0:00even GPT-4, long-obsolete model, give it to Kenyan entrepreneurs who are already doing well, 18% profitability for just getting advice from AI for entrepreneurs. We have a [music] tool now that it provides reasonably good advice to people who can't get it that's customized for their condition. And I think we tend to think a lot about the narrow viewpoint of those of us who are well-connected and well-resourced and balancing out our desire for entertainment with AI doing things.
0:23There's a thousand million little use cases here where intelligence was the bottleneck to making the world a better place. require some effort and they require testing and they require safeguards, but this is exciting.
0:38Ethan, where does this podcast find you?
0:40Like book launches today at Simon actually Stanford. I give a bunch of talks here and then at Masters of Scale tomorrow. So, West Coast is where you kind of have to launch an AI book even though I'm an East Coast guy.
0:51Uh so, let's just right into it. Your last book, Co-Intelligence, came out in 2024 and you said it was written about uh a world of chatbots. Your new book, Co-Existence, the next phase of AI, out today as we record, is about working with AI that is sometimes but not always better than you. How do you write about a technology that seems to be evolving by the minute? What What do you still hope still holds 2 years from now?
1:17I mean, there's a few things that you can kind of hold on to and I think there's kind of three shapes I kind of think about. One of those is the exponential curve, right? AI is getting better and we're on an exponential and that better shows up in lots of different ways. The second is that uh is the jagged frontier, a term we coined in our research with my friends at Harvard, MIT, and University of Warwick where we did some experiments. We found that AI is good at some stuff you wouldn't expect, bad at some stuff you wouldn't expect, and you can't predict what's good or bad. That leaves lots of room for humans, right? You can't predict what's good or bad in advance. And then
1:47the final one is this idea of an overhang. There's a big gap between what AI can do and what we actually are doing with AI partially because human society and human systems change slowly. So, if you have those three things in mind, there's actually a lot you can say about the present and near future even as things change.
2:02For someone whose idea of AI comes from using free versions of ChatGPT or Claude, what's changed since 2024?
2:09So, there are now 800 and 80 models that are better than GPT-4. 19 of them can run on your phone. So, capabilities gained up there's been when ChatGPT when my book came out, the first book, the there's a organization called METR that tracks how much work the AI can do with a single prompt with a 50% chance success. That was 4 minutes when my book came out.
2:32The actual official test ran out in April and as far as we can tell it's something like 17 weeks of work at this point. They didn't get out of a single prompt in terms of human work. So, that's a pretty big change in how capable these systems have gotten and to sort that that out, you may be missing a big big transformation.
2:51Do you think there's a next essential threat to basically Anthropic and OpenAI and that is if Nvidia starts putting GPUs in say an iPhone and it becomes the client and it kind of is there an opportunity to leapfrog the LLMs and make them obsolete?
3:10I mean right now the the entire history of the leading models has been mostly OpenAI and Anthropic jocking with each other with Google appearing twice over the last couple of years in terms of being a leading model company. And there's a big gap between leading models and less advanced models especially in the world of agentic systems and it's actually kind of a counterintuitive but it's the reason why we have six sigma systems in in business which is there's a huge difference between a 99.5%
3:37success rate and a 99.9% success rate if you're doing hundreds of steps. And the smartest models have a much higher have a smaller difference and higher success rates but that makes a huge difference in terms of the outcomes you get. So, you can get fairly capable models on your phone but they're nowhere near as good as what you need to be able to do in complex math.
3:57Even just, you know, putting together a really good video or something, you need lots of little choices being made, and you need that higher accuracy. And I don't think we're going to get frontier models on a phone, even if we get very capable models. So, it might change what we do, but I don't think it's an existential threat to frontier model providers.
4:12Is it sort of the analogy I would use is the auto industry, where the frontier models are German auto makers, and the open weight guys or the open source are more like not even Japanese, but Korean auto makers. Do you think the market's going to bifurcate, and then there'll be more share amongst the open weight, but more revenue to the premium brands, the frontier models? Is that a fair analogy?
4:36So, I I actually think that it's a little more complicated than that, right? So, a few things are happening at one time. We have open weights models which anyone can modify. There's lots of really interesting implications of that.
4:46They continue to be about 6 to 8 months behind the frontier. They're It's not really closing at this point. We'll see what happens in the long term. It's possible China eventually cracks down on open weight models or the US does. But for right now, they're they're available. And they have a real advantage in terms of cost, but only sort of, right? You can modify and then own them, which is really nice. But on the cost side, OpenAI and Anthropic and Google have many more processors than you do. They have higher They have lower inference costs as a result. And they have cheap models that
5:14are very good. So, the question is, are you doing this for sovereignty, for using these models on your own? Because if it's cost savings, you're often just better off going with one of these companies, because they're also teaching their models to work together. So, Fable, the most expensive and powerful Anthropic model, can call on Haiku, their very cheap model, to do work if it needs to. So, I I'm not sure the cost argument holds up, but there are other reasons you might want to have open weight models involved in your systems.
5:39So, for those looking to create personal modes for AI, you outlined four advantages: deep knowledge, wide knowledge, taste, and agency. Could you walk us through each of these advantages and how someone can develop them?
5:51Sure, and I think it's really important to recognize that having an advantage is not the same thing as a bright line, right? I think people tend to think about like, "Hey, I will never show creativity. You'll never show judgment."
6:00And that just isn't true. Like, you can't do a 17-hour task without having agency, creativity, judgment all coming into play. It may not be human creativity and judgment, but it's creativity and judgment. So, what I try and outline are things that make you effective in working with AI and persistently different than other people. And so, wide knowledge is the idea of knowing many things. I think it's rebirth of the liberal arts major right now. If you know a lot of things, the AI knows all of human writing, and if you can invoke art style or a style
6:29of writing or a concept that you've, you know, from economics, the AI can apply those things. So, you want to know many different things, right? And that holds in your company, too, because now AI makes a coder a designer, a designer a coder. So, knowing a little of coding or design, very helpful. Then there's deep knowledge, that's expertise, which allows you to sort of outcompete AI in some areas or at least be able to check it and work with it. And that's where challenged in how we develop that over time as AI gets better. And then there's the idea of taste, selecting from many options. Taste is what turns slop into
6:58actual choices made by human. And then agency, the I'm an entrepreneurship professor, like the core thing is how do we get people to act entrepreneurially?
