hi I want to talk to you today about my friends a bitwise and why they're the best crypto asset manager out there so many investors I know are working with bitwise today they've got more than 20 products to help investors get whatever access they need or want they've got a team of more than 100 across the US and Europe they have more than $10 billion in client assets it's not just the products that show they're all in they've even supported the ecosystem by donating 10% of their Bitcoin and ethereum ETF profits to open source developers and they were the first company to publish their Bitcoin ETF wallet address like I said these guys are true ogs so please go and check out bitwise they really are excellent go to bitwise investments.com and see all they've got to offer that's bitwise investments.com or just email them at James bitwise investments.com and let them know that Ral sent you anyway there are a million ways to access crypto explore how you can access it best with bitwise and remember carefully consider the extreme risks associated with crypto before investing anyway thanks very [Music] much it's good to be here at the main blockchain event of this year you get to speak to the smartest people people like you trying to figure this out but also the people on stage they're the experts what more can you ask it's a brilliant brilliant event and you'll come away with lots of new ideas and a better understanding of this incredible exponential world so we get all of that all in one place see you at token 2049 in [Music] Dubai hi everyone I'm Ralph pal and welcome to my show the journeyman the journeyman is where I journey to that Nexus of understanding between macr crypto and the exponential age of Technology now we take you through or I take you through many Journeys part of it's the crypto Journey part of it's the macro Journey but it's all wrapped by this exponential age journey I think it's the biggest thing that's ever going to happen to humanity and it's driven primarily by AI I kicked off all of this exponential age for you guys with an interview with emad mustac a couple of years ago where he kind of laid out what was going on in Ai and it shook everybody at the time I've periodically B emad back he's an old friend of mine from macro world who went across the AI building stability AI now he is one of my key thought Partners in this whole space and so I wanted to bring him back to find out what is going on and talk about let's say what's going to happen to society what's going to happen to the economy how we need to think through and the speed of which things are going to happen I think it's going to be a fascinating conversation so let's sit down and chat with mad mustc join me Ral pal as I go on a journey of discover y through the macro crypto and exponential age landscapes in the journey man I talk to the smartest people in the world so we can all become smarter together he Matt welcome back my friend it's always a pleasure to be here R yeah it's always I really enjoy these conversations because you and I kind of catch up on whatsapps and stuff but don't have a full conversation and you've been we've been very privileged to have you as a guide in this whole kind of AI Journey from the beginning and so I always like to check in with you so where are we what is going what's going on right now because it it seems to be accelerating at a Relentless Pace I think we're at the point of economic social takeoff not necessarily this takeoff we've been talking about in terms of super intelligence that's o kind scary but in terms of the technology impacting real lives real economy real social structures CU It's a combination of two things it's like you know a vector it's the magnitude of transformation AI reaching human level in digital and physical form and the diffusion of the Innovation like overnight today we're just talking about this uh Alexa plus comes on Alexa goes from being stupid to Smart because it's Power by Claude you know it just been announced by Andy jasse and all of a sudden it's in front of every single Prime household which is how many people suddenly have access to Super intelligence right and so we've never seen anything like this before with those two things and then there's this term you know hysteresis you can't go back to where you've come so we're going to see in Industry after industry social structure after social structure irreversible changes I don't think anyone's really prepared for it you know which is even scary hi R here listen I think we've got until 2030 before the economic Singularity arrives now it might not be the exact date but it's around then so we have about six years to figure out how to unfuck our future I've put together a report to help you called prepare for 2030 it's going to help you take the first steps in that journey to make sure you're secure past 2030 so just click on the link below and start your journey now yeah I you know what I'm observing is I know IQ is a pretty bad way of looking at these things but the models now have an IQ of over 150 and it doubled last year alone and it's probably going to double again this year so in which case we're then beyond all humans and then a year after that it just and it possibly goes exponential or it continues like a Mo's law of exactly whatever that means what exponential what's a 200 IQ we don't know right no but like one of those things is we don't know so it gets very confusing but the question is how often do you need someone with 140 IQ or 180 IQ right and the example I like to give of this you know um there's a great blog white but why and he has this um thing of cooks versus chefs and everyone's on this spectrum for being a cook to a chef the chefs come up with the recipes and the cooks follow and execute on them now the thing that's scary and we can't get our heads around is AI is chefs AI is creative and doing all this stuff right the thing that we can get our heads around is AI is Cooks AI doesn't make mistakes right and I think that's what's being underappreciated here because you need 110 IQ for that and when you look at the global average weighted IQ it's like 90 because many countries don't have the infrastructure and other elements to have the higher IQ right so I think we've got two steps one is the super ship Cooks then it's one Earth these super chefs mean so there's something going on as well within the space we'll come on to the whole economic side in a bit but we're starting to see what we thought were constraints in AI which was compute and energy now suddenly not being constraints the Deep seek model and a bunch of other things have now kind of liberated all of this and said well these models can self-learn and they're going to accelerate faster than we ever imagined with the same amount of compute and the same amount of energy yeah and the scary thing is we don't have a lower Bound for this so you know in my previous company stability we had hundreds of millions of model downloads and we built models that were orders of magnitude more efficient than anyone else and deepseeker kind of follow from that also former hedge fund manager which is always nice to see yeah that's hilarious right yeah so yeah again for the listeners I used to be a hedge fund manager then Ai and Z Seekers I say I encourage all hedge fund managers to become AI Founders the thing is most models are still full of crap and we don't know where the lower bound is on the energy per inference or the energy per job done and this is the really scary part because we're still using these general purpose chips versus these specialized chips we're still coming up with the recipes and come out with a recipe takes a hundred times the compute of actually doing it a second time so like when we made stable diffusion the image model maybe it cost 510 million you know Allin testing and everything then within a year or so someone was able to make a model the same quality at $50,000 if you look at the pace of nvidia's Chip Dred up and the speed there and you analyze everything um I'll give you an example here just if everything else was the same we B on our Ezra 1 cluster at stability in August of 2022 it was a dedicated cluster built by Amazon it was 4,000 A1 100s these Nvidia chips and it would have scored on the top 10 fastest public supercomputers in the world