someone was leaking information on Google and this stuff is incredibly secret so what are the secrets well the first is Eric Schmidt is the former CEO of Google who grew the company from $100 million to 180 billion and this is how as someone who's LED one of the world's biggest tech companies what are those first principles for leadership business and doing something great well the first is risk taking is key if you look at Elon he's an incredible entrepreneur because he has this Brilliance where he can take huge risks and fail fast and Fast failure
is important because if you build the right product your customers will come but it's a race to get there as fast as you can because you want to be first because that's where you make the most amount of money so what are the other principles that I need to be thinking about so here's a really big one at Google we have the 72010 rule that generated 10 20 30 40 billion dollar of extra profits over a decade and everyone could go do this so the first thing is what about AI I can tell you that
if you're not using AI at every aspect of your business you're not going to make it but you've been in the tech industry for a long time and you've said the Advent of artificial intelligence is a question of human survival AI is going to move very quickly and you will not notice how much of your world has been co-opted by these Technologies because they will produce greater Delight but the questions are what are the dangers are we advancing with it and do we have control over it what is your biggest fear about AI my actual
fear is different from what you might imagine my my actual fear is that's a good time to pull the plug this has always blown my mind a little bit 53% of you that listen to the show regularly haven't yet subscribed to the show so could I ask you for a favor before we start if you like the show and you like what we do here and you want to support us the free simple way that you can do just that is by hitting the Subscribe button and my commitment to you is if you do that
then I'll do everything in my power me and my team to make sure that this show is better for you every single week we'll listen to your feedback we'll find the guest that you want me to speak to and we'll continue to do what we do thank you so much [Music] Eric I've read about your career and you've had an extensive a varied a fascinating career completely unique career and that leads me to believe that you could have written about anything you know you've got some incredible books all of which I've been through over the
last couple of weeks here in front of me I apologize no no but I mean these are subjects that I'm just obsessed with but this book in particular of all the things you could have written about with the world we find ourselves in why this why Genesis well first thank you for I wanted to be on the show for a long time so I'm really happy to be able to be here in person in London Henry Kissinger Dr Kissinger ended up being one of my greatest and closest friends and 10 years ago he and I
were at a conference where he heard heard Demis hbus speak about Ai and Henry would tell the story that he was about to go catch up on his jet lag but instead I said go do this and he listened to it and all of a sudden he understood that we were playing with fire that we were doing something that we did not understand it would have the impact on and that Henry had been working on this since he was 22 coming out of the army after World War II and his thesis about Kant and so
forth as an undergraduate at Harvard so all of a sudden I found myself in a whole group of people who are trying to understand what does it mean to be human in an age of AI when this stuff starts showing up how does our life change how do our thoughts change humans have never had an intellectual Challenger of our own ability or better or worse it just never happened in history the arrival of AI is a huge moment in history for anyone that doesn't know your story or maybe just knows your story from sort of
Google onwards can you tell me the sort of inspiration points the education the experiences that you're draw on when you talk about these subjects well like many of the people you meet um as a teenager I was interested in science I play with model rockets model trains the the usual things for a boy in my generation I was too young to be a video game addict but I'm sure I would be today if I were that age um I went to college and I was very interested in computers and they were relatively slow then but
to me they were fascinating to give you an example the computer that I used in college is 100 million times slower 100 million times slower than the phone you have in your pocket and by the way that was a computer for the entire University so Moes law which is this notion of accelerating density of chips has defined the wealth creation the career creation the company Creation in my life so I can be understood as lucky because I was born with a with an interest in something which was about to explode and when when sort of
everything happens together everyone gets swept up in it and of course the rest is history I was sat this weekend with my partners little brother who's 18 years old yes and as we ate breakfast yesterday before they flew back to Portugal we had this discussion with her family that um her dad was there her mom was there Raph the younger brother was there and my girlfriend was there difficult because most of them don't speak English so we had to use funnily enough AI to translate what saying but the big discussion at breakfast was what should
Raph do in the future he's 18 years old he's got his career ahead of him and the decisions he makes as is so evident in your story at this exact moment as to what information and intelligence he acquires for himself will quite clearly Define the rest of his life if you were sat at that table with me yesterday when I was trying to give Raph advice on what what knowledge he should acquire at 18 years old what would you have said and what are the principles that sit behind that the most most important thing is
to develop analytical critical thinking skills I to some level I don't care how you get there so if you're if you like math or science or if you like the law or if you like you know entertainment just think critically in his particular case as a as an 18-year-old what I would encourage him to do is figure out how to write programming to write programs in a language called python python is easy to use it's very easy to understand and it's become the language of AI so the the AI systems when they write code for
themselves they write code in Python and so you can't lose as developing Python Programming skills and the simplest thing to do with an 18-year-old man is say make a game because these are typically Gamers stereotypically make a game that's interesting using python it's interesting because I wondered if coding you know I think 5 10 years ago everyone's advice to an 18-year-old has learn how to code but in a world of AI where these large language models are able to write code and are you know increasing every month in their ability to write better and better
code I wondered if that's like a dying art form yeah a lot of people have posed this and that's not correct it sure looks like these systems will write code but remember the systems also have interfaces called apis which you can program them so one of the large Revenue sources for these AI models because these companies have to make money at some point right is you build a program and you actually make take an API call and ask it a question typ typical example is give it a picture and tell me what's in the picture
now can you have some fun with that as an 18-year-old of course right so so when I say python I mean python using the tools that are available to build something new something that you're interested in and when you say critical thinking how does one what is critical thinking and how does one go about acquiring that as a skill well the first and most important thing about critical thinking is to to distinguish between being marketed to which is also known as being lied to and being being given the argument on your own we' have because
of social media which I hold responsible for a lot of ills as well as good things in life we've we've sort of gotten used to people just telling us something and believing it because our friends Believe it or so forth and I strongly encourage people to check assertions so you get people say all this stuff and I learned at Google all those years somebody says something I check it on Google do I and you then have a question do you criticize them and correct them or do you let it go but you want to be
in the position where somebody makes a statement like did you know that only 10% of Americans have passports which is a widely viewed but false statement um it's actually higher than that although it's never high enough in my view in America but that's an example of assertion that you can just say is that true right there's a a long meme of American politicians where the Congress is basically full of criminals um it may be full of one or two but it's not full of of 90 but again people believe this stuff because it sounds plausible
so if if somebody says something plausible just check it you have a responsibility before you repeat something to make sure what you're repeating is true and if you can't distinguish between true and false I suggest you keep your mouth shut right because you can't run a government a society without people operating on basic facts like for example climate change is real we can debate over whether it's how to address it but there's no question the climate is changing it is a fact it is a mathematical fact and how do I know this and somebody will
say well how do you know and I said because science is about repeatable uh uh experiments and also proving things wrong so let's say I said that um climate change is real uh and this was the first time it had ever been said which is not true then a 100 people would say that can't be true I'll see if he's fa and then and then all of a sudden they'd see I was right and I'd get some big prize right so so the falsifiability of these assertions is very important how do you know that science
is correct it's because people are constantly testing it and why is this skill of critical thinking so especially important in a world of AI well partly because AI will allow for perfect misinformation so let's use an example of Tik Tok Tik Tok can be understand it's called the Bandit algorithm in computer science in the sense of the Las Vegas one arm Bandits do I stay in the Bandit machine and I keep on this slot machine or do I move to another slot machine and the the Tik Tok algorithm basically can be understood as I'll keep
serving you what you tell me you want but occasionally I'll give you something from the adjacent area and is highly addictive so what you're seeing with social media and Tik Tok is a particularly bad example of this is people are getting into these rabbit holes where they all they see is confirmatory bias and and the ones that are I mean if it's fun and you know entertaining I don't care but you'll see for example there are plenty of stories where people have ultimately self harm or suicide because they're already unhappy and then and then they
start picking up unhappy and then their whole environment online is people who are unhappy and it makes them more unhappy because it doesn't have a positive bias so there's a really good example where um let's say in your case you're the dad you're going to watch this as the dad with your kid and you're going to say you know it's not that bad let me show you some let me give you some good Alternatives let me get you inspired let me get you out of your funk the algorithms don't do that unless you force them
to it's because the algorithms are fundamentally about optimizing an objective function literally mathematically maximize some goal that has been trained to they just in in this case it's attention and by the way part of it part of we have we have so much uh outrage is because if you're a CEO you want to maximize Revenue to maximize Revenue you maximize attention and the easiest way to maximize attention is to maximize outrage did you know did you know did you know right and by the way a lot of the stuff is not true they're fighting over
scarce attention there was a recent article where there's an old quote from 1971 from herb Simon an economist at the time Carnegie melan who said that um economists don't understand but in the future the scarcity will be about attention so somebody now 50 years later went back and said I think we're at the point where we've monetized all attention an article this week two and a half hours of videos consumed by young people every day right now there is a limit to the amount of video you can you know that because you have to eat
and sleep and to hang out but these are significant societal changes that have occurred very very quickly um when I was young there was a great debate as to the benefit of television and you know my argument at the time was well yes we did you know we did you know rock and roll and and drugs and all of that and we watched a lot of Television but somehow we grew up okay right so it's the same argument now with a different a different term will we will those kids grow up okay um it's not
