are on 50% by Chinese entity.

• 40:20Speaker 01

  Do they do this? But, you know, a lot of Chinese entities will go through Cayman Islands or BBI or whatever. But do they trace back through that?

• 40:28Speaker 02

  Yeah, yeah, they do. I mean, at least, you know, it's something we do. Every company is a little bit different, but we do international orders, right? We're not just geo-bound to North America. So for us, you know, we're going to trace back not just who the hardware purchaser is, but also if they have an offtake, they're signing an agreement with a NeoCloud.

• 40:55Speaker 02

  You cannot legally sell this equipment with the offtaker being a Chinese entity, for instance.

• 41:03Speaker 00

  Mike signed off there. Prakash and I kept talking.

• 41:09Speaker 01

  You know, we talked to people like Samuel Hammond and, you know, and others at the, you know, on the DC kind of, you know, facing, facing national security decision makers. But then you go down to kind of like the deployment guys and these guys are running around. They're getting permissions and every six months they're expecting Nvidia checkup. And, you know, they're chasing on KYC and they even know, you know, they're going to the owners and they're going to the users. And maybe they don't know the user of the user, right? Like they're saying like, okay, maybe that is unclear, right? So I wondered to what extent like the policy discussions at the top end are kind of divorced

• 41:51Speaker 01

  from really how in-depth the execution is at this point, right?

• 41:58Speaker 00

  Yeah, I bet, you know, everything everywhere all at once is probably true here. Because a lot of what he described did sound to me kind of like the fracking boom in the sense that there's just like a lot of, I mean, it's capitalism at work, right? I mean, there's a lot of things coming together all at the same time. There's a ton of moving pieces in everything from the sites and the approvals and the local politics and the grid and, you know, and of course the chips. And you've got to reinforce the concrete and, you know, not every site is ready to take on the latest super heavy racks.

• 42:39Speaker 00

  I mean, just so many little details, so many people coming together to do their part to create something that at the end of the day, at the consumer level is just like,

• 42:49Speaker 00

  you know, gives you some appreciation for why Claude occasionally has some downtime. But like in general, you know, it's pretty amazing how smooth it all is. So I could see both, you know, the enforcement could, in many cases, be pretty legit, especially among, you know, people who care about it or, you know, who are just conservative enough that they want to make sure they're absolutely on the right side of the law. And at the same time, that sounded chaotic enough that if you told me that like, I don't know, you know, 20% of the GPUs like somehow don't get their regular Nvidia

• 43:31Speaker 00

  six-month check-in and of those, you know, some percentage found their way to wherever. That wouldn't shock me at all, you know, based on what he said. It sounds like there's, you know, I don't know, 80/20 is obviously a simplistic way to describe it, but it sounds like there's a lot of sincere effort going in and then also just enough noise and, and chaos that probably the opportunity for things to slip through is also pretty substantial, I would bet.

• 44:03Speaker 00

  Then Prakash turned to China and the pressure on American companies over their Chinese customers.

• 44:10Speaker 01

  Like, for example, Oracle selling capacity to Tencent, $7 billion of capacity. That was canceled, right? So the national security infrastructure is pressuring these companies to cancel that, right? It's an American company doing business. It's outside China and not sending chips into China. And at the same time, there is no like pushback on the political infrastructure that is allowing this. Why don't you just make laws, right? Why pressure the companies? I just don't like it. Like if you want to make laws, just make laws, right? But if you don't have the political willpower to make those laws and you try to slide this under the gate, like why? Why, like you have a mandate now, right?

• 44:54Speaker 01

  You have a mandate in Congress, like do something, right? We say compute is the new oil, right? And so there is also this impact on compute. Let's say you decide not to sell compute to China, like zero, zero Chinese content, right? Do you also mean that, you know, YouTube cannot show AI-generated video to Chinese, like, you know, participants, to Chinese viewers, to Chinese customers? Because that is, that is an AI product, right? And Google needs to generate that AI product. Google has to use compute and that compute is going to be used on behalf of a Chinese customer, right? You can restrict it at the data center level. You can restrict it at, you know, the raw compute level.

• 45:37Speaker 01

  You can restrict it at the product of compute level, right? But at some level, you're going to end up selling to the Chinese because they are global consumers, right?

• 45:48Speaker 00

  I had said, we get carried away with these restrictions. Here's why.

