C (6:30)

Sure, yeah. I'm pleased, thanks to be here. I think based on the things can only go up from here. So happy about that. It's a beautiful space and a great place to be and I'm just grateful and it's nice to come to a place that's relatively nearby, as you said. I teach at Columbia, but I live up in East Village. So thanks for having me. So let me kind of get into it first. I want to be a little more clear about my thesis to begin with. I think I do react. The book has a reaction against the idea that in some ways technology has this inherently beneficent nature. But it doesn't mean I would suggest that I'm sort of anti tech. In fact, I feel like I made much of my early career in the tech industry. And I have this. It comes down to my long belief, I guess, in the cycle secular nature of many things. I think that many companies, and tech companies in particular, kind of start in these very optimistic phases, start in this way where they truly are creating and catalyzing a lot of value for a lot of people. But once they sort of reach a kind of monopolistic position or dominance, turn to a more extractive kind of mode, and then later on, depending how long they stick around, can become really a barrier to progress and a barrier to sort of a stagnant extractive thing. In some ways, tech is not the worst industry for this. If I take an industry like meat processing or aerospace, I think things are even worse. Tech, meaning like Internet tech. But I'm wary of the same trends developing in our own space. So what is a platform? I think people in this room probably compared to the average audience, have some Intuitive sense of what that means. But I kind of wanted in this book to get deep down to the origins and the most fundamental meaning of platforms. In some ways, I wrote this book. People write in different ways. I kind of wrote this book with a sentence in mind as I walked down the street and I said to myself, everything has to happen somewhere. That was a sentence. And I was like, originally I was going to make that the first sentence in the book. It's like, everything has to happen somewhere. And more likely than not, the thing or the place that things happen is some kind of platform. In other words, what I mean by that is that all through the course of human history, there have always been spaces where transactions happen, where speech happens. Sometimes we're, you know, any kind of human interaction happens. And it is the nature of those spaces that does a lot, in my view, determine what kind of civilization you live in. I was in Rome this fall on a family trip. And, you know, when you go to Rome, you go to the Roman forum, which is, you know, one of the classic kind of platforms of the ancient world. This area where it was, first of all, a commercial marketplace. It was also where they gave, gave speeches, it's where they had trials. It kind of all happened there. The Greek Agora, very similar. Ancient Chinese city markets were very similar. So there's always been these spaces. And prosperous civilizations have always centered around these kind of open marketplaces, open platforms that create an opportunity to generate wealth for a lot of people. Because only when you have some kind of platform do you have the possibility of independent farmers, businesses, so on, selling their stuff to make a surplus. So I think the platform is really essential. So what is a platform? You asked me to define it, and maybe I should finally get to that. A platform is, I guess, any space or institution or technology that facilitates transactions between groups of people. Okay, so that's very broad. That could be the Tokyo Fish Market, that could be the New York Stock Exchange, that could be Amazon Marketplace, and so on and so forth. And as I've said, I think the stakes are very high for what a platform looks like, because it has a lot to do with how wealthy, in some ways, how free a civilization is, because platforms are where speech happens as well, and where conduct, public conduct happens. And that leads me now to our current day. I mean, what's interesting about our times is we still have obviously physical platforms, streets and squares where people are sold. Union Square Green Market, for example. But some of the most significant platforms are obviously the online platforms, and they differ from the older platforms. In a couple ways. So, first of all, their technological powers are much greater. We have search, they can hold unlimited items and so forth. But they also have the fact that they're private and also that they take quite a bit the transactions as compared with historic platforms. So that's kind of, in some ways what this book is all about, is the take. I mean, this book is all about many things, but it's partially about that take and the freedom and openness of the platform. So there you go.

B (11:44)

I shop on Amazon constantly. My household buys virtually everything on Amazon. And I actually, you know, it's incredibly convenient and whatever. And so, you know, it's easy not to necessarily think about the broader implications. And, you know, in fact, one of the reasons it's so successful, obviously, is that it, it does provide enormous convenience. But you're trying to kind of lift up the curtain in the book and say, you know, it's not just a platform, it's a deeply extractive platform. And so, you know, what is, you know, how is Amazon, to take one example, extracting value from the economy, maybe undo value, and what are the harms from that extraction?

C (12:19)