as obvious because these tools are highly addictive much more so than television ever was do you think they'll grow up okay I personally do because I'm I'm inherently an optimist I also think that Society um begins to understand the problems typical example is there's an epidemic of harm to teenage girls uh girls as we know are uh more advanced than boys at those uh you know below uh and the girls seem to get hit by social media at 11 and 12 when they're not quite capable of handling the the rejection and the emotional stuff and
it's driven uh you know emergency room visits self harm and so forth to record levels it's well documented so Society is beginning to recognize this now F schools won't let kids use their phones when they're in the classroom which kind of obvious if you ask me um so developmentally uh one of the core questions about the AI Revolution is what does it do to the identity of children that are growing up your values your personal values the way you get up in the morning and think about life is now set it's highly unlikely that an
AI will change your programming but your child can be significantly reprogrammed and one of the things that we talk about in the book is what happens when the best friend of your child from birth is a computer what's it like now by the way I don't know we've never done it before but you're running an experiment on a billion people without a control right and so we have to stumble through this so at the end of the day I'm an optimist because we will adjust Society with biases and values to try to keep us on
a moral High Ground human life and so you should be optimistic for that because these kids when they grow up they'll live to a 100 their lives will be much more prosperous I hope and I I pray that there'll be much less conflict uh certainly lifespans are longer the the likelihood of them being injured and and in wars and so forth are much much lower statistically it's a good message to kids as someone who's LED one of the world's biggest tech companies if you were the CEO of Tik Tok what would you do because I'm
sure that they realize everything you've said is true but they have this commercial incentive to drive up the addictiveness of that algorithm which is causing these Echo Chambers which is causing the rates of anxiety and depression amongst young girls and young people more generally to increase what would you do so so I have talked to them and to the others as well and I think it's it's pretty straightforward there's sort of good revenue and bad Revenue when we were at Google uh Larry and ser and I we would have situations where we would improve quality
you know we would make the product better and the debate was do we take that to revenue in the form of more ads or do we just make the product better and and that was a clear choice and I arbitrarily decided that we would take 50% to one 50% to the other because I thought they were both important so and the founders of course were very supportive so Google became more moral and also made more money right all of the the there's plenty of bad stuff on Google but it's not on the first page that
was the key thing the alternative model would be say let's maximize Revenue we'll put all the really bad stuff the lies and the cheating and the deceiving and so forth that draws you in it will drive you insane and we might have made more money but first it was the wrong thing to do but more importantly it's not sustainable uh there's a law called gresham's law uh it's a verbal law obviously um where bad speech drives out good speech and what you're seeing is you're seeing in online communities which have always been um present with
bullying and this kind of stuff now you've got crazy people in my view who are building Bots that are lying right misinformation now why do you do that you've got in there was a there was a hurricane in Florida and people are in serious trouble and you sitting in the comfort of your home somewhere else are busy trying to make their lives more difficult what's wrong with you like let them get rescued you know human life is important but there's something about the the human psychology where people uh people talk the there's a German world
called shoden Freud you know there's a bunch of things like this that we have to address I want social media and the online world to represent the best of humanity hope excitement optimism creativity invention solving new problems as opposed to the worst and I think that that is achievable you have arrived at Google at 46 years old 2001 2001 2001 um you had a very extensive career before then working for a bunch of really interesting companies Sun Microsystems is one that I know um very well you've worked for zero in California as well Bell Labs
was your first um sort of real job I guess at 20 years old first sort of big Tech job what did you learn in this journey of your life about what it is to build a great company and what value is as it relates to being an entrepreneur and people in teams like if there were like a set of first principles that everyone should be thinking about when it comes to doing something great and building something great what are those like first principles so so the first rule I've learned is that you need a truly
brilliant person to build a really brilliant product and that is not me I work with them so find someone who's just smarter than you more clever than you moves faster than you changes the world is better spoken more handsome More Beautiful You know whatever it is that you're optimizing and Ally yourself with them because they're the people who are going to make make the world different um in one of my books we use the distinction between divas and naves and a Diva and we use the example of Steve Jobs who clearly was a diva opinionated
and strong and argumentative and would bully people if he didn't like them but was brilliant when he was he was a diva he wanted Perfection right aligning yourself with Steve Jobs is a good idea uh the alternative is what we call a Nave and a Nave which you know from British history is somebody Who's acting on their own um their own account they're not they're not trying to do the right thing they're trying to benefit themselves at the at the at the cost of others and so if you can identify a person in one of
these teams that they're just trying to solve the problem in a really clever way and they're passionate about and they want to do it that's how the world moves forward if you don't have such a person your company's not going to go anywhere and the reason is that it's too easy just to keep doing what you were doing right and and Innovation is fundamentally about changing what you're doing up until the this generation of tech companies the most companies seem to me to be one-hot wonders right they would have one thing that was very successful
and then it would sort of um it was typically follow an scurve and nothing much would happen and now I think the the people are smarter people are better educated you now see repeatable waves a good example being Microsoft which is you know an older company now founded in basically 81 82 something like that so let's call that 45 years old but they've reinvented themselves a number of times right in in a really powerful way we should probably talk about this then um before we move on which is what you're talking about there is that
sort of founder things people now refer to as founder mode that founder energy that high conviction that sort of disruptive thinking um and that ability to reinvent yourself I was looking at some stats last night in fact and I was looking at how long companies stay on the S&P 500 on average now and it went from 33 years to 17 years to 12 years average 10 year and as you play those numbers forward eventually in sort of 2050 an AI told me that it would be about eight years well I'm not sure I agree with
the founder Mort argument and the reason is that it's great to have a brilliant founder and um and there's this it's actually like more than great it's like really important and and we need more brilliant Founders universities are producing these people by the way they do exist and they show up every year you know another Michael Dell at the age of 19 or 22 these are just brilliant Founders obviously Gates and Ellison and sort of my generation of brilliant founders Larry and Sergey and so forth for anyone that doesn't know who Larry and Sergey are
and doesn't know that sort of early Google story um can you give me a little bit of that backstory but then also introduce these characters called Larry and Sergey for anyone that doesn't know so Larry pagee and Sergey Bren met at Stanford um in they were on a grant from believe it or not the National Science Foundation as graduate students and Larry pagee invented a algorithm called page rank uh which is named after him um and he and Sergey wrote a paper which is still one of the most cited papers in in the world and
it's essentially a way of understanding priority of information and mathematically it was a forier transform of the way people normally did things at at the time and so they wrote this code I don't think they were that good a set of programmers you know they sort of did it they had a computer they ran out of power in their dorm room so they um borrowed the power from the dorm room next to and plugged it in and they had the data center in the bedroom you know in the dorm classic story um and then they
moved to a u building that was owned by um the sister of a girlfriend at the time and that's how they founded the company their first investor was a one the founder of Sun micr System whose name was Andy bealine who just said I'll just give you the money because you're obviously incredibly smart how much did he give them $100,000 or yeah maybe it was a million but in any case it It ultimately became any billion ions of dollars so it gives you a sense of this early founding is very important so the founders then
set up in this little house in menla park which ultimately we bought at Google you know as a as a museum and they set up in the garage and they had Google Google world headquarters in neon made and they had a big headquarters um with the four employees that were sitting below them and the computer that Larry and sery had built Larry and sery were very very good software people and obviously brilliant but they were not very good hardware and so they built the computers using corkboard to separate the CPUs and if you know anything
about Hardware Hardware generates a lot of Heat and the corkboard would catch on fire So eventually when I showed up we started building proper Hardware with proper Hardware Engineers but it gives you a sense of the scrappiness that that was so characteristic um and you know today there are people of enormous impact on society um and I think that will continue um for many many years what did they call you in and at what point did they realize that they needed someone like you well Larry said to me uh now these were they're very young
he looked at me and says we don't need you now but we'll need you in the future we'll need you in the future yeah so one of the things about Larry and Sergey is that they thought for the long term so they didn't say Google would be a search company they said the mission of Google is to organize all the world's information and if you think about it that's pretty audacious 25 years ago like how are you going to do that and so they started with web search eventually and Larry had studied AI quite extensively
and he began to to work and ultimately he uh acquired uh with with all all of us obviously uh this company called Deep Mind here in Britain which essentially is the um the first company to really see the AI opportunity and pretty much all of the things you've seen from AI in the last decade have come from people who are either at Deep Mind or competing with deep mind going back to this point about principles then before we move further on um as it relates to building a great company what are some of those founding
principles we have lots of entrepreneurs that listen to the show one of them you've expressed as this need for the Divas I guess these people who are just very high conviction and can kind of see into the future what are the other principles that I need to be thinking about when I'm scaling my company well the first is to think about scale uh I think a current example is look at Elon um Elon is an incredible entrepreneur and an incredible scientist and if you study how he operates he gets people by I think sheer force
of personal will to overperform to take huge risks which somehow he he has this Brilliance where he can make those tradeoffs and get it right so these are exceptional people now in our book with Genesis we argue that you're going to have that in your pocket but to whether you'll have the judgment to take the risks that Elon does that's another question the one of the other ways to think about it is an awful lot of people talk to me about the companies that they're founding and they're they're a little widget you know like I
