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I'm With Musk
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Speaker 4
Hello, everybody. It is Friday, December the 13th, 2024. Nightmare Day, at least might seem to some of you, because Keith's editorial this week on That Was The Week is headlined, I'm with Musk. For haters, he's the new Trump. Keith. Some people are already going to switch off. You're with Musk. Isn't he the bad boy in all this?
Well, certainly in popular imagination, he's only the bad boy. And yesterday it was compounded by the SEC threatening him if he doesn't pay them a lot of money related to his Twitter acquisition. And a letter back to the SEC that was published from his lawyer exposing the extent to which the SEC is going after.
That's our post of the week, so let's not give away our best stuff until the end. But certainly he's always in the news. But you're a man who at least thinks himself on the left, Keith. I'm not entirely sure, as I've said many times on this show, whether you really are. But how can you be with Musk? Isn't he really the guy who wants to get rid of government bureaucrats, who wants to turn America into a version of Tesla or SpaceX?
But I mean, that's such a meaningless phrase. I mean, even I don't want to bring Hitler a bit early, but even Hitler would have argued he wants a better world for human beings.
No, I actually think Hitler didn't. Hitler wanted a better world for German Aryans. Musk actually wants a better world for all humans. That is different. And he acts according to that. Everything he does, hard things. is designed to improve things. He just announced that there's going to be a smaller Tesla next year priced at $30,000 when the rivals, for example, Ford are selling their cars for $60,000. Starlink brings good internet to people who've never had it. There is almost nothing he's doing. And if you just focus in on what he's doing in government, he was reacting against what he considers cancel culture, that led him to back Trump because he himself was cancelled by Biden, even in the EV world.
Everything he's doing on Twitter, which is... I don't think there's any bad version of Twitter since he took it over. It's opening it up. It's considered to be bad because it's allowing people we all disagree with to speak. Well, what's wrong with that? People should be allowed to speak. So there's nothing he's doing which is in any way either right wing or negative. Yet he's the opposite of lionized. What is that? Demonized. He's demonized for being this terrible person when actually he's the best of us. He's actually the best of us.
What about the Randian, the Ayn Randian quality, this obsession with the market? I mean, he's obviously an enormously, he's the wealthiest man in the history of the world. He's worth, I think, $400 billion as we speak. That, again, it's not his fault, obviously. I mean, you play by the rules, you make money, and we can't criticize people for making money. Isn't there a fetish with the free market with him, isn't he? The extreme manifestation of Randian free market thinking, that everything becomes the market, governments.
Well, you and me, because of our past, can have a good conversation about that, and we should. But I think most people, it's like good versus evil. like the guy who killed the insurance company, the whole world is resolved back down to good versus evil. And you're good if you're against the market and evil if you're for it. I don't buy that at all. The truth is more nuanced. I mean, Rand actually, to her credit, saw the market as the way to get things done and saw the government as a way to stop things being done. I don't think that's that wrong.
I mean, Keith, I think you're a classic old leftist who's become a free market person. I mean, it's not necessarily a criticism. It's just a reality, aren't you?
Well, it isn't that. I think I don't want to quote the Bible, that is to say das Kapital. But I do think that capitalism is the only way you get to something better beyond it. Look what happened in the Soviet Union when they didn't really yet have capitalism. And they overthrew the state, the czar, which was a feudal system. And because capitalism hadn't developed, they had a backward primitive society that led to authoritarianism through Stalinism and such. Capitalism, at its best, is a precondition for anything better. And that's very core to everything Marx wrote even. Marxists are the problem. Marx himself isn't a problem. He understood the benefits of capitalism. And I think there's nothing right wing about understanding that capitalist economics are a precondition to human uplift.
Well, Marx said that, although this is not a show on social studies, it's a show on tech news. In your editorial, You talk about how you believe at least the SEC has been blatantly blackmailing Musk, although you rely, and maybe we'll do post of the week in the middle here, you rely on a post put out by his lawyer. So who knows the context of any of this? Are you suggesting that the government's always evil, Keith, when it comes to Elon Musk?