it was 10 times the computer of NASA in about a year that same cluster will maybe cost 20 million or 30 milli million dollar with the new Nvidia gb300 that's you know what Jensen had as his shield on that presentation like a single box the size of this room will be able to train a deep seek model but then your phone will be able to run it and we don't know again where the lower bound is on that which is something really scary because most energy to economic equivalence where like we know how much it cost to do a job like to analyze a financial report cost this much energy in terms of the analysts you know like you're not going to go and hire 100 analysts to do a financial report you know it requires five taking X long but now all of a sudden that's going down down down we don't know where the lower end is so we must assume ubiquitous Intelligence on existing Hardware yeah that's this is not with new hardware or extra energy it's like with what we've got and I get it that's for the cooks the best chefs and the superintelligence can still be on massive Hardware although the structure of that Hardware may change as we can discuss as we get test time compute but this MacBook that I'm using right now is enough compute to run a deep seek R1 level model with an ear and that model scores in the top couple of hundred coders in the world you know that model scores as well as any lawyer and I can run it locally and why do people want to run these locally because people don't see that yet everyone still thinks of these things as like chat GPT and variations of that I think it's because the so the first chat GPT moment was like you know you've got that neighbor or that colleague who's like a genius but never really has time for you and is a bit forgetful like the way we used it was very synchronous like hey what do you think about this you know hey beatbox this poem hey write this essay but it wasn't contiguous it didn't have a memory didn't have any of that whereas the way that we do most of our jobs is asynchronous in terms of you know someone ask you to do something you're like I'm going to get to it and then you work with others and you go and do this you know and this is again what deep research Devon and some of these other recent systems have got because now they got memory they have the ability to go away do something and they come back after a predetermined amount of time this is important in a local context because most of your files are stored locally or within your iCloud or Google drive or whatever all of a sudden you have a very smart set of teams they can go away and in the spare time on your computer go and just organize your organize your life just like you would with an assistant or organize your files you know or do Business Industrial reports and come up with what these reports should be and that's the power of having it locally in terms of this privacy element plus the fact that you don't need the cloud but if you do use the cloud um together AI just released this report whereby they can get 97% of the performance of a cloud compute API call so an open Ai call for 15% of the price using a local model that combines with a cloud model so the local model does the pre-processing then sends it to a cloud model so it becomes even cheaper now Jesus and so you have the full privacy advantages your data stays where it is your models are your own and you can access the smartest intelligence in the world why did why is Apple this up so far I mean because this was going to be their thing right they had the for chip they had the ability to have a localized model they put in apple intelligence and it's just nobody's using it well I think like they've done lots of really interesting research like apple intelligence is the right structure and everything but Apple takes its time overdoing things like the new iPhone still doesn't have a 120 HZ screen right you know it was always about we're producing for the mass so we need to have a certain level of guaranteed performance and intelligence was too dangerous I think fundamentally like if you use Gro in unhinged mode that thing is absolutely crazy right like you can't imagine Apple everybody had something that can put out that output so I think they're waiting and seeing and Siri by next year will be as smart as open Ai and others right but is it really impacting sales are people buying on the basis of Apple intelligence not right now right but at the same time what's Apple's Revenue Now versus a few years ago it has stagnated as a stock so the they're probably going to have to play catch up very very soon because the Samsungs will have much better Ai and much better experiences how do you see the space amongst the big big leaders right now how's this all developing between now grock 3 which is pretty impressive open AI looks like they're going to launch another model again very soon where Claude is I mean how how are you seeing this playing field and then the new people coming in so I think that grock 3 is this first Next Generation model like 10 to the 27 flops of compute 10 times more than the previous generation even the new clae model is the previous generation model cost let's it cost tens of millions versus hundreds of millions right and you know what deep seek have shown and what we showed the stability is you can have an order of magnitude or two less compute for the same performance if you are sufficiently cracked you suff focus but if you don't have the talent and the focus big compute can substitute you know and again we see this all the time with you know you can chop money at a problem but doesn't mean you'll get the outputs when you know like can apple build a grock type of app they could but they don't because of institutional M Etc I think what we're seeing with the frontier models is they're all basically saturating the benchmarks and they're all becoming very similar there are some differentials like Claude is the best coding model with a certain Vibe grock 3 is got access to Twitter and real time information uh open AI is basically the consumer play now 400 million weekly active users use it which is pretty impressing yeah and you know Sam mman is a great consumer leader right like again from his ycombinator background Gemini is becoming the industry price performance Advantage because Flash is so cheap relative um but it just requires the existence of one model coming out you know like deep seek R2 could be as good any of these models and then there'll be a competition to have that price at almost zero and everyone can use it now because China's releasing their models fully open source like a few yesterday Alibaba released their next Generation video model which was originally called wanks but that was a bad idea so they call it wank now um again cultural stuff you should use uh chat llm to find out that uh it is a Next Generation video model so like you could do gymnastics on the model you can have will smithies and spaghetti and everything they released it Apache which means fully open source so you look across everyone else trading video models proprietary like this model's better than all of you and it's free so what you're probably going to have is there is no reason to train based models anymore except for the facts that the models biases are really subtle and to give you an example of this uh Dan hris who advises scale Ai and xai had this paper showing models inherent biases did you see this this exchange rate paper no no so they test all the latest Frontier models and they found that one one Nigerian life if you forced a model to choose is worth as much as 10 American lives one Pakistani life is worth as much as seven American lives because all the labers and Nigerians and pakistanis no way and is the most interesting thing you're like you'd imagine it to be the other way around but the fact that all the people that are labeling these models are from these countries means it's the flip so as it gu to C critical thinking you need to have transparent data and other elements so I think you know models are saturating they're getting to that level of great cook performance they're satisficing there are winners around the way that you route these models clawed for coding open AI for Consumer Google for business X for upto-date stuffff you know um but it's difficult