want to make the camera better I want to make the dress better I want to make book publishing cheaper or so forth these are all fine ideas I'm interested in in ideas which have the benefit of scale and when I SC I say scale I mean the ability to go from zero to Infinity in terms of the number of users and demand and scale um there are plenty plenty of ways of thinking about this but what would be such a company in the age of AI well we can tell you what it would look like
you would have apps one on Android one on iOS maybe a few others those apps will use powerful networks and they'll have a really big computer in the back it's doing AI calculations so future success companies will all have that right exactly what problem it solves well that's up to the founder but if you're not using AI at every aspect of your business you're not going to make it and the distinction as a programming matter is that when I was doing all of this way back when you had to write the code now ai has
to discover the answer it's a very big deal and of course this was a lot of this was invented at Google you know 10 years ago but basically all of a sudden an analytical programming which sort of what I did my whole life you know writing code and you know do this do that add this subtract this call this so forth and so on is gradually being replaced by learning the answer right so for example we use the example of transl language translation uh the the current large language models are essentially organized around predicting the
next word well if you can predict the next word You can predict the next sequence in biology You can predict the next action You can predict the next thing the robot should do so all of this stuff around large language models and deep learning that has come out the Transformer paper gpt3 uh chat GPT which for most people was this huge moment is essentially about um predicting the next word and getting it right in terms of company culture and how important that is for the success and Prospects of a company how do you think about
company culture and how significant and is it and like when and who sets it so I'll give well it's almost always set company cultures are almost always set by the founders I happen to be on the board of the Mayo Clinic Mayo Clinic is the largest healthc care system in America it's also the most highly rated one and they have a rule which is called the uh the needs of the customer come first which came out of the Mayo brothers who've been dead for like 120 years um but that was their principle and I when
I initially got on the board I started wandering around I thought this is kind of a stupid you know stupid phrase and nobody really does this and they really believe it and they repeat it and they repeat it right so it's true in non-technical cultures in that case it's a healthcare for Service delivery you can drive a culture even in non-tech in Tech it's typically an engineering culture and if I had to do things over again I would have even more technical people and even fewer non-technical people and just make the technical people figure out
what they have to do um and I'm sorry for that bias because I'm not trying to offend anybody but the fact of the matter is the technical people if you build the right product your customers will come if you don't build a product then you don't need a Salesforce why are you selling an inferior product so in in the how Google works book and the ultimately in the trillion dollar coach book which is about Bill Campbell we talked a lot about how the CEO is now the chief product officer the chief Innovation officer because 50
years ago you didn't have access to Capital you didn't have access to marketing you didn't have access to sales you didn't have access to distribution hours I was meeting today with an entrepreneur who said yeah you know we'll be 95% Technical and I said why I said well we have a contract manufacturer and our products are so good that people will just buy them this happened to be a a a technical switching company um and they said it's only a 100,000 times better than its competitors and I said it will sell unfortunately it doesn't work
yet yeah it isn't the point but if they achieve their goal people will be lined up outside the door so as a matter of culture you want to build a technical culture with values about getting the product to work right and working me is not another thing you do with with Engineers is you say they make a nice presentation to you and they go I said that's very interesting but you know I'm not your customer your customer is really tough because your customers wants everything to work and free and work right now and never make
any mistakes so so give me their feedback and if their feedback is good I love you and if their feedback is bad then you better get back to work and stop being so arrogant so what happens is that in in the invent in the invention process within firms people fall in love with an idea and they don't test it one of the things that Google did and this is largely Marissa mayor we back when is one day she said to me I don't know how to judge user interface mer was the previous CEO she was
the CEO of Yahoo and before that she ran all the consumer products at Google uh and she's now running another company in uh in the Bay Area but the important thing about Marissa is she said I can't I I said well you know the UI the user interface is great at the time and it was certainly was and she said I don't know how to judge the user interface myself and none of my team do but we know how to measure and so what she organized were AB tests you test one test another so remember
that it's possible using these networks to actually kind of figure out because they're highly instrumented uh dwell time how long does somebody how long does somebody watch this how important it is if you go back to how Tik Tok Works uh one of the things the signals that they use include the amount of time you watch commenting um forwarding uh sharing all those kinds of things and those you can understand those as analytics that go into an AI engine then makes a decision as to what to do next what to make viral and on this
point of um culture at scale is it right to expect that the culture changes as the company scales because you came into Google I believe when they were doing sort of hundred million doll in revenue and you left when they were doing what 180 billion or something staggering but is it right to assume that the culture of a growing company should scale from when there was 10 people in that garage to when there's 100 so when I go back to Google to visit and they were kind enough to give me a badge and treat me
well of course um I hear The Echoes of this um I was at a lunch where there was a lady running search and a Gentleman runting ads you know the successors to the people who worked with me and I I asked them what's it going and they said the same problems you know the same problems have not been solved but they're much bigger and so when you go to a company I suspect um I was not near the founding of Apple but I was on the board for a while um the founding culture you can
see today in their Obsession about user interfaces their Obsession about being closed and their privacy and secrecy it's just a different company right I'm not passing judgment um setting the culture is important the echo are there what does happen in big companies is they become less efficient for many reasons the first thing that happens is they become conservative because of they're public and they have lawsuits and um a famous example is that Microsoft after the antitrust um uh case in the 90s became so conservative in terms of what it could launch that it really missed
the web Revolution for a long time they they have since recovered and I of course was happy to exploit that as a competitor to them when we were at Google but but the important thing is when big companies should be faster because they have more money and more scale they should be able to do things even quicker but in my industry anyway the the tech start that have a new clear idea tend to win because the big company can't move fast enough to do it another example we had built something called Google video I was
very proud of Google video and David Drummond who was the general counsel at the time came in and said you have to look at this YouTube people I said like why right who cares and it turns out they're really good and they're more clever than your team and I said that can't be true you know typical arrogant Eric and we sat down and we looked at it and they really work quicker even though we had an incumbent and why it turns out that the incumbent was operating under the traditional rules that Google had which was
fine and the competitor in this case YouTube was not constrained by that they could work at any pace and they could do all sorts of things intellectual property and so forth ultimately we were sued all over all of that stuff and we ultimately won all those suits but it's an example where there are these moments in time where you have to move extremely quickly you're seeing that right now with generative uh technology so the AGI the generative Revolution generate code generate videos generate text generate everything all of those winners are being determined in the next
six 12 months and then once once the slope is set once the growth rate is you know quadrupling every uh six months or so forth it's very hard for somebody else to come in so so it's a race to get there as fast as you can so when you talk to the the great Venture capitalists they are they're fast right we'll look at it we'll make a decision tomorrow we're done we're in and so forth and we want to be first because that's where they make the most amount of money we were talking before you
arrived I was talking to Jack about this idea of like harvesting and hunting so harvesting what you've already sewed and hunting for new opportunities but I've always found it's quite difficult to get the Harvesters to be the hunters at the same time so so Harvesters and hunting is a good metaphor um I'm interested in entrepreneurs and so what we learned at Google was ultimately if you want to get something done you have to have somebody who's entrepreneurial in their approach in charge of a small business and so for example Sundar when he became CEO had
a model of which were the little things that he was going to emphasize and which were the big things some of those little things are now big things right and and he managed it that way so one way to understand innovation in a large company is you need to know who the owner is Larry Page would say over and over again it's not going to happen unless there's an owner who's going to drive this and he was supremely good at identifying that technical Talent right that's one of his great founder strengths so when we talk
about Founders not only do you have to have a vision but you also have to have either great luck or great skill as to who is the person who can lead this inevitably those people are highly technical in the sense that they can and very quick moving and they have good management skills right they understand how to hire people and deploy resources that allows for Innovation um most of the if I if I look back in my career each generation of the tech companies failed including for example Sun at at the point at which it
became noncompetitive with the future is it possible for a team to innovate while they still have their day job which is harvesting if you know what I mean or do you have to take those people put them into a different team different building different p&l and get them to focus on the disrupt div evation there are almost no examples of doing it simultaneously in the same building uh the Macintosh was famously um Steve in his typical crazy way had the this very small team that invented the Macintosh and he put them in a little building
next to the big building uh on bub Road and and um Cupertino and they put a pirate flag on top of it now was that good culturally inside the company no because because it created resentment in the big building but was it right in terms of the revenue and path of of Apple absolutely why because the Mac ultimately became the platform that established the UI the user interface ultimately allowed them to build the iPhone which of course is defined by its user interface why couldn't they stay in the same building it just doesn't work you
you can't get people to play two roles the incentives are different if you're going to be a pirate and a disruptor you don't have to follow the same rules so um there there are plenty of examples where you just have to keep inventing yourself now what's interesting about cloud computing and essentially cloud services which is what Google does is because the product is not sold to you it's delivered to you it's easier to change but the same problem remains if you look at Google today right it's basically a search a search box and it's incredibly
powerful but what happens when that interface is not really textual right will have to reinvent that working on Tech it'll be the system will somehow know what you're asking right it will it just it will be your assistant um and again Google will do very well so I'm in no way criticizing Google here but I'm saying that even something as simple as the search box will eventually be replaced by something more powerful it's important that Google be the company that does that I believe they will and I I was thinking about it you know the