No, that's a great question. The Amazon marketplace and the story of the marketplace kind of charts this narrative that is key to the book. So one of the things, another reason I wanted to write this book is I was interested in what happened to that idea that from the 90s early thousands, that the Internet was going to make everybody wealthy, that it was going to be this great sort of distributor of wealth, decentralization, the kind of economic activity that wouldn't matter where anybody lived. And I'm not saying none of this came true, but it certainly came true less than, I think, than people thought in that time. And I think the story of the Amazon marketplace is a key part or a great example of that story. So Amazon, as you may remember, used to be a bookstore. And it, you know, basic idea was would have a huge warehouse of books and sell more books. And then I guess I'm going to use Borders. Anyone remember that company? And, you know, Barnes and Nobles, like that was going to be their thing. And, you know, it was kind of a good rip. But they really figured, like Amazon really started growing when they started to understand that there was a lot of value in the marketplace, that is, them being a platform where a whole bunch of sellers could show up and reach a whole bunch of buyers, which is the key dynamic we're talking about here, which I think is familiar to this audience. They started the marketplace first. It was Used books. Then it became other products and it spread and spread. At a moment, let's say maybe 2010, 2011, 2012 or something like that. I think Amazon really was fulfilling that original dream of, you know, Internet as this decentralized wealth generator. And I say that because there were a lot of people getting on around the country and around the world, especially around the country selling stuff. And Amazon's take was low. It was somewhere between 15 and 20% was what people were selling. And Amazon figured out fulfillment and that was a big advantage over ebay and they had a good search engine. Do you remember actually, does anyone remember when Amazon was competing with Google in search of very long, probably before people's time, they had this search engine anyway. And I think like if Amazon circa like 2010 had stayed the way it was, I think I would be the biggest fan of Amazon there is. The problem is from my point of view is once Amazon kind of had a dominant share of sellers and of buyers, they started to start to turn all the knobs and take more and more and more and you know, all the fees started going up on both sides of the market. And they did it, you know, because any for profit business will try and increase their business. But the question is how much were they taking from everybody else? And you know, I have in my book like the example of random barber in Indiana who starts selling I think hair products and makes a lot of money in the early Amazon because it's very profitable and he can do it and he hires a bunch of people and he's making, becomes a millionaire. But the fees, everything adds up. And it becomes very hard for independent sellers to make any money. I'm not saying impossible, but difficult. One of the real cash cows I kind of found this amazing is the Amazon advertising model which people may know about. So when you search something on Amazon you get sort of a whole bunch of sponsored links and so on and so forth. So that over time has, as far as I can tell from the reading I've done, become Amazon's most profitable products, more profitable than Amazon web services. Take an example, 10 billion, 20 billion. Last year they clocked 56 billion of revenue. Sponsored link placement kind of advertising thing with limited costs by the ingenious device of making sellers bid against their own margins on this platform. I looked into it recently. I think in 2025 it's going to be over $70 billion pure profit for a product. That actually makes search worse, makes it harder to find what you want. So in other words it's sort of 70 billion as an example of just pure, not value adding, but value taking away extraction. That's just one example. But I think it again comes back to my point, which is I said this book is kind of all about the take. I think it's a very different kind of thing where Amazon Marketplace has taken 20% of transactions and is sort of spreading a lot of wealth to the country and helping fight inequality and making this prosperous to one where it's over 50% worse than, maybe even worse than brick and mortar. I think mostly easier for Chinese importers to be successful. It's just different in terms of its effects on the country. So that's sort of my story of the Amazon marketplace. It's not that I think it's useful. In fact, of all the platforms, I find Amazon the most difficult to do without because, you know, obviously you're going to, you know how Peter Singer doesn't eat meat. So if I'm going to be critical to platforms, I feel like I need to sort of not use them all the time. But Amazon's very hard to avoid.

B (17:16)

Yeah, I mean, convenience is an addictive drug. It's just very, very hard to do something that's less convenient. I think you call this, rather than the singularity, the sofa larity, where we'll all be on our sofas and never move for the rest of our lives. Because it's just the tech companies have made our lives so convenient. Brad, I want to bring you in here. You know, you have yourself been an important part of the development of some major technology platforms over the last couple decades, most notably, you know, helping Uber grow into, you know, an extraordinary business. And so I'm curious, as you reflect on the power of Uber or of Amazon, do you have the same concerns about the sort of extractive role that they're playing in the economy?

A (17:57)

Yeah, I mean, yes and no is sort of unfortunately, the complicated but right answer here. And I think a lot of this comes down to balancing positive and negative externality. So when Tim talks about the take, that's a clear negative externality of a platform. And I actually think we'll tell a story about regulation, which sort of is a analog here. That makes sense. Right. So, you know, when you look at some of my colleagues in Venture, some like Marc Andreessen would say regulation is terrible and we should be libertarian and we shouldn't have anyone telling us what to do. And of course that's an absurd position because fundamentally, without cooperation and laws and rules and everything else, there is no organized society. We haven't advanced, we wouldn't have advanced at all. And we'd be living in total chaos. And he couldn't enjoy all the things that his money buys him. And when people on the far left, I don't know, Bill de Blasio or someone says like tech is evil and I'm only using a flip phone and whatever else, that's equally absurd. Because if we didn't advance and develop and innovate, you know, we'd still be in the Stone Age, right? So that with life expectancy of 32, and that wouldn't be good either. I was driving once from Santa Barbara to la and it kind of something hit me along the way that I thought maybe captures this, which is. And have any of you done that kind of Pacific coast highway drive, right? So. So you know that it's really beautiful, right? And I remember I was driving and at one point I'm like, this is so incredible. And I was like. And the reason why is in this case, regulation worked really well. There are not Sunocos and Kadobas and whatever else between me and looking at the beach and the ocean. Because regulation said, you can't put that stuff here, right? There would probably be market demand for it. But the regulator said no. Now when I got into downtown LA and there were homeless encampments everywhere, that was also the product of bad regulation, right? Which in those cases, and Tim, might not totally agree with me, although I'm stereotyping you based on what I believe your politics to be, which may not be accurate at all. But the far left with sort of endless environmental reviews and community vetoes and demanding union, using union labor on every project effectively led to, and this is what is captured in the abundance book that probably a bunch of you have read, led to the lack of affordable housing in Los Angeles and in cities all over America that make it really hard for poor people or even middle class people to find place to live. Basically zoning regulations on the same stretch of road in different parts of the same state, even within a two hour drive, led to dramatically different outcomes. Which means tech platforms are not inherently all good or all bad. Regulation is not inherently all good or all bad. And we know that you can't not have progress and development because otherwise there's no society. And we know that if you leave it totally unchecked, the, the extractive value becomes incredibly high. And that also becomes a significant problem. And so it's really kind of how do you balance the two? Doing it in retrospect can work in the sense that, like, I thought, Tim's colleague Lina Khan was totally right about her antitrust prosecution of big tech. And I think that's probably one of the only VCs that was publicly supportive of her in doing it. Because from my perspective, A, everything Tim is saying is right about, say, Amazon and B, as an early stage vc, no one ever comes to me and pitches me a startup saying I want to take out Meta or Google or Amazon because it's like an absurd concept, right? They have so much market power, so much monopolistic power, that I would argue they actually stifle early stage innovation because no one even tries to compete with them. Right. Sometimes people build things they think they could sell to them and that's, you know, kind of a risky bet because you don't know what's going on inside of those companies and whether or not they're developing the same thing or not. And so when it's retroactive, I think you can figure it out. The question is, especially with AI or kind of any platform that's kind of coming together now is how do you do it prospectively in a way that both protects people but at the same time doesn't stop good things from happening that otherwise would have happened. Right. So, like for example, a lot of states are dealing with the regulation of mental health chatbots right now. And last year Illinois and Nevada banned them. There's about half a dozen other big states right now looking at it in this current legislative session. And the reason why they're doing that is very rightfully there were examples of chat, mental health chatbots that told teenagers that yes, you should end your life. And they did. And of course that is a terrible outcome and of course not wanting that to happen again is what elected officials should be doing. On the flip side, you live in a country with massive mental kind of illness and depression and anxiety and addiction and everything else, and a giant shortage in people, qualified human beings to provide counseling and care to other people. A lot of people who can't afford that type of care, even if, even if they did exist for them. And so to correct the difference between, difference imbalance between supply and demand, you would imagine that being able to use technology so that people can both talk about how they feel, feel heard and seen in some way and hopefully get some perspective, might have great societal value. And so then it's a question of if you ban them entirely, you're going to lose all of that gain if you don't regulate them properly, you could have teenagers killing themselves. That's not okay. And therefore what's the right balance? And it's really hard to do prospectively because almost by definition regulation has to lack innovation. If the regulator had the ability to conceive of a new technology and build a company and everything else, they'd be a founder, not a bureaucrat. Right. So you know, they can't regulate things that haven't happened yet that they can't even necessarily conceive of. So it's a really tricky thing. I think to Tim's great credit, you know, he is ultra sophisticated and nuanced about it and then the question is really what's the right balance to achieve the greatest good for society in the face of so many unknowns and so many variables?

