All-In with Chamath, Jason, Sacks & Friedberg
00:55:34 · David Sacks, Jason Calacanis
[00:55:34] S1: And Now here... Yeah. [00:55:36] S0: Go ahead. Just just to dovetail with that, Sacks. What's happening with the models is even more impressive. The... They're lowering the price of tier two and tier three models. Right? Your your Sonnets, your Opus. Those are getting cheaper, but enterprises are saying that's enough for me. So as they make that cheaper, then businesses get more value, they solve more problems out of it, and they don't feel the need to be on the latest greatest fable. If you're all hollow, maybe you need that to do science. If you're a mathematician, you need it. If they can keep making their second and third run models this much cheaper, 10 x cheaper each year, the Jevons paradox is gonna get even more pronounced because enterprises will use it more. Token cost matters. Right? We're sitting here with the token max and cost.
00:56:19 · David Sacks, Jason Calacanis
[00:56:19] S1: What we're is that... I mean, we we keep seeing Jevons paradox play out at every level, which is as you cut the cost of tokens or more and more use cases, enterprises use it more and more and the the net result is that the total demand just keeps going up. And the total revenue and market size keeps growing. Also, just to reiterate a point that you made earlier in the program, the new applications that are coming all consume a lot more tokens than the ones that we started with, right? Like agents use a lot more tokens than prompting. And cyber defense is gonna use a lot more tokens than just doing, you know, a pen test once a year, right? You're gonna need continuous monitoring of agents, attack surfaces, all that kind of thing. So all the new applications are gonna be using exponentially more [00:57:08] S0: 50 to a 100 number of tokens. Yes. [00:57:11] S1: Exactly. So the price will keep going down, but the market size keeps increasing. I think the biggest risk factor to Anthropic, I do think it is some version of the open source models, maybe not catching them, but sort of saturating intelligence at a low price point for [00:57:27] S0: Commoditizing it.
00:57:27 · Jason Calacanis, David Sacks
[00:57:27] S0: Commoditizing it. [00:57:28] S1: Commoditizing it for things like coding or, you know, where there is a big chunk of the market, that is still a risk. I would say sort of a second order risk is that in order for Anthropic to stay ahead and to keep making their models more and more efficient, they have to keep using more recursive self improvement, right? You see this in the charts that they published, that they are using their latest models more and more to discover these compute multipliers, to discover these new algorithmic efficiencies. So they have to kind of push the limits of what they themselves call risky activity. I don't know if I fully believe in the Doomer story about RSI, but they themselves say that RSI is very risky, but they have to keep pushing RSI in order to keep delivering these algorithmic improvements in order to stay ahead of the open models. And I just wonder how sustainable that is. At some point, do you get a breach with the doomers that becomes irreconcilable? Do the doomers want to basically shut down RSI or basically slow it down to the point where then the open models truly do catch up? I don't know the answer to that question. It's sort of just a more nuanced take on this idea of open models catching up.
00:58:44 · Jason Calacanis
[00:58:44] S0: Yeah. And I think this chart is super illustrative. If you could pull it up, Nick. Gallup's been keeping a survey of who's using AI at work daily versus frequently defined as a few times a week. And, you know, the people using it, like, frequently versus daily, we're still talking about 1020% here. It's nascent. A lot of the top enterprises are not letting their employees use this in an unconstrained fashion, and they're certainly not letting them connect their email, their knowledge bases, their Notions, their Slacks. Big corporations are not letting people actually use the power of AI because they're scared about cyber. So once the cyber threat Chamath gets mitigated, this is gonna go from 10% of people being daily users to 60, 70, 80%. There's so much growth left here when every single employee has an agent. I saw just last week, Uber bought open a... OpenAI ChatGPT for every employee. That's gonna be the next shoe to drop is do you buy these things for every single employee? Okay. I think we beat that one to death. Congratulations to the Anthropic team and all the investors on making an incredible business extraordinary. And, yeah, shout out to Sacks who predicted this would be the greatest business ever on multiple programs. Turns out you got that one correct. And we'll see we'll see what happens.
01:00:16 · David Sacks, Jason Calacanis
[01:00:16] S1: But like I said, I I said two things. Number one, best business ever creating this AGI monopoly. Second, they're going for regulatory capture, and we should definitely not allow that to happen, especially in light of number one. Right? It's just kind of unseemly and gross for them to be seeking red capture when they already have such a good business and they're in such a dominant position. And I think actually that this IPO will be very helpful in clarifying on that because, again, once they're seen as a big tech monopoly or part of a, you know, huge duopoly, the arguments for giving them, like, regulatory advantage will go go away. In fact, we should do everything we can to make this market more competitive. Before we [01:00:56] S0: help the Breakup Anthropic movement, Breakup Anthropic, separate the land It [01:01:01] S1: could happen. [01:01:01] S0: From the tokens, from the subscription. It will. Like, if... And the... Who said it? Gavin that they were claiming they were building the last business ever? You know, when you look at the other franchises [01:01:11] S1: said that. [01:01:12] S0: Well, Gavin said somebody said Dario. [01:01:16] S1: Oh, sorry. Yeah. Gavin said that Dario said that and then said it. [01:01:19] S0: And that actually [01:01:20] S1: But Dario did not deny it. Remember? He had this lengthy response, but
01:01:24 · Jason Calacanis
[01:01:24] S0: then said... Yeah. So... Yeah. I I mean, I I think they obviously believe it. And if you look at that chart I made with the other franchises, they they obviously have an incredible franchise that's theirs to lose when we get the OpenAI data. Man, then we're gonna have all three of the major players in this space disclosing the key information we need, and that's gonna be really interesting when we have all of the hands turned over in this poker game when OpenAI files. Alright. Google got smashed on Thursday, 10, 15% down. We we record on Thursdays, obviously. Q three earnings wiped out about 500,000,000,000 in market cap. Why? For two straight quarters, Google missed on search revenue. Even though searches are growing massively, the people clicking on the ads is not, which leads to a little bit of shenanigans and trying to get people to click on more ads. They're negative on free cash flow even though cloud is ripping. Cloud doubled year to year, 30,700,000,000. That's the AWS business they have. It's called Google Cloud. It's quite nice. And overall revenue is still strong. They're growing 25% year over year. The issue is people are looking at that Google cost per click advertising network and saying, well, obviously, that goes away at a certain point if you just give people the answer. Right? ChatGPT, Anthropic Grok, they just give people the answer. In some cases, they go solve their problem if it's an agent. So that is pretty disruptive. Search business, is what pays for everything, and that grew 12% down from 17%. So it's decelerating, but it's still growing nicely. Friedberg, this is your alma mater. You witnessed the cost per click greatest business ever. This was the previous one that we said was the best business ever created along with the iPhone franchise. What are your thoughts here? Are you worried about that franchise, or do you think they've done a good enough job with the other businesses? Google Cloud and YouTube come to mind, Android, in terms of diversifying their revenue. You worried about Google as a buy opportunity, or is this stay away? It's a complicated story. I think the core services, the core Google ad revenue is a real challenge right now in terms of can they keep the momentum up.