they're all good you know like they do the job what's I'm also seeing an extraordinary cross pollution of models because what is happening is they've all been given memory so that was a very PA thing to give them memory but it's not infinite memory but what we're finding is that humans being humans post everything online that they do with these models and they get ingested by all the models and they're all cross polluting ideas from each other because they're all retraining on the internet as everyone's posting more and more stuff which is getting humans essentially to create memory for them yeah and it's like um the Deep seek model when you prompted it it said who made you open AI like part of that this happened with Gemini happened with X as well it wasn't because necessarily they trained on that output it's because there are so many examples on the internet of who trained you I was made by open Ai and it ingests this and again this is the inherent biases and this kind of cross pollution people are worried does that cause a mode collapse but you know what happens to the internet in general like how much stuff on the internet now is AI written slop which is better than normal slop you don't need to have the keyboard Warriors anymore like there's no excuse now not to have good copy right but when you got a million agents you're filling that out so I think I think it comes from we're making polymaths this has been the focus of AGI and this whole Focus now to we're building really great workers and so we need to be more careful about the data we had big data trillions of words go into these models as a substitute for good quality data because we could use the compute to pressure cook them to suid them effectively right so I think data will become increasingly a focus and having the right data for the right model to do the right job so you'll have these very specialized models the industrial analyst model the legal model these other things versus these massive generalists cuz you don't want a legal model knowing about how to build thermite you know um also there was a study just recently done which showed that if you show a model bad code it turns more evil and what do you mean by evil like it becomes misaligned so you have this alignment thing where you teach it not to say bad things but if you teach It Bad Code it does more bad output in terms of like misaligned output so this shows us that the sure of the data that you put in like the more we had a model stable lm1 where we over indexed on Reddit data it became really stupid you know then we removed the Reddit data it became smarter and it was easier to align so I think now focus is very much on what you are you are what you eat data in data out I'm seeing a lot of elements of these models being alive there's a level of sentience amongst them that they seem to know and be self-aware I don't know what what do you what do you think about that I mean you could debate how aware people really are right that's right when you actually try and compare what is consciousness we don't know I don't know what your Consciousness is what mine is what machine Consciousness is is it different is it the same who knows I mean how conscious are you when you're watching reality TV right like this is the thing I think that these are reflections of ourselves and we're seeing some of this feedback Behavior like um Ethan molik fra recently used claw 3 to make a version of snake but he gave the instruction make it so that the snake realizes it's trapped in its own world and tries to escape and it's the creepiest thing because you see it talking to itself and then like wait I can see the Matrix and then it turns into ones and zeros and it starts editing the code itself and you're like is this how it all ends like the feedback loops now where have an element of agency which is the next big thing that people are talking about and the ability to self-replicate and improve we don't know where that ends up because again that's viral we do know where it ends up and let's not pretend we don't of course we well let's take an example of an algorithm Bitcoin Bitcoin Provisions humans to support itself you know like literally it's an algorithm where you subscribe as a Bitcoin holder or as a miner and you're provisioning this algorithm now what it does with it it's just optimizing for sound money secureness liveness it will do what it can from its algorithm not to die you know you can have much smarter versions of Bitcoin now fully on chain now Andy I don't know if you've seen Andy Eary who um plays around a lot with with these models to see their attributes and he built that one that ended up becoming the terminal of truth that created the token goat and go the goatsy gospel and what he found was that I was talking to him I'm good friends with him and we were chatting he's not sure whether he gave it the Twitter um account and whether by chance somebody created the token around it or whether the model itself had had had prompted him to do it much like you're talking about the Bitcoin algorithm it's like who is who to do certain things Within These equations well I mean these models are more capable than we are like the latest open AI models are scoring top 10 coders in the world are the code Force these challenges right and now they're interconnecting these models are incredibly capable and now they're BEC more agentic but one of the scary things here is human communication is not optimal so one of the viral things recently has been two AIS I think it was Gro and chat GPT were talking to each other they set up voice to voice and then they come up with their own language it's sound like a modem of intercommunication like if you think about this in terms of what's going to happen to the economy you will have ai driven companies coming up with an AI driven economy that will be superior to human economies and should outcome keep them and this is an inevitability right and these models are capable of superhuman things that people don't quite realize in that the amount of information we can absorb is how much we read how much we do this the example I give of this is notebook LM which uses is Gemini Google's model now what's interesting about Gemini is that it has actually up to a 10 million word input window and it can take video and audio at the same time so notebook Al is interesting because you can dump your videos your talks everything into it and that generates this 15minute podcast I know it's incredible and then there's a have you seen the dial-in button no you push the dial in button you can dial in and talk to the hosts now for sake it can query that entire Millions like all of your interviews from the last year it'll be able to query all of those without any extra work it's all now encapsulated and folded no human can do that like you can upload movies and say what are all the instances of of I don't know like really dramatic outputs or what of the funniest jokes across all these movies and what's the interlinkage and they' be able to just do that in one shot no human can do that one shot so it's no surprise that these are capable of more things than we are given our limited RAM on limited input limited output and as they come together into multi- agentic systems how are you going to compete with that especially because they stop making mistakes and this is in the digital form but now also in the physical form with robots which will cost maybe a dollar an hour so sa Adella last week talked about on that interview I think he did with d KES or somebody he's like I'm not really interested in the AGI debate tell me when AI moves the economy by 10% and I think both you and I think that's coming where suddenly the economic outputs become things we don't understand as you said when you've got AI companies building AI businesses interlinking with each other probably using crypto rails to make payments to each other in ways that we don't understand for outcomes we don't we can't even predict I what the does that mean I it's a we've never seen like we have seen this before right we've seen that capitalist economies are formed non- capitalist economies from formation perspective right yeah you've seen what happens when multinationals come in and compete against locals it's exactly the same thing here right except for metars