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Speaker 3
It's Friday, March 21st, 2025. If it's a Friday, it must be That Was The Week. My weekly roundup of news with Keith Teer from That Was The Week. This is the week, according to Keith, at least. that Europe goes mad and AI marches on. And the madness in Europe, at least according to Keith this week, is about Europe's attempt to control and regulate American AI, particularly Apple, but also Google. Keith, happy Friday. I know you got up early today. You're not a morning person, unlike myself.
This week, there's no news. I mean, Europe goes mad and AI marches on. Every week we talk about AI marching on. That's about as inevitable as you can get. And the madness in Europe, at least in your mind, for some people it's a kind of sanity, that's also a weekly feature. So is there anything particularly unusual about this week, both in terms of AI marching on and Europe going mad?
No, I think you're right, Andrew. bow my head and agree with you because these are old themes that seem to be reoccurring. Europe going mad has just reached a new extreme. I mean, just reading the European Commission declaration or whatever it is, it's almost as if, you know, Apple...
You actually read it, the European Commission, and we got it on the screen. Commission provides guidance under Digital Markets Act to facilitate development of innovative products on Apple platforms. I think I could read one sentence of that, and after that, I'd fall asleep.
But I use the word audacity. The European Commission is facilitating the development of innovative products on Apple's platforms. I mean, you already know the minute you read that out loud and think about it for a second, this is delusional.
Well, here's my pushback, Keith, because I'm not quite as hardcore as you on regulation, but I'm broadly in agreement. But The other headline this week, I mean, this is a tech show, so maybe you shouldn't have included, but the other big headline this week is that Germany is set for a trillion dollar, a trillion euro, which is basically trillion dollar defense and infrastructure splurge with what's happening in Ukraine and MAGA and Trump and all the rest of it. What's increasingly clear is that Europe is going its own way. So it seems to me as if whilst we can mock, we, you and I in Silicon Valley on the west coast of the US can mock what the Europeans are doing, this does reflect a real direction that Europe is developing for better or worse, and I know in your mind, it's very much for worse, a different model.
Well, they're not really, Andrew. They're being forced to consider one due to the fact that they are somewhat irrelevant in the world, have leaned heavily on the US as a supporter through the NATO Alliance, and that they now are super insecure that that isn't going to continue. So they're making all kinds of announcements. Clearly, spending a trillion dollars on rearming Germany is not... Well, it's a beginning.
I mean, you can't just write them off. I mean, we put their numbers together. It's the world's, I don't know, first, second or third largest economy. It's still a continent of significant political, economic, cultural and eventually military strength. You can't just write them off because you don't like their policy on Apple.
No, I'm not being emotional. I'm just being realistic. I acknowledge that they're not going to have the innovation of the US or probably the military might of China or even Russia, but they are going their own way. I'm being anything but emotional. I think you're the one being emotional in the sense of being upset with, in a way, disappointed. It's like being disappointed with, I don't know, an alcoholic who keeps on going back to the bottle.
Eva Pascoe, who was one of the kind of most well-known founder of Siberia, Eva, I'd say that about you, says Germany is the biggest arms exporter after the US, not a small beer. And, of course, that's true. Germany is a highly challenged economy, but it's a big economy. It's been shrinking. It's car industry, especially Mercedes.
Well, there's an American model in contrast, say, to the Chinese model, which is much more state-controlled, state-centric, but also highly innovative and successful. Let me just lay out two options in Europe. On the one hand, in five or 10 years, Europe will be so highly, that there still won't be a European tech, much of a tech industry, European search engines or AI companies, but it will be so sort of regulated, thick in red tape as it probably already is, but even more compounded. On the other hand, there may be
a state-subsidized European tech industry. That's not inconceivable. Just as Trump, for better or worse, is forcing Europe to rearm and defend itself. So ultimately, won't the same happen with tech?
I don't see how it possibly could. I mean, just look at the new cars sold in Europe annually and made up mainly of Chinese cars from Xpeng, from BYD, or Teslas, even in Germany, which is the world center of manufacturing and good cars. So it seems inconceivable to me. What you've actually got is an unelected European commission. It's appointed. uh the european parliament is elected but it has no power all the power is in the commission it's appointed it's a kind of a fiefdom if you will they have the temerity to think they can be the product management team for apple which is only going to lead to one thing, which is Apple doesn't want to do business in Europe, along with many others.