example of Steve Jobs and that building with the pirate flag on it my brain when um there's so many offices around the world that were trying to kill Apple at that exact moment that might not have had the pirate flag but that's exactly what they were doing in similar small rooms so what Apple had done so smartly there was they owned the people that were about to kill their business model and this is quite difficult to do and part of me wonders if in your experience it's a Founder that has that type of conviction that
does that it's extremely hard for non-founders to do this in corporations because if you think about a corporation what's the duty of the CEO many there's the shareholders there's the employees there's the community and there's a board trying to get a board of very smart people to agree on anything is hard enough so imagine I walk in to you and I say I have a new idea I'm going to kill our profitability for two years it's a huge bet and I need1 billion now would the board say yes well they did to Mark Zuckerberg he
spent all that money on um essentially VR of one kind or another doesn't seem to have produced very much but at exactly the same time he invested very heavily in Instagram WhatsApp and Facebook and in particular in the AI systems that power them and today Facebook to my surprise is a very significant leader in AI having released this uh language called or version called llama 400 billion which is curiously an open source model open source means it's available freely for everyone and what what Facebook and meta is saying is as long as we have this
technology we can maximize the revenue in our core businesses so there's a good example and uh and Zuckerberg is obviously an incredibly talented entrepreneur um he's now back on the list of the most rich people um he's feeded at you know and everything he was doing and he managed to lose all that money while making a different bet that's a unique founder the same thing is almost impossible with a hired CEO how important here is focus and what's your your sort of opinion of um the importance of focus from your experience with Google but also
looking at these other companies because when you're at Google and you have so much money in the bank there's so many things that you could do and could build like an endless list you can take on anybody and basically win in most markets how do you think about focus at Google focus is important but it's misinterpreted in Google we spent an awful lot of time telling people we wanted to do everything and everyone said you can't pull off everything and we said yes we can we have the underlying architectures we have the underlying reach we
can do this if we can imagine and build something that's really transformative and so the idea was not that we would somehow focus on one thing like search but rather that we would pick areas of great impact and importance to the world many of which were free by the way this is not necessarily Revenue driven and that worked I'll give you another example there's an old saying in the business school that you should focus on on what you're good at and you should simplify your product lines and you should get rid of product lines that
don't work Intel famously had a the term is called arm it's a risk uh chip and this particular risk chip was not compatible with the architecture that they were using for most of their products and so they sold it unfortunately this was a terrible mistake because the architecture that they sold off was needed for mobile phones with low memory with small batteries and and heat problems and so forth and so on and so that decision that faithful decision now 15 years ago meant that they were never a player in the mobile space and once they
made that decision they tried to take their expensive and expensive and complex chips and they kept trying to make cheaper and smaller versions but the core decision which was to simplify simplify to the wrong outcome today if you look at I'll give you an example the Nvidia chips use an arm CPU and then these two powerful uh gpus it's called the b200 they don't use the Intel chip they use the arm chip because it was for their needs faster I would never have predicted that 15 years ago so at the end maybe it was just
a mistake but maybe they didn't understand in the way they were organized as a corporation that ultimately battery power would be as important as computing power right the amount of battery you use and that was the discriminant so one way to think about it is if you're going to have these sort of simple rules you better have a model of what happens in the next five years so the way I teach this is just write down what it'll look like in five years just try what will look like in five years your company or whatever
it is right so let's talk about AI what will be true in five years that it's going to be a lot smarter than it is be a lot smarter but how many companies will there be in AI will there be five or 5,000 or 50,000 50,000 how many big companies will there be will there be new companies what will they do right so I just told you my view is that eventually you and I will have our own AI assistant which is a polymath which is incredibly smart which helps us guide through the information overload
that it is today who's going to build it make a prediction what kind of hardw will be on make a prediction how fast will the networks be make a prediction write all these things down and then have a discussion about what to do that what is interesting about our industry is that when something like the PC comes along or the internet I lived through all of these things they are are such broad phenomena that they really do create a whole new Lake a whole new ocean whatever metaphor you want now people said well wasn't that
crypto no crypto is not such a platform crypto is not transformative to daily life for everyone people are not running around all day using crypto tokens rather than currency crypto is a specialized Market by the way it's important and it's interesting it's not a horizontal transformative Market the arrival of alien intelligence in the form of savant that you use is such a transformative thing because it touches everything it touches you as a a producer as a star as a narrative it touches me as an executive um it will ultimately help people make money in the
stock market people are working on that there's so many ways in which the technology is transformative to start you in your case when you think about your company whether it's little you know itty bitty or a really big one it's fundamentally how will you apply AI to accelerate what you're doing right in your case for example here you have I think the most successful show in the UK by far right so how will you use AI to make it more successful well you can ask it to distribute you more right to make uh narratives to
summarize uh to to come up with new insights to suggest uh to have fun to create contest there all sorts of ways that you can ask AI um I'll give you a simple example if I were a politician thankfully I'm not um and I knew my district I would say uh to the computer write a program so I'm saying to the computer you write a program which goes through all the constituents in my interest figures out roughly what they care about and if and then send them a video which is labeled you know of me
digitally so I'm not fake but it's kind of like my intention where I explain to them how important I as their constituent have made the bridge work right and you sit there and you go that's crazy but it's possible now politicians have not discovered this yet but they will because ultimately politicians are around a human connection and the quickest way to have that communication is to be on their phone talking to them about something that they care about when chat GPT first launched and they sort of scaled rapidly to 100 million users there was all
these articles saying that um the founders of Google had rushed back in and it was a crisis situation at Googled and there was panic and there was two things that I thought first is is that true and second thing was how did Google not come to Market first with a chat GPT style product well well remember that Google also that's the old question of why did you not do Facebook well the answer is we were doing everything else right so my defensive answer is that Google has eight or nine or 10 billion user clusters of
activity which is pretty good right it's pretty hard to do right I'm very proud of that I'm very proud of what they're doing now um my own view is that what happened was Google was was working in the engine room and a team out of open AI figured out a technology called rhf and what happened was when they did gpt3 and GP the t is Transformer which was invented at Google when they did it they had sort of this interesting idea and then they own then they sort of casually started to use humans to make
it better and rhf refers to the fact that you use humans at the end to do ab tests where humans can actually say well this one's better and then the system learns recursively from Human training at the end that was a real breakthrough right and uh I joke with my open a eye friends that you were sitting around on on Thursday night and you turn this thing on and you go holy crap look how good this thing is it was a real Discovery right that none of us expected certainly I did not um and once
they had it um the opening eye people Sam and and and so forth we'll talk about this they didn't really understand how good it was they just turned it on and all of a sudden they had this huge success disaster because they were working on GPT 4 at the same time it was an afterthought it's a great story because it just shows you that even the brilliant Founders do not necessarily understand how powerful what they what they've done is now today of course you have uh GPT 40 um basically a very powerful model from open
eye you have Gemini 1.5 which is clearly in clearly roughly equivalent if not better in certain areas um the Gemini is more multimodal for example and then you have other players llama the Llama architecture l l la ma uh does not stand for llamas it's large language models um out of Facebook and a number of others uh there's a startup called anthropic um which is very powerful founded by one of the inventors of gpt3 um and a whole bunch of people and they formed their company knowing they were going to be that successful it's interesting
they actually formed as part of their incorporation that they were a public benefit Corporation because they were concerned that it would be so powerful that some evil CEO in the future would force them to go for Revenue as opposed to world world goodness so the teams when they were doing this they understood the power of what they were doing and they anticipated the level of impact which and they were right do you think if Steve Jobs was an apple they would be on that list um how do you think the company would be different well
Tim has done a fantastic job in Steve's Legacy and what's interesting is normally the successor is not as good as the founder but somehow Tim having worked with Steve for so long and having set the culture having Steve having they've managed to continue the focus on the user this incredible safety focus in terms of apps and so forth and so on and they've remained a relatively closed culture I think all of those would have maintained detained had St you know tragically died uh he was a good friend but the important point is Steve Steve believed
very strongly in what are called close systems where you own and control all your intellectual property and he and I would battle over open versus closed because I came from the other side and I did this with respect I don't think they would have changed that and they've change that now no I think still apple is still basically a single company that's ver Ally integrated the rest of the industry is largely more open I think everyone especially in the wake of the recent launch of the iPhone 16 which I've got somewhere here um has this
expectation that Apple would if Steve were still alive taken some big bold bet in some and I think about you know Tim's tenure he's done a fantastic job of keeping that company going running it with the sort of principles of Steve Jobs but has there been many big bold successful bets a lot of people point at the airpods which have a a great product but I think AI is one of those things where you go I wonder if Steve would have understood the significance of it and Steve was that smart that he I would never
you know he's an Elon level intelligence um when when Steve and I worked together very closely which was what 15 years ago for his death um he was very frustrated at the success of MP4 over uh mov um format files and he was really mad about it and I said well you know maybe that's because you were closed in quick time was not generally available said that's not true my team you know our product is better and so forth so his his core belief system he's an artist right and and given the choice we used