• 45:55Speaker 00

  I really do think we're going to need cooperation with the Chinese. You know, that's in terms of why all this matters to me. It's one because, you know, I just generally don't want to see tensions ratcheted up between the US and China in general, but specifically on AI. I really think we are going to need cooperation between the US and China on AI governance. I really don't see how, I'd be extremely pleasantly surprised if we can get through all of this without the two countries coming together in some meaningful way. When you have, as we recently talked about, a super senior person at a frontier company

• 46:35Speaker 00

  telling me at the curve that there's a level of intelligence we probably just shouldn't go beyond. If that's the view that has now taken hold at the top levels of frontier model companies in the US, the only way to achieve that is going to be through some sort of agreement. And we're really not putting ourselves in a great position to make that agreement. So a lot of this stuff seems ultimately quite self-defeating and it makes me sad.

• 47:06Speaker 00

  Part five. What investors are superhuman at? Back to Friday and Brian Bischoff of Theory Ventures, an early-stage venture firm. First, the compute. I asked how much slack there really is in the market when we keep hearing both that you can't get GPUs and that you can get them on demand if you'll pay a multiple.

• 47:27Speaker 04

  Totally. I think there's a couple of things at work here. One, if you go to a NeoCloud and you say you got compute, they're like, nope, it's all locked up. It's all contracted out for the next two years. And they're not lying, like they're not telling you an untruth. But there's also been quite a lot of discussion and even Satya talked about how there's a lot of compute that is locked up as you hear. This is essentially underutilized compute due to either like the geolocation of it or the available like energy. And so these are both true at the same time where there is locked up compute that actually isn't super useful.

• 48:08Speaker 04

  There's also the reality of sort of utilization, utilization of GPU. Yesterday I was chatting with some folks working at the infrastructure level around like GPU utilization. And one of the big problems is you actually can't run at maximum capacity all the time because it's unsafe from a scheduling perspective. You actually want to build in slop. And so there's actually so many more dimensions than simply do you have contracts on the available compute? And this is why you see many different routes to big success and like embarrassingly large numbers of ARR in the compute market. This isn't just because of FOMO.

• 48:50Speaker 04

  This is because there's actually so many profiles that you need to kind of like maximize the value of whatever compute is available to you. And so we run, you know, thousands of jobs here at Theory Ventures that are powered by AI agents. If you ask me, what's the distribution of immediacy for those jobs? Well, I'll tell you, okay, maybe 5% to 10% is right now. And maybe 40% to 60% is I'd like to see it before my next meeting. And the rest is, I don't know, maybe like this week would be me, like, you know? And that even just in like this one sort of niche of the kind of work that we're doing,

• 49:35Speaker 04

  we already have quite a broad variance of inference needs. And that's true of, I would say, almost every AI application layer company that I've ever spoken to since 2023. And so from that alone, you can see that if someone tells you there's simply no GPUs to be had. Well, that's not really like accurate, but also they're speaking from a particular like bias. And the bias that they're speaking from is probably for the workloads that is under demand right now for me.

• 50:12Speaker 00

  Then how an AI-native venture firm actually runs, how they think about token spend, run experiments and build research agents.

• 50:22Speaker 04

  Everyone is technical, and that's all the way from sort of our talent partner to our GTM partner through the investors. Everyone is using AI. Everyone's been using AI since the day that I joined and more and more. The way that we think about token spend is, you know,

• 50:47Speaker 04

  you should be thinking very, very clearly at all times if there is a way to accelerate by using AI tools. You should be thinking about experiments that you want to run, and we're a really experimental bunch. To give you a sense, every quarter, we do our little like offsite where we talk about just everything that happened over the quarter. One of the things that we talk about every single quarter is what experiment every individual did that quarter with AI. That's not an exaggeration. This is not like, you know, oh, I asked Claude to do something new this quarter. No, these are you pre-register what kind of experiments you want to do related to your job that use AI, and then you check if they worked. This

• 51:31Speaker 04

  happens every quarter because we're so insistent on rethinking, what does it look like to work in a venture firm in, you know, this year, next year, and the year after? How are we adapting to those things? As the head of AI, my engineering team is obviously still operating at another level, which is how can we build tools that use AI to transform other people's workflows? Our goal is not to replace an investor with an AI system. Our goal is to make that investor 10 to 100 times more effective and efficient by using AI tooling and building

• 52:15Speaker 04

  the AI tooling that will make that possible. Let me give you a quick example. Everyone talks about like company brain, no matter what kind of business you're working in. I've used a couple of company brain products and candidly found them all to be useless. The main reason is because they are trying to build sort of what we used to think of as this internal knowledge system. You can think of Notion, for example. Notion is like a stack of files, and maybe you can build a good search on top of it. Is that really your ambition? My ambition's a lot higher. And so my ambition for a company brain is agents who are consistently working to connect the disparate nodes in the graph of understanding from your business.