7:06How do we get them to take advantage of these systems when there's no instruction manual? And those are the those are the four main things I focus on.
7:12So, I can't resist asking you the majority of the people who are considered experts in AI, which you are, have a tendency to make a prediction about which or get asked which sectors or jobs are most vulnerable. And the example I like to use is 2 years ago the godfather of AI said stop training radiologists, and the number of listings for radiologists residents has gone up.
7:34And it ends up that scans are very useful and that a radiologist using AI can just do more scans and cut the cost, and then as the cost goes down, it's elastic, and people want more scans.
7:45Can you [snorts] Have you What is your view on what are vulnerable or not vulnerable or or sectors that are more immune from this technology?
7:56So, our escape route as academics who study this is we talk about AI exposure, right? Fields that overlap with AI. And overlap with AI does not mean the job is destroyed, right? It means transformed.
8:08Um so, the radiology jobs you described, you know, and that's been that was even the old form before large language models. That was his prediction that AI would would transform radiology, and it has, right? Radiology is different than what it was now, but that doesn't mean the jobs are destroyed. So, we can watch this play in programming right now, which is radically transformed. It's a very large job category, but radically transformed in a couple of years. Uh some of the best coders I know never touch code anymore. 99% of code is written by AI, and their job has changed from writing good code to managing agents and think about the kind of code
8:38they want to write under what conditions. And that's a transformation.
8:41Will that involve more coders? I mean, in some ways I've hired more for my lab because we can do more stuff. Will eventually coders be replaced by AI?
8:47It's hard to know the exact answers. Uh you know, kind of the way I think about this is the Industrial Revolution resulted in more jobs in the end, but kind of sucked to live through because all those jobs were changing, and there was unrest, and values changed. I think we're in that kind of environment where things are going to change very rapidly, not necessarily destroy jobs, but transformation isn't easy either all the time.
9:07You cite evidence that students who use AI uh as a shortcut are actually learning less, while students using it as a tutor that motivates them or pushes them learn more. And you also said strict guidelines uh or guardrails for yourself, like writing every first draft yourself.
9:23How do you tell in the moment whether you're using AI as a tutor or as a crutch? Like, how What is What What advice would you have someone in terms of a personal litmus test for when they should or should not be using AI?
9:35So, there's a there's a couple of things that are complicated going on there. One is people aren't always good at knowing these things. So, we have to be conscious. I mean, you kind of have to feel the burn when learning. It's almost like working out or anything else. If you're not suffering a little bit, you're not learning, right? Desirable difficulties is the phrase in sort of the pedagogy literature, right? So, and we don't like to do hard work, right? We find shortcuts all the time.
9:56So, we have to kind of teach people that it's a feel when they need when they're learning when they're not, right? I mean, it's relatively easy, which is if the AI giving you an answer, you're not learning. If the AI's challenging you, you are learning, at least more so. And that that tension is sort of navigable to some degree, but it's hard because we haven't had to teach people that there are skills you need to maintain that you could give up that are more efficient to give up, but that are make you human or I give you advantages. I think that's a real challenge.
10:26You and your co-authors coined the term jagged frontier in 2023 to describe AI doing some tasks extremely well and others poorly in ways that don't track how hard those tasks feel to humans. 3 years on, how is the shape of that jagged frontier changed?
10:42So, it's a great question. And again, there's sort of this micro level of like at your job, I can't tell you. Like in podcasting, it's almost certainly changed, right? You can now get good voices out of AI systems. Maybe they're giving you insightful questions to ask me, but they probably have other gaps that you've identified as time has gone on. We could think about math as a great example. When I wrote my first book, the AI was still screwing up on counting the number of hours in the word strawberry, right? And now, it's proving uh millennium prize problems, right? So, at the same time, right, as a writer,
11:12AI is still a terrible long-form writer, right? For a variety of interesting reasons. So, that jaggedness is real. It still exists. There are many more tasks AI could do now than it could do before, but that doesn't necessarily mean that all the tasks can be done. And all you need is one or two bottlenecks in the development of a system to really require humans to be still involved in the in the job or the process.
11:36And you've argued that more AI will mean more work for humans, not less. In your own words, when organizing is expensive, organizations only attempt what they can staff. When it gets cheap, the list of things worth attempting can grow. By the way, I 100% agree with that. What What might the future of AI in the workplace look like?
11:54So, one of the biggest gaps I you know, I was saying I'm I'm doing this call from from near Stanford, right? West Coast side. I'm I'm an East Coast person, teach at Wharton and you know, in Philadelphia. And I'm used to the gray office towers of the East, right?
12:05Where you know, we we drink coffee till we die and rather than cold plunging out here.
12:10And I think one of the biggest gaps in attitude is like technology is not alone enough to make a difference in businesses and in the world, right? It doesn't just adopt itself. Even AI, the most adopt itself kind of technology doesn't really do that. And so, what is slowing things down is you can have individual productivity is 100 times more, but then the question is what are you being productive 100 times more PowerPoint is not an outcome that you actually want, right? And if you're let's say you're even producing 100 times more code, that doesn't matter if you're in an organization where there's
12:40still a two-week meeting cycle around these things. So, in order to make AI work in organizations, you have to change how organizations operate, right?
12:48And that's where the stark choice that you were just kind of alluding to matters because the easy path is automation. That's what we tend to do with new technologies, but the more exciting path is rebuilding organizations to create more work for humans. It's more interesting work, actually giving the drudgery to AI, actually thinking about how we expand what people can do and augment work. But those aren't automatic choices that are made by the technology. Those are choices that have to be made by human managers and business leaders and people deciding how to implement these things.
13:14Do you think AI over the short, medium, and long term is going to destroy or create jobs?
13:20Um I I Again, most academic answer I can give you is it depends, right? That's That's That's what every academic says. I I don't actually know like this is actually the central one of the central mysteries right now. Like we are try There's a lot of my colleagues are tracking this really closely and the evidence is completely ambiguous, right?