to have this debate where do you want to be Chevrolet or do you want to be Porsche do you want to be you know General Motors or do you want to be BMW and he said I want to be BMW and during that time Apple's margins were twice as high as the PC companies and I said Steve you don't need all that money you're generating all this cash you're giving it to your to your shareholders and he said the principle of our profitability and our value in our brand is this is this luxury brand right
so that's how he thought now what How would how would AI change that everything that he would have done with Apple today would be a I inspired but it would be beautiful that's the great gift he had CU I think Siri was almost a glimpse at what AI now kind of looks like it was a glimpse at what the I guess the ambition was we've all been chatting to the Siri thing which is I think most people would agree as kind of like largely useless unless you're trying to figure out something super super simple but
now I this weekend as I said I was sat there with my my girlfriend's family there speaking to this voice activated device and it was solving problems for me almost instantaneously that are very complex and translating them into French and Portuguese welcome welcome to the replacement for Siri and again would Steve have done that quicker I don't know it's very clear that the first thing Apple needs to do is have Siri be replaced by an AI and call that Siri hiring we we're doing a lot of hiring in our companies at the moment and we're
going back and forward on what the most important principles are when it comes to hiring making lots of mistakes sometimes getting things right sometimes what do I need to know as when it comes to hiring startups by definition are huge Risk Takers you have no history you have no incumbency you have all these competitors by definition and you have no time so in a startup you want to you want to um prioritize intelligence and quickness over experience and sort of stability you want to take risks on people and the great and part of the reason
why startups are full of young people is because young people often don't have the baggage of Executives have been around for a long time but more importantly they're willing to take risks so it used to be that you could predict whether a company was successful by the age of the founders and in that 20 and 30y old period the company would be hugely successful startups um Wiggle they try something they try something else and they're very quick to discard an old idea corporations spend years with a belief system that is factually false and they don't
actually changed their opinion until after they've lost all the contracts and if you go back the all the signs were there nobody wanted to talk to them nobody cared about the product right and yet they kept pushing it so um if you're a CEO of a larger company what you want to do is basically figure out how to measure this Innovation so that you don't waste a lot of time Bill Gates had a saying a long time ago which was that the most important thing to do is to fail fast right that the charact from
his perspective as the CEO of Microsoft founder Microsoft um that he wanted everything to happen and he wanted to fail quickly and that was his theory and do you agree with that theory yeah I do fast failure is important because you can say it in a nicer way but fundamentally um at Google we had this 72010 rule that Larry and Sergey came up with 70% of the Core Business 20% on adjacent business and 10% on other what does that mean sorry cor Core Business means search ads adjacent business means something that you're trying like a
cloud business or so forth and the 10% is some new idea so Google created this thing called Google X the first product it built was called Google brain which is the one of the first machine learning architectures this actually precedes Deep Mind Google brain was used to power the AI system Google brin's team of 10 or 15 people generated 10 20 30 40 billion dollars of extra profits over a decade so that pays for a lot of failures right then they had a whole bunch of other ideas that seemed very interesting to me that didn't
happen for one or another and they would cancel them and you you and then the people would get reconfigured and one of the great things about Silicon Valley is it's possible to spend a few years on a really bad idea and get cancelled if you will and then get another job Having learned all of that my joke is the best CFO is one who's just gone bankrupt because the one thing that CFO is not going to let happen is to go bankrupt again yeah well on this point of culture as well Google as such a
big company must experience a bunch of microcultures one of the things that I've always I've kind of studied it as an as a cautionary tale is the story of TGIF at Google which was this sort of weekly All Hands meeting where employees could ask the executives whatever they wanted to and the Articles around it say that it was eventually sort of changed or canceled because it became unproductive it's more complicated than that so lar and serus started TGF uh which I obviously participated in and we had fun uh there was a sense of humor it
was all off the Record um a famous example is the VP of sales whose name was Omid um was always predicting lower Revenue than we really had which is called sandbagging so we got a sandbag and we made him stand on the sandbag in order to present his numbers it was just fun humorous you know we had skits and things like that um at at some size you don't have that level of intim intimacy and you don't have a level of privacy and what happened was there were leaks uh eventually there was a presentation I
don't remember the specifics where the Pres presentation was ongoing and someone was leaking the presentation live to a reporter and somebody came on stage and said we have to stop now I think that was the moment where the company got sort of too big h I heard about a story that um because from what I had understood this might be totally wrong but it's all just things that Google employees have told me was that there wasn't many sackings firings at Google's wasn't many layoffs wasn't really a culture of layoffs and I guess I guessed in
part that's because the company was so successful that it didn't have to make those extremely extremely tough decisions that we're seeing a lot of companies make today I reflect on elon's running of Twitter when he take took over Twitter the you know the say the The Story Goes that he went to the top floor and basically said anyone who's willing to work hard is committed to these values please come to the top floor everyone else you're fired um this sort of extreme culture of culling and people being sort of activists at work um and I
wanted to know if there's any truth in that there's some um in in Google's case um we had a position of why lay people off just don't hire them in the first place it's much much easier and so in my 10 year the only layoff we did was uh 200 people in the sales structures right after the 2000 epidemic and I remember it as being extremely painful right it was the first time we had done it so we took the position which is different at the time that you shouldn't have an automatic layoff what would
happen is that there was a belief at the time that every six months or nine months you should take the bottom five% of your people and lay them off problem with that is you're assuming the 5% are correctly identified and furthermore even the lowest performers have knowledge and value to the corporation that we can take it so we took a a very much more positive view of our employees and the employees like that and we obviously paid them very well and so forth and so on I think that the the cultural issues ultimately have been
addressed but during there was a period of time where there were uh because of the free willing nature nature of the company there were an awful lot of internal distribution lists which had nothing to do with the company what does that mean they were distribution lists on topics of War peace politics so forth what's a distribution list a distribution like an email dist think of it as a a message board okay roughly speaking think of it as message boards for employees and at one I remember that one point somebody discovered that there were 100,000 such
me message boards and the company ultimately cleaned that up because companies are not like universities and that there are in fact all sorts of laws about what you can say and what you cannot say and so forth and so for example the majority of the employees were uh Democrats in the American political system and I made a point even though I'm a Democrat to try to protect the small number of Republicans because I thought they had a right to be employees too so you have to be very careful in a corporation to establish what what
does speech mean within the corporation and uh what you what you are hearing as wokeism is really can be understood is what are the appropriate topics on work time in in a work venue should you be discussing my own view is stick to the business and then please feel free to go to the bar scream your views talk to everybody you know I'm a strong believer in free speech but within the corporation let's just stick to the corporation and its goals because I was hearing these stories about I think in more recent times in the
last year or two of people coming to work just for the free breakfast Pro protesting outside that morning coming back into the building for lunch as best I can tell that's all been cleaned up I did also hear that that it had been cleaned up because I think it was addressed in a very high conviction way which meant that it it was um seen to how did how do you think about competition for everyone that's building something how much should we be focusing on our comp competition I strongly recommend not focusing on competition and instead
focusing on building a product that no one else has and you say well how can you do that without knowing the competition well if you study the competition you're wasting your time try to solve the problem in a new way and do it in a way where the customers are delighted U running Google we seldom looked at what our competitors were doing what we did we spent an awful lot of time was what is possible for us to do what can we actually do from our current situation and sort of the running ahead of everybody
turns out to be really important what about deadlines well uh Larry established the principle of um okrs which were objectives and key results in every quarter Larry would actually write down all the metrics and he was tough and he would say that if you got to 70% % of my numbers that was good and then we would grade based on are you above the 70% or you below the 70% and it was harsh and it works you you have to measure to get things done in big Corporation otherwise everyone kind of looks good makes all
sorts of claims feels good about themselves but it doesn't have an impact what about business plans should we be writing business plans as found us Google wrote A business plan there was a run by a fellow named solar and I saw it years later and it was actually correct and I told salar that the this is probably the only business plan ever written for a corporation that was actually correct in hindsight so what I prefer to do and this is how I teach it at Stanford is try to figure out what the world looks like
in five years and then try to figure out what you're going to do in one year and then do it right so if you can basically say this is the direction these are the things we're going to achieve within one year and then run against that as hard goals not simple goals but hard goals then you'll get there and the general rule at least in a consumer business is if you can get an audience of 10 or 100 million people you can make lots of money right so if you give me any business that has
no revenue and a 100 million people I can find a way to to monetize that with advertising and sponsorships and donations and so forth and so on focus on getting the user right and everything else will follow the Google phrase is focus on the user and everything else is handled Sergey and Larry you work with them for 20 years many decades yeah two decades what made them special frankly raw IQ they were just smarter than everybody else really yeah and uh in sergey's case his father was a very brilliant Russian mathematician his mother was also
highly technical his family is all very technical and he was clever he's a clever mathematician uh Larry different personality but similar so an example would be that Larry and I are in his office and we're writing on the Whiteboard a long list about what we're going to do and he says look we're going to do this and this and I said okay I agree with you I don't agree with you we make this very long list and Sergey is out playing volleyball and so he runs in in his little volleyball shorts and his little shirt
all sweating he looks at our list and said this is the stupidest thing I've ever heard and then he suggest five things and he was exactly right so we ar red the Whiteboard and then he of course went back to play volleyball and that became the strategy of the company so over and over again it was the it was their Brilliance and their ability to see things that I didn't see that I think really drove it can you teach that I don't know I think you can teach listening and um but I think most of