No, but I think we probably all agree on this. It's become politicized. It's always been politicized one way or the other, whoever's in power. Yeah, but you can't internalize. There's something new, which the word lawfare is being used to describe it. which really started with Biden's administration and what happened to Trump, mostly legitimately, I would say. But lawfare is when instead of fighting politics, you resort to law to beat your opponents. And I think there's an element of lawfare that is now focused on Musk's as the accused.
Although, again, I mean, I'm not a Musk hater. But on the other hand, I'm not a Musk lover like you. I mean, Musk himself has learned from the master, Trump, the lawfare war. I mean, he's currently suing OpenAI and anyone else he disagrees with. So he's not exactly only a victim here. He's a perpetrator too.
He's a change agent, and if that's the same as a perpetrator, I think the word perpetrator assumes he has bad intent, that it's either self-serving or negative for people. I think he's more of a change agent. and a catalyst, which is a better word than perpetrator, for what comes next. And there isn't very much about what he wants to achieve that you could object to if you turn off your hatred and just think about what he's actually trying to do.
Well, you shall see on this. I mean, it's all theory at the moment. You note in your editorial that... Without builders, and it just happens that they're billionaires and millionaires, then you don't have a positive narrative of modernization. You also quote an interesting X from Aaron Levy, who I think is politically on the left. I think he's the CEO of Box, who is also in some ways sympathetic. Is there a shift in Palo Alto, Keith? You're at the heart of Palo Alto. You know lots of VCs. Are people beginning to change their mind on Trump and Musk?
I think the Valley is as politicized as Washington, D.C. So I'd say, broadly speaking, it would be wrong to answer in either way, because I think the Valley's got points of view across the entire spectrum and is very divided on it. I do think the Peter Thiel circle that Musk is in is not well regarded.
Well, Musk and Thiel aren't particularly close. I think they were together at PayPal and they were I'm guessing there's not a lot of love lost between them, either politically or personally.
Actually, they have both sentiments. They're not friends. They had a falling out. Musk got fired, actually. but there's a lot of mutual self-respect there at the same time. So I think they're in the same circles. Even if they're not friends, they are all friends with people who are friends with both of them. So that is a circle. David Sachs is one of those. And so I think there is a group within Silicon Valley which is very much on Trump's side. Marc Andreessen this week, by the way, did a fantastic interview with Barry Weiss and firmly puts himself in that camp as well.
Yeah, well, Andreessen is clearly a founding member. I mean, he's less philosophical than Thiel. and less, I guess, entrepreneurial than Musk, but certainly.
Well, yeah, they're definitely not impartial. Who would want to be impartial? I mean, impartial basically means you're absenting yourself from history. No one should be impartial. Aren't we impartial, Keith? I think we're lazy and not doing anything other than this newsletter. But we're not impartial. We've got points of view.
Yeah. I think what's for sure is that this is going to be a profoundly consequential administration on the future of technology. John, you linked to an interesting piece by John Cassidy, an excellent writer. He has an important new book out, Critics of Capitalism, coming out early in the year. I read it. It's very good. He's going to come on the keynote show. And he asked in The New Yorker, how long will the Trump crypto boom last? He wrote Dot Con in, I think, 2001 or 2002. It was a very influential book. He was there. Just give me a second. I told you about this dog, Keith.
So anyway, back to John Cassidy, and he asks in The New Yorker, how long will the Trump crypto boom last? He wrote .com, so he knows about booms and busts. It seems to me, I mean, in the old days, in the 90s, there was the clichรฉ, which was true, as most clichรฉs are, that once taxi drivers, we didn't have Uber back then, but once taxi drivers were talking to you about the value of Yahoo stock or Amazon stock, you knew that the market was bound to collapse. These people coming into crypto have no idea what they're doing. So isn't there an inevitability of a crash of crypto?
