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The Artificial Intelligence Show
#159: Trump’s AI Action Plan, AI Could Upend the World Economy, GPT-5 Rumors, AI Tech Layoffs, Advice for College Students & First AI for Therapy
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- [00:00]
Paul Raitzer
People in power want to stay in power. And if these models from the five companies that are building the frontier models control the power and the trillions of dollars of value, whoever is in power will abuse them like that is human nature. Welcome to the Artificial Intelligence show, the podcast that helps your business grow smarter by making AI approachable and actionable. My name is Paul Raitzer, I'm the founder and CEO of SmartRx and marketing AI Institute and I'm your host. Each week I'm joined by my co host and Market AI Institute Chief Content Officer Mike Kaput as we break down all the AI news that matters and give you insights and perspectives that you can use to advance your company and your career. Join us as we accelerate AI literacy for all. Welcome to episode 159 of the Artificial Intelligence Show. I'm your host Paul Raitzer along with my co host Mike Kaput. We are recording July 28th 11am Eastern Time. Expecting maybe some announcements this week so timestamp might be relevant here. This episode is brought to us by AI Academy by SmartRx. We have our 3.0 launch coming up. I think I mentioned this last week that there was an announcement pending and it is going to happen on August 19. So we have spent the last nine months or so reimagining our AI Academy and our AI Mastery Membership program and it is launching on August 19th. We're actually going to launch with a collection of new on demand course series and certifications, a new AI Academy live with weekly experiences there, a new gen AI app series that Mike is taking the lead on creating which is going to be weekly 15 to 20 minute product and or feature reviews. It is a complete reimagination and maybe sometime I'll tell the full story of kind of how we got here. I'll probably actually honestly tell it on the August 19th webinar. I still have to kind of like build that presentation. I'm actually in the midst of finalizing a couple of the new course series as we speak, taking an hour off in between doing that to do this podcast. So I'll probably tell the story of kind of how this came to be and what version one and two were. If you're not familiar with AI Academy, we actually launched our AI courses in 2020. In lieu of not being able to have a in person conference that year we launched online courses. So we've been doing this for five years and this is a complete reimagination of it. So I'm really excited to launch it. The team has been working incredibly Hard behind the scenes. We've doubled our staff in the last like 45 to 60 days in preparation for this launch. We expect to continue to grow that staff and the organization as a result of this. So we're grateful for everyone who's been a part of AI Academy leading up till now. We have. I don't even know. There's been probably over 2,500 to 3,000 people go through AI Academy through the years. We anticipate a pretty dramatic uptick in that number very soon based on early demand for what we're launching. So yeah, join us August 19th to hear all about it. The vision, the roadmap, an inside look at everything that's launching that day. Any AI Academy members will have access, access that day to a lot of the new stuff that's coming out and then we'll share a little bit of the roadmap for where we're going from here. One of the big features is the new AI Academy will have business accounts which previously there, that was not a feature of it. It was a lot of individuals. So join us August 19th. We'll put the link in the show notes. You can also go to SmartRx AI and click on Education. And the AI Academy 3.0 launch event is right there. So again, just go to SmartRx AI. Maybe Mike will put that in the header to the cta. I think there's currently like a job openings header. Maybe we'll swap that out and put that there so it's easy for everyone to find. Great. All right, so that is AI Academy launch again August 19th at noon Eastern time. And then also Macon, our annual in person event. This is happening October 14th to the 16th. We've had incredible response to this so far. I think we are, I don't know the exact numbers. We had a big week last week. I want to say we're trending somewhere between 40 and 50% ahead of ticket sales for 2024. So we had about 1100 people at the 2024 event in Cleveland and we are definitely trending in the direction of 1500 plus. So thank you to everyone who's registered already. It's, it is like the best place if you are a marketer, business leader to meet other forward thinking marketers and business leaders. Again, it's happening in Cleveland October 14th to the 16th. Majority of the agenda is published. I'm working on finalizing the main stage general sessions as we speak as well. Actually I think three of them we finalized. Three or four of them we actually finalized last week. We won't be announcing them probably here for a couple weeks, but a few more announcements coming. But you can get a general idea of the. The amazing speakers and sessions and the workshops. The pre. The pre event workshops on October 15th. It's live right now. Go to Macon AI. That is M A I C O N AI. And you can use the code POD100 for 100 off your ticket. So when you're going through the registration process, make sure to enter the promo code POD100 for a hundred dollars off. Okay. We had what kind of seemed like a slower week, honestly, at first, like, as I was looking through all the links going into the weekend mic, it was like, yeah, okay, nothing too crazy. And then honestly, like, you know, sometimes there's podcasts I prep for where I start to get really excited to talk about the topics. And there's like three or. I mean, they're all great this week, but there's like three or four that ended up becoming probably bigger things to discuss than I initially thought at first glance when I, you know, first put them in the sandbox of things to go through this week. So we got a lot to talk about, starting with the White House AI Action plan. Mike?