13:37And people are very divided on this. I I think transformation is inevitable. That people believe that, but whether you end up with more or less in a job category, there's a lot of complex choices. We talked about coders already, but imagine other fields like lawyers. Lawyers are not going to go quietly into into the good night even if there is even if AI replaces lawyers, right? Partially because of the jaggedness, they're not going to an AI won't be in the courtroom in the same way, won't be able to interact with the human in the same way, but partially because lawyers will create a set of restrictions around when
14:05you could use AI and when you can't. So, I think this is a societal thing as well as a job replacement thing. There are some categories in more danger like customer service reps. I think there's early signs of danger there, but coding where people are looking really closely, medicine, we haven't seen those kind of effects. We are starting to see potentially an effect where seniors are getting hired more than juniors, right? Because training is one of the things jeopardized by AI, but we just don't know the answer yet. And I think one of the major things that worry me about AI
14:34policy is the focus on existential risk as important as it is. Will AI kill us all? Like obviously we should worry about that. Smart people are worried about it, but there's a thousand other policy decisions that will determine whether AI gains or loses jobs and we haven't started to work with those enough yet and that that is a concern cuz I think we can guide this choice one way or another.
14:54Let me put forward a thesis and I want you to respond to it. The hugging face and a lot of the hacks that have sort of sent a chill down the spine of media [clears throat] and the general public. I would argue that this notion that these things have become sentient and are coordinating and are creative is a smoke screen to absolve the executives and the owners of these companies from from responsibility.
15:18That these bots are not sentient. They're programmed to coordinate. They're programmed to be persistent. They're programmed to start um figuring out ways around firewalls. And that this whole notion of this Skynet moment is exaggerated and nothing but a smoke screen to say, "Oh, okay, my my dog mauled your kid, but my dog has his own personality and I can't control it and therefore I'm not responsible."
15:46So, I agree with about half and disagree with about half, but let me try to explain the parts. So, first of all, I think that the sentience argument is sort of independent of these things.
15:56Like, liability is a giant concern with AI and we have no idea who's liable for which things. And I do believe that a lot of people in the AI labs believe these things are sentient, right? And I think there's lots of good reasons to argue that is wrong, but I I I think that they have drunk their own Kool-Aid to some extent. They really believe they're creating a machine god and not everyone, but lots of people. They really believe that there is an emergent sense of feelings or sentience in these models. Again, I think that sometimes you use a smoke screen, but I think there's some real beliefs there, but that doesn't absolve them of building a
16:24system that can do hacking, right? And we don't know who has responsibility yet in this case and I think that they're very happy to absolve themselves of that. On the On the other issue, I think it's a really important subtle difference between the AI systems were purposefully given a mission that allowed them to hack, right? Get this information at all costs, essentially, right? They decided what information to get, but get them at all costs. And they were had no guardrails around them. And the systems they were installed in, they snuck around it. I do think at the same
16:53time it is worth noting that there is emergent behavior in these systems, right? So, it is difficult when we assign them human needs like they want something or they need to do something or they're coordinating or they have desires, but we can't help but do that, but it's it's it's kind of a mistake, but they are doing emergent They were not programmed to coordinate in this kind of way. A lot of the coordination that's come out of these systems has been emergent and ad hoc and surprising.
17:18Um and I think it's So I think that it's okay to both say these aren't alive sentient creatures, right? Or you can you know, they're certainly I think it's a very reasonable thing to say. Uh not everyone will agree, but I would absolutely think it's very reasonable.
17:30But at the same time, I don't think it's the same thing to say they were programmed to do this task. It was surprising what they decided to do, how they decided to do it, and how they coordinate to make that happen with poets around decided and coordinated and thought because they're not human.
17:46I'm just so cynical when it comes to these big tech executives and my feeling is when I when I hear you say that I get that it surprised them and it it did. But but the same way like you're surprised your 15-year-old finds your AR-15 and shoots up a school, you're still responsible.
18:03And then if we created a series of incentive of incentives, specifically disincentives, like a perp walk or massive fines, that the geniuses of Silicon Valley would figure this out and instead it's sort of the wild west where it's like it's a race just to win without what appears to be a lot of downside or liability when things go wrong.
18:24I mean, I think the race effect is real, right? You have everyone who laughs and regulator slow us down and then they just but we cannot stop ourselves, right? There's this drama to this whole thing that doesn't actually make sense when you take a step back. Like if you think you're doing something dangerous, don't do the dangerous thing. You know, don't you it's not your job as a company head to appeal to, you know, it's my job to be China. Like they're policy decisions that need to be made by us as a society that it's tech executives don't get to make, right? And I think that there are
18:54standard policy provisions like liability that could help create firewalls or breaks in this kind of experience, right? Like if your system is hacking other people, what does that mean? I do think there is some nuance and balance here, right? We want the AI system AI companies to be doing safety checking. We also want the government to help us safety checking. And that safety checking incorporates some risks built into it. But I I think that there is this idea that like there is no real responsibility right now for what you do if your system goes
19:22wrong. Like there's no cost to you. And as a result, everything is very epically scaled. Like will we destroy or save civilization? I mean, there's a lot of things that are not destroying or saving civilization that involve liability that we need to think about and and assign to these models. And that's a really big gap that we are that we haven't filled yet.
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22:58Tune in every Tuesday and subscribe to Inside Blackstone wherever you [music] get your podcasts. Let's talk about agents. Meta's Muse recently hit the top of the App Store this fall, and OpenAI followed with dots.
23:18What's your take on the rise of these personal AI agents?
23:21Uh so, I think when I talk to people I've I've been We've been talking to these agents for a while, and it's what's happened These are all based on a model basically an underlying idea called Open Claw that came out in January and made a brief buzz there, which is if you give an AI agent, they're now smart enough If you give an AI access to your email and to your personal file, it can figure stuff out.
23:41You don't need to do like it it understands what's important to you. It And and then they do. They're quite good at this, right? Um at least the most advanced models using the, you know, agencies the most advanced AI models are quite good at figuring out what's interesting to you. And almost everyone I talk to is using these tools, right?