Right, so you're not necessarily, I mean, you're not happy about this. To me, it's, I'm neither happy, I don't really care one way or the other, but, so, yeah, As you say, they will interfere more and more with Apple. They'll come out with these absurdly bureaucratic regulations about what Apple can and can't do with their various iOS and other products. And the same will be true of Google. Eventually, Apple will say this is just not worth it for us. We're going to focus on other markets. We're not going to we're just not wasting our time with you anymore. At that point. What happens to the tech industry or the tech market in Europe? Don't you want local companies, which are highly regulated, probably from your point of view, very annoying, very inefficient, can't compete in a free market with the US or even China, but will nonetheless exist? The other option, of course, as you're kind of hinting with the car market, is that Europe becomes colonized by the Chinese.
Well, a couple of things are going to happen. Eva said another thing, which is the EU can turn the tap off for American digital products. And indeed, that is true. They can do that. And they are doing that, by the way. But the consequence of that is quite profound. Almost all the good AI in the world is coming out of America and China. Mistral in France, which is increasingly looking like it's going to become an American company as well
So roll the clock forward on turning the tap off. It basically means European citizens don't get to experience the most recent innovations at the same rate that Chinese and American citizens do. and that's going to put European citizens in a second lane. Now, if there was an innovation culture, like, for example, in Japan after World War II or Germany after World War II, where European protectionism was part of a strategy to build domestic industries, yeah, there's some rationality in that, but that doesn't exist.
or France or Italy or Germany or Spain. There is a defensive militarization happening due to fear of Russia, which is not a good signal, I would say, for a prosperous future. So pretty much everything's going in the wrong direction due to the lack of faith in innovation and value growth through innovation. And the fear of American innovation leading to all kinds of protectionism. It just seems bizarre to me.
Well, it seems it's not just bizarre to you when it comes to... I mean, Europe is much more progressive politically, culturally and socially than the United States or China. And you have an interesting piece this week from The Guardian, which I think has had quite an impact.
from Jaya Chen, who describes themselves, I think it's a woman, as a recent STEM graduate. Here's why the right is winning us over. And what Chen talks about is the need for the progressive movement to organize technical talent. Is that the challenge in Europe, Keith, perhaps? to start rethinking their relationship with technology? Is that how the Danes or the Germans or the Dutch or the French will begin to rebuild their own economies to be able to compete with the US and China?
Yeah, well, Jay points to the fact that the right's message is more attractive to a STEM graduate than the left's. The left is you know, has become dominated by the idea that tech is a problem. The right is dominated by the idea, and this is quite new by the way, that tech is an asset. And she just makes the simple point that as a young scientist graduating from university, the rights message aligns with her view that her life can be interesting and exciting. Now, in Europe, there is great science in Europe, fantastic science, probably as good, if not better, than US science, especially in Eastern Europe. But it is buried inside academia. There's no link between science and innovation through doing things. You know, that famous quote, philosophers have interpreted the world, the point, however, is to change it. So the science is there, the talent is there, but the bottoms up company creating culture where entrepreneurs coming out of universities can can work on projects that can, if they work out, impact the whole world, and as a side effect, make them rich. That culture doesn't exist. And that's even true in Russia, by the way. It used to be true in China. China was heavily academic, but has now become more...
Well, they... I'm not sure we can generalize about all 500 million Europeans about what they want to do. But New York Times has an interesting feature on Steve Davis, Musk's top lieutenant who oversees Doge. Do you think that guys like Steve Davis are a model for the J.H.Ns of the world? Are they... Are the Doge people inspiring young people? There was a very interesting interview on the Ezra Klein show this week with a Democratic pollster about how successful the Trump people are with young people, especially young men. So clearly something's dramatically changing in terms of how young people are thinking about politics in the U.S. and maybe more broadly, as J.R. Chen notes.
Yeah, exactly. And so Steve Davis really is a doer. It's a little bit like we talked about Sam Altman hiring the marketing guy, I've forgotten his name now, a couple of weeks ago. Musk has his doers, and Musk himself is a thinker that moves from thinking to wanting to do things pretty quickly. And so, yeah.
But anyway, that's... But it is inspiring, Andrew. I mean, you know, Elon last night ran the quarterly all-hands meeting for Tesla with a bunch of Tesla employees standing up in an auditorium. And it went on for about an hour and 20 minutes with Q&A. And you could see that the people... who work for Tesla want to be inspired and believe in something good coming out of their work. And Jay Chen's the same. Steve Davis is the guy that acts on many of the ideas that Musk has. And so it's super important because everyone needs that. I can tell you in my career, I have been useless.
So we are getting somewhere, Keith. We started off with Europe going mad. Now you're beginning, I think, to acknowledge that Europe can change. History doesn't just repeat itself, although sometimes it seems to. You have a link from an article from the 90s about comparing the original .com gold rush with today. Is there much difference? Has history changed? You and I were both around in the 90s. We were both part of the, you were in London, I was in San Francisco. We were both part of the original dot-com gold rush. Has anything changed much?