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Mike Kaput
Yeah, Paul, I felt the same way. I kind of was like, okay, it might be a little bit of a slow week. And then once we started getting into them, I was like, wait a second. There are some really important things going on. And like you said, the first one is that the White House has released its official AI Action plan. This is a strategy document that frames AI as a global race for unquestioned and unchallenged technological dominance. And basically the way they describe this is, quote, this action plan sets forth clear policy goals for near term execution by the federal government. The action plan's objective is to articulate policy recommendations that this administration can deliver for the American people to achieve the President's vision of global AI dominance. The AI race is America's to win, and this action plan is our roadmap to victory. So with that in mind, keep, keep that at the forefront while we go through kind of the three policy pillars that they built into this plan. And by they, I mean this is an action plan authored by three kind of key people in the administration. Michael Kratzia, who is an assistant to the President for Science and Technology, David Sacks, we've talked about before, a special advisor for AI and crypto, and Marco Rubio, Secretary of State. So this plan is built on three pillars. The first, accelerating innovation, calls for unleashing the private sector by removing bureaucratic red tape and onerous regulation. It directs federal agencies to rescind the Biden Administration's AI executive order and revise standards to ensure AI systems are free from what it calls ideological bias. The plan also emphasizes supporting American workers with skills training for an AI driven economy. The second pillar, building infrastructure, is a massive domestic push under the mantra they literally have this in their build baby, build. It aims to streamline environmental permitting for data centers, semiconductor factories and energy projects while explicitly rejecting what they call, quote, radical climate dogma to expand the nation's power grid. Now, the third pillar is international diplomacy and security. This focuses on exporting the full American AI tech stack to allies while strengthening export controls to deny adversaries access to advanced chips and manufacturing. Now, Paul, there's a ton to unpack in this. It's like a 28 page policy brief. A couple things that jumped out to me. I mean we've talked about this a ton of times, but my gosh, like you really can't read this and expect any consideration for AI's environmental impact from this administration. I mean, literally, they say their mantra is build, baby, build. There's a ton of stuff in there about basically streamlining, which is maybe code for getting rid of or ignoring certain environmental, environmental regulations. I also found some of the commentary around AI's impact on workers interesting. There's some measures to drive overall AI literacy. There's training for jobs in the trades to support all the data centers and infrastructure and there's even some discretionary funding to potentially help rapidly retrain displaced workers. So what did you find noteworthy in here?