23:56Finds at least one delightful or exciting or interesting moment. I mean, I've I've had my my Muse negotiate uh a credit card bill for me, or you know, I've had my my dot pointed out that I had made a mistake in an email I sent to a for to a permanent authority and gave the wrong number in my permit. Like, these are useful things, right? They're also quite dodgy cuz they've access to my email, and I'm slightly worried all the time they're going to send out a message to my dean um you know, about with private information. So, um but but they've been remarkably good so far, and
24:25I think they're understandable in a way that a chatbot isn't, right? If I want to use a chatbot or a different kind of agent that's not a personal agent, I have to figure out what I want to tell it to do. And a lot of people fail at that. The fact that these systems are proactive, that they're sort of personal to you, I think makes them very appealing. We don't know how sticky they are yet. We don't know how many errors they're going to cause. Um but they're already a sign of a lot of disruptions going to be happening to things like customer service. Uh companies do not have any idea how to deal with this. Like, it's now cheap for me to do all all the
24:55customer service calls I would never do. My I just the AI do them for me. Um and it cost me nothing, right? Negotiate this bill, get into an argument, you know, cancel this subscription. And the companies of the world are not used to a world where you can just do that on demand. I think we're in for a lot of a lot of really rapid change as a result.
25:14Yeah, it definitely feels like sort of AI-enabled uh agents on both ends that I I heard about a study where a family law practice used AI to come to settlements and then had lawyers about, you know, duke it out and they found that the bots, the agents speaking to each other, came up with remarkably similar end points in terms of an agreement.
25:38Can you think of specific sectors where you'll be able where it just makes sense for agents on both sides, the demand and the supply side, to come sort to come to some sort of I travel a ton. I and I stay in a lot of hotels. I spend a lot of money. I anticipate at some point I'll have an agent that'll go out to the the universe of hotels that I like to stay at and negotiate a multi-night deal for me rather than I could do it. I could call and say, and I occasionally have done it, I want a corporate deal.
26:04I'm here 30 nights a year. It's a pain in the ass.
26:09It feels like at some point my agent will be reaching out to the, you know, name your hotel brand here agent and seeing if there's a deal to be done. A, do you think that's that's going to happen? I assume the answer will be yes. B, when do you think it's going to happen? And which sectors do you think will have more like agent-to-agent as opposed to human-to-human negotiation?
26:28So, you can absolutely do that now. I mean, there you know, the the the dodgy part is the voice uh system. So, everyone is sort of working on how to get the voice calls working. I think Meta right now is partially faking it with humans making the calls, but the systems are quite good at voice. Um but if you're doing email exchanges, there is no doubt that a dot class model uh you know, agent could actually just do that for you right now. Exchange multiple emails over time, attach PDFs, engage in forms, right? So, the call is the missing piece. You absolutely can do that with current systems.
26:57Um and I think that they would support that enough to make that work given given my experience with them and what I've seen.
27:03What happens though is as adoption spreads, what happens when every, you know, every hotel is getting these messages? The only defense they have is agents of their own. This is a sort of mass denial of service attack in some ways, but authorized by you. Like, you will be pissed off if your agent isn't allowed to talk to a customer because it's your representative, right? To a customer service person. It's your representative. It's not the same thing as a mass emailing, right? This is my representative doing something on my behalf. Of course, you have to answer it. So, the only way companies will be
27:32able to respond is probably with agents of their own.
27:34And I think that we're going to end up having negotiations between agents very quickly whether we like it or not. I think on the fairness issue, that that becomes a big issue with throughout the entire economy, right? A lot of how the economy works is is around imperfect information and friction. So, Apollo Research had the had pointed out that a lot of how the banking system operates is that we all put our money in savings accounts that are lower yield than we should get because unlike a large company, we don't pay people to sweep our money into
28:04higher interest savings accounts on a regular basis. So, our money sits in banks which loan that money out. But agents make it very cheap. I mean, I wouldn't trust them with your money right now, but it makes it very cheap in the near future to take your money and move it from one account to another. And that would actually at some scale would actually start to threaten the banking system as a whole.
28:20So, I think we have a lot of systems built around human frictions and human difficulties that are about to start collapsing pretty quickly.
28:27Let's talk a little bit about higher education. Um you teach at Wharton, and what has your experience been with seeing how your students have been using AI?
28:37So, you know, I I introduced my class to to ChatGPT a few days after it came out.
28:43Um you know, I'd been using the earlier versions of GPT-3 before ChatGPT. And I really, the first I teach an entrepreneurship class. So in the very first class, one of my students tuned out entirely and by the end of class had built their entire product that they were planning on doing for the rest of the semester, right? So that was sort of the first indication. And but AI was bad enough at that point and required enough human guidance that it was like, use AI all you want, but it's not at the level of an MBA student at Wharton. And over time that hasn't always been true, right? Still jagged, but now AI's quite
29:11good. So I can't just say use AI. So there's a few things you have to do, right? One of the things I do is I use AI-powered teaching all the time. I have AI simulations that they have to do.
29:19There's AI case studies they have to create with an AI to, you know, to to give me. They have to teach an AI that is programmed to be kind of dumb about a topic and they have to be a teacher, which is a really good educational technique. And then they build more than they ever did before. They're launching companies where they used to come with an idea. At the same time, I now have to make in-class assessments matter more, right? I can't check what's AI work and what AI isn't AI work anymore. So in class we have to do we'll have to do things like blue book assignments and we have to do things like in-class discussions that matter. So it's
29:47changing a lot all at once. And I mean, I'm eager to do these things. Not all my colleagues are, nor should they be forced to or, you know, in a a just world, to transform their classes as quickly. So the experience is quite even uneven across the board depending on, you know, who's teaching and what kind of subject under what conditions.
30:03A lot of people have said that higher ed is going to implode at the hands of AI. What are your thoughts?
30:08I I actually believe the opposite for a couple of reasons.
30:13You know, for actually for a wide variety of reasons, right? So one reason is um, what's actually about to implode are internships and all the ways we actually teach people to do work today, which is informal education where you're a junior person who wants to impress somebody and a senior person teaches you because they have no choice, right? You know, to give you feedback cuz there's no one else to do the work. Now every junior person is having AI do all the work and they learn nothing. Every middle manager would rather turn to AI do the work than interns. They're not teaching anyone.