She is not any of the above. Ava is very, very democratic, I would say. She's Polish. Her dad was a minister in the Polish government prior to the war. Oh, my God.
which I've now forgotten because you distracted me. Oh, yes, history changed. Look, the biggest shift is the rise of Asia. That's going to be the story for the next 30 years. America is a little bit like Europe in that the chances of Trump reinvigorating America's industrial base by tariffs are almost zero. And so America is also in decline. Europe and America... only differ in the role for entrepreneurs in America and the lack of regulation allows things to happen.
Those are pretty big deals. I mean, America is very different, much more. I mean, we don't want to turn this into just a geopolitical blah, blah, but America is very different from Europe.
It is very different. I mean, I'd say it's different by about 100 years. If you go back 100 years in Europe, which would take us to the early 1920s, the UK was already only the third most...
your distribution for software was people with IBM PCs or Macintoshes, and there weren't that many of them. Today, it's billions of people with smartphones. So it's gotten bigger. It's gotten more impressive. The ability to, I mean, modern AI, the things it can do, blow you away. And in the 90s, you know, the nearest equivalent to that was being able to do a video call to someone on the other side of the world in black and white with text, not voice, using a See You See Me in Siberia Cafe. And so there's a massive change. The guy who wrote that, by the way, Stephen Bobrick, was a tenant of Eva Pascoe and myself in Siberia.
Well, I tend to... I have to admit that it doesn't seem as if, going back to the 90s, things have really changed. My interview of the week, I know this is rather... self-centered is myself i i was interviewed by a young journalist andrew kekia on my own show on the current state of american journalism and it seems as if on that front nothing much has changed i mean we've had this slow inevitable decline of american journalism all this promise of non-profit journalism is never realized so again While we do these weekly shows, in the long term, some stuff's just inevitable, like the rise of AI. I mean, you feature an interview with Sam Altman on Stratecherry with Ben Thompson. He talks about the inevitability of AI, and perhaps he's right.
Well, you know, in this interview, he exposes his failures early in his career that led him to Y Combinator, which was as a result of failures, not success. And he's from a fairly modest background on the east coast of America. But the interview is really all about what's coming next and a little bit about GPT-5, a little bit about agents, a little bit about AGI. And it's good just because it gives you a bit more of a subtle insight into where things are. There's nothing dramatic in the interview, but there's a summing up of the current state of play.
It's quite good. And you quote him in your editorial, and I think this is a good quote. This is Altman talking. My favorite historical analogy, I'm guessing, is the transistor for what AGI is going to be like. There's going to be a lot of it. It's going to diffuse into everything. It's going to be cheap. It's an emerging property of physics, and it on its own will not be a differentiator. I mean, maybe beyond even the transistor, it's just electricity.
Yeah, anything that has the tendency to penetrate everything just like water does when it's released, uh has that characteristic and agi is definitely like that in that you can implement it sitting at your desk at home in an app and have it running without needing to talk to open ai so it literally can get everywhere and to remind
everyone agi for our non-tech audience is uh artificial general intelligence which suggests a level of intelligence at least as quote-unquote intelligent as you and I, Keith, have. Maybe you. I'm less intelligent than you. Or Ava, of course. I think Ava is already super AGI, isn't she? Even though I've never met her, she's probably a bot for all we know.
Well, I'll have to get her on the show. So everything seems to be inevitable. The decline of Europe, the shift in Europe to a... big bureaucratic state uh america's uh uh the uh the the inevitable what you call the uh the marching on of AI, but there is concrete news. A couple of interesting pieces caught my mind. One, again, self-serving is a podcast, and this is from the information, a podcaster develops AI to search his own episodes. I wouldn't mind that. I've got thousands of episodes. What podcaster and how are they using it?
I actually don't know his name, but he's building a kind of a web front end on top of his podcast. He's called Chris Williamson, and his podcast is called Modern Wisdom. And he's using retrieval augmented generation, which means that he's giving an LLM access to his content, indexing it, and then the LLM can answer questions about his content. It's a fairly standard thing now.
Well, he's hiring people to do it, which is the interesting thing. So he's still really not current because if he was, he could do it himself using tools like cursor, but he's hiring people and paying them.
I hope she punishes me. I like to be punished. So there is other news. Again, some people are making money. One investor from a $6 million bet on Wiz has turned it into a massive 200x return, as long as, of course, Google's acquisition of the Wiz is not held up by the bureaucrats in Washington, D.C., the ones that are left. um what do you make of the wiz deal is it is it a wizardly or is it just boring um
i think it's a little bit boring it's it's about the importance of cloud security i know from my wife cloud is a big deal at google yeah uh you know google is um There's made big bets in the past. This is a big bet.