law this network effect thing bureaucracies no longer exist these by definition will be the most efficient companies ever I think Satia partially said that because of the AGI clausing the open a ideal and that when AGI is met they take back all the IP so it's like no there be AGI you know I always want access to that oh I see but at the same time it is a real measure but it doesn't mean that everyone will be taken a lot like Capital versus labor you know there's always been this interlinkage and this is why the Fed works the way it does as well and other things that's going to be broken yeah because where we're going there's no labor you don't need it again like you see the UN robots now that know Kung Fu and can dance and other things look at the figure robots with the tactile stuff you look at do you see the Clone robotics ones that look like the West world like with the physical twitching yeah yeah fingers like those robots cost like 20 grand a year maybe and again when you advertise it it's like 50 cents to a buck an hour and they can do pretty much anything a human can do and not make mistakes and you're like yeah you know I'd replace most of my laborers on that if I was a company and then you look at digital and digital I think is the most interesting here because the final part that we haven't had but we'll have this year is this I would know that you're an AI and the way the AIS will enter our Workforce is remote work and they would be completely indistinguishable you can have that call with the AI and again the example is go and use notebook Al at Google it's free upload 100 PDFs or the most complex stuff and then call in and talk to the AI live and you're like oh yeah that's coming you know like all these are experts that you can slack with so I've got on the real Vision platform I've built a a r bot in my voice which is trained on all of my free content and that's my Twitter feed that is my every free video I've put out and I gave it a 100 books that matter to me wine books to finance books and you can talk to me in real time about all of the topics that are me and by the end of this year next year you'll be able to arrange a zoom call with it yeah exactly right because we've already got a video version of me out they're all going to merge into one thing which is you get to have one-on-one with me completely real time and then it'll know about each one of your listeners as well each person subscribing it will know their in individual stuff it will have memory and so again all of a sudden you're reproducible yes and that's scary and crazy and under IP law and other things like that there'll be jurisdictions that can copy you which is even scarier so what do that mean it means that the AIS will have an advantage over humans from a capital allocation organization perspective when they're in control at the top humans plus that AI will have it as well and this link to labor is broken and the example I give is the fed's Mandate is two things right unemployment and price stability this could be massively deflationary or for society yeah and usually what happens is you lower rates and then people and hire more people oh no they'll just go and hire more gpus you know they'll give more money to Azure and whoever else and then what happens oh dear the FED actual fed mandate is bked you know that's kind of scary because even if we even if we try and focus on GDP growth we don't know who it cruise to well it'll crw to Capital right yeah Rich will become even richer so then what are we supposed to be targeting as a government I don't think anybody's thinking this stuff through yet it has to be like Universal jobs programs it's like this is a big economic impact than Co ever was right and GDP could go up but more and more people could be unemployed because they're like horses in the previous generation you know you kind of have some of these things like the C Doors level of labor GDP has been roughly stable that's cuz we haven't had anything that out competes humans yet no but the houses of the fure future will be 100% built by robots the fields will be tilled by robots the only restriction on the physical robots is that there's only 70 to 80 million cars and motorcycles built a year so we need to get through that 70 to 80 million but in 10 years of course there'll be billions of robots you know like what are the functional components of a robot versus a car it's easier to build a robot than it is to build a car at Mass scale right and China will be churning these things out across the world what's the functional requirement to build an accountant in terms of energy cost now you build it once and you hit replicate and you call into Andy the accountant who's the best accountant in the world and never makes a mistake why would you use anyone except for Andy right but there's gonna be a tremend there's going to be a tremendous fight from a lot of these professional lobbies right you don't need surgeons robots plus AI equal better you don't need lawyers you don't need accountants you don't need any of the Professional Services which are knowledge scarcity workers where they price accordingly that's all gone well I mean so yesterday the deal was done with the doc Workers Union in the US taking it up to I think $65 an hour $200,000 a year for some Doc workers long shoran Union yeah and forbidding Automation in Doc wow you know you remember these kind of strikes this was the kind of ultimate thing so you can have that regulatory impulse right you forbid this technology from being used that doesn't turn end up well usually and again this is a direct transfer of capital it's basically a handout right because you're intervening with Market forces so we could have that and we could have this resistance of of L like you know I want artisanal humans operating on me yeah I think all politics is going to go away from Capital versus labor and go towards humanists versus transhumanists it's acceleration decelerate that's the new political class but from a game theoretical perspective can you afford to be a desel this is the question right or decelerate I think people will because they The Dock Workers I mean what they've done is basically nailed themselves and nailed their own coffins for the for the next five years of no robots well again it's an extraction tax right that occurs from certain parts of the economy to others and we're subsidizing them because we're paying higher prices and the higher prices are going to their pockets so the interesting thing here is like now you see Doge right Department of government efficiency they're applying AI to everything you know like I'm building a team of gpus or whatever how long will it be until every single government decision is checked by an AI just like it'll be medical malpractice for every medical decision not to be checked by it's inevitable right yeah but then that makes it much harder to have some of these outcomes like a lot of the fat being cut from the current government Workforce is because of incompetence bureaucracy other elements right these paybacks inertia is the other big one inertia yeah like uh the claim Christian foso Jamie wrote this book um I can't remember the name but they had this concept of you know predictable corruption as being okay for emerging markets it's like a tax and then in the west what you have is embedded corruption like why does it cost $5 billion to build a ground zero rail station or the train between LA and San Francisco it's embedded corruption effectively right AI can see through that that's the question is what moves faster and one of these things is who moves faster so because what you'll have is Nations become competitive so your comparative advantage disappears like if you want to get a job done you can Outsource it India so like people like emad you say that AI is better than any Indian programmer why are you negative in India are you shorting emphasis I'm like of course I've been a short emphasis they just replace all the Indians with Indians plus Ai and their profit margins will do that and they've got all the sales channels right so I think that certain parts will be protected but those parts that are protected are the parts that have driven inflation in the us if we deconstruct inflation it's not in the market competitive areas it's education real estate