TWTW - Can We Stop a More Brutal World

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I've got sunshine on a cloudy day When it's cold outside, I've got the month of

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October the 13th, the Friday, 2023. If it's October the 13th, the Friday, 2023. If it's Friday, it must be that was the week. It's been quite a week. I need to tell you what happened this week. Such a shocking week, in fact, that it even seemed to shock Keith into dropping his AI-generated art and have a more vivid and dramatic cover for his newsletter. Can we stop a more brutal world, Keith? At least it stopped the brutality of your AI art. It did indeed. I couldn't even begin to think how to ask Midjourney to do this week's front cover. I was lost for prompts. Yeah, I don't think we I don't think we want Midjourney coming up with images from Gaza or northern Israel. So I don't spend the whole time, Keith. This is a tech show rather than a politics show. But your editorial this week focuses on politics. So very briefly, you write. So for me, it's a time to stand back and ask some big questions. What are the big questions that the events of the week have triggered in you? I think the questions are posed by some of the people I've published this week in the curated list. But it really comes down to is the weakness of America relative to its future replacement such that the world is starting to fall apart. Ray Dalio writes a piece about that. Graham Allison, who has been a long term advisor to US foreign policy and wrote a book called Destined for War, talks about it. And Noah Smith in his excellent newsletter called No Opinion also writes about the end of Pax Americana as leading to, let's think of them as mischief makers around the world, whether it's Putin or Hamas or anyone else, taking advantage of the fact that no one's going to stop them. And that this for these writers is the precursor to the ultimate showdown, they believe, between the US and China. And so they're predicting that these are the early skirmishes of a future global conflict. Well, we've heard this a million times before, firstly. And secondly, I don't know what was so peaceful about the 70s or 80s, Pax Americana. What exactly does that mean? Wars in Korea, in Vietnam, wars in the Middle East. I just think this is hysteria to me. I don't know where any evidence. Firstly, there's no evidence that what's happening in Gaza is going to result in a war between China and America. And secondly, where is this Pax Americana? I don't see any evidence of that. Well, I mean, obviously, there's some of what you say I agree with, but just to kind of to retrieve the logic out of what they're saying. It is the case that the Cold War was a cold war, not a hot war. And despite Well, ask the Vietnamese or the Cambodians or the Laotians or the Koreans there. I don't think they would agree. Or many countries in Africa. I think you could be accused of losing context there, Andrew, because remember, by 1950, we're coming out of 50 years of global conflict, two world wars, and regional conflict and global conflict are not the same thing. They're both horrible, but they're very different. And what these guys are saying is we're moving from a period of regional conflict, which is what Pax Americana acknowledges existed to back to global conflict. Now, that that is an actual point that you can engage with. And I agree with you. I mean, my editorial is all about preventing that and human agency and not wanting that to happen. But for example, that has consequences. It means America shouldn't be fighting China, it should be embracing it. I don't understand the connection between what's happening in Gaza and Israel and China. China's not involved in this. Well, it's an abstraction to do with opportunity when there is a contested world stage for regional players to take actions that will not be policed by global policemen. That's the Smith thing. But again, I don't even understand the context there. Americans sending huge amount of support for Israel. So why is this different from