- [09:30]
Paul Raitzer
There was a lot. So the document, you can see the whole thing@AI.gov and view it. Basically what it does is it breaks down a bunch of areas and then provides a one paragraph summary and then recommended policy actions. So I'll kind of go through some of the highlights and then a quick summary of the executive orders that were released to with this AI action plan. So the, I guess the prelude to wasn't even in the introduction. The prelude comes from. It's signed by Donald Trump. So it says, today a new frontier of scientific discovery lies before us, defined by transformative technologies such as AI. Breakthroughs in these fields have the potential to reshape the global balance of power, spark entirely new industries and revolutionize the way we live and work. As our global competitors race to exploit these technologies. It is a national security imperative for the United States to achieve and maintain unquestioned and unchallenged global technological dominance to secure Our future, we must harness the full power of American innovation. So my very, very high level take on all of this is, comes down to competition mainly with China and is about national security, the economy and power. Now if you go back to last year, you know, we were talking as a lead up to the election cycle last year that this is what America needed to do. So I'm, I'm kind of all for the fact that we are all in on having a plan for AI. The, the devil is sort of in the details and the, the nuance of, as you were kind of alluding to, Mike, what they mean by certain phrases and, and if you don't pay close attention to politics, some of this may just sound all amazing and great and, and all we should be all for it. When in reality, I think that we have to understand the nuance of what this administration believes and, and what they're doing and, and kind of the direction they're going and what they've told thoughts on some of these key issues. So with all that being said, kind of break this down a little bit. So in the introduction it says the United States is in a race to achieve global dominance in AI. Whoever has the largest AI ecosystem will set global AI standards and reap broad economic and military benefits. Just like we won the space race is imperative that the United States and its allies win this race now that on its own there would be some debating. This isn't a win or lose thing. This is like this perpetual advancement of a technology. There is no point where you say, okay, we won or we didn't win. So you know, again, some of the language, you just have to kind of put it into context here. It then says winning the AI race will usher in a new golden age of human flourishing, economic competitiveness and national security for the American people. AI will enable Americans to discover new materials, synthesize new chemicals, manufacture new drugs and develop new methods to harness energy. An industrial revolution. AI will enable radically new forms of education, media and communications and information revolution. And it will enable altogether new intellectual achievements, unraveling ancient scrolls once thought unreadable. That has actually happened. That's why they're alluding to it. Making breakthroughs in scientific and mathematical theory. That is happening right now. We just had last week with the International Math Olympiads, OpenAI and Google Gold medal there and creating new kinds of digital and physical art. A renaissance. So again, contextually, I don't disagree with any of this. Like this is all what AI is going to enable. And it is nice to see the administration Acknowledging that and understanding that then says several principles cut across each of these pillars. First, American workers are central to the administration's AI policy. The administration will ensure that our nation's workers and their families gain from the opportunities created in this technological revolution. I bold faced this part. The AI infrastructure buildout will create high paying jobs for American workers. They're basically referencing the build out of energy and data centers there. And the breakthroughs in medicine, manufacturing and many other fields that AI will make possible will increase the standard of living for all Americans. That is, this is commentary. That is not a given. That is, that is a hope and a vision. I would say at this point AI will improve the lives of Americans by complementing their work, not replacing it. That is a pipe dream. So the administration, and again this is the context and this is as unpolitical as I can possibly make this. I, I don't care, Republican or Democrat or something in between, like me and Mike, don't see our job to have a political view at all in any of this. Like our job is literally just to report what is happening and what the current administration believes and is doing. No administration in the United States can admit that jobs are going to be replaced. Like they can't do that. Like if, if the US government straight up comes out and says yeah, it's actually just going to replace millions of jobs, then they would have an uproar and they would lose the next election cycle. So nowhere is this administration going to admit millions of people are going to be displaced or underemployed. They can't do it. So again, you have to take all of this within the context of who is publishing this and what their goals are for publishing it. And that's just one area to you know, really understand. So then it gets into the action plan I mentioned. So Mike, you talked about the three pillars and the way the, the action plan is organized is within those three pillars. And then I'll