us get caught up in our own ideas and we are always surprised that something new happened like I've just told you that I'm I've been in AI a long time I'm still surprised at the rate uh my favorite current product is called notebook LM and for the uh listeners notebook LM is an experimental product out of Google Deep Mind basically Gemini um it's based on the Gemini back end and it was trained with high quality podcast voices it's terrifying and you basically give it a so what I'll do is um I'll write something again I
don't write very well and I'll ask Gemini to rewrite it to be more beautiful okay I'll take that text and I'll put it in Notebook LM and it produces this interview between a man and a woman U who don't exist and for fun what I do is I play this in front of an audience and I wait and see if anyone figures out that the humans are not human it's so good they don't figure it out we'll play it now so this is the big thing that everyone's making a big fuss about you can go
and load this conversation now it's going to go out and create a conversation that's in a podcast style where there's a male voice and a female voice and they're analyzing the content and then coming up with their own kind of just uh creative content so you could go and push play right here we are back Thursday get ready for week three the injury report this week was a doozy it's a long one yeah it is and it has the potential to really shake things up so for that to me gem notebook LM is my chat
GPT moment of this year it was mine as well and it's much of the reason that I was um deeply confused okay because as a podcaster who's building a media company we have an office down the road 25,000 square feet we have studios in there um we're building audio video content at this in the dawn of this new world where the cost of production of content goes to like zero or something and I'm trying to navigate how to play as a media owner so first place you're you're what's really going on is you're moving from
scarcity to ubiquity you're moving from scarc to abundance so one way to understand the world I live in is it's scale Computing generates abundance and abundance allows new strategies in your case it's obvious what you should do you're a really famous podcaster and you have lots of interesting guests simply have this fake set of podcasts criticize you and your guests right you're you're essentially just amplifying your reach they're not going to substitute for your honest Brilliance and Charisma here but they're going to accentuate it they will they will they will be entertaining they will summarize
it and so forth it amplifies your reach if you go back to my basic argument that AI will double the productivity of everybody or more so in your case you'll have twice as many co podcasts what I do for examples I'll write something and I'll say I'll have it respond and then to Gemini I'll say make it longer and it adds more stuff I think God I do this in like 30 seconds then how powerful in your case take one of these uh lengthy interviews you do ask the system to annotate it to amplify it
and then feed that into fake podcasters and see what they say you'll have a whole new set of audiences that love them more than you but but it's all from you that's the key idea here I worry because there's going to be potentially billions of podcasts that are uploaded to RSS feeds all around the world and it's all going to sort of chip away at you know the the moat that I've so so many people have believed that but I think the evidence is it's not true um when I started at Google there was this
notion that celebrity would go away and there would be this very long tale of micro markets you know Specialists because finally you could hear the voices of everyone and we're all very Democratic and liberal in our view that's the what really happened was networks accentuated the best people and they made more money right you went from being a local personality to a national personality to a global personality and the globe is a really big thing and there's lots of money and lots of players so you as a as a celebrity are competing against a global
group of people and you need all the help you can to maintain your position if you do it well by using these AI Technologies you will become more famous not less famous Genesis I am I've had a lot of conversations with a lot of people about the subject of AI um and when I read your book and I've watched you do a series of interviews on this some of the quotes that you said really stood out to me one of them I wrote down here which comes from your book Genesis it's on page five the
Advent of artificial intelligence is in our view a question of human survival yes that is our view so why is it a question of human survival AI is going to move very quickly it's moving so much more quickly than I've ever seen because the amount of money the number of people the impact the need what happens when the AI systems are really running key parts of our world what happens when AI is making the decision my my simple example you have a car which is AI controlled and you have a emergency or a lady's about
to give birth or something like that and they get in the car and there's no override switch because the system is optimized around the whole as opposed to his or her emergency right we as humans accept various forms of efficiency including urgent ones versus system systemic efficiency you could imagine that the Google Engineers would design a perfect City that would perfectly operate every self-driving car on every street but would not then allow for the exceptions that you need in such a in such an important issue so that's a trivial example and one which is well
understood of how it's important that these things represent human values right that we we have to actually articulate what does it mean so my favorite one is all this misinformation um democracy is pretty important democracy is by far the best way to to live and operate societies look at there are plenty of examples of this none of us want to work in essentially an authoritarian dictatorship so you better figure out a way where the misinformation components do not screw up proper political examples another example is this question about teenagers and the develop their mental development
and growing up into these societies I don't want them to be constantly depressed there's a lot of evidence that dates around 2015 when all the social media algorithms changed from linear feeds to targeted feeds in other words they went from time to this is what you want this is what you want that hyperfocus has ultimately narrowed people's um political views as I as we discussed but more importantly it's produced more depression and anxiety so all the studies indicate that basically if you time it to roughly then when people are coming to age they're not as
happy with their lives their behaviors their opportunities for this and the best explanation is it was an algorithmic change and remember that these systems they're not just collections of content they are algorithmically deciding you know the algorithm decides what the outcome is for humans we have to manage that um what we say in many different ways in the book is that you have sort of a choice of whether the um the algorithms will advance that's not a question the question is are we advancing with it and do we have control over it um there are
so many examples where you could imagine an AI system could do something more efficiently but at what cost right um I should mention that there is this discussion about something called AGI artificial general intelligence and there's this discussion in the Press among many people that AGI occurs on a particular day right and this is sort of a popular concept that on a particular day five years from now or 10 years from now this thing will occur and all of a sudden we're going to have a computer that's just like us but even quicker that's unlikely
to be the path much more likely are these waves of innovation in every field better psychologists better writers you see this with g chat gbt already better scientists is a notion of an AI scientist that's working with the AI real scientists to accelerate the development of more AI science people believe all of this will come but it has to be under human control do you think it will be I do and part of the reason is I and others have worked hard to get the governments to understand this it's very strange in my entire career
which has gone for you know 50 years the um we've never asked for government for help because asking the government help is basically just a disaster in the view of the techn industry in this case the people who invented it collectively came to the same view that there need to be guardrails on this technology because of the potential for harm the most obvious one is how do I kill myself give me recipes to hurt other people that kind of stuff there's a whole Community now in this in this part of the industry which are called
trust and safety groups and what they do is they actually have humans test the system before it gets released to make sure the harm that it might have in it is suppressed it's literally won't answer the question when you play this forward in your brain you you've been in the tech industry for a long time and from looking at your work you it feels like you're describing this as the most sort of transformative potentially harmful technology that humans have really ever seen you know maybe alongside the nuclear bomb I guess but some would say even
potentially worse because of the nature of the intelligence and its autonomy you must have moments where you you think forward into the future and your thoughts about that future aren't so Rosy well because I have those moments yes but but let's let's think let's answer the question I said think five years in five years you'll have two or three more turns of the crank of these large models these large models are scaling with ability that is unprecedented there's no evidence that the scaling has laws as they're called have begun to to stop they will eventually
stop but we're not there yet each one of these cranks looks like it's a factor of two factor of three factor of four of capability so let's just say turning the crank all of these systems get 50 times or 100 times more powerful in it of itself that's a very big deal because those systems will be capable of physics and math you see this with o. one and um and open AI all the other things that are occurring now what are the dangers well there's the most obvious one is cyber attacks there's evidence that the
raw models these are the ones that have not been released can do what are called Day Zero attacks as well or better than humans a day Zero attack is an attack that's unknown they can discover something new and how do they do it they just keep trying because they're computers and they have nothing else to do they don't sleep they don't eat they just turn them on and they just keep going um so the so cyber is an example where everybody's concerned another one is biology viruses are relatively easy to make and you can imagine
coming up with really bad viruses there's a whole team I'm part of a commission looking at this to try to make sure that doesn't happen I already mentioned misinformation another probably negative but we'll see is the development of new forms of warfare I've written extensively on how war is changing and the way to understand historic war is that it's the stereotypically the the soldier with the gun you know one side and so forth World War trenches you see this by the way in UK in the Ukraine fight today where the ukrainians are holding on valiantly
against the Russian Onslaught but he's sort of you know mono Amano you know man against man sort of all of the stereotypes of War so in a drone World which is the sort of the fastest way to build new robots is to build drones you'll be sitting in a Command Center in some office building connected by a network and you'll be doing harm to the other side while you're drinking your coffee right that's a changed in the logic of War um and it's applicable to both sides I don't think anyone quite understands how war will
change but I will tell you that in in the Russian Ukraine war you're seeing a new form of Warfare being invented right now right um both sides have lots of drones tanks are no longer very useful a $5,000 drone can kill a $5 million tank um so it's called The Kill ratio so basically it's drone on drone and so now people are trying to figure out how how to have one drone destroy the other drone right this will ultimately take over war and conflict in our world in total you mentioned rural models this is a
concept that I don't think people understand exists the idea that there's some other model that's the role model that is capable of much worse than the thing we play with on our computers every day it's important to establish how these things work so you the way these algorithms work is they have complicated uh training things where they suck all the information in and they uh one week currently believe we've sort of sucked all of the written word that's available it doesn't mean there isn't more but we've we've literally done such a good job of sucking