Well, history would say yes. Bitcoin cracks sometimes by as much as 80%, 90% roughly every four years. And so you would be brave to bet that it's only going to go up from here. That said, there are things at work that make it likely that the level at which it adjusts with the range is on a constant up. The biggest thing is institutional money buying Bitcoin as a holding, BlackRock being the most recent and the growth of now five or six Bitcoin ETFs. Every other cryptocurrency seems to track Bitcoin's value And with Sachs in the White House talking about the Federal Reserve buying Bitcoin alongside gold, the demand to buy Bitcoin has never been higher.
Is the Bitcoin boom Will it inevitably have an impact on the power and credibility of the Fed, of central banks? Or can you have a powerful Bitcoin and not undermine the power of the Fed?
Well, you can't have more than one currency that is in popular use without undermining both issuers. So the Fed gets to print money. And it does it by loaning to banks who then owe the Fed at an interest rate that then gets notes distributed to the rest of us. And if we collectively start using something other than dollars, that would change the power relationship between the Fed and the population. But I think the right framing to understand Bitcoin, it goes bigger than that. The world needs reserve currencies. It always has. It just changes from time to time what the reserve currency is. And at one point, it was gold, the gold standard. Between the pound and the dollar was the gold standard. And the gold standard kicks in when there is no credible currency, which was true during that period. Most economists believe that the US dollar in the short term is going to be very strong. but is challenged in the medium term by the relative growth of China and the rise of the BRICS. And if you look at the BRICS, they're talking about creating their own reserve currency between them.
Brazil, India, Russia, and what's the sea? South Africa, some of the Middle Eastern countries. South Africa begins with an S. China, I think. Oh, China, of course. You missed that one. There you go. Yeah, China and South Africa are the core, but it's growing. I think it's quite a number of countries now. And it's an alternative poll in the world to the dollar.
I wonder whether... I mean, I have no better idea than anyone what's going to happen, but it seems as if it's either a perfect storm or an imperfect storm that's brewing with crypto, with the Musk initiatives in government, with all the rest of it, that something of major significance is going to happen over the next four years, for better or worse. That's my sense. I have no idea what it's going to be.
No, that is, not to quote the Bible again, but... You know, capitalism has a constant need to grow. And as it grows, it creates change. And the balance of the world shifts in line with that change. I mean, there's a layer cake. At the bottom is economics. In the middle is politics. And at the top is social structures. And we're living at a time when the post-war agreement is breaking down.
and it's interesting that another piece you linked to in this week's newsletter is one by Paul Krugman. He wrote his last column in The New York Times, probably 10 or 20 years too late. They should get rid of all their old columnists, Maureen Dowd, Tom Friedman. krugman krugman's the first to be displaced he asked why u.s technology still rules i wonder whether we could have a future where u.s technology is really strong but the dollar and maybe america's political significance is uh lessened um what does krugman tell us about u.s technological domination why does it rule well he he
I like reading him and he's very clear, very direct. You can understand what he says. He is not prone to lawfare. He's actually a thinker. So I like reading him. I think this thesis is a backward looking, that is to say rear view mirror looking. So it's a self-fulfilling truth that California being California, it is the source of all innovation and AI certainly bears that out. But I think it's a descriptive reference rather than a causal one. I think the causal is to do with the moment in history that venture capital meets innovation through the military complex that Second World War created. And the winner was America, clearly. And California was the think tank of America. And that survives to this day. There's no signs that that's going to change, although there are a lot of interesting technological things happening in China. Most of the rest of the world is not in the game. Europe in particular is not in the game. And he talks a lot about Europe in this. and mentions the Draghi report, which we talked about a few weeks ago. So I think there's nothing very wrong with what he says. It's just not a complete explanation.
And people have tried to explain it many times. One thing that does seem to be changing, and we've talked about this before, is that the corridor between Washington, D.C. and Silicon Valley has been replaced. Everyone seems to be in the same room. Obviously, Musk is... example number one, exhibit one in this, in that Elon Musk has arrived in Washington and is changing the world. But more and more tech entrepreneurs are having an influence on policy. You have a piece by Joe Lonsdale, another influential technologist who's always been considered on the right, about our duties as defense technologists. So what does Lonsdale say? You said that you didn't much care for him, but after this piece, you like him a little more.