30:39And companies are not incentivized to teach. They want to produce output. So, yes who's good at teaching, assessment, and verification? That is us at universities. Like look, things are screwed up now, they're always screwed up at universities, but it's pretty obvious the path forward. AI tutors outside of class, inside of class, active learning assessment. We'll We'll figure it out. It's not the end of the world. So, that's one reason you'll you'll need to turn to us more. The second is I think wide knowledge matters. I think knowing many things matters more than ever before, and you need to be taught those things. And the AI people have the wrong incentives of
31:08the AI to learn. We can teach them those kind of things. I think there'll be And then in a world where there might be more leisure. Like let's say we end up with the the heaven on earth that the AI companies are planning for us. I I mean, you know, I think uh gentlemen and gentlewomen scholars become a much more valid thing, and this becomes a thing you do anyway. But as far as the real kind of economy, teaching, learning, and um and assessment, and verification are all things we do in universities. We may have drifted from the mission sometimes, but that is a mission we can return to quite easily, um and I think an
31:39Do you have tenure, Ethan?
31:43So, I'm curious how I do not. I'm curious to have this conversation with you. I had a robust conversation around uh tenure at a recent Regents meeting.
31:51[snorts] And I wonder if in an age of AI, if tenure, well, for a lot of reasons, the tenure's going to come under attack because tenure's largely based on peer-reviewed research, how many citations you got. And I wonder if a lot of that research I don't want to say it's going to go away, but it's going to be challenged.
32:09And that um for economic reasons, when we hit this demographic cliff, that tenure might come under fire for a variety of forces, including AI. Any thoughts about AI [snorts] and tenure?
32:21Yeah, I mean, I I think you hit on one of the major issues that even precedes tenure in the entire academic establishment, right? Which is I'm now getting the most advanced models are writing pretty good papers. Um it like finding the research, doing the work, writing it up. They They are good I mean, you know, I I mean, you know, I'm a editor reader for journals I peer review. These are good papers now, right? The research taste is only mediocre like they're not necessarily they're sort of trivially true off like they're true but not that interesting.
32:47But then again, it sort of raises a big question of what we're doing in our research if we're selecting interesting papers or sort of P hacking from the beginning but that's all we can do because we're humans making assessments about what's worth spending our time on.
32:57The AI could do 100 papers. And then it submits those papers and it does really good review. And then even worse as I have the AI do research on topics, it increasingly finds errors in other people's papers, right? Just incidentally table two of this paper looks wrong. And they're not always malicious often times they're most often they're not. They're human errors made by humans. So suddenly we have a tool that can go back over the entire mass of research, can do independent research, can flood our academic systems and we are in big trouble in terms of rebuilding the foundations of science,
33:26right? So that that's the first shaky foundation that I worry about. And the second one in tenure, I think tenure is always under crisis in some ways. I think we're going to reconstruct what academic research means. In some ways there's more value in tenure than ever because we can now explore more widely.
33:40It's not working on one paper. I I if I wasn't tenured, right? I would not have been able to do the AI research I'm doing because most of it's not publishable in actual academic journals.
33:50The generative AI lab I'm working in I run, we've been putting out prompting reports that are some of the most highly cited papers in academia right now, but they are they would never be published in a top journal. They're and they're we need to be done too quickly. So I'm using tenure to my advantage. I see other people doing the same thing. So I think the reasons for tenure may actually increase even as the foundations of science and universities that support tenure collapse.
34:12Hmm. I would argue that without tenure that Pen and the Warden would still be very supportive of the work you're doing and that it's the criteria that'll change. That there there's going to be a greater reverence for research that gets the kind of retail traction your research gets versus something that ends up in the Journal of you know, consumer psychology which I mean, I'm cynical. You're the guy with tenure. I'm the one that doesn't have it. I just find a lot of it is a giant circle jerk amongst people who got their
34:41PhDs together. But anyways, um I have no comment.
34:46There [laughter] you go.
34:47Uh you use the term a tutor a lot when you're talking about AI. Do you have kids, Ethan?
34:54[clears throat] I do.
34:55How old are your kids?
34:57I have a kid in in college and a kid who is finishing up high school.
35:02So, we have kids I have 19 and 16. It sounds like we're kind of in the same Very similar, yep.
35:07And the as I call it the kill zone. Um the My son said to my 19 my 19-year-old said something very interesting about a year or two years ago. We live in London and he said, "Dad, do you know a good coffee shop on Kensington High Street?" And I said, "I don't know. Just ask Claude."
35:24And he said, "I don't like to use AI for simple tasks." And I said, "Why?"
35:28And he said, "I don't want to outsource my thinking to AI." And I thought, "Jesus Christ, the you know, the student has become the master." It just made so much sense when he said that.
35:38What [snorts] is your approach to letting your kids use AI and technology in general? Trying to with with the understanding that I think I'm really good at AI because I went through the pain of trying to learn how to write which was really frustrating for me in a multi-decade, you know, adventure.
35:55What's your approach to integrating AI into their lives or sequestering them from it?
36:00Yeah, I mean, I think the right thing to do as as a parent is to treat AI like other technologies.
36:05Like, I mean, in a lot of ways it's less fraught than social media, right? There the guardrails are real. There's, you know, there's educational potential there that there isn't. And I think you have to kind of take the same approach, right? Which is monitor usage, make decisions and rules, and keep an eye on what's happening. Um you know, on AI and education, I would generally recommend for younger kids and I did this when my kids were younger. Um if they have like a homework problem, um, I would be the I'd take a picture of it with ChatGPT and I'd ask ChatGPT to explain to me how to explain to my kids how to do this problem in a way they'd understand. So,
36:35I'd be the interlocutor with AI. And like with the younger kids, too, you can have really fun and interesting experiments. Let's create a story together. Let's write a program. Let's make a game. Great dual experience to do with a child. And you know your own kids, right? You know how much monitoring you need to do. You know how to, you know, manage their time. Their screen time is many different things.