everything that humans have ever written it's all in these big computers when I say computers I don't mean computers I mean supercomputers with enormous memories and the scale is mindboggling uh and of course there's this company called Nvidia which makes the chips which is now one of the most valuable companies in the world um surprisingly so incredibly successful because they're so Central to this revolution and good for Jensen and his team so the important thing is when you do this training it comes out with a raw model right it takes six months and you know
you wait 24 hours a day you can watch it it gets close to there's a measurement that they use called the loss function when it gets to a certain number they say good enough so then they go what do we have right what do we do right um so the first thing is let's figure out what it knows so they have a set of tests and of course it knows all sorts of bad things which they immediately then tell it not to answer to me the most interesting question is in over a 5-year period the
systems will learn things that we don't know they learn how will you test for things that you don't know they know the answer in the industry is that they have incredibly clever people who sit there and they fiddle literally fiddle with the networks and say I'm gonna I'm going to see if it knows this I'll see if it can do this and then they make a list and they say that's good that's not so good right so all of these Transformations so for example you can show it a picture of a website and it can
generate the code to generate a website all of those were not expected they just happened it's called emergent Behavior scary scary but exciting and so far um the systems have held the governments have worked well um the these trust and safety groups group are working here in the UK um one year ago was the first trust and safety conference um the government did a fantastic job the team that was assembled was the best of all the country teams here in the UK um now what's happening is these are happening around the world the next one
is in France in uh early February and I expect a similar good result do you think we're gonna have to guard I mean you talk about this but do you think we're going to have to guard these role models with with guns and tanks and machinery and stuff I worked for the Secretary of Defense for a while uh in my in Google you could spend 20% of your time on other things so I worked for the Secretary of Defense to try to understand the US Military and um one of the things that we did is
we visited a plutonium U Factory plutonium is incredibly dangerous and Incredibly secret and so this particular base is inside of another base so you go through the first set of machine guns and then you have normal thing and then you go into the special place with even more machines guns and even because it's so secure so the the metaphor is do you fundamentally believe that the computers that I'm talking about will be of such value and such danger that they'll have their own data center with their own guards which of course might be computer guards
but the important thing is that it's so special that it has to be protected in the same way that we protect nuclear bombs and proliferate uh and programming an alternative model is to say that this technology will spread pretty broadly and there'll be many such plac if it's a small number of groups the governments will figure out a way to do deterrence and they'll figure out a way to do non-proliferation so I'll make something up I'll say there's a couple in China there's a few in the US there's one in in Britain of course we're
all tied together between the US and Britain and maybe in a few other places that's a manageable problem on the other hand let's imagine that that power is ultimately so easy to copy that it spreads globally and it's accessible to for example terrorist then you have a very serious proliferation problem which is not yet solved this is again speculation because I think a lot about adversaries in China and Russia and Putin and I think I know you talk about them being a few years behind maybe one or two years behind but they're eventually going to
get there they're eventually going to get to the point where they have these large language models or these AIS that can do these Day Zero attacks on our nation and they they don't have the like sort of social incentive structure if they're a communist country to protect and to um guard against these things are you not worried about what China is gonna do um I am worried and I'm worried because you're going into a space of great power without fully defined boundaries what kinger and we talk about this in the book The the Genesis Book
is fundamentally about what happens to society with the arrival of this new intelligence and the first book we did age of AI was right before chat GPT so now everybody kind of understands how powerful these things are we talked about it now you understand it so once these things show up who's going to run them who's going to be in charge how will they be used so from my perspective I believe at the moment anyway that China will behave relatively responsibly and the reason is that it's not in their interest to have free speech in
every case in China when they have a choice of giving freedom to their Cit citizens or not they choose non-freedom and I know this because I spent through all the uh I spent all the time dealing with it so it sure looks to me like the Chinese AI solution will be different from the West because of that fundamental bias against freedom of speech because these things are noisy they make a lot of noise they'll probably still make AI weapons though well on the weapon side you have to assume that every new technology is ultimately strengthened
in a war um the tank was invented in World War I at the same time you had the initial forms of uh airplanes much of the second world war was an air Campaign which essentially built many many things and if you look at the the there's a a book called Freedom's Forge about the American U structure according to the book they ultimately got to the point where they could build two or three airplanes a day at scale so in an emergency Nations have enormous power I get asked all the time if everyone if anyone's going
to have a job left to do because this is the disruption of intelligence and whether it's people driving cars today I mean we saw the Tesla announcement of the robo taxis whether it's accountants lawyers and everyone in between that's or podcasters are we going to have jobs left well um this question has been asked for 200 years um there was there were the L eyeses here in Britain way back when and inevitably when these Technologies come along there's all these fears about them indeed with a lot I there were riots and people you know destroying
the Looms and all of this kind of stuff but somehow we got through it so um my own view is that there will be a lot of job dislocation but there will be a lot more jobs not fewer jobs and here's why we have a demographic problem in the world especially in the developed developed world where we're not having enough children uh that's well understood uh furthermore we have a lot of older people and and the younger people have to take care of the older people and they have to be more productive if you have
young people who need to be more productive the best way to make them more more productive is to give them more tools to make them more productive whether it's a machinist that goes from a manual machine into a CNC machine or in in the more modern case of a knowledge worker who can achieve more objectives we need that productivity group if you look at Asia which is the centerpiece of manufacturing they have all this cheap labor well it's not so cheap anymore so do you know what they did they added robotic assembly Lin so today
when you go to China in particular it's also true in Japan and Korea the manufacturing is largely done by robots why because their demographics are terrible and their cost of Labor is too high so the future is not fewer jobs it's actually a lot of jobs that are unfilled with people who may have a job skill mismatch which is why education is so important now what are examples of jobs that go away automation has always gotten rid of jobs that are dangerous physically dangerous or ones which are essentially too repetitive and too boring for humans
I'll give you an example um security guards it makes sense that security guards would become robotic because it's hard to be a security guard you fall asleep you don't know quite what to and these systems can be smart enough to be very very good security now these are these are important sources of income for these people they're going to have to find another job another example in in the media in um Hollywood everyone's concerned that AI is going to take over their jobs all the evidence is the inverse and here's why um the Stars still
get money The Producers still make money they still distribute their movie but their cost of making the movie is lower because they use more they use for example synthetic backdrops so they don't have to build the set um they can do synthetic makeup now there are job losses there so the people who make the make make the set and do the makeup are going to have to go back into construction and personal care by the way in America and I think it's true here there's an enormous shortage of people who can do high quality craftsmanship
right those people will have jobs they're just different and they may not be in Los Angeles am I gonna have to interface with this technology am I going to have to get a neuralink in my brain because we you go over the subject of there being these sort of two species of humans potentially ones that do have a way to incorporate themselves more with artificial intelligence and those that don't and if and if that is the case what is the time Horizon in your view of that happening I think neuralink is much more speculative because
you're dealing with direct brain connection and nobody's going to drill on my brain until it needs it trust me I suspect you feel the same uh I I guess my O My overall view is that um you will not notice how much of your world has been co-opted by these Technologies because they will produce greater Delight if you think about it a lot of life is inconvenient it's fix this call this make this happen AI systems should make all that seamless you should be able to wake up in the morning and have coffee and not
have a care in the world and have the computer help you have a great day this true of everyone now what happens to your to your profession well as we said no matter how good the computers are people are going to want to care about other people another example let's imagine you have Formula 1 and you have Formula One with humans in it and then you have a a a robot Formula 1 which where the cars are driven by the equivalent of a robot is anyone going to go to the robotic Formula 1 I don't
think so because of the drama the human achievement and so forth do you think that when they run the marathon here in London they're going to have robots running with humans of course not right of course the robots can run faster than humans it's not interesting what is interesting is to see human achievement so I think the commentators who say oh there won't be jobs we won't care I think they miss the point that we care a great deal about each other as human beings we have opinions you have a detailed opinion about me having
just met me met me right now and I for you we just are naturally set up your face your mannerisms and so forth we can describe it all right the robot shows up is like oh my God what another robot how boring why is samman working on the the founder of open AI when the co-founders of open a working on universal basic income projects like worldcoin then well worldcoin is not the same thing as universal Bitcoin uh um Universal basic income there is a belief in the tech industry that it goes something like this the
politics of abundance what we do is going to create so much abundance that most people won't have to work and there'll be a small number of groups that work who typically these people themselves and there be so much Surplus everyone can live like a millionaire and everyone will be happy I completely think this is false I think none of what I just told you is false but all of these Ubbi ideas come from this notion that humans don't behave the way we actually do so I'm I'm a Critic of this view I believe that that
we as humans so I an example is um we're going to make legal the legal profession much much easier because we can automate much of the technical work of lawyers does that mean we're going to have fewer lawyers no the current lawyers will just do more laws they'll do more they'll add more complexity the system doesn't get easier the humans become more sophisticated in their application of the principles we are naturally basically uh we have this thing called um basically reciprocal altruism that's part of us but we also have our bad sides as well those