Yeah, he felt to me a bit like an ideological hawk. that didn't really have an intellectual framing for his hawkishness that made any sense other than USA, USA, USA. But actually, this piece, and bear in mind, he is the co-founder of almost every successful defense company in Silicon Valley, including Palantir. So he's a very influential guy.
He's also the funder and founder of... the new university which Free Press is involved in, the University of Austin. So he's also very much committed to, at least in his language, anti-woke education. So he's a man of the traditional right, although you may disagree that it's really the right.
Yeah, no, he's a libertarian, which can be defined as right or left, depending on your overall view. certainly when it comes to education and free speech, he's a strong libertarian, which I think mostly would make him historically part of the left. I think the left has become right wing there.
Well, you just define anyone on the left as someone, anyone you like is on the left. Anyone you don't like is on the right. So it's become entirely meaningless in your head.
Well, because you prompt me to use them, and I go with it.
Words and timings
Well,becauseyoupromptmetousethem,andIgowithit.
Speaker 4
You're blaming me now? You're a capitalist. We're going to have a new system here. Every time you mention left or right, you're going to get an electric shot.
There you go. But this piece from the guy who co-founded almost every defense tech company is actually focused on what could go wrong. And he rightly says that... Dangerous technology in the hands of the wrong people is not a good idea. And most of what he talks about is how you protect against that through society and rules, which is not a libertarian point of view. The need for rules is clearly socially right.
Is it possible that the Lonsdales and the Musks and the Saxes, who were all libertarians in their youth, have beginning to grow up and recognize a responsibility, a broader responsibility?
Well, definitely as they get closer to power and these guys, all of them, you know, people should be aware of this, are just strikingly close to power now, which has never been true ever.
Well, and they're not strikingly close to power. They are power. I mean, in his own way, he's probably more powerful than Trump in the sense that he owns $400 billion.
Right. So as they get closer to power, with power comes responsibility because you make decisions. And you get scared of your own decisions because now they are going to be executed. So you become incredibly careful. Like if you look at what Musk has done at SpaceX over its life, he started off as a cowboy and now he's a detailed risk measurer. And so it's in the nature of power that you become careful. And I definitely think that Lonsdale piece is a reflection of that.
Yeah, and I think what's going to happen in this Trump administration is that the Lonsdale and Musks of the world are going to replace the traditional 20th century experts, the McKinsey types, the Buttigieg who we've always relied on, but politically perhaps aren't that savvy and certainly economically aren't that powerful. It's going to be interesting to see how Musk and Lonsdale and Sachs perform. Meanwhile, Keith, coming back down to earth a little bit, been a very good week in some ways for Google. They announced their new quantum chip breakthrough. The New York Times describes it as a Google breakthrough. The stock is up dramatically. It's up about 15% this week. On the other hand, O'Malik, you linked to as well, believes that AI might eat the browser. So what do things look like this week from Google's point of view?
Overall good. Not only did they launch Willow, their quantum chip, they also launched Gemini 2.0, which is their AI platform, including capabilities in the space of being an agent, not just a foundation model. And you're right, the stock is up, mainly because the The early conversations suggest that Gemini 2 is better than the other foundation models, which would be the first time Google crept ahead.
And that makes you look like a bit of a dimwit because you've always claimed that OpenAI was so far ahead that it was invulnerable in any way and that Google had no chance of catching up.
Well, you could say you're the dimwit because the measure of whether OpenAI is ahead is nothing to do with the quality of the foundation model. It's to do with how many people use it. And OpenAI's benefit is that it isn't Google and is everywhere, whereas Google is Google. And so only its diaspora is using its stuff. So I still think OpenAI is invulnerable, but it isn't intellectually invulnerable. Other platforms will grow. For example, I don't use OpenAI for coding. I use Anthropic because it's better. But I do use OpenAI for lots of other things. And by the way, OpenAI this week announced O1, its new model. Wasn't that last week? We talked about that last week. We talked about it last week. But what they added this week is real-time voice and video input, which is amazing. And they also announced the release of Sora, the video.