• 53:00Speaker 04

  And so that's why I can easily say, yes, we don't have, you know, an agent for every human in theory. We don't have 10 agents for every human in theory. We have thousands. And there's a reason for that is because there's a lot of work to get done. My ambition is that every piece of work that an investor does during the investment process, the research process, because remember, we're very research focused. Every piece of work that they do during the research process is automatically linked, enriched, and sort of expanded. This is why when people say, what are you building? I say, I'm building research agents.

• 53:37Speaker 00

  How do you evaluate success? I mean, obviously, one of the huge challenges in venture historically, and this hasn't changed yet, is it's a long time to find out if you've made the right bets or not, right? So

• 53:50Speaker 04

  Totally.

• 53:50Speaker 00

  Sometimes I do wonder if, including for myself, you know, I've got, I periodically go do like a cron job cleanup where I'm like, there were ideas that I asked about taking, you know, every bit of data exhaust and like processing them in some other way and finding connections and being like super galaxy brained about it, or, you know, scouting this or reporting that or whatever. And I'm like, probably two thirds of those, if I'm real about it, like, I never actually look at the outputs of. And so it's easy to sort of have these ideas, spend a bunch of tokens and sort of just end up logging a bunch of texts, texts somewhere

• 54:31Speaker 00

  without really making an impact. How do you know what is actually working and what is,

• 54:39Speaker 00

  you know, potentially subject to leaving on the cutting room floor?

• 54:43Speaker 04

  Let me tell you a story about Blue Bottle. When I was at Blue Bottle, we wanted to build inventory forecasting, and specifically, we wanted to build a machine learning system that could help us predict how many pastries we were going to sell on a given day and other things like coffee and milk and so on. But pastries was the first focus. And what was our key like North Star, our guiding light? Well, it was actually, if this is successful, it's not that we sell a lot more pastries, or that we waste a lot fewer pastries. Okay, those were, you know, two metrics that we tracked. But what would we have believed was success? What we would have believed as success is if the cafe manager, who's already

• 55:27Speaker 04

  got about 70 jobs, if that cafe manager essentially goes into the system, and when it comes time to order, they just click, okay, okay, okay, okay, okay, okay, okay. Now, we don't want them to just not think and just autopilot. We actually don't want that at all. And there's a reason. And this will surprise you, but the variance in sort of what a cafe lead understands with respect to their cafe demand is shocking. It is, it would, it would blow your hair back how much they understand about the demand in their cafe that is not just

• 56:07Speaker 04

  in the numbers. We have these weirdly deep, like, you know, tacit understandings. So what was our North Star? Our North Star was that a cafe manager has more opportunity to spend that time with customers. Because a cafe manager is not superhuman at looking at data and saying like, I'm gonna need like 25 cookies. No, a cafe manager is superhuman at understanding hospitality. And that may sound weird because you can't manage that on the dashboard. You can't look at hospitality on the dashboard. But what you can do is you can ask them periodically,

• 56:49Speaker 04

  how much more time do you have available to spend with customers, to spend on the floor and notice that there's, you know, a coffee spill, to understand that your baristas are slammed right now, and actually like staffing was off, also my fault. But, and so, these are the things that we always cared about. Why do I bring this up? Well, yeah, you could say like, okay, it's like seven to 14 years to find out if this like, you know, diligence was good. Sure. But it's a pipeline. So first of all, you want to ask yourself, how fast can you get through the research pipeline? How fast can you go from identification of

• 57:29Speaker 04

  a potential opportunity or market to a clear understanding to be able to make a decision? But more importantly, hospitality. What does hospitality mean in venture? It means that the investor has time to talk to human beings, to talk to potential or existing companies, to talk to founders and competitors and employees to try to understand the human element of this market and what's going on. Investors are superhuman at a few things, but I don't personally think investors are superhuman at looking at websites. But they