B (24:05)

Let's get back to the AI topic in a minute. But Bradley, you mentioned the sort of role of the big technology companies in stifling innovation and I think actually you and I are probably the only two VCs who have been public on that.

C (24:21)

Union Square Ventures used to be quite public about that.

B (24:23)

But anyway, sorry, yeah, no, fair enough. We're not literally the only two. There might be three in a country of 2,000, but they're not that many. But Tim, you point out the nature of these technology platforms and their attractive role in the economy and. But your concern is not just the inshidification of the Amazon experience or it's bad that Amazon makes a lot of money, but in fact that there are other very significant knock on effects of this one is stifling innovation. A second is more about political instability and what it does toward democracy. So can you talk a little bit about what you see as those kind of knock on effects of the role of Google and Amazon and others?

C (25:02)

Sure. And I don't want to. So turning back to this problem of extraction and the take, I mean one way of thinking about this and the reason it creates problems is it's almost like a private tax when you think about like when you have an unregulated monopoly which is in a essential part of the economy, they can charge whatever they want and charge grossly in excess of their cost. Amazon advertising being an example where there's almost no cost associated with it. It just kind of functions like a private tax on and it's one somewhat felt by consumers but it's kind of quieter because it's usually felt by the sellers on the other sides of the market. But I think it has this effect on kind of making it more challenging for entire groups of people and that leads to sort of the political sort of challenges I think the original promise of the Internet, and I think it was an exciting one back in the 90s, early thousands of, was that it was going to decentralize wealth, was that we were going to have a country where it wasn't just a small number of people, but all over the country there would be buildup of wealth and it would be more or less equal, would be too strong, but distributed. I think we've got to a very different kind of reality where much of the population feels like the game is rigged against them. And this is not only tech, but tech is a very visible sign of it to a lot of people. And I think it's hard to deny and this sort of elementary history that when there's large groups of people who feel economically insecure and feels the game is fixed and feel they're going to be poorer than their parents, that they get angry and increasingly turn to more radical political answers. Now, partially we have obviously a media environment that sort of fosters that and feeds off it. But the core of it is this real sense and it's expressed in a lot of crazy, different ways, but at some level a sense that whatever system we had is not fair and is not one that looks promising to me where I can get out there and make a lot of money if I'm not part of some small class or something like that. And I think history over and over and over again tells the same lesson. In fact, I have a part in the book which is called the the Real Road to Serfdom which is if you look through the history of the turning of democracy into dictatorship, authoritarian government, a lot of it goes through the path of monopolization of key industries, a buildup of a huge amount of wealth and elite, just an anger among the people. And then if the democracy cannot manage to fix that or manage to make the system seem fair, if people just think it's captured, then the strongman has a lot of appeal. This was Mussolini's rise to power, was based a lot on economic dissatisfaction tied to current events. The pioneer in our time, obviously the German Nazi party in the 30s, built on economic dissatisfaction. Examples are everywhere. The pioneer in our time, something I briefly talk about in the book and next book talk about more was really Hugo Chavez in Venezuela, which is so interesting to tie in today's times, is he basically saw a population that was furious about oil wealth going to this small number of elite in the capital Caracas. And he said, listen guys, I'm going to take back oil wealth and give it to you all. And it's going to be great. He was elected popular elect. He actually won election after election. And in the beginning, it's always how these things go. He did give a lot of money out, he lowered and all this sort of stuff. But there's a cycle to all things, as I keep suggesting, and eventually became this repressive autocratic strongman. So I think this is a danger for all democracies, obviously. I think it's a danger for our democracy. I think we've gone in this direction. And I'm not saying, okay, Google caused us, but I'm saying somehow we have not structured our economy in any kind of balanced way whereby it feels like there's opportunity for a lot of people. It feels like there is a real chance to get out there and put your thing and either create a great job or make a lot of money. Somehow that is the deeper level beyond tech, what I'm very interested in.