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the Yom Kippur War or the Six Day War? I don't see what the difference is. The difference is that they happened at a time of American rising global power. You know, we all pretty much didn't like it. But when America did what it did in Iran and even in Iraq post Cold War, it was the dying embers of a strident, rising America. What they're claiming in these pieces and we can disagree. This is the Smith piece and the pieces by the book by Alison, Destined for War and Ray Dalio. And by the way, if you look at the subtitle of Alison's book, talking about the... What that refers to is the inevitability of a declining power having to fight to retain its position in the world. It's not about the rising power, it's about the declining power. So Great Britain would be the archetypal example in modern history where, you know, the rise of Germany and the US happened many, many decades before World War I. It took half a century for the transition of world power to play itself out very violently. And they're claiming that we're in such an era. I'm not saying I agree with it. In fact, I'm saying that they write as if it's inevitable. And I disagree with that. Well, enough. We've done international politics, Keith. This is a tech show. We're talking with Keith Teer, the CEO of SignalRank and the author of a wonderful weekly newsletter, which we deal with every week called That Was The Week. Keith, how have the events played out on social media? You connect with an interesting piece from Ryan Broderick. This is what an unmoderated Internet looks like. Content moderation is a failed project. Seems to me, from the small amount of time that I've spent on social media this week, it just mimics the hysteria in the world itself. Is this week going to be remembered as the week where social media formally failed? I think the opposite. It's the week it succeeded. Mimicking the real world is what you want it to do. The real world is full of weirdness and things you strongly disagree with. And the idea that social media could be this haven that isn't like that, first of all, begs the question, well, who would be allowed to publish in it? Which part of the real world would be allowed to survive in social media versus some other part? I think the very discussion of social media is somehow separate from the real world. That's the actual problem. It's an unrealistic point of view. The minute you open up a platform for anyone to publish to, anyone will publish to it. You connect with an Al Jazeera piece that I actually sent you. It's a social media platform swamped with fake news on the Israel-Hamas war.

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Al Jazeera, if there is a relatively unbiased platform, it's Al Jazeera, but that's another issue. A lot of complaints I read on social media saying we used to trust Twitter to get us the real news and now we don't. Are you saying then that if it does mimic the real world, what's the point of going on it? It might as well be in the real world. Well, it's the place that the real world meets each other. You're not going to meet everyone in the real world in your local town, but in Twitter, you literally see everything.