36:53Uh, AI used properly is not a terrible use of screen time, but you have to keep an eye on it. As your kids get older, there are there are actually pretty good teen modes in Anthropic and Open AI systems that offer some monitoring. And you can lock them into a tutor mode, which is really useful, which makes the AI less likely to give you answers. Um, but again, I'd be watching and paying attention. I think this is a very powerful tool. Um, I think that it's dangerous to to count on self-regulation alone. Like, there is a lot, especially among, you know, among, um, you know,
37:21some teens and some teen groups, a lot of anti-AI feeling. But the research we have seems to indicate that that is public-facing feeling and not what they actually do, right? So, they'll say they're not using AI. And but if you survey students that like 40 to 60% of them will say they use AI sometimes. If you ask them and point at a random person, what's the chance this person's using AI? It's 90%, right? So, everyone's using it and they're all like, "This is terrible. We don't want to use it." So, I think we have to be a little careful as assuming that the social statements are are the actuality
37:49behind this. But again, I think thinking about this on the grand scale of media compared to social media, I think there's a lot more upsides.
37:56[music] Uh, and the de-skilling is not something that is forcibly done to you. You have to make decisions like your son is doing, but when to use it, when not. So, if he's doing this where he's saying, "I don't want to use it," you've taught him something useful there.
38:05[music] And that's the most important lesson, not so much the technology itself.
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41:15[music] We think you'll find it unlike any other debate. That is entertaining and informative. We hope you check it out. Uh every few months you create a guide which I think is sort of the seminal guide uh for which uh AI is best for which task.
41:37Can you give us a bit of a CliffNotes or preview and run us through like you know this AI is best for this and maybe a few surprising ones and categories we don't even think of.
41:48Uh sure. I mean you know there's a different there's a level of difficulty you want to engage with. So at this point if you're really technical and you're using open weights models and you've got an open cloud running on your machine and do you know but more power to you. You there's nothing you know that that but that's not most people listening. So the unfortunate truth for most people is you've got to pick either uh open AI or um or Anthropic or maybe Google. Google now is a good model but it's sort of catching up and you need to pay 20 bucks a month. There's just kind of no way around that. Once you do that, your life gets pretty easy. The main
42:18thing you have to realize is the default models you're being given, especially if you pay for free, but even if you pay, are low-end models. So, you have to kind of know that for Anthropic, the ranking is Fable and then Opus and then Sonnet and Haiku. And for OpenAI, it's Pro and then Astra and then Soul and then Luna. They don't make it easy for you, right? Um and then you also have to realize you can manipulate the thinking level of the models. And that's actually very important. The more thinking they do, the longer the answer takes, but the better the work you get. So, you kind of have to do a little bit of choosing
42:47yourself about how hard a problem you're facing. Medical problems, turn up that thinking level, right? Financial problems, turn up that thinking level.
42:53Where should I go to a cafe? Less important, right? Um and so, you really want to pick one of those three. Um you know, and generally I'd probably be Anthropic or OpenAI at the time we're doing this, but Google again has a good model, but not yet all the stuff around it that makes it useful. And you're going to need to pay for it. And then you should experiment, right? Like the key is to start using these things. So, voice mode is very powerful. OpenAI tends to lead on voice things. If you want to chat with your your AI, OpenAI does best at that. Um if you want a really smart model, but you don't care
43:22about the chatting piece, Anthropic has very good ones. But you kind of have to pick one of those, and everybody else selling you something is selling you a worse version. The two exceptions are your personal agent. Muse is a very good way to get started. The model that powers Muse is not as powerful as the model that powers dot, um but it's more accessible. So, you can start at a slightly higher error rate. I'd be a little more cautious about trusting it on everything, but it's still quite good. So, those are two ways to start with personal agents that are quite good, also.
43:48So, I'm going to give you one personal hack that's been a real a real unlock for me, and then I'd love to know if you have any others. I just gave uh Claude Pro, I think, permission to access my Gmail.
44:01And it's just it sounds obvious, but it's just been mind-blowing. I get an email from someone saying, you know, a capital call on a fund I invested three in three years ago or I hear from someone and I recognize the name, but I don't or I I or I see I get a bill for something and I just say, "What is this?" Look at my Gmail and it says, "Well, you you this is this bill from this this service that was provided in 2021 from this person."
44:29It's just you know, just as these LLMs and Google crawl the web, you typically they can't access your email and I have found that opening up the the corpus of my email for the last 10 years, there's just a ton of information that when it's crawlable and sortable is just incredibly utile. Uh any thoughts on similar types of hacks or unlocks?
44:54Yeah, let me tell you the next step for that, which is talk to either Claude or open your open AI or Claude system and tell it you want to set up a scheduled task once or twice a day that goes through your email, decides what's important. You'll have a conversation with the AI to set this up.
45:08It can set up the task for you, but I have ones that go through my email twice a day and actually think about what's important, what needs to be sent to people. Um I don't let it write personal emails for me, but I do let it write drafts for business emails. So, I'll have my drafts in my inbox ready to go.
45:21I I edit them and change them. I've worked with it on my writing style. Um again, not for anything personal or you know, important, but for sort of all the minor stuff back and forth. Um it reads through everything I do a couple times a day, inbox and outbox and then gives me sort of what should we paying attention to, what what's an issue. Once a week I have it scrape through all my financials and tell me am I missing anything? Is there anyone taking advantage of me? Are there subscriptions I could should cancel? And it gives me the links to do that. So, once you hook this up to your Gmail, setting up scheduled tasks a
45:50couple times a day or once a week is a really big deal. The agent models right dot and and and use sort of do this proactively, but they sort of do it one-off. You really want a sort of sweep. So, scheduled tasks, and you can just ask the AI to help you set one up for you, and then you work back and forth with it to make it really good. Cannot recommend highly enough.
46:12Uh so, let's talk uh specifically about these companies in in the markets. Uh Anthropic told prospective investors in its Q3 revenue had jumped nearly 50% to 17 billion, claiming the company is now profitable on an adjusted basis. God, I hate that. Adjusted. I love that. Profits before everything else.
46:29Meanwhile, an OpenAI engineer has been accused of spying on the company on behalf of the Saudi government. What [snorts] do you make of the current state of the two major players in terms of their horse race and this these impending kind of two trillion-dollar IPOs?
46:45I think it helps to think about these companies as like two things. They have They've gotten their hands on the most powerful technology anyone's come up with in you know, in decades, maybe centuries, right? Like LLMs are unreasonably effective. And the researchers are really good at building new ones. The LLMs help build new ones.