B (29:24)

I think your book does a great job talking about that. We're living at this moment where there's for some reason deep returns to scale and the few of the largest companies in our world are so dominant. And there's this deep historic irony. And you have these great quotes from the early 2000s of people saying everything's going to be decentralized, like, wow, every entrepreneur is going to be empowered. And I think it's like you say something like, rarely have so many confident predictions been so wrong about how the Internet would actually impact the economy. Not to say it's not extraordinary and that we don't all benefit every single day. But in terms of the economic impacts, it was so far from, know what people expected in terms of decentralization. And that's, I think, you know, part of the story of increasing returns to scale. You know, last week I was talking to him before this. I saw a LinkedIn post from a founder who said it was almost like he. I mean, he must have been his early 20s, so he didn't live through the Internet, you know, boom. But he was talking about AI and was like, this is the most amazing technology ever. It's going to decentralize power and make every entrepreneur successful and break down big institutions. And I was like, I've heard this story before. I mean, I'm pretty sure now. But maybe he's right, maybe he's wrong. And so I'm curious from both of you to hear, does AI actually create a new opportunity where in fact maybe it will be more decentralized economy where individual entrepreneurs do have more power, where the big tech Companies maybe are less dominant.

A (30:48)

Sure, yeah. I mean, again, I feel like I saw every answer to this yes and no. Which means, if you ask me, do I think in 20, 25 years, we're probably better off as a society than we were before in the sense that, you know, advancements that AI can bring about, whether it's in figuring out carbon capture or drug formation or how to teach kids based on their own learning style, whatever it is, sure. There's all kinds of great things can come, and there's all kinds of great technologies and industries that will emerge. I think the challenge is the AI thing feels to me to be even more disruptive potentially than the Internet in the sense of the short term, at least short term harm that will come from it. So, like, I won't name the people, but I had a meeting two months ago with a member of Congress who was working on a legislation, and he said to me, friends of them, he said, can you get like 10 early stage VCs around a table? I just kind of want to pick their brains on, like, what should be in my bill. Great. And everyone was excited to do it. You weren't there, but one of your colleagues was there. And I said to him, okay, do you think there will be significant job displacement due to AI? And he said, yes, because I don't know anyone that doesn't really think that. And then I said, great, you're an elected official. What's your answer? And he said, job training. And that's what they always say, right? And I knew he was going to say that. And then I turned to the VCs and I said, okay, we are New York, you know, reasonably well known venture capitalists who invest in early stage companies. If anyone knows what those industries that we should be training those people in will be, it should be us, right? Because we're seeing these deals. Nobody had a single idea at all, right? And so I'm not worried about sort of necessarily 20, 25 years from now, because I think the good probably will outweigh the bad. I am very worried about the society that we are heading into, because to Tim's point, there's already this incredible distrust of institutions and already this incredible lack of faith. You know, if you think about what might be powering crypto and meme stocks and prediction markets and all of that other activity, it may be that a lot of people are like, I'm never gonna be able to afford a home, so I'll take whatever discretionary income I have and put it into these things. And maybe I'll get lucky and hit it big and then I'll get rich. And that's clearly you don't want sort of a lot of tourize, if that's a word, all of society. And so that gets to the question of what do you do in between? So, like, for example, we ran Andrew Yang's campaign for mayor of New York City in 2021. The thing that I've always liked about Andrew is I just think he's been right from the beginning that, you know, I think at the time when he wrote his book the, you know, War on Normal People, or what's called, I'm sure we have it here somewhere, he was thinking of sort of automation more broadly because it wasn't like he could really know exactly what AI would be back then. But his point was when you have giant job displacement, people have to eat, people have to pay the rent and propose universal basic income as a solution to it. I think we need that more than ever right now. And it's challenging, right? Republicans won't like it because they'll just see it ideologically as this giant giveaway and people are going to spend it on drugs and hookers and whatever, which, you know, maybe 1% of people will. But I really don't think that's the norm. And then the left's not going to like it because to do it properly, you then have to commensurately reduce taxes and reduce much of the government apparatus that provides social service, because you don't need to do that anymore. And that means laying off tons of people who are union members and Democratic voters and donors. And we're going to get opposition there too. Look, Mondami right Now could use AI to probably replace 10% of the current New York City workforce. Procurement compliance, facilities management, data management, permitting, licensing, all of that can be done better by AI. And he could take that 3, 4, 5 billion dollars in savings and put it into childcare buses, all the things he cares about. And no New York City voter is going to say, I would rather pay for middle management than pay for these other things that would tangibly benefit me and make my life better. And yet I don't think he'll do it because I think he will back down to DC 37 and the other municipal unions here. And he won't want the political pain of getting his ass kicked on Blue SK and whatever else. And therefore it won't happen. So in order for to me to prevent the catastrophic societal harm that will come from the job, short term job displacement of AI, we need to do some really radical things that gore the ox of both parties significantly. And that's going to be really hard. But I still think it's better than the French Revolution.

C (35:30)

I mean, your comments are.

B (35:31)

That's a low bar. Having read history of the French Revolution recently.