Yeah, in cash as well, by the way. This is a cash payout. So it's a huge deal, and it puts Google closer to an infrastructure player like Microsoft is with Azure. which they want to be. Google's job for the next 10 years is replacing search revenue because everyone assumes it's going to decline eventually to very little.
I mean, even my AI engine, Claude Anthropic, came out with a a search application this week. So you're right on that. Another inevitability like AI marching on. We will see with Wiz whether it actually goes through, but certainly someone's profiting from it. Meanwhile, the other piece, the final piece of news, not a big deal, but I was intrigued by it. I think I may have sent it over to you in the first place, or I certainly saw it, is Sequoia, one of the major VCs, are shuttering their D.C. office. What's going on now? I would have thought that all the VCs would be opening offices in lobbying offices in D.C., particularly given how friendly now the Trump regime seems to be to moneyed interests of one kind or another.
No, I actually think it's the right thing to do. I think you need lobbyists when the politicians are a problem for you. When the politicians are not a problem for you, you just get on with normal business and you don't need to lobby. So I think it probably reflects victory. It's declaring victory.
startup of the week is mercore that according to brendan foodie whoever that is has scaled from a million dollars to a hundred million in an annual run rate in 11 months mercore according to them at least uh matches you with elite opportunities
what is mercore and is this for real yeah mercore is basically an ai platform and by the way disclosure single rank uh uh has not announced but is an investor in MoCore. MoCore is an AI platform for matching you with jobs that fit your skill set. And so it works for the applicant and hence the elite opportunities. And, you know, the Valley has been through three years of layoffs. So there's a lot of talent available. And that talent needs to be matched with the available jobs, which in AI, at least, are growing.
Now, the thing is, as we know, Andrew, there is a deep point here, which is AI is not... it's probabilistic, not deterministic. That is to say, making a match between a person and a job is a deterministic skill. And LLMs are probabilistic. So it's going to be plus or minus good at doing this. That said, it's obviously good enough to have attracted $100 million run rate in a year. So let's assume it's... So $100 million, I'm always confused with this term, run rate.
run rate uh if ai marches on what's ai's mark run rate keith oh it's in in the double digit billions by now trillions i would think finally post of the week is
So I'd say it is... I mean, where's the Premier League or the context for that? It just shows someone scoring a goal. I mean, you don't need to be a smart AI to be able to do that.
No, it made a video from nothing, an actual video with people and physics and movement and realism from just a single line of text. So what this is saying is that this software is capable of doing entire movie scripts and rendering entire movies with drama. And in the past, everything's been able to do a 30 second clip, but this one can do soup to nuts.
Well, speaking of soup to nuts, finally, if I had another interview of the week, I'm going to slip it in. It's with Dan Brooks, who wrote a really interesting piece what it for the new york times on how generative ai complements the maga style and he referred to the gaza 2025 ai generated video that made a lot of news a couple of weeks ago um what he says is that this is more than just technology this is an aesthetic a style and it actually goes together with the mega world do you think there's any truth to that that You know, we go on and on about these new platforms like Skyreels AI. Maybe they're for real, maybe they're not. But more importantly, there is an aesthetical element to this, an aesthetic element to this. It's not just about technology. There's a way of thinking about this technology that lends itself to our particular moment.
Well, you need to read it. It's a very good piece in The Times from Dan about how generative AI complements the MAGA style. I think he's on to something.
I do think that MAGA is a word that describes a very broad and very different set of people. And in the technology part of MAGA that's embraced Trump, There is a kind of free-thinking, almost liberal attitude to change.
You're flirting with it, Keith. You're flirting with your friend, Elon. You've sometimes got closer to putting your cards on the table. Are you still not in their camp?
I'm in the camp of Elon, strongly. although I think he's a blunderbuss when it comes to Doge. If I was advising him, I think I could help him cut a lot of costs without all of the negative publicity. So he's a bit of a blunderbuss. But broadly, I think Elon's great. What's bad to say about him, really, if you watched him last night, he's like a kid in that he really just... instinctively responds to questions honestly about what he thinks, despite the fact that it might damage him.
Just to give you an example of that, last night one of the questions was, why is he working so hard? And he said out loud, well, of course I could be on the beach full of bikinis. And then he paused and he smiled and looked up and he said, yeah, why aren't I doing that?
Yes, because he won't find any. I mean, he could be, I mean, on the Gaza beach maybe, but I don't think many bikinis would actually want to be with him. I think that's maybe one of his problems, but we will never know on that one. So, Keith, that was the week for March the 21st, 2025. Europe goes mad. AI marches on. No real news, although maybe we made a little bit of news by trying to think beyond the headlines of this week and imagine a world where Europe had its own tech companies or certainly a policy that really profoundly distinguished itself both from the United States and China. This will be a theme that I'm sure we will investigate over the next few weeks.