just go through like the quick summary and then the highlights of what each of these areas are. So the first pillar, accelerate AI innovation. It says America must have the most powerful AI systems in the world, but we must also lead the world in creative and transformative application of those systems. Ultimately is the uses of technology to create economic growth, new jobs and scientific advancements. America must invent and embrace productivity enhancing AI uses that the world wants to emulate. Achieving this requires the federal government to create the conditions where private sector led innovation can flourish. So then within that section, these are sort of, imagine these as the subheads and then underneath each of these that I'm about to list in bullet point form are policy recommendations. So the plan itself doesn't mandate any of this happening. It is basically recommending how to achieve these desired outcomes. Okay, so again we are in the Accelerate AI innovation. These are the subheads within that section. Remove red tape and onerous regulation. We've talked about how this administration hates regulation. Ensure that Frontier AI protects free speech and American values. The definition in America of what is classified as free speech and American values has never been more polarized. So again, we have to understand who is saying this. What what they define as free speech and American values matters. And not just this administration, the next administration. So everything within this and when I talk about being as unpolitical as possible with this, whatever this administration decides, the next administration gets to build off of those principles. So if the next administration decides America has different values or free speech means something different, understand that that shifts the context of this conversation. Encourage open source and open weight AI Enable AI adoption. Empower American workers and support next generation manufacturing. Invest in AI enabled science. Build world class scientific data sets. Advance the science of AI Invest in AI interpretability control and robustness. These are all things we talk about on the podcast all the time. Build an AI evaluations ecosystem. Accelerate adoption in government. Drive adoption of AI within the Department of Defense. Protect commercial and government AI innovations and combat synthetic media in the legal system. So a couple of these Micah just unpacked. So the Enable AI adoption is a critical one. Their recommended policy action here to give you an example of kind of the tone of this document. So what they recommend, one of them is establish regulatory sandboxes or AI centers of excellence around the country where researchers, startups and established enterprises can rapidly deploy and test AI tools while committing to open sharing of data. So that's an example of a policy recommendation, maybe the most important one at least Mike, based on the stuff you and I talk about on the pod all the time. Empower American workers in the age of AI. So what does that mean? So here's a quick synopsis of some of the policy recommendations. Again, these are not things they're committed to doing. These are recommendations. Advance a priority set of actions to expand AI literacy and skills development. Continuously evaluate AI's impact on the labor market and pilot new innovations to rapidly retrain and help workers thrive in an agile economy. I couldn't agree Grimore. That is fundamental to everything we talk about. So to see the US government saying that is is good news. The next Prioritize AI skill development as a core objective of relevant education workforce funding streams. Agreed. Great. Issue Guidance clarifying that many AI literacy and AI skill development programs may qualify as eligible educational assistance under Section 132 of the IRS Code, given AI's widespread impact reshaping the tasks and skill required. So in essence, the government should support this. They should provide funding. They should probably tax free reimbursements for AI related training. Awesome. Like, I hope that happens and I hope it happens tomorrow. Like, I hope, you know, three months from now. We're talking about the forward steps being taken in this one. Another One is Study AI's impact on the labor market by using data they already collect on these topics. Specifically the Bureau of Labor Statistics and the Bureau of Economic Analysis and the Census Bureau leverage available discretionary funding where appropriate to fund rapid retraining for individuals impacted by AI related job displacement. 100%. Like I've thought about doing that ourselves where we would provide low cost, no cost AI education. We can't as a private entity the size we are, do that reasonably. It would probably need to be underwritten in some way by sponsors or something like that. But I think you're going to see this from the major AI labs and the nonprofits. Like everybody's going to kind of jump in on this and then pilot new approaches to workforce challenges created by AI, including retraining needs. The next one was build American infrastructure. This is all about the grid, increasing energy, building more manufacturing of semiconductors on site in the us, skilled workforce for the infrastructure, cybersecurity, those sorts of things. And then pillar three is export AI to allies and partners, counter Chinese influence and international government's body, strengthen AI compute. So again, those three pillars, I would recommend people go read this stuff and understand it a little better, but also understand it it is now just a here's what we think we need to do now it comes down to actually