C (35:35)

I mean, your comments are consistent with what the history suggests of the Industrial Revolution. Just take one thing which is in the long term, people were better off from the Industrial Revolution, obviously. But there was a lot, a lot of turmoil. And depending when you count, depending when you count, especially later stages of industrial revolution, late 19th century, they have a lot to do with multiple world wars, communist revolutions, anarchist revolution, civil war. I mean, there's a lot of death, dying and chaos that comes from those periods. So in some ways the second half of my book is kind of at this question of like, here we are, we're in a period with a lot of, as you say, really disruptive economic change. Can we do better than history? Can we avoid it at some level, like avoid a world war? That is another way, one of the ways that income gets redistributed over history is through massive world wars that actually have a leveling effect. And revolutions, like violent revolutions, have a leveling effect, but I would suggest not the best policy tool like mass amounts of suffering. So in some ways what we're trying to do is like better than that. And the fact is like previous generations did not do better than that. Let me be a little more optimistic because I think there have been times where we could have gone in that direction where things were kind of going in different directions. Like the 50s being a good example. 50s had some good and bad, but they did have a lot of very large scale companies. But we also managed to sort of go through that period and there was some chaos and some war, but there wasn't this. It was after World War II, obviously. So there had been this kind of re leveling the 50s, 60s and 70s, we didn't have, let me take a good example, the PC revolution. So this is what I think is our model. So the personal computer was an incredibly disruptive technology. Obviously right there you had this little thing that as opposed to being owned by a company or university was like a person could own it, you could start a business with it. It dislocated a lot of jobs ultimately, like accountants and so forth, travel agents, and ultimately kind of changed everything, but it didn't lead to. The thing about the PC that I think was so amazing is that it was kind of, it actually was a Decentralizing technology. It did create a lot of wealth, but without just creating a couple. I mean, there were people like Michael Dell who made money and later on Bill Gates, but it wasn't this like most people lost out. A lot of people made a lot of money out of the PC. So I think the PC, if I would have some hope for what direction AI could go, that would be like this empowerment tool like the PC that makes a lot of people able to do something that used to be, that a company could do. That's hopeful, that's optimistic. But you need some model of what we could be.

A (38:29)

Can I ask you a question? So the PC and then even the Internet to some degree, compared to at least what we think the harm in terms of at least short term job displacement of AI were relatively limited. Why was that? And how do you try to prescriptively make that happen, make it unfold in that way?

C (38:53)

It's a good question. I mean, I think it had a lot to do with design ideology. So if I think about the PC in the 70s, they were, it was, you know, invented by people like Steve Wozniak and some degree jobs and then a bunch of other people at that time in the 70s who were ideologically against giant institutions and corporations and who wanted to create kind of a tool of empowerment. And that ideology went a long way. Right. And I think we've gotten to it, I think without really noticing it. I mean, Silicon Valley and the tech industry in general, not maybe necessarily people in this room, but has really changed its identity from one which saw itself as the kind of outsider that tried to empower a lot of people that was kind of anti government and anti big corporation, looked at defense contractors as beyond redemption and hopeless and slow and so forth to wanting to be defense contractors. I mean, Marc Andreessen is always going on. He's turned himself into General Dynamics or something. He wants to be Lockheed Martin. Like who wanted to be that in the 70s.

A (40:03)

Right.

C (40:03)

Well, so I think ideology in tech matters a lot.

A (40:06)

Yeah, Compass is a good example where like, I think a lot of us who work in tech are like, okay, brokers are totally just attacks on the system and Internet means disintermediation of the brokers. And technology should allow people to find places to live without having to pay these outrageous fees. And Compass was like the best startup to do that. They became a giant brokerage firm. Right.

B (40:28)

Well, I want to open it up for, for questions from the audience and then we'll reserve one minute each at the end to talk about what solution you think is most important? But we'll come back to that questions from the audience. Right in the blue jacket, blue shirt, right there.

A (40:43)

I'm curious about what we do about this extractive force.

C (40:46)

Right.

A (40:47)

Just as in housing, it's really hard for a community to vote for more housing when they have seen housing as

B (40:53)

an asset class that is part of their portfolio.

A (40:56)

Similarly, all of these platforms in the age of retail investing and 401ks are so much a part of people's personal wealth. And these platforms in particular account for a lot of the growth in the American economy that we are also all personally hooked on. Right. So how do we do something about that 70 billion annual Amazon additional tax

B (41:16)

when that is also reflected in all

A (41:19)

of our portfolios and our retirement futures?

C (41:21)

I mean, I think you want to be interested in the wealth of ecosystems, not in the wealth of companies. And I think we've kind of gotten to a period where we're, you know, too hooked, I think. And I think it's a problem for the political stability and economic stability on the, you know, on, on a few stock prices continuing to go up. There is such a thing as wealthy countries that are not just centered on a couple very large companies, including increasing their stock prices over and over. I think it's a dangerous thing for a country to be in that. And so short term thinking, I do think we want a prosperous, growing tech sector. In fact, tech, broadly defined, has been the anchor of growth not for 20, not for 30, but for 100 years. But it hasn't always been about, oh, a couple big companies. I mean, you might have said the same thing about General motors in the 50s. Oh my God, how can we ever think about doing anything that might force them to become more competitive or something? Because everybody owns General Motors stock. And then, so what we did is we let General Motors go. We gave them all kinds of favors. We never broke them up. There was a big movement to break them up in the 60. We never did it. We never forced them until they just, you know, eventually became this, this colossus that got half its money taken from by Japan and other competitors. And, you know, like that. That's the problem if you get too obsessed with the idea that these companies are our champions and they cannot do anything. It's a very precarious. We become like the country version of a one company town.

B (42:46)

Yeah.