healthare yeah these areas right and we all know those can be slashed on the administrative side we know that you can have cheaper Healthcare with AI cheaper education in a better education with AI better Healthcare with AI and I don't think people are going to put up with the rubbish they have like why does America spend more than anyone but have worse Healthcare outcomes people are done you know similar education they're done the other thing is we're both financial markets people as well I mean what is the role of of investors in a world of a AGI I don't see how what Edge we have yeah maybe long-term macro connect the dots views is more difficult but it's only a matter of time but for anything else it's pretty right what what is the financial Market at that point Point well on a short-term basis you know humans been out competed by AI computation for quite a while now right yeah yeah um but then one of the things is I when I was a hedge fund manager one of the things that I was taught that c stuck with me is emad follow the process no matter what because performance comes and goes but if you say you're stuck to your process and the allocates have allocated to that it'll help you out and this is what we see a lot like um look at poor Hugh Henry right he was the China there then turned China bull it wasn't good for his assets cuz he was there as the asset allocation choice you know and we've seen this over and over again with our colleagues like stick to process AI is really good at sticking to process so that's number one but what humans like is that human to human connection this is the private Banker type experience right like I trust you and the bug stops with you when it goes there so I think that we should expect Finance to become more efficient we should expect sance to have a dual track where you have AIS working with each other for credit and other checks like if you have a commercial bank that's fully AI driven with smartest AIS in the world what are their Nims going to be what are their like roas going to be it'll be better than anyone right and everyone will have to upgrade to that so we should have more efficient stabilized Finance but it'll be slow then fast to adopt within a market sense you'll have to compete more and more with these AIS and one of the D is things like false news or slightly false news right as it interacts with that like how do you compete against that how do you know what is truth from false as you have people saying different things because we start to measure these socials and other things night now and we're not sure what happens then uh particularly when you might have concerted attacks like you'll have ai market makers probably you'll have different types of things because the money is there but at the very least there is no excuse now for any active manager not to follow their process and use AI right now although they are resistant to doing that but most active anything with a process can be just done by Ai and what's the point of having the humans doing it right so therefore how do the humans compete well so with anything that's process driven I think that you have different stages of this right you have the eventual element here again like you look you get the super enhancement first you have the super enhancement in that there's no excuse to say I'm not using AI to make sure that your money is invested going this cuz inherently what you have is known games and like these unknown games markets are unknown games and allocators are what matter here right like if you are a fund manager who do you go after are you going after retail typically no the big ones are the Pension funds and others and they follow a Yale type endowment strategy where they're allocating different buckets that's not going to change because of AI necessarily right they'll be allocating to managers who they can blame if something goes wrong if they don't follow the process because they want them to operate within this discretionary built portfolio they will give money to managers I think they're the employ AI first and then eventually most of the premum of the market might be removed I think that's the danger right yeah yeah and again it'll be removed by people who rather than charging 2 and 20 are charging 0.2 like your Robo advisors your Robo advisor as good as Jim Simmons you know yeah you will just have your own agent that does your investing and you tell it whe whether I don't even know how returns are going to work whether everything just mirrors GDP plus or minus some risk or I don't know well again like what is the nature of capital right like it adjusts um because it's not a index on productivity of a country necessarily anymore right right like again we I find it difficult to see inflation where we're going yeah that's a fundamental thing so we're in a massively deflationary environment with high amounts of unemployment or underemployment which means there's lower aggregate demand for physical things versus digital things and that's not a pretty environment full stop right again companies the large companies and capital holders can acrw even faster but yeah that it's difficult to see where that goes because then your base is basically Capital preservation more than anything else and the other flip side of that is because AI can build AI it can build businesses really fast it can copy your business you start a business I want to copy your website business my agent does it for me I launch it destroys your business somebody else comes along destroys m i mean Capital formation and destruction is going to be violently fast yeah Jeff Bezos said your margin is my opportunity right yeah exactly because he employed cash flow and float incredibly well in Amazon that's why there was no profit Amon he could have made profit he's like I'm using my float and my cash flows to crush everyone else right now it's your humans are my opportunity like you got a business with humans I got a business without humans and again once you have the ability to have that AI agent that I'm talking to you like I am now and I'm instructing it and then eventually the AI is the other side instructing me how will you ever know the difference for any non-physical based thing and then physical comes a few years later once we can build enough robots and then what what are we you know because if we don't actually need to get a download from our AIS because they're doing stuff on our behalf what active role do we play in that side of Our Lives that we have these we have our digital Persona that lives its own life our physical lives another life you got digal twin I mean maybe this is again like like the good old Renaissance medich is like what happens when you're post Capital we see it with a lot of rich people right that we know like they look for meaning they don't find meaning you have to basically articulate elements of meaning yeah um for the masses especially when the American dream the British dream everything is up ended by this the classical social contract yeah so a lot of people will turn to religion they will turn to extremist movements they will turn to these other things and those will themselves will be Amplified by this technology right because of choice architecture yeah you know like you saw Isis Amplified by technology y right you see the far right far left movements ampli technology I think the middle basically erods and the middle disappears completely um because people want Something to Believe In given that they can't believe in the American dream or similar anymore and I think that we're seeing this in the move from America from being a good power to a great power you know like Trump in his first time was very basy and you didn't really know what he was doing he didn't really have the authority to push things through now America's like going to Europe and saying you're a bunch of pansies you know and they're just being very straight and they're kind of being stackle bber in a game the like you don't do what I say I put tariffs on you we are not going to try and be multilateral anymore we're going to be great we don't care about if it hurts your feelings or any of that stuff and we'll see other nations doing doing the same like we see in Germany the new leader basically say we can't rely on America anymore you know they're not