putting this into action. And then a quick synopsis on the three executive orders that best I could find. There was three related to this. So the first is export of American AI technologies. So what does this one mean? I won't get into like reading the whole thing. It means they don't want China to win. An interesting side note, Mike, I'd sent you this one as sort of like a side not originally intended to be in the podcast, but it fits so well. I figure we probably have to address this. So apparently Donald Trump didn't know who Jensen Huang or Nvidia was up until recently. So Nvidia, if, if you're A listener and don't know is the largest company in the world. They have a $4.2 trillion market cap, and Jensen Huang is the sixth richest person in the world. So I think the. The Verge didn't give the timing of when exactly this happened, but it appears to be since Trump came into office the second time, so since January of this year. And so they wanted to go after some of the big companies. And apparently Nvidia was on Trump's list of companies he wanted to break up. So Trump told this story himself during the AI Action plan launch event. So I'll just give a little context here, because this matters relative to this idea of AI dominance and the infrastructure side. So this is from Trump. Before I learned the facts of life, I said, we'll break him up. Trump recalled. During his speech about his new AI Action plan, he recounted what seemed to be a conversation between himself and an advisor who he didn't name, who told him it would be very hard to break up Nvidia. Trump said, why? What percentage of the market does he have? Referring to Jensen Long. And the advisor said, sir, he has 100%. And he said, who the hell is he? What's his name? His name is Jensen Huang of Nvidia, the advisor replied. Trump said, what the hell is Nvidia? I never heard of it before. He said, you don't know what it is. You don't want to know about it, sir. Trump said he backed away from breaking up a video after he realized it would be counterproductive. This is quote from Trump. I figured we go in and we would sort of break them up a little bit, get them a little competition. And I found out it's not easy in that business. So I said, suppose that we put together the greatest minds and they work hand in hand for a couple years. The advisor said, no, it would take at least 10 years to catch Jim referring to Wong if he ran Nvidia totally incompetently from now on. So Trump said, all right, let's go on to the next one, meaning let's go break somebody else up. And then Jensen Wong got to know Trump. And Trump said, and then I got to know Jensen and now I see why. So what happened was in the last few months, Trump, who didn't know who Nvidia or Jensen Huang was, apparently, according to his own testimony here, realized the significance of Nvidia and that it's an American company and the previous administration had put export controls in to prevent the sale of Nvidia chips to China in the fear that China would catch up to us. And so Jensen Huang went, met with Trump and actually convinced him to remove that export control and allow them to sell chips, maybe not their most powerful chips, maybe a generation or two earlier, sell those chips into China so that America could dominate and they could make the Chinese reliant on American technology. That's literally the goal. There's so this entire part of the I action plan, the entire executive order, is about creating reliance on American technology and accepting that Nvidia is at the frontier of all of that and that penalizing Nvidia would be a bad idea. This is why Nvidia's stock jumped back up in the last couple weeks. So that's an interesting executive order. There's another executive order on accelerating federal permitting of data center infrastructure. So this is like, like you said, Mike, forget any impact on the environment. If it has to do with energy or data centers, we are building it and we are going to win in that space. The interesting thing here, I'll put a link in the show notes for this is from last fall, Jensen Huang was talking about data centers and he says AI is now infrastructure. And this infrastructure, just like the Internet, just like electricity, needs factories. These factories are essentially what we build today. So he's talking about Nvidia builds data centers, but he actually calls them AI factories. You apply energy to it and it produces something incredibly valuable. And these things are called tokens. So what he's saying is we build energy, we build data centers. Those data centers produce tokens, which basically are the foundation of intelligence. And then an interesting related quote last week from Demis Asabas of Google DeepMind tweeted, you know what's cool? A quadrillion tokens. We processed almost 1,000,000,000 tokens last month, meaning June, more than double the amount from May. And that was in a reply to Logan Kilpatrick, who said Google is processing 980 trillion plus monthly tokens across our products, up from 480 trillion in May. So the basically doubling every month the number of tokens being output by these data centers, which means we as business users and personal users of AI technology are using it that much more that it's now outputting all of these tokens. Even if you don't understand the concept of tokens, it's basically the equivalent of words that would be there was a quadrillion or let's say 980 trillion tokens. That's about, I don't know, like 750 trillion words. Like the equivalent of that would be roughly what we're outputting within these models. And then the last one is the most probably subjectively biased. Like, depending on