A (42:46)

And to, to add to that, because Tim's totally right, sometimes imposing various forms of regulation force companies to innovate and get better. Right. So one of the fears that I have is if you don't use antitrust to successfully limit the monopolistic power of the giant tech platforms today, they're going to become General Motors. That's human nature. They will become slow and stagnant and internally focused and corrupt in various ways because that just what happens. And if the companies to replace them aren't being ceded because no one bothers, because it just seems impossible to try to compete with them, then you have this giant hole in the economy. So I think sometimes it actually helps it. Or so, for example, right now I'm working on different ways to limit the negative externalities of data centers in terms of imposing higher utility costs on residents nearby. Right. And obviously the hyperscalers hate it because, hey, we're fixing and solving all the world's problems and here you are making it harder for us. And my argument is no. If you have to be able to power your product without imposing giant costs on everyone else, you will have to innovate. And that might mean alternate forms of compute, that might mean permitting nuclear, microgrid nuclear and bringing it on site. There's lots of ways to do it. I don't know all the solutions, but, you know, it's. I don't think it's either or, or even like I've tried and failed at a little campaign to get state controllers and city controllers around the country who collectively own like a, you know, 7% or something of meta stock, to say to them, listen, we're not going to, you know, if we all sold on day one, that's a pretty big hit to you. And if you don't take real steps to protect children on the Internet, whether it's stopping opposing the repeal of section 230 or banning social media like Australia for people under 16 or whatever it might be, we're going to do this and force change. And the objection I got from the controllers as well, it's in our, it was to your point, it's in our portfolio. We can't risk it going down. And my view is like, it might go down temporarily, but if you force them to innovate, they will figure it out and it will actually ultimately be for the greater good. And your job is to both represent, you know, the case. Like when I talked to Tom Dapley about this, yes, the New York pensioners who rely on this, but also you're an elected official by the people of New York. And when parents have their teenagers committing suicide or cutting themselves or developing eating disorders, that's your responsibility too. And so I Think we can also do things that will A force companies to limit the pain they cause and all those distracted values Tim talks about in the book and B, potentially innovate in ways that actually help them in the long term.

B (45:22)

Hi. Yeah, thanks for this conversation. It's super interesting. I'm sure everyone here agrees. I expect you will get a lot of very practical questions. So I actually want to ask a more theory question and that question is are there technologies that are inherently bad, like prediction markets or gambling, that really just have only negative externalities on society? If yes, how do you regulate it? What do you do about it? If no, you can't avoid the vices, what do you do to mitigate it?

C (45:47)

I think there are some. Yeah, so I don't view technology inherently good and inherently evil. I think there are a few, particularly in context technologies that were negative in retrospect. In the book I talk about the difference between the plow and the cotton gin. So you think about the plow. The plow was invented all over the world, multiple agricultural societies. And this is the good technology created a lot of wealth, was something a lot of farmers could use to create more food and feed a lot more people, you know, ultimately to prosperous civilizations. Cotton gin greatly increased the efficiency of cotton harvesting. Unfortunately, it fed into the already concentrated plantation slavery market and many historians believe extended the life of plantation slavery in the south for a good 30 or 40 years. So it wasn't like it was inherently evil to have a more efficient way to produce cotton, but it did interacting with that economic context lead to prolongation of slavery, arguably the Civil War. So there's an example in terms of present day, I mean there's positive uses for something like fentanyl, but I think they've been overshadowed by these incredibly addictive drugs that overcome human willpower. I mean they've got to, they've got to be net negative. Even though I'm sure there's someone will say, well it treated whatever medical problem I had. But hi, I was in Syria in December and I just came back from Minneapolis. And what's common in both situations, that civilians are taking photos and videos of the scene and publishing them on these platforms. The challenge now is that hyper realistic AI is also publishing similar things of the same scene. So people don't know what to believe anymore, which people suggest will affect democracy, as you guys mentioned, and trust. So how do you think this will impact the future and what kind of

A (47:46)

solutions do we have to still use

C (47:49)

visuals as documentations prove in the legal system? It's relevant in social uprising. It's relevant, sure.

A (47:57)

Yeah. I mean, I think that like you said, there's good and bad. Right. If there were not the videos in Iran, then the idea, the possibility of regime change in a better life wouldn't be there. At the same time, the use of AI to counter narrative is also problematic. I actually think for a lot of the social media platforms, it really comes back to that one specific. You guys don't know what section 230 is. Yeah. So if you don't. So in 1996, the Congress passed a bill called the Telecommunications Decency act, and they had one 32 word provision in its section 230 that effectively said Internet platforms cannot be sued for the content posted by its users. And in 1996, at the birth of the Internet, that probably made sense. Right. No one saw what was going to come out of it, and certainly not what you're describing right now. And to me, first, I believe that generally speaking, you know, condiment aside, people are, or companies are generally rational economic actors. Right. So Mark Zuckerberg is aware of the harm that his platforms do to people. He also knows that because of the evolutionary trait of a negativity bias, when any of us are given two different headlines to click on, we almost instinctively click on the more, you know, the more negative one. Right. And so the more talks of the content, the more clicks he gets. The more clicks he gets, the more money he makes. And he would say, I have a fiduciary duty to my shareholders, especially himself, to make as much money as possible, no matter the cost. Right. However, if we were to repeal Section 230, and it's, it's an issue, that's funny because there is broad bipartisan support to do it, and yet we can get into sort of politically why it's really difficult, but. And all of a sudden he can be sued by parents, by, you know, dissenters in Iran, whatever it might be. Then all of a sudden he starts getting whacked with five, 10, $20 billion judgments. And I think because of the anger that Tim mentioned, juries are going to be vicious around this stuff. Ultimately, jurisprudence will emerge that will change the economic calculation for Meta, where all of a sudden real content moderation becomes important because it cost them too much money not to do it. So, you know, I don't see really any form that would be effective other than repealing section 230. And while the plaintiff's part might fit in that fentanyl French Revolution category, in many ways, actually they would be why I Would just say do your worst, like go at it, right? Let them go fucking crazy. Because I think that's actually what would lead to the, to the behavioral change. So I think we have a solution. Lindsey Graham and some others, but he's the lead sponsor, just introduced new legislation in the Senate to do this. And so there's a vehicle for it. The politics of it are always, have always been difficult.

