Intelligent Machines (Audio) - Episode 847: "Caked Up Football Man: Why Small AIs Are Smarter"
Podcast: Intelligent Machines
Host: TWiT (Leo Laporte, Jeff Jarvis, Paris Martineau [joining later])
Guest: Emad Mostaque (Founder of Stable Diffusion & Intelligent Internet, Author: "The Last Economy")
Air Date: November 27, 2025
Episode Overview
This episode centers on the shifting landscape of AI—from giant, monolithic models to smaller, specialized AIs—and how these “small AIs” may actually be “smarter,” more efficient, and more democratizing than the mega-models dominating tech headlines. Leo and Jeff interview Emad Mostaque, famous for creating Stable Diffusion and leading the new company Intelligent Internet (II.inc), who expounds on these trends and the impending "intelligence inversion" upending the economy, work, and society.
The conversation explores:
- The four great economic "inversions," culminating in intelligence inversion,
- The replacement horizon for knowledge work,
- Economic and societal impacts,
- Technical differences between LLMs and diffusion models,
- Democratizing and sovereign AI,
- Risks, doom, and optimism about the future.
Key Discussion Points & Insights
1. From Stable Diffusion to the “Intelligence Inversion”
[03:20 – 07:00]
- Context: Mostaque reflects on the release and cultural impact of Stable Diffusion, marking an inflection point before ChatGPT and the AI revolution as we know it.
- "Intelligence inversion" explained:
- History: Agriculture → Industrial → Service → Intelligence inversion.
- “We’re no longer the smartest things on the planet. ... Our cognitive labor is probably going to have negative value because we’ll be the dumbest people on any team.” – Ahmad Mostaq [05:00]
- Prompt-to-output → Agents:
- LLMs and image models have shifted from passive “tool” to proactive, multi-hour, agentic workflows (e.g., AI auto-creating dynamic websites on Replit).
2. The Future of Work and Who Gets Replaced First
[07:00 – 09:30]
- Where the “AI snowball” starts:
- Remote, repetitive, and customer service jobs (e.g. call centers) go first.
- Super cheap "digital twins":
“The first thing to go is the remote jobs. Anything that can be done remotely, those are most at danger.” – Ahmad Mostaq [08:32]
- Economics of intelligence:
- 2023: $600/million tokens; now: $0.50/million tokens; a year’s worth of cognitive labor ($10–$50).
- Ability to create a digital “double” for individuals and companies, with AIs seamlessly impersonating or automating previously human roles.
3. Digital Doubles, Creativity—and Identity
[09:30 – 15:49]
- Digital twins:
- Not just industrial; everyone may have a digital “self.”
- Unclear if this will be empowering or alarming:
“It can be both, either … you don’t really want to fire people, you want to be more effective first.” – Ahmad Mostaq [09:54]
- Creativity & culture:
- Most work is “repetitive” cognitive labor—not deeply creative.
- “Even when you’re talking about creativity … KPop outperforms top notch music. People know what they want to consume. … It’s premium mediocre.” [15:11]
- What is our identity if AI does the work?
- “If your identity is tied up in your work … you’re in trouble. If you’ve got a strong community, strong family, then you’re less likely to be affected.” – Mostaque [15:31]
4. Rethinking Money, UBI, and the Rise of Fully-AI Companies
[15:49 – 18:45]
- Human companies vs. AI companies:
- Vision of fully AI-staffed businesses (e.g. Elon’s “Macrohardt” as a SaaS army of AIs, not humans).
- UBI math doesn't add up:
- “If you gave every adult in America $16,000 a year, that’s $5.1 trillion. … Even if you tax LLMs, it’s not going to work.” [16:50]
- Alternative: Universal AI + “money for being human”:
- Give everyone a sovereign, aligned AI; humans are paid for “being” humans, not for cognitive labor.
5. Technical Paradigms: Scale, Research, and Small AI
[17:00 – 22:00]
- LLMs vs Diffusion models:
- Sufficient progress has been made; “scale” is now about efficiency, not breakneck growth.
- Cites “7-billion parameter medical model” on Raspberry Pi, outperforming human doctors on benchmarks.
- No monolithic “AI God”:
- “It’s not one master AI, it is a whole army of AIs that are able to do certain things better than the accountant.” [18:33]
- Every pixel will be generated:
- Future is media-dominated diffusion models, not compute-hungry LLMs.
6. Sovereign, Democratic, and Edge AI
[19:47 – 34:34]
- Sovereign AI:
- “AI that is controlled and aligned with you.” – Ahmad Mostaq [30:13]
- Users will have their own AI (“local champion”—not ChatGPT or Claude) capable of invoking cloud AI as needed, but locally controlled.
- Resist “cognitive colonialism”:
- "It [sovereign AI] is your only defense. From your cognitive ... it's your only defense against cognitive colonialism." [32:02]
- Governments, cities, and even personal lives will be managed by AI; “control plane” and transparency are crucial.
- Biases and latent space in AIs:
- Companies are already selling “preference space” in AIs, e.g. Meta and Google making Bud Light the default “beer”.
7. Positive Visions (and Backlashes)
[26:45 – 32:23]
- Positive use cases:
- Medical diagnosis:
- “By next year … every single medical decision in the world will have a second diagnosis … it will be free … on a 10-year-old computer.” [26:58]
- Efficiency and economic parity with Universal AI.