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Mimic might be too engineered a word, Andrew. I think it reflects, is probably the right balance. It reflects the real world because it doesn't alienate it. It allows it in. The Broderick piece I'm quoting, he talks about dog shit content swirling inside of X. I mean, when you go on these platforms, no one's talking to one another. They're all hysterical. They're all articulating their own particular insanity, their own hysteria. I mean, I understand it's valuable if you want to post that hysteria, but what's the value for people actually reading it? Well, the primary value is knowledge. I mean, part of knowledge is knowing what people think. And to surface knowledge in real time, this is the first time in human history that that could happen. Even printing presses typically took 24 hours to recycle. And by the way, we're full of fake news as well. I mean, press releases from governments that were republished from Reuters in The Times is a common occurrence. So, you know, the fact is human beings contest reality and they now have a very big canvas to contest it on. You've talked about Twitter in the past or X as the town square. So it's not as quite a civilized town square as some people might imagine. Well, the town square isn't civilized. Why would you even want it to be? Yeah, but if everyone's just screaming at one another and I'm not sure what's the value here? I don't think everyone is screaming. There are people who scream at each other, of course. But I don't think Twitter is only a place where people are screaming at each other. There were things I read this week that were insightful, hundreds of tweets. So then I wouldn't have known about some of the things unless I was looking at Twitter. So the caricature of Twitter as a screaming match just isn't true. Also, as it's been the week or one of the other issues of the week is the EU are looking now at X over the distribution of misinformation. I'm guessing, Keith, that you're not a big fan of this EU investigation. Is it going to go anywhere? Are the Americans going to try and mimic the EU in investigating X? Well, it's Big Brother, isn't it? It's 1984 or Big Brother. It's it's, hey, we're the government and we want you to only publish this kind of stuff. Well, sorry, you know, you don't have any authority and we and if you do, I'm not recognizing it. But if the EU has authority, they can shut it down. They can find them. I mean, they can't really shut it down. How are they going to do that? Well, they can find them and we should. Well, they could just pull out of Europe and publish from the US. I mean, honestly, the European government has almost no capability to control thought. And if it tries, it will become the bad guy. Well, if I know you're not keen on the EU, you're also not keen. And you managed it in spite of all the big events this week. You managed to find space for your favorite graduate student, Lina Khan. You had a connection with Lina Khan's FTT is totally outmatched versus Amazon. I'm not sure whether Lina Khan is gearing up for a fight with X, but she seems to be outmatched, Keith, by big tech. Yeah, I put that in mainly as a historical placeholder to affirm that the narrative we've discussed over the past two or three years is accurate. That she's out of the depth and trying to extend antitrust law to things it has no business to be in. One of the key points of that article is that 40 percent of Amazon's users are now shopping on a Chinese alternative. I forget what it's called now, it starts with the letter T, Telus or something. So the idea that Amazon is any kind of a monopoly is the root problem. And for Lina Khan, anything big is a monopoly. But actually, she's wrong. It isn't. Yeah, Lina Khan never seems to have met anything big that isn't in at least, according to Keith in her mind, a monopoly. We'll have to get Lina on the show, Keith, because I know you and she would have a very civilized conversation. It's not just Israel and Hamas that's in crisis this week. It's also streaming services are struggling. What's happening with streaming services, Keith? Well, this is a very thoughtful piece. You sent me this one as well, actually, Andrew. It really discusses the failing business models of some of the large networks that have gone into streaming, particularly Warner Brothers, but others as well. And when you read it, what for me comes out of it is that the streaming model requires high quality, regular content. Not a back catalog. Disney has a great back catalog. So does Paramount Plus, so does Peacock. But people, I think, in the main are looking for new content they haven't seen before. And that's dominated by Netflix, Apple TV Plus, a little bit Amazon Prime. And that's about it. So the streaming business model seems to challenge the old networks because they're not spending enough money on great new content regularly enough. What's happening is people are subscribing for a week, binge watching the small amount of new content and then unsubscribing. So the idea that you get an annual subscription from a person isn't happening for the ones that are only relying on back catalog. That's my take. Others have got different explanations as to why it's the case. But I think it's really all to do with quality and volume of content. Wouldn't be a week on That Was The Week without AI, AI of the Week. Interesting links. The one that really struck out to me was that OpenAI's revenue, this is on the information, that its revenue crossed 1.3 billion annualized rate. Is this a big deal, Keith? Yes and no. The other news this week was that it's costing something like 700. I think I'm getting my facts right here. I'll fact check myself later, but I think it's $700 million a day to run OpenAI. They're losing money on every user, including the paying users. So 1.3 billion annual revenue doesn't really pay the bills. So they're still challenged to get to much larger numbers. There are rumors that they are going to try to raise upwards of $100 billion to fund it. I don't know if that's real. Is that a smart move, do you think? I mean, what would the company then be valued at if they raised $100 billion? Well, it'd be valued as a function of the appetite of the providers of the money. I understand, but I mean, would it get valued at $300-400 billion? Well, you've got to believe if Apple is worth nearly $3 trillion, and OpenAI really represents the future of the human race's knowledge network, it's going to be worth trillions. $100 billion is a tenth of a trillion. So it isn't totally unrealistic that it could raise that kind of money. I understand, but I'm curious. Google's valued at $1.7 trillion. Apple, you say, almost $3 trillion. Microsoft, I think, is above $2 trillion. What kind of valuation do you think they can get away with? I mean, it's all speculative, as you suggested. It all depends on what the appetite of the investors. But could OpenAI theoretically be valued at $1 trillion? And wouldn't that be a record as a startup? What pre-IPO startup has ever been valued at $1 trillion? Yeah, I mean, it is breaking records every time it does anything, in terms of growth and value. No one's gotten to $1.3 billion of annualized revenue as fast as this, either. I think $1 trillion valuation would be actually quite small. Would you invest at $1 trillion? I think if you invested at $1 trillion, you'd probably make five times your money in five years. So you mean, in other words, it would be worth $5 trillion in five years? Yeah, it's going to be the most valuable company on the planet by a large degree, because there's no other game in town for the future of human knowledge management. Wow, gee, I'm going to come back to you on that one. So you're dismissing Microsoft and Google? Well, Microsoft relies on OpenAI, and Google is a weak competitor to OpenAI. With a legacy business, it can't close down. So I think OpenAI holds all the cards. Wow, so it is a good investment, then. A trillion-dollar investment would be a smart move. Well, put it this way. You'd be betting on OpenAI being the equivalent of the next internet. It's not just one company. It's the whole infrastructure of knowledge management.