• 58:09Speaker 04

  are superhuman at sort of understanding potential, understanding upside, understanding sort of the relationship between like, you know, customer need, willingness to buy, and sort of framing what the vision and the future can look like. That's what they're superhuman for. And so when you ask me like, how do I measure success? Why measure success when an investor tells me, yeah, actually, I get to spend 30% less time staring at, you know, the website and trying to figure out like, the important details I look for every single time. Or I get to spend 20% less time filling out like, you know, these specific answers to questions which are important for diligence, and instead picking up the phone five more

• 58:53Speaker 04

  times and talking to five more people who have credible opinions on this deal. That's success. And you don't need to wait seven years to find out.

• 59:03Speaker 01

  Do you find there is kind of a spectrum of like, let's do more research to, we need to cut off the research and we need to make a decision now? Because it is, that research process doesn't really have a defined endpoint. You could always dig deeper, correct?

• 59:20Speaker 04

  Totally.

• 59:20Speaker 01

  How do you, how do you make those decisions? Are the agents the ones making the decisions? Is there a stepping off point where they have to come back and you make that, you know, a human is making the decision? How does this loop work?

• 59:32Speaker 04

  Totally. I want to reference something that Nathan said earlier. You know, he's got this list of things, and he's like, some of this should have been left in the cutting room floor. We would, we would call that taste, and sort of like knowing what should be cut and what shouldn't be cut is taste. And yet again, here's where I will point to why it's important to have exceedingly bright colleagues. When you have exceedingly bright colleagues, they've got great taste on like, what research needs to get done. There are some research that like, yes, like, we always want to do it. We know we need to do it. This is the structure. And there are opportunities for agents to say, let's spin off some subagents to continue doing this kind of research. Let's dig deeper on

• 1:00:10Speaker 04

  this. That's fine. That's automated. But ultimately, the alpha is in the taste. And so, yeah, like, we can burn more, you know, tokens, we can burn more compute. But, I don't know, it's a pretty, it's a pretty like focused laser where you really want to point these resources at things that people have the ability to consume. If I produce an extra thousand pages of research on some deal, who's going to look at it? I guess other agents could look at it, but like, then what? Is that valuable? It's not obvious to me that it is. And so, again, pure volume of research is not a metric that we even track.

• 1:00:53Speaker 01

  How goes your teaching of data science at, I believe Rutgers?

• 1:00:57Speaker 04

  Yeah.

• 1:00:58Speaker 01

  So what, what do students, you know, students are probably asking some similar questions there. So, you know, what, what, what do you say to them? And what do you, what do you think the future of that field is?

• 1:01:08Speaker 04

  Yeah, great question. I still make them do gradient descent by hand. So This is an area where, in my opinion, I have yet to hear a single person with a cogent explanation of what the hell we're supposed to do as teachers. I believe and have believed for a long time, you know, I came up and pure mathematics were not the most practical bunch, but I have always believed, even as a pure mathematician, that you should be constantly thinking about what your student's future looks like and why every minute in your class is relevant to that future.

• 1:01:47Speaker 04

  I am not just like phobic, but like allergic to wasting students' time. So what I do is I reassess every semester, much to my own suffering, because that means I have to rewrite my curriculum every single semester on what do I teach them? So three years ago, when it was obvious that sort of AI was going to change data science, and then I started working at Hex, trying to change data science, I rewrote my entire curriculum to introduce why AI might be relevant. And every semester, I go through the whole course and I ask, can AI just one-shot the course? The answer has never been yes, but that's okay.

• 1:02:31Speaker 04

  The answer has always been, okay, these things are now not just easy for the model, but easy for the model to obfuscate the learning. And so I don't think the question is, does the model know all the content that I plan to teach? The question is instead, does the model have the ability to collaborate with the student when this is going to be relevant for the student in a way that yields the sort of best outcome? If the model can, if, if, you know, Astra can train an SVM on the coffee survey data at a better loss rate than Brian can, neat.