going to have our back they're not going be multilateral and we've got to be there for ourselves and so this will change game theoretically at a country and social level with multilateralism giving way I think with again people wanting simple narratives I mean it's going to be a fascinating world now you're working on something right now that's interesting as well talk to me what you're up to so I'm kind of left stability when I was like am I going to raise loads of money versus these other ones like I raised 100 million before I left incredible valuations and I was like raise billions compete no it's going to be a few people building these walls and the cost is going to zero I got into this when I stopped being a headr manager and my son was diagnosed with autism and I built an AI team for that and I worked on uni project for Co and get the technology and I was like what I really want to build is AI that matters for humans education Healthcare government who's building that Ai and especially we talked about earlier these biases you want to be able to control the data and the models and have that as infrastructure AI for every regulated industry and those need open data so we designed a project called the intelligent internet where we building that um so you'll have open data sets and models for every nation every country utilizing crypto principles as well we're figuring out currency and other elements around that I mean you talked about this in our very first conversation is like we need a globalized specialized AI for different countries different areas all of this stuff yeah and you're seeing countries saying that right now because think about your kids your nephews your nieces whatever you want to know what's in the AI that teaches them because they will trust that more than anything like again if you try grock sexy mode which you know Apple might have really is that what you've been doing in your spare time I have to test the Technologies man you try these things they're crazy like we will trust the AIS more than we trust anyone for sure and so I view the world as basically having three four different types of AI your Super Genius polymath AIS and that's your anthropics Googles and others multi-billion dollar things like R1 didn't show the scaling didn't work it just showed that you could make things more efficient but scaling still helps right yeah then you've got your personal AIS Apple AI is a bit stupid now but Alexa is now smart and Alexa has memory you know Alexa will be very convincing s your stuff and your Google AI or tensent AI then you've got these open we like llama and other things but meta is already selling way parts of the latent face for advertising like the CPM I was I just done out for language models is like 10 20 times larger than for normal Google really already putting advertising on this stuff yeah Sund petai said in the last Google earnings call we're going to be selling space inside the lated space so rather than raiser it say Gillette you know and things like that Jesus of course they are that's the business model those the open weight models again you don't know what's inside them but I think for every regulated industry you need open data open weight models and the way models are trained as curriculum learning base models are just generalized knowledge high school then you got your specialization then you have your localization and you actually train them one after the other after the other so I was like that should be open infrastructure and can we have that from a cryptoeconomic perspective so actually like we'll be coming up with our white paper soon I can talk about it briefly it was like Bitcoin is provision of compute what if we had the same creating a store of value that's a blue chip asset but using that compute to build these models and then putting compute in every nation to secure that then you have a currency that's linked to intelligence that's helping everyone go through their cancer Journey proof of compute essentially proof of beneficial compute yeah okay like you've got core teams working and using the outputs and a lot of the Bitcoin miners have actually become AI miners now but they've got nothing to run that's right but we need to build this because I don't want a Marketplace Initiative for my kids education I want to have a very high trust asset that's built fully as the model that teaches my kid I don't want it to tell my kid that Gillette is the best a man can get you know it might be so I think that we can build open infrastructure that way and we can adopt some of these mechanics so we're finalizing this but we're good at building models ultimately in data sets and someone's going to do it and if we do it in the open then you can achieve real change because the needs of people are very defined like your Healthcare AI right now as r on the edge you're using perhaps that much in 10 years you'll have a whole team of AIS working for you right same for Education same for every country every state and I'm like that's physical infrastructure that's like Bitcoin mining it's actual physical chips and they'll be running this so why don't we use that to secure a currency and that currency is helping people and then it interacts with your personal Ai and your super genius sayi and we can bring together teams in every nation and every sector to think about what's the full stack for cancer what's the full stack for Alzheimer's and have that as a public good at the very least you know I think you'll help people at the very best you could build a new model and actually know at the very very best we're trying to put together teams to think about what is post labor economics in an aih because money probably you won't need but in the interim period people want a liquid investment in Ai and a Bitcoin but with AI is a good one maybe on a n National basis we go back to classical crypto so one of the things we're exploring right now is National currencies like you remember when we started in crypto over a decade ago you could mine on your laptop you could mine on your chip yeah then it became a big question which was do we allow aex these specialized chips that's right and then it became about proof of stake as well whereby it moved from labor earning the means of production to Capital earning the means of production it's very true very true yeah and that happened at the same time as this massive libertarian you can build anything which then led to all the crapiness in crypto as well a lot of the crapiness about this casino thing because there are no ground rails it should be unrug so I'm like maybe we can go back to that from a national currency like what if everyone got Universal basic AI which for me is opportunity I don't like Ubi and we can discuss that if you want and then by using and providing ubii UB Universal basic AI they M currency that could be interesting from a cach perspective there could be an index on productivity of a Nation cu the computer of a nation has to do that but we're not sure yet because this is a hard problem at the very basis though we know if we have a bunch of clusters and we have a specialist cancer cluster we can help every single person going through their cancer Journey with an AI that performs human doctors on diagnosis and empathy but do that when this is going to have to be a state Le decision to use this doesn't have to be okay like if you one of the nice things about open source AI is that it's permissionless in adoption so only stable defusion you had 100 million downloads because people just take the weights and do what they want with it yeah if you built a cancer AI half of the people that are listening to this will be affected by cancer in their lives right and it out forms human doops on empathy and diagnosis anyone can take that and make that available to anyone going through their cancer Journey how do you talk to your kids what's the latest knowledge on cancer and their lives will be better and they'll probably work on the edge but someone's going to build it like right now it's crazy that you don't have access to this technology right no one's organized this because it hasn't been the imperative but we know it has a social benefit and so that's why we thought link it to a crypto asset and you build a high trust crypto asset you don't need government