are not going away because of AI when I think about AI this simple analogy often think of is say my IQ is Steven bartett is 100 and there's this AI that sat next to me whose IQ is 1,000 what on Earth would you want to give Steven to do because because that 1,000 IQ would have really bad judgment in a couple cases because remember that the AI systems do not have human values unless it's added right I would much rather talk to you about something involving a moral or human judgment even with the Thousand I
wouldn't mind Consulting it so tell me the the history how was this resolved in the past how are these but at the end of the day in my view the core aspects of it which have to do with morals and judgment and beliefs and Charisma they're not going away is there a chance that this is the end of humanity no um the way Humanity does is much it's much harder to eliminate all of humanity than you think all the people I've looked with on these biological attacks say it's it takes more than one horrific pandemic
and so forth to eliminate humanity and and the the pain can be very very high in these moments look at the World War I World War II the Hodor in uh Ukraine in the 1930s the Nazis you know these are horrifically painful things but we survived right we we as a as a Humanity survived and we will I wonder if this is the moment where humans couldn't see past around the corner because you know I've heard you talk about how the AIS will turn in they'll be agents and they'll be able to speak to each
other and we won't be able to understand the language I have a specific proposal on that um there are points where humans should assert control and I've been trying to think about where are they I'll give you an example there's something called recursive self-improvement where the system just keeps getting smarter and smarter and learning more and more things at some point if you don't know what it's learning you should unplug it but we can't unplug them can we sure you can there's a power plug and there's a circuit breaker go and turn the circuit breaker
off another example um there's a there's a scenario theoretical where the system is so powerful it can produce a new model faster than the previous model was checked okay that's another intervention point so in each of these cases um if the if agents and the technical term is called agents what they really are is large language models with memory and you can begin to concatenate them you can say this model does this and then it feeds into this and so forth you can build very powerful decision systems we believe this is the the the thing
that's occurring this year and next year everyone's doing them they will arrive the agents today speak in English you can see what they're saying to each other they're not human but they are communicating what they're doing English to English to English as long as and it doesn't have to be English but as long as they're human understandable but let's so the thought experiment is one of the agents says I have a better idea I'm going to communicate in my own language that I'm going to invent that only other agents understand that's a good time to
pull the plug what is your biggest fear about AI my actual fear is different from what you might imagine my my actual fear is we're not going to adopt it fast enough to solve the problems that affect everybody right and the reason is that the that if you look at every everyone's everyday lives what do they want they want safety they want Health Care they want great schools for their kids we just work on that for a while why do we make people's lives just better because of AI we have all these other interesting things
why don't we have a um a teacher that is an AI teacher that works with existing teachers in this language of the kid in the culture of the kid to get the kid as smart as they possibly can why don't we have a doctor or doctor's assistant really that enables a a human doctor to always know every possible best treatment and then based on their current situation what the inventory is which country is how their insurance Works what is the best way to treat that patient those are relatively achievable Solutions why don't we have them
if you just did education and Healthcare globally the impact in terms of lifting human potential up would be so great right that it would change everything it wouldn't solve the various other things that we complain about about you know this celebrity or this misbehavior or this conflict or even this war but it would establish a Level Playing Field of knowledge and opportunity at a global level that has been the dream for decades and decades and decades Chuck me that perfect head one of the things that I think about the time because my life is quite
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throughout the pandemic I've been a big supporter um it was a contrarian view but I think it's now less a contrarian view that companies and CEOs need to be clear in their convictions around how they work and one of the things that I've um been criticized a lot for is that I'm I'm for having people in a room together so my companies we um we're not remote we work together in an office as I said down the road from here and I believe in that because I think of community and engagement and synchronous work and
I think that work now has a responsibility to be more than just a set of tasks you do in a world where we're lonier than ever before there's more disconnection and especially for young people you don't have families and so on um having them work alone in a small white box in a big city like London or New York um is robbing them of something which I think is important this was a bad this was a contrarian view it's become less contrarian as the big tech companies in America have started to roll back some of
their initial knej reactions to the pandemic that there a lot of them are asking their team members to come back into the office at least a couple of days a week what's your point of view on this so I have a strong view that I want people in an office it doesn't have to be all one office but I want them in an office and partly it's for their own benefit if you're in your 20s when I was a young executive I knew nothing of what I was doing I literally was just lucky to be
there and I learned by hanging out at the water cooler going to meetings hanging out being in the hallway had I been at home I wouldn't have had any of that knowledge which ultimately was Central to my subsequent promotions so if you're in your 20s you want to be in an office because that's how you're going to get promoted and I think that's consistent with the majority of the people who really want to work from home have honest problems with commuting and family and so forth they're real issues the problem with our joint view is
it's not supported by the data the data indicates that productivity is actually slightly higher in uh work uh when you allow work from home so you and I really want that company of people sitting around the table and so forth but the evidence does not support our view interesting yeah is that true it is absolutely true why is Facebook and all these companies rolling back their uh and like Snapchat rolling back their remote working policies then not everyone is um and you most companies are doing various forms of hybrids where it's two days or three
days or so forth um I'm sure that for the average listener here who works in public security or in a government they say well my God they're not in the office every every every day but I'll tell you that at least for the the industries that have been studied there's evidence that allowing that flexibility from work from home increases productivity I don't happen to like it but I want to acknowledge the science is there what is the um the advice that you wish you'd gotten at my age that you didn't get the most important thing
is probably keep betting on yourself and bet again and roll the dice and roll the dice what happens in as you get older is you realize that these opportunities were in front of you and you didn't jump for them why you were in a bad mood or you know you didn't know who to call or so forth life can be understood as a series of opportunities that are put before you and they're Tim Limited I was fortunate that I got the call after a number of people had turned it down to work for Larry and
for and with Larry Sergey at Google changed my life right but that was luck and timing my one friend on the board at the moment said I was very thankful to him and he said but you know you did one thing right I said what he said you said yes so your philosophy in life should be to say yes to that opportunity and yes it's painful and yes it's difficult and yes you have to deal with your family and yes you have to travel to to some foreign place and so forth get on the airplane
and get it done what's the hardest challenge you've dealt with in your life well on the personal side you know I've had the I've had a set of you know personal personal Pro problems and tragedies um like everyone does I think on a business context um there were moments at Google where we had control over an industry that we didn't execute well the most obvious one is social media uh at the time when Facebook was founded we had a system which we called Orit um which was really really interesting and somehow we we we did
everything well but we missed that one right and I would have preferred and I'll take responsibility for that we have a closing tradition on this podcast where the last guest leaves a question for the next guest not knowing who they're going to be leaving it for and the question left for you is what is your non-negotiable something you do that significantly improves everyday life well what I try to do is try to be online and I also try to keep people honest every day you keep you hear all sorts of ideas and and so forth
half of which are right half of which are wrong I try to make sure I know the truth as best we can determine it Eric thank you so much thank you it's uh such an honor your books are have shaped my thinking in so many so many important ways and I think your new book Genesis is the single best book I've I've read on the subject of AI because you take a very nuanced approach to these subject matters and I think sometimes it's tempting to be binary in your way of thinking about this technology the
the pros and the cons but your writing your videos your work takes this really balanced but informed approach to it I have to say as an entrepreneur the trillion dollar coach book is what I highly recommend everybody goes and reads because it's um it's just a really great Manual of being a leader in the Modern Age and an entrepreneur I'm going to link all five of these books in the in the comment section below the new book Genesis comes out in the US I believe on the 19th of November um I don't have the UK
date but I'll find it and I'll put it in but it's a book it's a it's a critically important book that nobody should avoid I've been searching for answers that are contained in this book for a very very long time I've been having very a lot of conversations on this podcast in search of some of these answers and I feel clearer um about myself my future but also the future of society because I've read this book so thank you for writing it and thank you and let's thank Dr Kissinger he finished the last chapter in
his last week of life in his deathbed that's how profound he thought that this book was And all I'll tell you is that he wanted to set us up for a good next 50 years having lived for so long and seen both good and evil he wanted to make sure we continue the good progress we're making as a society is there anything he would want to say any answer he gave would take five [Music] minutes a remarkable man thank you Eric thank you [Music] I'm going to let you into a little bit of a secret
and you're probably going to think that I'm a little bit weird for saying this but our team are our team because we absolutely obsess about the smallest things even with this podcast when we're recording this podcast we measure the CO2 levels in the studio because if it gets above a th000 parts per million cognitive performance dips this is the type of 1% Improvement we make on our show and that is why the show is the Way It Is by understanding the power of pounding 1% you can absolutely change your outcomes in your life it isn't
about drastic Transformations or quick wins it's about the small consistent actions that have a lasting change in your outcomes so two years ago we started the process of creating this beautiful diary and it's truly beautiful inside there's lots of pictures lots of inspiration and motivation as well some Interac Dev elements and the purpose of this diary is to help you identify stay focused on develop consistency with the one % that will ultimately change your life we have a limited number of these 1% Diaries and if you want to do this with me then join our
waiting list I can't guarantee all of you that join the waiting list will be able to get one but if you join now you have a higher chance the waiting list can be found atth diary.com I'll link it below but that isth diary.com [Music] ah