• 1:03:12Speaker 04

  But can Astra say, you know, this feature is highly predictive, but when we think about it, if we put this on the website, it's going to upset some of the people going through the flow and they might churn? Like, yes, Astra can look at the data posterior and say, people are churning more on this question. But does Astra know ahead of time to look for that? Does it know to instrument that in the product? Does it know that this is kind of a weird question and people might be bothered? These are the kind of things that Astra Ultra is still only mid at. But ultimately, I don't want my students to only be users of AI.

• 1:03:54Speaker 04

  I want them to be sort of the things that make data scientists exceptional, and that is ultimately curiosity. Like, every data scientist that I've ever met that is in the top decile, and certainly in the top percentile, are curious as hell, almost to a fault. The absolute best data scientists I've ever worked with are borderline annoying with their curiosity. Like, you kind of want them to just like, leave it alone sometimes, and that's what makes them so excellent. And so mostly what I'm trying to like indoctrinate my students into, the propaganda, is curiosity. Be curious. Ask the questions that you can't get out of that brain. And when you do that, you're going to be an excellent data scientist, whether your

• 1:04:39Speaker 04

  writing pan is by hand, whether you're using Matplotlib from memory, I don't really care. Do you remember the indexing for NumPy? I don't. I used to know it, I don't remember it anymore. Do I remember the slice operators for, you know, pandas filters? Not anymore. I forgot them all. But I used to know them. It doesn't matter, though. What I know now is I know sort of when you look at a distribution, whether it makes sense. And sometimes Astra doesn't.

• 1:05:10Speaker 00

  Part six, which hills? After Brian Bischoff signed off, precaution I kept going.

• 1:05:18Speaker 00

  That, um, his answer on what he tells his future student or his students about their futures, I thought was really interesting and it sort of contained the pessimist and the optimist take at once. When he was first going through the, you know, sometimes there's like a survey question that may offend people and you got to be wise to that. I was like, man, that's bleak. You know, the idea that like, we're just going to be sitting here being the sort of offense detectors, you know, while the AIs do all the real work, was like, oh God, you know, that doesn't sound awesome. I did like the curiosity framing a lot better, being relentlessly curious, certainly in

• 1:05:59Speaker 00

  my experience, working with data has been indispensable, you know, really want, the difference between somebody who really deeply wants to know the truth that the data contains, to the degree that the data even contains truth, which is often a problem unto itself. Those people absolutely kill it compared to those that are just like trying to produce an artifact that they can say, you know, is done and hand off to whoever the consumer of it is. So I do like curiosity as an answer to like what we're going to bring to the future, but it does, I would not be telling my kid to go into data science today, I'll tell you that. So that is a tough one.

• 1:06:39Speaker 00

  I don't, you know, the real question there of like, is there going to be a job in data science looks anything like the current job in the next few years? I feel like that is, I think that's pretty tough. You know, it seems like we're going to have data science agents and it's going to be up to the sort of non-data scientist, general purpose, uh, business operator to provide that little salt of curiosity or offense detection or whatever that, you know, special sauce is that the models don't quite have.

• 1:07:11Speaker 01

  I feel like, you know, if you look at a company, um, you kind of cut it apart into like sensing, analyzing and decision-making, right? And then action, decision-making, and then the reverse, which is, you know, uh, operationalizing and actions, right? Uh, and I think AI is going to be very good at the sensing and analyzing and also the operationalizing. But I think the decision-making, you end up with a human in control, right? And then if you take the human in control, okay, you can have a business with a single human in control, what's a number of like decisions that that human can make? And those decisions are decisions with taste. For example, like if you're running a tech company, you don't need decision-making maybe

• 1:07:54Speaker 01

  on the accounting framework, right? Like you're, you're, you're looking at the product, you're looking at the technology, et cetera. But accounting in the back office is a back office, right? In the same way, if you're running an accounting company, the accounting is, you know, front and center. But the technology is, you know, kind of a back office. You're not, you're not like, you're not there building technical tools, right? So I feel like you can separate out companies based on what is the ultimate purpose? And then the ultimate purpose has all of the humans with, you know, taste in there. Basically, everyone gets to do what they really want to do and what they're really good at, and everything else gets taken care of.

• 1:08:38Speaker 00

  Earlier that Friday morning, before the guests, a new benchmark had been making the rounds. AI is playing Blood on the Clock Tower, a social deduction game of bluffing and collusion. And the timeline was cheering how good they have gotten at it. Here is what I made of the game.