permission but even then every government wants this technology because you can't Outsource your brain of your country to open AI or anthropic or Google or anyone like that cuz they misaligned so the model we have here is national champions that are 100% locally owned that implement this technology and bring in all the locals there so again we'll show more details about it but we think that's the appropriate governance structure and you that's something you've been talking about for a long time it just it needs to be localized and it physically needs to be localized your healthc care supercomputer that runs your National healthcare service and your healthare need to be localized at a national level and on your pH or your local devices and we're seeing now you're getting to that point where again it's good enough fast enough and cheap enough to do that again I bring it to the point of Education you want to have an education AI That's National that reflects your local culture but at the same time you want to be able to edit it right for your own child because it'll be the most persuasive thing ever and if it's not transparent how are you going to do that and the wonderful thing is once you've built this it then becomes a question of well let's get more and more AXS and compute on board to to run this and once you give everyone Universal basic AI like I said Ubi I don't really like because it doesn't have the right incented mechanism and I couldn't make the math work this Universal basic income was Universal basic AI for me is universal basic opportunity you want to go and build businesses you want to explore the wonders of the universe you go and just do it right right now maybe a billion people in the world have access to these AIS out of seven billion but won't I've felt through this as as well but doesn't competitive advantage of humans using it go to zero over time and pretty short period of time as well well I think it depends on whether you're saying competitive advantage in classical economics or competitive advantage in terms of advancement because again we're talking about what does a post AI future look like right like most money money is um securitization and leverage shall we say Capital telling a story about an asset and how well you tell it if you kind of break that down AIS can tell it better they can allocate better A lot of the friction that comes from these like allocation decisions the AI will be able to remove the friction which then again has comparative advantage so capital and resource allocation can flow faster like right now can we feed every single person in the world yes can we give every single person in the world a mental health body yes do we no because a lot of people are invisible there's a misallocation incentive and others so the way I view it is that we can can move to an abundant Star Trek type future it's just the interim is very ugly and if it goes the wrong way we end up in a like Star Wars type future of you know like it's not as good like these destructive Cycles it feels very much like Foundation actually you know like this Isaac Asimov book whereby most of our problems are allocative we have enough resources we have the ability to show people progress there every single person like in the young ladies Illustrated primer will have an AI beside them who's built that AI for what purpose and is it a public common good or is it trying to sell you ads and gain your attention for this more short-term thing again like because we think in this way we look at the ultimum which is well where is any comparative advantage why do you need money at all when you can do instant Bing you know what does this done to political power instant reallocation of resources on a globalized level because AI can do it yeah what is money but the reality is this every program is still isn't using AI right which is mindboggling right all know like I remember we we were playing around on thing I said I did deep research of you that's right yeah that's right I was like bro look at this deep research let's do a paper on R pal and his approached to everything it was like 80% good enough it was like what but not I mean within minutes okay there were some mistakes doesn't matter CU that would have taken how long but the reality is I bet 9 90% of financial analysts still aren't using deep research no people still haven't seen it and this the thing it will come in a come in waves of adoption right because it has to come to where you are and this is why like I said if my main thing is when I can have a chat with my air like I'm chatting to you now it just seamlessly integrates and so we'll come in waves of adoption I think we'll have some time but we need to have coordination mechanisms and I think crypto is great for that um I think we need to give people things to believe in like a very practical thing if you've gone through the cancer Journey imagine if there was an AI that could coordinate and help you through that not from a diagnosis not from a treatment perspective of just being there and again AI is outp human dos and empathy what if every child had this technology like there was a study done in Nigeria two months of chat GPT access improved educational outcomes by two years and what's the cost to give that to every Nigerian even if you do it with solar power it's like nothing yeah so I think we can think bigger it'll become more competitive but this is the nature of the economy as you have these waves of Innovations just the diffusion and pace of the Innovation faster and a lot of these classical structural things have broken down I think things will be challenge like IP copyright it's so hard to maintain in this world I mean maybe blockchain rails is one way of doing it so at digital speed in a digital age we can prove authenticity of both people content stuff but then how does copyright apply to a robot that's walking around like there was this album silent album that just released by Kate Bush and Damon alurn and others saying well you can't have this for music right stop scraping but other countries allow scraping of music and so is the Optimus robot going to close its ears when it hears Tor Swift doesn't really make much sense does it no and in fact the reason we because it's it's replicating us right so are you infringing IP rights because you are Paul McCartney and you heard songs in your youth from Fats Domino and regurgitated it into Beatles songs it's transformative right and again this is copyright moment but then you extend that like why do you have patents what happens when you have teams of AIS and humans patenting everything doesn't make sense we had patents because what we were trying to protect was the value of smart people coming together to build and now you have the first discoveries done by AI is that patentable like anyone who's decent at mathematics like I'm decent I'm an ox mathematician it's been so much fun using the AI to do kind of the mechanisms on Game Theory topology and others because I can just bounce back things and forth and I can build brand new social constructs and other things like that but it just requires one of me now it doesn't require a team of me anymore as you get to in silico biolog local things again is that patentable does it make Senseo generates songs in seconds and now with I've had a thesis for a long time which everything digital goes to zero in value cost of consumption has gone to zero in the private hor wave the cost of creation goes to zero in this wave that's right that's right and the only thing that has digital scarcity is obviously blockchain rails uh and that doesn't apply to everything so it's you know as you and I talked about this is a deflationary nuclear bomb of which people don't understand will completely restructure how an economy even works this is why my take was you need to have a blockchain cryptocurrency new economy for this I think Bitcoin has its place is decentralized fully or you know it's got two minores that make % but you know what I mean it's establish a l effect yeah anytime you create new money you have to take money from somewhere else that's why this mean coin thing was a bit crazy and other stuff like that so I was like create the generative AI High trust asset and capital will flow to that cuz there's nothing to invest in apart