your perspective here. This is literally the headline of the fact sheet. President Donald Trump prevents woke AI in the federal government. And so it says they are prioritizing truthfulness and ideological neutrality. They talk about unbiased AI principles. They say the large language model shall be truthful and prioritize historical accuracy, scientific inquiry and objectivity and acknowledge uncertain where reliable information is incomplete. They say they shall be neutral, nonpartisan tools that do not manipulate responses in favor of ideological dogmas like dei and that developers will not intentionally encode partisan or ideological judgments into lms. This is the most absurd of all of them because they're on record saying they want them to output their ideals. So this administration, the idea of neutrality is our view of the world. This is what, this is what Elon Musk is doing with Xai. Like he literally said it. We're going to train these things to represent what we believe to be historical truths. So this goes back to the episode 158 conversation about who decides truth. And again, in a non political way, like, if you think that this administration knows what truth is and they present facts, then like, okay, but that means you won't believe the next administration. Let's say it's a demo, you know, the Democrats come back into power, then you will believe that the Democrats are being untruthful. And if the Democrats control what a large language model says, and I mean literally within this executive order, it says that LLM companies, AI model companies, will not be eligible for federal contracts if they don't adhere to the quote, unquote unbiased AI principles determined by a biased government. So this is the part, like, I just, I don't understand. And again, I, I go back to last episode's conversation. I don't care who you think knows truth and fact, the opposite administration will always come into power. It's inevitable in politics. And so we still arrive back at this idea that someone is the gatekeeper of this. Whether it's this administration and you like this administration or you don't, or it's the next administration and you like them or you don't, they will determine this. And if this executive order that mandates following the unbiased AI principles determined by a biased body of people, I don't get it. Like, and so this is where you then worry about like the whole AI action plan and how much of it actually falls within the true principles says it will follow. Which I believe in almost all of them. Like, the action plan is a fundamentally solid plan. Right. It's just, is it going to be pursued in an objective way or not? And I would have the same questions regardless of who is in power. Again, this is all about power and controlling these things. It is believed these things will drive trillions of dollars of economic impact. We'll talk about that in the next main topic. People in power want to stay in power. And if these models from the five companies that are building the frontier models control the power and the trillions of dollars of value, whoever is in power will abuse them. That is human nature. So I don't know what it means beyond that, Mike. I don't. I don't have a here's how we're going to make this better kind of ending to this. I just want people to understand this is a very important plan. It is a sound plan. It's well written. People who know AI wrote this plan. Whether or not it is pursued to the true benefit of Americans at a small scale and more broadly, humanity and society. That's the to be determined part.
- [29:58]
Mike Kaput
Yeah. And I like your point, too, about showing. It shows where this stuff is going. Whether or not these policies get enacted in the right way, we can make some very reasonably confident bets about the future. Right. Is that the environmental aspect is not going to be a priority, that some type of AI literacy is on the table, but it doesn't address displacement. And that I would be betting pretty heavily on anyone that makes data centers moving forward.
- [30:27]
Paul Raitzer
Yeah, I think that's a good synopsis. It is everything we've been saying needed to happen or was happening. It does just sort of validate a lot of that. And. And again, for me and Mike, like, we spent a lot of time researching this stuff, thinking about this stuff, synthesizing this stuff, and we always want to, like, know that we're heading in the right direction, that we're not misleading our listeners in our pursuit of being as objective as we can be about this stuff. And then you get a plan from the government that's basically, like, literally, like in print, saying everything we've been saying. It's like, okay, good. Like, we're on the right track, we're interpreting correctly what is going on. And so, yeah, I think, like, for us, it's helpful to just see it said. And I do. I think AI literacy, they're aware of the jobs impact. They don't want to acknowledge it, you know, directly, transparently, but, like, they're pursuing ways to solve for it. They're embedding on infrastructure. I don't know that. That it's the right play to think of it as a race that we have to beat China at, and we didn't. Well, maybe next week we'll touch on. But, like, China came out with their own plan, like, 48 hours later. And they were trying to portray it more as like, hey, let's all work together. And I think it was meant to be sort of like a, I don't know, sort of the opposite of the US Approach. But again, is it truthful? Is it, like, actually what it was? Who knows? It's politics, like, right? Everybody lies, everybody pursues power, regardless of what side of the aisle they're on.