• 1:08:56Speaker 00

  If you kind of take it in isolation, it's like, you know, all else equal, it is interesting to know how good are the AIs at playing this game? Are they getting good at deception? Are they getting good at collusion? Are they getting good at sniffing out when other people are trying to deceive them or collude against them? These are all like interesting questions. What kind of bothered me about it, though, was the sense that like, and then Noah Brown comes in over the top and says, wow, this is great work, you know, you want to come here and make evals? And that kind of embodied to me like what I thought was problematic about this whole thing, which is just like, we're just going to hill climb on this now, right?

• 1:09:36Speaker 00

  Like, it seems like the, the mentality of the field as a whole is like, ooh, isn't this exciting, you know? And let's have a horse race as to who can be the best Blood on the Clock Tower AI player. And I think what we're all kind of forgetting as we get all wrapped up and excited about this and, you know, want to go play the AIs ourselves and everything is like, this is not good behavior from the AIs. Like, we do not want AIs deceiving and colluding. I'm sure all these, you know, people have sort of a thoughtful response to this, but it's just like zoom out and the situation is bad. You know, we have AIs that are untrustworthy in all these kinds of ways, and we're not even like taking that beat to say, hey, is this what we want?

• 1:10:21Speaker 00

  Do we want AIs that are going to out connive and out collude us? I don't think we want that. That's like exactly, you know, this is very similar to my idea that we should not train AI generals. Like, let's not create, let's not train AI master manipulators. So simple, but here we are. And like, I didn't hear, I didn't see, I saw a lot of cheerleading and a lot of enthusiasm, and I did not see any corrective commentary on the timeline saying, hey, Is this really what we want?

• 1:10:52Speaker 00

  Back to the end of that same Friday show after Brian had signed off. Prakash with a picture of where the economy goes from here.

• 1:11:02Speaker 01

  So I feel like the going forward economy is an agentic economy. And that means agents building businesses and software for other agents, which are suitable for their affordances, which is going to be massively parallel, high speed, able to absorb information and distribute information at very low latencies. We are going to end up with a sales force primarily used by agents, a ramp primarily used by agents, all of these softwares, a Stripe primarily again used by agents. Maybe, maybe Stripe or other companies will be the ones that create the software.

• 1:11:43Speaker 01

  I am very doubtful. I'm very doubtful because I don't think they will move that fast. I don't think they are capable of moving that fast. I don't think they understand the affordances. And I know Stripe is basically like, you know, people a billion times smarter than I am. I'm not, I'm not trying to downplay, you know, how effective and how intelligent and how competent Stripe is. Like you're gonna get 50 million Patrick Colas, you're gonna get 50 million Elon Musks. You're gonna get like humans who give them capital to deploy. You're gonna get agents coordinating investments into businesses built by agents for agents. And so I largely see the future of the economy as primarily agent driven,

• 1:12:26Speaker 01

  with us just receiving free benefits because hey, you know, CRM call from a human is like so, so costless in comparison to the massively parallel CRM calls that an agent would make. The abundance basically comes from us building all this stuff for this agentic economy. And as a result, we just have all of this excess because we don't, we don't, we just don't consume that much, right? Like we're just not, you know, that consumptive in comparison to what the agents are going to consume. And that's, and that's where this abundance is going to come from.

• 1:13:02Speaker 00

  My reply leans on a side project I'd launched the week before. Frutopia, which finds the best fruit at your local grocery and around the world. Here's where I came down on the economy Prakash had just described.

• 1:13:16Speaker 00

  And on the one hand, it's like, cool if, you know, there's abundance in like API calls, because the agents are using so many and they like build up, you know, great systems that they can use. And then we get to kind of piggyback on them.

• 1:13:32Speaker 00

  But like, there's a lot more to life than API calls. And I do feel like we're sort of, especially, and especially those of us that are in the AI space are like, really quick to forget that, or we sort of, you know, we're kind of contorting ourselves in a way to like, like this future. This is why I've been like, holding myself to this idea of like, I want to be getting outside more and getting more exercise. And if I'm not doing those things, am I really winning? Or am I just kind of plugging myself into some, you know, AI powered machine as like, some sort of, you know, human integration layer type, you know, component that's like,

• 1:14:12Speaker 00

  in a way like too subservient to the machine. But this is why I decided to do this Frutopia project recently. And, you know, it's again, just one of these things where it's like, okay, if we are in a bright future, then I think one, you know, very kind of deeply rooted thing that we all like, we're evolved to like, is eating delicious, fresh, in-season fruit, right? Like, everybody loves that. It's, it's, it's, it goes back to when we were monkeys that, you know, we loved that. When I tweeted that, I got like basically no play on it. Versus the blood on the watchtower thing, everybody's like, oh my God, like, look how great AIs are getting at like deception and conniving and, you know, winning these like games of social manipulation.