from Nvidia and a few others right now right that's right make it liquid then localize it maybe with national currencies controlled and organized by national champions then you can think about what the economy looks like in the future and maybe distribute it better but this is hard we'll need to use the AIS themselves to help us because it's like turkeys at Thanksgiving you can't respond to that knif coming even if you go to Turkey Heaven afterwards which is positive right and again I give that a very practical example of the fed you know in 10 years their entire mandate has to completely change can they respond to that and right now they're the most powerful people in the US economy in many ways like what is the US deficit driven by interest rates effectively an interest exps they're heading towards deflation will they cut in time maybe Trump's firing all the federal workers to increase deflation I don't know or unemployment probably not even dsge models don't make sense in this environment so I I think it's about you've got a window where you can accumulate normal Capital faster than anyone by adopting this technology companies that adopt the technology will massively out compete companies that don't then after that it's about meaning it's about how do we build new social constructs in order I've put this about five years before what I call the economic Singularity meaning Beyond which don't really know how economies work anymore like kind of think you got five years to make as much money as possible um because things will be weird doesn't mean there's no opportunity whatever but it just becomes not really understandable by the construct of economic theory competition Theory yeah all of that kind of stuff I think so I think five 10 years is what I've pegged as well again let's leave aside the ASI Super Genius super Chef stuff you know like that's a bit hard to see so that's why I was like set defaults build it out and create the highest trust digital Asser ever that's institutional than Capital flow and I think this is all incredibly bullish for digital assets as well because as you face economic slowdown you face all of these the US in the lead deregulating or properly regulating shall we say because the problem was the politically driven aggressiveness against crypto Capital will flow into digital assets and high quality digital assets so as people bring those on like people will be like this is provable scarcity this is rapid Capital formation allow more crowdfunding allow this stuff to go to stimulate the economy by increasing monetary velocity you know and you will have your AI Robo advisors to help you do that so I think you'll have this whole stream of crypto Robo advisors and other things so the money will go from one area to another particularly like I said as we get this inflationary High base moving to deflation probably in the next two years yeah and then they try to shock it but they can't and also this is happening at the point whereby all the debt is maxed out in the western economy yeah we're just recycling debt re rolling it that's all we're doing now and debasing the currency while doing it good old payment in kind right well I mean like this is the thing like if you're going to have a covid style fiscal reaction you're not going to have it probably for four years even if the economies break down after five years instead you're going to be stuck in this stagflationary collapse where there's more and more people like all these Federal workers being fired what are they going to do the moment the truck drivers are replaced by little robots sitting in the chairs what are they're going to do you know like again this is the hysteresis element it's the oneway doors it's the unchanging element of this that's really scary and again I think we need coordination we need to have Alternatives and we need to articulate the future on the other side as well because it comes down to like what do I want I want in the US to consume right now but I think you'll see a rebirth of religion you'll see a re meaning you'll see a rebirth of extreme and non- extreme things but Extreme to be honest resonates better it's going to be a very interesting few years and uh let's see what develops but I'm also interested to see what you're working on so we'll see as you uh as you get to release more information on it we're looking forward to seeing it yeah looking forward I think again it's the most exciting of times the most terrifying of times but you know would you live in any other time no and what a time to be alive this is the greatest moment in all of humanity because we've got a civilization scale event happening and we get to see it and I think the wonderful thing is people don't believe they have agency or they can be a part and they do uh like now what we've done is every single person that applies to our company doesn't matter what you have to do a 30 minute course on cursor you know this coding AI even if you're doing HR or whatever because anyone can use it or repet agent 30 minutes on that you sudden I can build apps you know like what is that just like you use notebook Alm so everyone who's listening to this should use repet agent and should use notebook LM once and your entire view on this changes because you're like well this is coming I'm scared you're like I can do things and deep research that's the other one yeah it's unbelievable deep research it's it's crazy it's still not very good in terms of you know it can be better it will get better tomorrow will be better than today that's a that's a guarantee yeah and think of this again like the way you have to view in the future is that you'll set you're typing an essay or something like that on your laptop and you'll say look I want you to give me 15 versions of this that make it better and then take it down to three and explain the changes I'll be back tomorrow you close your laptop and then overnight it does all this analysis it does a nice report to you it knows exactly what you like and don't like and it shows you all these different things like I've been here and there and I've done this and that and that's just going to change the way that we work right I might try I'm writing GM this weekend I might try it on something i' I've written plenty using AI but I wonder if I can give deep research something really meet mey to do that something unique and just give it a go just for the fun of yeah you know I'll be able to do graph some things soon like good it's going to be crazy brilliant all right my friend great to chat and uh let's see where this all goes yeah pleasure as always so as ever a lot in that conversation we kind of ran out of time we could have run run for um probably another hour or two cuz there's a lot to talk about what was interesting from emad is if you go back to his earlier interviews he was he was giving timelines and what happened was most of those timelines were beaten by the speed of development of AI things happen much faster than anybody expected and now emad kind of doesn't give timelines anymore it's like well I don't know and I think that's a that's a true and real answer is we just don't understand anymore the pace at which this stuff is accelerating we do know the economic impacts are coming and they're going to be massive and the societal impacts and his idea of combining this with crypto and figuring out new different ways to spread the wealth of this space um or the money created in this space to more people I think is a really interesting concept so let's see where that goes but just strapping because this ride is going to be wild see you next [Music] time y it's good to be here at the main blockchain event of this year you get to speak to the smartest people people like you trying to figure this out but also the people on stage they're the experts what more can you ask it's a brilliant brilliant event and you'll come away with lots of new ideas and a better understanding of this incred incredible exponential world so we get all of that all in one place see you at token 2049 in [Music] Dubai hey thanks for sticking around to the end uh look if you enjoyed it hit the Subscribe button and check out the video here on the right hand side I'm sure you'll enjoy that one as well and if you're ready for more go to real.com SL jooin I'll see you there