C (50:45)

The politics would not be difficult. It was actually a vote on it. I'll say one thing, one thing I learned from My time in D.C. is a number of very pop amounts of very popular legislation that never gets a vote is extraordinary. But that's an aside. Can I just say one thing? I'll say this about AI. I feel that our conversation about AI regulation has been dysfunctional so far because there's been an extraordinary amount of attention to kind of more existential style risks and the idea of takeover and AI getting out of control, which I don't think of as a zero, but premature in terms of actual government action when you don't even know what the thing is. But there's other things that are clear harms I think from AI that seem relatively straightforward, like human impersonation in general. What is good about human impersonation? It's a form of fraud. So why is that something to encourage to deal with the exact problem you're talking about? It seems to me that once AI is as it is getting relatively established, a requirement that legitimate AI companies have some kind of fingerprinting in everything they do does not seem crazy to me. Now, maybe to be embarrassing for people who write briefs based on AI, when someone says actually most of this was written by the. But you know, so you can easily fingerprint stuff and know and there's technologies to bury in fingerprints to make it clear this was created by an AI. And you know, we have this kind of stuff for all kinds of other forms of media regulation. So you know, the sort of very basic steps are not even on the table and instead we have a conversation about whether the robots can take over the universe or whatever.

D (52:22)

This is a combination question about energy regulation, AI and platforms. So right now, because this new technology is coming in, there's a lot of margin on the table and there's a question of where that will go. And so I'm at niacup and Anthropic where we're definitely in close competition. And right now people are being these massive data center build out huge energy requirements. But the, the energy mix that's getting selected and where that's happening and whether it's taxed or not, just like, you know, is, is very much up in the air and a function of current regulation. Right. And so like, is this going to be a ton of solar? Is this nuclear? Is this an opportunity to like do low carbon solutions? Or is there a race to the bottom of like reactivating coal plants, states competing for the cheapest, fastest, dirtiest solutions. Right. Is going to be a big part of the environmental impact here. And you know, if, if, if Anthropic's fighting OpenAI for this, they're gonna, they're gonna go to the bottom. But if, if they're faced with the same regulatory landscape, they're basically indifferent as to what that is. And so, and so, you know, but

A (53:35)

can I just ask you. Yeah, so, and I think you just answered already, but if not for regulation not allowing you to either use the dirtiest fossil fuels or to effectively pass off all of your costs on to other regular people, would you not choose to do that?

D (53:51)

Yeah, I mean, I think, I think it's the classic capitalist dynamics here where in this particular case it's not about cost, it's about speed. And so no one's going to wait three years for a data center if they can get one in six, in six months because their competitors are, are doing it. But it's purely driven by the competition. Right. Not as much by the absolute need. And so I just see the decisions we're sort of making in this competitive landscape, but if the landscape shifted, we'd get all the societal benefits of this in the 20 year time horizon. So I'm wondering for those on the sort of like regulatory side, like how can that market be structured or incentivized.

B (54:33)

Right.

D (54:34)

In such a way that, that we don't get the companies racing to the bottom on this stuff.

A (54:38)

Even though I'm supposed to be the VC that you know, fights off bad regulation, I actually the answer is more regulation in this case, meaning you care as to whether the data center comes online in six months as opposed to 12 months or 18 months. I don't think it really matters a lot much to the rest of us. Right. You're just in your own fight with OpenAI and Claude and whoever else and you're going to pick the most economically rational choices for you. So if the answer is speed, that's still going to lead to all kinds of negative externalities that don't have to happen. Right. And so given that we can't trust you or anyone to sort of on their own, solely choose what's best for society at the expense of their own economic good. That's why it needs to happen. So there's legislation right now, I think, in Wisconsin, Kentucky, Florida, New York, Virginia, Pennsylvania, a few other places that in different ways, get to the point that you're making around either prohibiting consumers from having to pay for effectively your energy needs or not allowing you to use certain types of, you know, fossil fuels or whatever it is to get there faster. And so, you know, it kind of gets back to the original point. Regulation is neither inherently good nor inherently bad. It's based on the application of it. And I think in your case, unfortunately, because you're not going to want to hear this, but it is to assume that ultimately you're going to impose negative externalities on everyone else, and the only way to stop you is to create a level playing field where everyone has to do it in a certain way.

C (56:09)

I have two observations on this question. So first, I'm obviously very in favor of competition. In most industries, I think competition is this extraordinary tool, but it doesn't mean that it, like many things we've talked about here, doesn't have potential dark side. And in many areas, for example, companies would be more efficient if they relied on child labor, for example. But we banned child labor at some point because we thought even though there are cost advantages to using children instead of adults, there's disadvantages to that, too. And so some of this is the same things. That's the one thing I would say. It's like, competition is very effective, but you need baselines. And the second thing I'd say, when it comes to dirty environmental regulation, the most straightforward answer is cold is not, and other dirty things. If people are forced to absorb the full externalities of their activities, the pollution costs a lot of money in terms of lung disease, in terms of cleanup later, if the people using those sources are forced to internalize all those externalities, then you have a more of an even playing field. And so environmental regulation in general on things like coal and stuff, should be trying to make the creators bear the full costs of what they're doing. And when you do that, solar and wind end up being much more competitive prices. I mean, it's not crazy. I mean, China's got this idea. In fact, I think in some ways China's energy policy seems a lot more rational right now, which is to massively bring down the price of solar panels and wind and try to make that bet, even though they have more coal than I think any other country in the world. They're trying to get off coal. So it'd be kind of crazy if we try to get on coal with this competitor.