We'll take the Sora in a minute. But let's go back to O'Malik. I know you like him, one of the... the most seasoned tech writers in Silicon Valley. It's funny, if AI eats the browser, will Google even care? I mean, talk about fighting the previous war. This government decision to break Chrome off from Google seems such an absurd, archaic thing to do. Would Google even care if the browser, if some, whatever AI, if AI did indeed eat the browser, would that be bad for Google?
Well, if you break it down, Google has really two audiences, one on Android and one on the web, and probably one on iOS as well due to its partnership with Apple. And OpenAI has taken first place on iOS for AI. Google isn't there. So insofar as AI becomes the input and the browser not, on Apple, Google loses. On Android, Google wins because Gemini will become the dominant input on Android. And Android is, I think it's about three-fifths of the smartphones in the world. And then the web, the reasons you would need to go to Google are in decline and may, as Om is saying, may decline to zero because the browser by definition is a temporal technology. That is to say, it's very specific to that time when there was information, but you needed to ask for it. And that took the form of typing in a browser search terms. That age is, I don't think anyone could sustain the argument that that age is going to continue.
Well, they will take a bit of time in the same way as people still use Microsoft desktop software, even today, I mean, it takes a decade to change, doesn't it?
Yeah, it does. And it will never get to zero, but it becomes meaningless from a business point of view to own the browser eventually. It becomes very meaningful to own whatever the interface is to knowledge. And that probably is, based on what OpenAI launched this week, your camera and your microphone and your ability to type all feed into AI, increasingly agents, where you'll have a travel agent, you'll have a, you know, a kind of a booking dinner agent. You'll have agents for everything. And so going to OpenTable and filling in a form and choosing a time is not going to be needed anymore.
Well, it might be if you've got a wife who changes her mind. The... The keen on interview of the week, appropriately enough, is with Michael Seyman, one of the smartest young programmers around. He started Facebook, I think, as a 13-year-old or 17-year-old. He's back with them then. He launched Social AI. He believes that all this obsession with humanity and AI is misplaced and that the web now, and this comes back to Doug Rushkoff's notion of AI being the first native app for the internet, that all interactions with the internet will be with smart machines. So his social AI experiment, which was quite controversial, was real people interacting with bots in a kind of Twitter-like social media environment. He thinks of it in a generational sense. He's certainly younger than you and I. He thinks that generationally people understand that, whereas our generation don't. Do you think he may have a point?
Yeah, I listened to it yesterday and I concur with your characterization. He's super, super thoughtful and articulate on his topic and very close to Malik's point of view, actually, that the interface is going to change and that the quality of interaction is going to go up and that the ability of each human to leverage these tools is going to be close to free. I thought his social AI app was very clever. You know, the difference between a human and a bot when it comes to social is almost zero. It is almost zero. It's zero. It is zero. And if the bot's clever, you know, you can imagine a therapist bot, for example, is probably better than a human and cheaper for sure.
Yeah, so I think he's imagining a world that almost exists, and for him it already does in his head, and that makes him very pertinent to what happens next. He did say he's going to close his app down ultimately, so I don't know what his exact... Yeah,
I think he did an acquihire with Facebook. I don't get the sense that the app was particularly successful, but it does also speak of maybe the vitality of Facebook that clearly... He's the kind of young thinker, programmer, executive that Facebook's bringing on board. So he's a smart young man. We'll have to deal with him again. And then, of course, we don't want to leave OpenAI out of things. Your company, Keith, they're not formerly yours, but you've always been big believers. They came out with a new version of Sora, an open version of Sora this week. You linked to M.G. Siegler's piece on Sora slaps. What I've read about it suggests that it's still not really very usable. What does Siegler say?
Yeah, it creates videos. I did one yesterday. I asked it to make a video of the beach in Scarborough where I grew up with the donkeys. with a couple in love, and in the background, donkeys with children riding.