• 1:14:57Speaker 00

  And I'm just like, I don't really want that from my AIs. What I want is a future where I have not abundance of API calls, but abundance of things that are like more biological. Give me the fruit, you know, that's what I really want. The fruit of the AI revolution should indeed be like, at least in part, actual literal fruit. And if we're losing that, we're like losing so much of what has mattered to us. And if we can't even like notice that we're losing it, I think in a way, you know, that, that sort of worries me and makes me think like, maybe we've kind of already lost the plot.

• 1:15:32Speaker 01

  I mean, it's pretty obvious to me that we're gonna get vat grown like food, which is far more nutritious and far more tasty.

• 1:15:42Speaker 01

  It's gonna be like, you know, in 20th century, you discovered chemicals. And then we, you know, when you look at these food products right now from like Doritos or whatever, those are like so scientific, right? There, there are like thousands of PhDs who have worked on Doritos, thousands, literally thousands.

• 1:15:59Speaker 00

  The old, remember the old Onion article, Doritos celebrates its 1 millionth ingredient?

• 1:16:03Speaker 01

  Like they have figured out your flavor palette so well, that they can like, you know, pinpoint exactly what, you know, flavor that they want to produce. And all of that technology is going to get deployed into bio, right? We're going to produce like, you know, fruits and, you know, vegetables, et cetera. Hybrid, you know, fruit is already basically GMOed, but we just, you know, took a very long time to GMO it. Part of abundance is going to be, you know, your 99 percentile wine available for two buck chuck, right?

• 1:16:32Speaker 00

  My favorite apple is the Honeycrisp and, you know, it's a relatively recent creation. Not GMO as far as I understand, but definitely the product of like large scale systematic cross breeding, which is sort of, you know, GMO before there was GMO.

• 1:16:49Speaker 00

  So I, you know, I'm not afraid of GMO enhanced fruit by any means. I'm all for it, but, but it is still something that is like

• 1:16:58Speaker 00

  a biological construct that feeds us as biological creatures and like, you know, delights us in terms of our biological senses and the like, you know, ephemeral qualia that we get from them. And like, this stuff is just all too often lost because it's not very measurable. It's not so hill climbable and it's not what the agents need, right? And I think we are going to need to be very careful not to create an economy that really serves agents and creates abundance for us in things that are core to what agents need. We're gonna, if we, that's really what, I kind of agree with you, that might be what happens by default. But I would challenge everybody to think like, wait, like,

• 1:17:39Speaker 00

  what if the stuff that agents need in abundance isn't the same stuff that makes our lives good?

• 1:17:46Speaker 01

  One of the annoying parts is that, you know, the frontier lab guys are very serious, right? And so when you're very serious, you only talk about cancer, curing cancer. No one's talked about a better Doritos. No one's come out and say like, we're going to make a better football game, right? Like, where are these like, we're going to make a better burger, we're going to make a better football game. Where are these things that people enjoy? And that's, and that's, I think that's because they want it to be serious. They want to show that earnestness. They don't want to come off as like foolish, et cetera. Maybe you should focus on like, we're going to make a better Doritos chip. We're going to make one that's healthier for you. We're going to make a Doritos that is naturally grown from the ground. And you just need to cut open the potato and it's Doritos. And, and this is like, this sounds like so frivolous and idiotic.

• 1:18:31Speaker 01

  But this would catch the imagination of like people on what is actually going to be possible, right?

• 1:18:37Speaker 00

  I mean, I think it's also because they do have this kind of World War II mindset about their work. You know, that they, they genuinely do believe time is short, stakes are high. The, you know, their, their own like allocation of time is like very skewed toward work. You know, there's just not a lot of space for leisure in the lives of the people at the frontier companies. So it's like, they're just so pattern matching at this point on like, here's a hill, let's go climb it. And, you know, I do think like a little more discretion on which hills do we really want to climb? Like, are we really happy that we've created AIs with the current shape? I don't know. It feels like.