- Medical diagnosis:
- Fears and Resentment:
- “Backlash is coming” as job losses mount.
- Need to “show the benefits” while acknowledging inevitable dislocation.
- “I know a lot of AI leaders now have canceled all public speaking, because next year is the backlash …” [26:45]
8. Practical Advice for the Next Generation
[28:46 – 30:13]
- Don’t go to college (unless you must).
- “Use the AIs every single day, day in, day out. … What’s going to get you a job is showing work you did using AI, not a resume.” – Mostaque [29:06]
9. Building the Future: II.inc and Open Models
[32:23 – 40:09]
- Intelligent Internet (II.inc):
- Building open, full-stack models for education, health, government, “sage” agent, and more.
- “World’s best agent, … we’re just going to give that free to everyone.” [32:43]
- Focus: open-source, values-aligned, deeply localizable AIs—unlike current black box, ad-driven products.
- Benchmarks and transparency:
- Mission: transparent, aligned medical/gov/education models as human right.
10. Risks, Regulation, and the 50/50 Future
[34:40 – 42:48]
- Doomer or Optimist?
- “Peer doom’s 50% ... I think we’re probably going to die 50/50 because of all this.” [34:45]
- Viral cognitive stuxnet:
- If “someone basically has a prompt” and “the data is a black box,” everything could collapse (robot swarm, bad firmware).
- AI governance engine:
- Efforts to build regulatory/policy AIs and “state champions” to let local communities own/control their own sovereign AIs.
- Proof of Benefit Coin for decentralized civic AI funding.
Notable Quotes & Memorable Moments
On intelligence inversion:
"We are no longer the most economically valuable things on the planet ... our cognitive labor is probably going to have negative value."
— Ahmad Mostaq [05:00]
On how fast the automation comes:
"Remote jobs ... those are most at danger, and there’s a lot of those."
— Ahmad Mostaq [08:32]
On AI costs:
"When GPT3 came out it was $600 per million tokens … now Groq models are 50 cents. If you add up the words you speak in a year … it’s $5."
— Ahmad Mostaq [11:00]
On identity in a post-work world:
"If your identity is tied up in your work ... then you're in trouble. If you’ve got a strong community, strong faith, strong family, then you’re less likely to be affected."
— Ahmad Mostaq [15:31]
On UBI and AI company rivalry:
"You won't be able to tell. ... That’s the real total addressable market for this: trillion dollars of spending on all these GPUs. Each GPU replaces 10 cognitive workers."
— Ahmad Mostaq [15:57]
On leaning into specialization, not AGI:
"It's not one master AI ... it is a whole army of AIs that are able to do certain things better than the accountant."
— Ahmad Mostaq [18:33]
On democratization and defense:
"Resistance is the only defense. Me having my own AI, protecting me against that."
— Leo Laporte [31:58]
On regulation and aligning values:
"AI should reflect local culture, ethics, values ... Because right now AI models don’t even have any ethics programmed into them, not even the laws of robotics. ... Someone should probably build that for the civic AI."
— Ahmad Mostaq [33:09]
On optimism vs. doom:
"My peer doom’s 50%. I think we’re probably going to die 50/50 because of all this. So we’ve got to do something about it."
— Ahmad Mostaq [34:45]
Timestamps for Key Segments
| Timestamp | Topic | |------------|-----------------------------------------------------| | 03:20 | The launch and impact of Stable Diffusion | | 04:58 | Explaining the “Intelligence Inversion” | | 06:05 | Agents vs. prompt-output; shift to proactive AIs | | 07:31 | Who gets replaced first—call centers & remote jobs | | 11:14 | Economics of intelligence; falling costs | | 14:36 | Creativity, work, identity in post-AI world | | 15:57 | UBI, AI companies, & future of work | | 17:13 | Scale vs. research paradigm; small medical AIs | | 19:47 | Building full-stack, open, small, sovereign AIs | | 30:13 | Sovereign AI: what it means and why it matters | | 32:02 | “Cognitive colonialism” and the defense | | 34:45 | 50/50 doom/progress, viral “cognitive Stuxnet” risk | | 37:07 | AI governance engine and “state champion” model | | 40:09 | Proof-of-benefit coins: funding civic AIs |
Additional Conversations (Post-Interview)
- News industry and AI (Fox, Palantir, newsroom tools) [47:09+]
- AI detectors & education (Declaration of Independence as "AI-written") [125:10]
- The US government opening up scientific data and AI platforms ("Genesis mission") [59:47+]
- Humanoid robots hype vs. reality (Harper’s "Kicking Robots" article) [90:01+]
- Musk, collapse, and “disaster capitalism” with AI [96:22+]
- Lighter asides: caked up football figurine ([114:53]), AI image fails, Thanksgiving food, and retro tech discussions populate the final third with a light, irreverent tone.
Final Thoughts
Emad Mostaque paints a vivid picture of the coming AI-centric world: not dominated by a singular AGI, but “populated by armies of small AIs,” each specialized, affordable, and—if done right—democratized and aligned to local, human needs. The near future is one of immense change: some perilous, much promising, and all demanding new ways to think about value, identity, sovereignty, and the meaning of work.
Episode Highlight Clip
"In a few years we will have an AI that's our best buddy for all of us. ... That's going to have a huge impact on the way we view the world, the way our cognition behaves, and more. … The defaults that emerge now are going to be so, so important."
— Ahmad Mostaq [20:54]