It didn't. It was all donkeys and lovers. Very Yorkshire. It wasn't Scarborough, for sure, but it did depict a seaside scene. It put donkeys with no kids, and the first attempt, it made the male, who was the sole human in the scene, appear to be in love with one of the donkers. So it totally looks imperfect. You're going to get us into trouble. So it's not perfect, but the fact that it happens at all is kind of amazing. Are these right or left-wing donkers? Definitely right-wing donkeys. They were pooping on the beach and all kinds of... Disgusting.
Definitely right-wing. Another piece you linked to. This is going to be the last news, weekly news. That was the week of the week. That was the week episode of the week. We're going to do two more. One looking back at 2024 and one looking forward to 2025. So this piece...
by Fifi Lee, Big Ideas in American Dynamism from Andreessen Horowitz probably fit better with that. What are they saying in terms of big ideas for 2025, Keith?
So I put this in many to tee up next week's conversation, but they go through about nine areas of interest for 2025. And they're not exactly making predictions, but they're saying where they're going to put their money, which is almost better than a prediction because they can make it come true. And there is another piece, which we'll look at next week, where Y Combinator do a request for startups for next year, saying where they're interested in applications coming from, which domains, as it were. American dynamism is a core overarching concept.
Yeah. And it feels a bit too desperate to me to frame it like that. I mean, America either is dynamic or it isn't. It's pretty hard. It suggests that it isn't when you frame something like this, that you have to bring, it's almost like make America dynamic again, is what's really being said, which means it may have lost its dynamism. Now, certainly in tech, that doesn't appear to be true, but it is true at the level of the entire economy. You know, America is far from being a modern infrastructure society. It's very old when you travel to really modern places, you see it. So I do understand what Andreessen are doing, but I think the framing actually says the opposite of what they wanted to say.
Elon Musk's lawyer, Alex Spiro, to Gary Gensler, the chair of the SEC. I think Gensler, he certainly won't be there in the Trump regime, so it'll be interesting to see. Finally, though, we have Startup of the Week, our final Startup of the Week, which is... In some ways, I think rather old fashioned. We use Restream for this platform, but you've given Riverside, which is a direct competitor to Restream, your startup of the week. According to TechCrunch, they raised 30 million Series C to expand its podcast and video recording platform. Should we be switching over? What does Riverside do that Restream doesn't do?
A couple of things. it never used the cloud to store video. So every participant in a video makes their own video on their machine, which means the quality is much higher. And then they upload it for mixing after the event is finished, which means you get a much higher quality rendition. The second thing is that just because it, we use Restream, which is kind of good enough, but I think we can certainly consider using it. The second thing they do is they've got a lot more tools for social media and AI clip making than we have. So there, and I think the third thing worth saying is I met the founder about three years ago and used the platform then. They were, The founder is now in Israel, but was then in Holland. He's Dutch. And he's a very, very clever, good guy, good thinker. And it was pleasant for me to see that he's not only survived, but prospering.
So what will be the fair? I mean, what's the idea when they pitch their investors? What are they telling people about where Riverside will, excuse the pun, flow in the future?
They're going after the same crowd as Substack and Restream and to some extent any of those live broadcasting platforms like LinkedIn and Facebook and probably not too soon in the future, Instagram. where live streaming to an audience is just a commoditized feature, if you will. They're going after being the Uber version of that, almost like the substack of video. And what do they have of value? Is it their users or their technology? The tech. The tech is really good. And me and you should probably play with it. I have a free account. We can play with it and we can see.
Well, that was the week for Friday, 13th of December. Not so much of a nightmare perhaps as some people might expect. Keith is with Musk. Elon Musk, that is. I'm less convinced, but I'm one of those few people still neither hates nor loves Elon Musk. There'll be a lot more Musk, I'm sure, when we look back at 2024 and perhaps even more when we look at 2025. It's clearly going to be a figure who shapes the next year. Keith, have a good week and we will see you next week to talk about a more universal view of what did and didn't happen in 2024. Thank you.