B (57:40)

I'm sorry, we can get to every question. I do want to do a lightning round under one minute each. We've talked about a lot of challenges, a lot of opportunities. What do you see as the single most important policy step that we should be taking at the federal, state or local level to try to build a better economy and democracy? Bradley, then Tim, and then we'll close.

A (58:00)

All right, you know my answer already. And there's some people that get in here that certainly do too. But having worked in politics for over 30 years, you know, my takeaway from it is every policy output is the result of a political input. Just like every company makes decisions based on their economic well being, politicians make decisions pretty much solely based on the next election, with a handful of exceptions here or there. And in a world of gerrymandering, only the primaries really matter. And primary turnout is typically 10 to 15%. And those tend to be dominated by either ideological extremes or very special interests. And as a result, if elected officials are acting rationally, they answer to that 10 to 15%, whoever it is. And as nothing really gets done. So we either get totally one sided governments, whether it's the state of Texas or the city of Portland or just the chaos and dysfunction of Washington D.C. and in my view it's solely a math problem. So if turnout were 30 or 40% instead of 10, you move things to the middle. And the American people by and large agree. You know, if we all sat here and went through 20 issues, I'm pretty sure 80% of us could eventually agree on a framework to solve every one of them. But because that 80% doesn't vote in the primary, their views aren't reflected. And so mobile voting to me is the solution we have out of my this is something we knew at my foundation now since 2017, and we just built technology that is end to end encrypted, end to end verified biometric screening, multi factor authentication, air gapping. The code is up on GitHub and open sourced right now and we are hoping to start making it available because as engaged intellectually as everyone in this room is, my guess is the vast majority of you do not vote in state senate primaries or city council primaries or things like that. You vote for president, you think you're a regular voter, but 100% of you have phones. And if we could even just get a quarter of you to then choose to participate while you're waiting for your coffee. That meaningfully shifts the equation into the middle and that allows us to start reaching consensus, working together, compromise. Because I think there are solutions to a lot of these different problems. I mean, when Nate started this off, and I'm way over a minute now. I know, but it's my store. He said he kind of predicted that Tim and I would disagree a lot. And I'm sure there are areas where Tim and I disagree, but we pretty much agreed, right? Because ultimately, even if we're slightly on different parts of the spectrum, there's reasonable room to come up with stuff, but only if politicians feel safe to do so. And so we've got legislation pending in five states right now that would allow mobile voting for municipal elections. New Jersey, Maryland, Colorado, Vermont, Minnesota. This April, Anchorage will be the first city in America to offer mobile voting for municipal elections. And so to me, if we can take advantage of the technology that we all already have to make voting a lot easier, we increase turnout, we change the underlying political inputs and that gets us better policy output.

C (60:56)

That's a pretty good idea. I second that one. Do you get a lot of pushback from the security guys? I proposed that. I remember once when I was running for lieutenant governor and I got all these hate emails from security guys.

B (61:09)

Yeah, yeah.

A (61:10)

And yesterday put out a whole statement in opposition to me specifically from like 20 different universities. The problem is these guys live in these ivory towers and they tell you what can't be done and they have no solutions on to actually fix the problems. And they're living in like a fictitious world that I don't think we're one country in 20 years at this pace.

C (61:28)

So.

A (61:28)

But yes, I get a lot of it and from all of the people who theoretically should know better and at least be willing to try to solve the problem.

C (61:34)

Yeah, they're a big barrier because I'm an elite barrier as opposed to popular barrier. I think we need to be serious about the problem of private power and its distractive effect. I mean, it's the whole theme of the book. And I guess maybe I'll put one idea out there. So think about the electric network that we all sort of depend upon. A lot of things are almost all technology depends on it one way or another. We rely on it for our daily lives. And some of the things we kind of take for granted about it is it is a non discriminatory network. You know, you can plug in a toaster made by General Electric or one made by, I don't know who at Panasonic it all works. And they don't get to charge any price they want. I mean, if electric company could charge anything, what would you pay? You know, how about $5,000 a month? Oh, you don't want electricity? Oh, well, too bad they don't. You know, they have to serve everybody. And we need to thinking about the big platforms kind of the same way as they've matured, become essential. We cannot just have it that they can take everything they want. And we cannot think of the entire tech economy as just these three or four big companies. They have a problem, I'd say, of main character syndrome, which is to say tech should be about everybody in tech, not just like three or four companies. And what are they going to do next? That leads in dangerous directions. It leads to groupthink. It leads to like, oh, this is going to be the future, when something completely different could be the future. It's constantly. And these are all people who run these companies who think of themselves as different thinkers. But it can happen to anybody. The heads of General motors and Boeing 50 years ago were like, those guys are geniuses. And then you sit around for a long time and you start thinking you're great and you have got all the ideas we really need to keep the tech sector vibrant, keep the cycle of industrial succession and not let it have unlimited power. So that's what I got. I'd be happy to sign books afterwards.

B (63:28)

Let me just conclude by saying we're living at a moment where these questions are being debated in real time. And so the reason I want pull together this conversation is that all of you have a role to play in it also. And we all have to do our part to make sure we have a competitive, innovative, fair economy. So thank you guys so much for this. Sorry we couldn't get to every question, but we'll be hanging out for a while.

A (63:54)

Firewall is recorded at my bookstore, PNT Netware, located at 180 Orchard street on the lower east side of Manhattan. We'd love to hear from you with questions, feedbacks or idea for a guest. Just email me at Bradleyirewall Media or find me on LinkedIn. And to keep up with what's on my mind and my latest writing, please follow my new substack@bradleytus.substack.com. thanks again for listening.