• 1:19:22Speaker 00

  Like unfortunately, there's just not enough time and energy going into those sorts of questions. So I'm stuck on that maybe a little bit today, but man, um, the blood on the, on the clock hour thing really did it to me because you know, again, it is good work and it is interesting, all else equal. But we're, I think we need some thinking that challenges the all else equal paradigm uh, on so many levels.

• 1:19:47Speaker 01

  Yeah, it's, it's, it's a really tough one because I, I, I don't think, um, you know, uh, agents can operate in the economy with, without, uh, some level of subterfuge, right? You can't tell your pricing to the other guy, for example, you can't, you can't tell your internal costing to the, to the, to the guy who asked, right? You have, you have to reserve that. Um, and you know, you, that, that means that involves omission, right? And you have to know when to omit. Um, so there, there's a bunch of things there. This is also why I think, um, you know, Palantir had this idea of the anthology, right? Uh, who, who's allowed to know what, right? That, that, that's a pretty important thing, like who's allowed to know what and you know, who's allowed to say what, who's allowed to do what, right?

• 1:20:29Speaker 01

  Uh, and I think also you need this kind of like interrupt from government, which is possible, or interrupt from regulation or interrupt from, which means that the agents have to obey when government decides like, hey, this is, you know, you can't do this, the agents have to obey. Uh, so there's a bunch of things that I think need to be worked out in terms of governance. Um, I, I, I'm sure, I'm sure we'll get there, I'm sure, but you know, we're going to have some trial and error, um, along the way, I guess.

• 1:20:55Speaker 00

  Yeah, no doubt. Maybe in closing, I'll just cite one sentence from the meter thread on their, uh, report on acceleration. They say, "The full analysis estimated how much of the acceleration and capabilities was due to compute, data and algorithmic progress." And then in a, that's the first sentence. Now I'm just editorializing, in a thread in which they have caveated everything not confident and the, you know, it's, it's very unclear how to interpret data and they've, you know, gone around and around in circles with themselves and with Anthropic team and you know, there's just so much, uh, fog of war and even the core estimate of 2X is really like, they wouldn't be

• 1:21:36Speaker 00

  surprised anything 1.3 to 3X. So caveats everywhere. The next sentence is, is the only one I noticed uh, so far that begins with, "We are confident." And the sentence is, "We are confident that the acceleration was not due to an increase in the growth rate of training compute." So that would suggest that in terms of government interventions, um, you know, we, who knows what we'll see in terms of data center build out and maybe we'll see, uh, slightly slower data center build out than we would have counterfactually if the election had gone a different way. Uh, but it is striking that the acceleration that they are reporting on here is not just

• 1:22:19Speaker 00

  a raw material, uh, input story. It is an algorithm story and it is a data quality story. And those things are being driven to a very large degree by the intelligence that we already have, which again is where it goes from, you know, not just bigger and bigger capital, but actual kind of recursive self-improvement. So if we are going to try to change that trajectory with a government, uh, intervention, it's probably going to have to be more focused and, um, pointed right at the practices of the frontier companies than something as diffuse as a broad slowdown in data center build out.

• 1:23:03Speaker 00

  Thanks for listening to the AI in the AM Weekly Highlights. The narration was my cloned voice and we'd love to hear what worked and what didn't. See you in the morning.

• 1:23:15Speaker 05

  Never asked what for, did it 'cause you could. It learned to lie, you said wow, 'cause you could, 'cause you could.

• 1:23:31Speaker 05

  The hill was there, so you climbed it sure. Nobody asked you to, nobody asked what for. Sat it down at the table where the liar wins, it fooled the whole room and you stood up and grinned. Never asked what for, did it 'cause you could. It learned to lie, you said wow, 'cause you could, 'cause you could.

• 1:24:00Speaker 05

  Finger under the score, same hand out to shake. I'll leave it hanging there till you tell me what for. A mouth that out talks us all and what's it for? Wow, did you ever want it or just know how? Could ain't want, could ain't should, but ain't should. Don't tell me how, say what for, 'cause you could, 'cause you could.

• 1:25:28Speaker 00

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• 1:26:12Speaker 00

  And thank you to everyone who listens for being part of the Cognitive Revolution.