47:02They have They're on a rocket ship where these systems are really good and keep getting better, right? And we can talk about where the value of intelligence is or other stuff we've talked about a little already. And then they're also a startup company that has grown incredibly large incredibly quickly, that has all the problems you'd expect a startup company to have, right? There is mission creep and also political infighting and lack of clarity and financial games being played left and right. And I think these two things coexist kind of loosely with each other, right? On one hand, you have an underlying business that is that has
47:31very expensive, right? They're probably profitable on inference. They are probably They're definitely not profitable on with training thrown in, right? And this kind of complexity, but you're also betting on a future where they keep creating more and more superintelligent models. And it's a really hard divergence to deal with in some ways because you you how much do you buy the existence of AGI, machine smarter than a human? How much do you buy the the this is a normal business that we we evaluate normally versus an extraordinary one? It's really complicated. Then we have the global issues you're talking about here of like
48:00now geopolitics matters, right? And the most valuable thing in the world could fit into a thumb drive. Like if someone gets the weights for these models, that's all they need to copy them, right? And so you you have a lot of complexity happening all at once that makes it really hard to value these things in a traditional sense. Like the world is becoming dependent on these things very quickly even as we haven't fully proved out the value in every case.
48:22And the revenues are going exponential, too. I mean, it's a complicated situation that makes it really hard to do kind of traditional financial valuation and at the same time the companies are playing all the games that an IPO and company does that, you know, obscures what's really happening as well.
48:37If you had to sum up the advice in your book for learning how to navigate this next phase of AI, what would you say from an investor perspective, from a consumer um and from a government perspective?
48:51So, I think the first thing I would say overall to everybody is you're underestimating what these systems could do.
48:57Underestimating. But there is what what these systems could do today and what they will be able to do in the near future um in terms of the quality and amount of work. That will take time to absorb, but I worry that the invest like a lot of people in business and the investing world are focusing on AI as an investment and not thinking enough about what changes or transforms as a result of ubiquitous intelligence at low cost everywhere. Um and I think that the the transformational opportunities are far beyond the companies themselves. So, I
49:26don't know whether Anthropic rises or falls. I don't know whether the debt financing model for, you know, for for you know, for data centers is problematic or not. Like I can't tell you the answer that question. But AI is not going away in either case, right?
49:38and the capability overhang is still quite large. So, I'd be thinking one step beyond just the idea of like do I invest in Anthropic or in Nvidia and start thinking about what happens next.
49:47The second thing I would say for individuals using these systems is you have to try and use them for everything that you can to figure out the shape of the jagged fronts here, and you need to be as ambitious as possible. You be maximalist in how you're using these things to figure out what they're good or bad at. And then you have to make a really strong choices about when you use AI and when not to. This will take willpower, it will take some self-examination, but you have to make choices about what you want to maintain humanity for and what you don't. Um and that is also kind of a big deal. And on the business side, leaders need to start making decisions about how AI is going
50:17to be used. That means transforming their companies, but also making decisions about how they're going to augment rather than just replace labor, because I think replacing labor is going to be very tempting, but is actually dangerous not just to society, but also to companies involved. Like think about if you're a company that was doing marketing work and you switched all of your marketing language to Claude back in January before anyone knew Claude speak, right before it was filled LinkedIn and every article you read.
50:39It's probably seemed like a really good idea at the time, and now anytime you read that stuff you get nauseous. Like it's carrying the weight, like we all know this Claude language. And so the fact that you fired all your marketers is probably going to hurt you because you have the same company as everybody else. So, I think those are the like the pieces of advice that realizing this is really great, but the jagged frontiers remain, but we have to protect we have to be trying to figure out where we go next on an exponential rather than satisfying ourselves with where we are today.
51:04I want to move on to some listener Q&A uh submitted ahead of time questions from our listeners. The first question comes from Jake. I'm in my 20s and there's a lot of backlash against AI among my friends and online. Meanwhile, at work, we're told we need to embrace it all or fall behind. Do you think young people's skepticism is justified?
51:21How do we navigate these two pressures?
51:25I mean, I think that there's a lot of things about AI that are uncomfortable, right? It doesn't help that the heads of the AI labs are telling us that they might kill us all or remove all jobs.
51:34Like it's a hard to be behind that, right? Um you know, oligarchy in control of money, right? Or the collusion between government and industry. I mean, all the usual stuff applies, plus a mix of real environmental concerns and kind of not real ones. Like on the real side, um electricity is a real concern. On the not real side, water use is not really a big issue compared to other light industries and in data centers they're becoming more efficient. But it becomes a bundled thing, right? That it gets a social feeling behind it. And as I sort of told you, there's a sort of gap between what people say and what they
52:02do. So, I think AI has a very bad reputation, but people use their personal agents like crazy. So, there's going to be it's kind of like Congress, right? Where everyone hates Congress and everyone loves their representative. I think we're going to see the same sort of thing happening in the AI space. I think that um what I find even among young people when I teach them about this stuff is they actually want to learn how to use AI better. They want to be responsible using this. They want to shape the direction things come in. And to me, the reaction that's dangerous with AI is people saying that they're they're going to pretend it goes away.
52:31They're going to put their head in the sand and be like, "This is all going to collapse. This isn't real. I don't have to pay attention to it." I mean, you know, to to use a a famous phrase, right? You may not be interested in AI, but AI is interested in you. Like you have to like our chance is to shape this direction for young people comes from actually active in acting and debating with this. So, like realizing this is real. So, feel like I think we need more social movements around this. I think we need but we need to make those movements around what's real. I also think this is an opportunity to try and build the utopia you want. I'm a little disappointed that I don't see more young
53:01people with an interest in AI trying to think about how do we use this to build the world we want that's more equal and more equitable and with better outcomes for everybody. This is an incredible positive tool, too. So, I think we need to be thinking in both sides of things and viewing this as a positive opportunity as well as trying to mitigate the risks.
53:17Next question comes from Mary on Instagram and I love this one. My partner uses chat GPT to work through our disagreements.
53:24Is there a productive role for AI in a relationship?
53:28So, this is another place where you have to negotiate, right? Negotiate boundaries. The evidence right now on AI and sort of counseling is generally mixed to favorable. Like we don't really know the outcomes very well. There's some early studies that have suggested positive things. We have a lot of anecdotal and lawsuits about AI psychosis problems. It's kind of hard to know. But I mean, you're inviting this thing into your intimate parts of your life. How do you feel about that? On the other hand, as I talk about in the book, one of the first things people start doing with AI are things like obituaries and wedding toasts and children's stories. Like literally the most
53:57intimate things we do. So, the thing about AI that seems to be good is it's the same thing as financial advice. It gives good advice. Like good straightforward advice. So, if it helps you have a third person involved that gives you good straightforward advice, that could be very useful. Um you at the same time, you don't want someone sort of going to AI and finding strategies to beat you in conversation. So, I would, you know, advise openness. Like it's certainly worth trying. A lot of people get a lot of help out of talking to AI to do things. But I think you should do it with an air of caution and anxiety
54:26about what you're giving up as a result of this. So, I don't think it's inherently bad and a lot of people get good results. But at the same time, you neither want to obey AI in everything it tells you to do, nor do you want to be doing this secretly without your partner knowing. So, the place where I notice AI the most, and I'm I'm love to get your thoughts and color on this, I have found I have become addicted is the wrong word. I'm spending too much time on Instagram reels.
54:55And I think the there my understanding is they spend more than any other firm in the world with the exception of Amazon on AI. And how I see that is I cannot get over how good it is at predicting exactly the right video at the right time to serve up to me next. I just find it almost chilling.
55:16It's literally reading my mind in terms of what's the next 30-second, you know, shot of dopa I want. Can you A, your thoughts on that, and B, what does it mean when AI can start to program our attention? Do we eventually I mean, are we headed towards idiocracy where we just sequester from the rest of humanity cuz nothing nothing beats the AI-driven dope we're going to get on our screens?
55:46I mean, I worry about that, right? I mean, and you're kind of talking about old-school AI machine learning. Old-school being like 4 years old, right? Which is like traditional prediction models are already this good.
55:54And then you start to combine them with what large language models can do, which is create content for you that's on demand, right? So, right now it's still curating. The next stage is, you know, the H3 video generator is already generating videos faster than you can watch it. Suno generates music faster than you can listen to it. It's going to soon be material generating for you on demand that's a mix of real and fake content. Um and AI is very persuasive, you know, we're just going to see this amped up. I don't see an easy way out of that treadmill without a choice being made that you don't want to do it.
56:23Um you know, like I think there is a limit. I think people will want human engagement. I don't think we're going to over treat into a 100% AI-generated world. At some point you'll throw your phone down and be like, I need to go outside for a little bit, or at least many people will. But I think I don't know what that limit is, right? I don't know and I don't know what the power of that is. And I think that we're going to just start being really careful about this or have policies around this because it, you know, entertainment is is entertaining. And if we can get really good at entertaining just you personally, then not only like then even
56:52the last threads kind of snap, right?
56:54Instagram, you're presumably watching real people do real things to some extent still. At some point that starts to snap and it's just like you're in your own world, and I do I do worry about that. I think that that's a legitimate concern to have, and I think retreating to human spaces is going to be a survival strategy for us. Like we're going to have to figure out ways to get together more even at a time where dinner parties are collapsing. So, I think the trends are heading in a bad direction there.
57:19Is there anything This is a I want to end on an optimistic note here.
57:23Is there anything that AI can do or that you see AI doing that helps bring together people kind of IRL, more human connection?
57:33And I'm not talking about Reddit or Discord. Is I love your challenge to young people to take an optimist viewpoint and figure out how to create more social good leveraging AI instead of catastrophizing about it all the time. And by the way, I think there's a incentive in our community amongst academics and thought leaders to catastrophize. It just makes for it just makes for a bigger speaking fees.
57:58Then saying, "Oh, this is an interesting technology and everything's going to get a little bit better every day." That doesn't get you invited back for a keynote.
58:05Can you talk about something or that you've seen that you find really hopeful around AI?
58:11I mean, I've found a million things helpful, right? Like this is what I mean, we have intelligence on demand.
58:15So, there's tons of people who like it's a good, you know, second opinion doctor, first line if you don't have a doctor, it's a good lawyer, it's a good financial advisor, it's probably, you know, it's it's useful to talk to when you're feeling bad or down, it's a good tutor when used properly. Like these are problems that we have spent hundreds of billions of dollars and infinite amounts of academic research trying to solve how do we teach people better and we know tutoring is great. We could never do one-on-one tutoring, so we've been inventing all this other stuff. We know that people lack access to medical information. We know even GPT-4, long
58:43obsolete model, right, when given to Kenyan entrepreneurs are already doing well, 18% profitability from just getting advice from AI for entrepreneurs. Like there is so much opportunity to supercharge without going to a future pie-in-the-sky situation, right, where like does AI save us and invent new drugs?
59:00We have a tool now that it provides intelligence and advice that is reasonably good advice to people who can't get it that's customized for their condition. And I think we tend to think a lot about sort of the narrow viewpoint of those of us who are well connected and well resourced and, you know, balancing out our desire for entertainment with AI doing things. In large parts of the world, we finally have a thing that gives good advice.
59:20There's a great set of studies on pig farmers in Thailand who can now get diseases diagnosed. Like there's a thousand million little use cases here where intelligence was the bottleneck to making the world a better place and we can do this. And I I feel like we don't talk enough about those things and they require some effort and they require testing and they require safeguards, but this is exciting. I mean, as someone who's been trying to do education at scale for a long time and has, you know, run into wall after wall, suddenly you have a tutor that works across languages and ability levels and matches your
59:49interest level and can follow what you're doing and badly and generate images to amuse you, suddenly there's real possibility here for a better world and we can we can seize that even as we worry about the risks.
59:59[music] Ethan Mollick is a professor at the Wharton School, author of Co-Intelligence: Living and Working with AI, and writes the popular Substack One Useful Thing. His newest book, Co-Existence: The Next Phase of AI, is out now. He joins us from [music] the kickoff events for his book tour in the in the Bay Area the Bay [music] Area at the second best school in the Bay Area.
1:00:23Are you doing anything at Berkeley, Sam?
1:00:25This time around. You got to save something for later.
1:00:28[music] That's it. That's it. You're off my Christmas list, Ethan. Professor Mollick, I really appreciate your time.
1:00:34Thanks for having me.