- [31:51]
Mike Kaput
All right, our next big topic this week is about the following question. What if artificial intelligence doesn't just disrupt the economy but actually detonates it? And that's kind of a provocative question posed in a briefing in this week's issue of the Economist. So in this briefing, they talk about the fact that unlike past technologies, truly getting to AGI could end up automating not just labor, but but innovation itself, with AI generating ideas, conducting scientific research, and even improving its own design. If that kind of intelligence explosion happens, they posit the economy wouldn't just grow, it would explode. You'd be hitting things like, in some projections, 20 to 30% annual growth rates, which are insane the longer they go on. But as the Economist kind of unpacks, growth at that scale doesn't necessarily mean prosperity for all. As AI gets cheaper and more capable, we could see wages shrink. Workers might be priced out of the labor market entirely. Capital, not labor, would capture most of this value, meaning those who own AI or data centers could end up with a staggering share of the future wealth created. Yet with these kinds of projections, if you start gaming this out, if that happened, markets are not behaving like explosive growth is around the corner. So the Economist kind of unpacked. Well, why is that? On one hand, it's possible the forecasting models being used by some of the more optimistic AI labs and economists out there are just wrong. Or maybe just like with AI's capabilities, everyone's underestimating how fast things are about to move. But as one economist they talked to put it in the report, he said, once you start thinking about the impact of economic growth when it comes to AGI, it's hard to think about anything else. And I think, Paul, that last part really stood out to me here, because when you start thinking creatively about the possible effects of Like AGI or even, you know, runaway, essentially super intelligence that is improving constantly. When you think about how that's going to affect the global economy, it just becomes kind of a rabbit hole. And I guess my question for you is, are enough people thinking seriously enough about this?
- [34:08]
Paul Raitzer
I don't think they are. I mean, we. So we talked about. I was going back on, like, how many times last year we talked about GDP and economic impact. And episode 122 jumped out in particular when we talked about situational awareness from Leopold Aschenbrenner from June 2024. And that was an episode where we kind of got into this a little bit, because that was one of the beliefs within Aschenbrenner's situational awareness articles was that we could see economic growth rates of 30% per year beyond quite possibly multiple doublings a year. And that was just an asinine thing to most people because again, economists, like I say it's never happened. Like, you can't, can't do that. If you look at historical context, this is not something that occurs. And so it's a hard thing for people to wrap their minds around. And so, you know, it largely just kind of gets ignored, at least by the economists I've talked to. Like, they don't even acknowledge this as a possibility. So, quick, backup GDP growth, gross domestic product, total monetary value of all finished goods and services that are produced within a country's borders in a specific time period. It's usually measured quarterly or annually. I pulled this morning. As of June 27th was the last update, the United States GDP decreased in an annual annual rate of 0.5% in the first quarter of 2025. So January through March, according to third. Third estimate released by the U.S. bureau of Economic Analysis, which is the authority on this. So the, the GDP is at about 29 trillion, give or take. You know, somewhere between 29 and 30 trillion currently. But it shrunk in the first quarter this year. So again, for someone to show up and say, yeah, it's going to grow 20, 30% annually. It's like, well, just shrunk 0.5%. How could it possibly grow 2030? It's like a ridiculous thing to consider. So how does AI impact it? Well, it increases productivity. We can do more in the same amount of time. It in theory, drives innovation and new product development, which maybe creates demand for new products and services. It creates industry and sector growth. Potentially it boosts consumer demand through personalization of products and services. Now the question is, will people be working and have the Income to, to have that demand, like that's an unknown. So we can only create more products and services if there's money to be spent to purchase those products and services. So, yeah, I think that this is an example of why Zuckerberg is spending tens of billions acquiring top AI talent. Why hyperscalers like Google and Microsoft soft have 80 to $100 billion capex expenditures this year. Google just raised theirs in their earnings call last week. They said they were increasing their capex this year. Microsoft, I think, has stayed steady at their 80 billion. It's why OpenAI and XAI are pursuing trillions to build out data centers and energy infrastructure. And it's why we have an AI action plan from the US Government that prioritizes AI acceleration at the cost of everything else. Because Even if the 20 to 30% numbers are unrealistic, even getting to like 5 to 7 to 10% would be transformational for the government. So if you could, you could do that in a consistent way. And so there's, there's literally trillions of dollars to be unlocked here. And so the companies that can be at the center of it, which largely are the AI model companies, and the companies that produce the energy and the infrastructure to enable those things build the AI factories like Nvidia. We're talking about trillions of dollars in market cap. And so spending tens of billions or hundreds of billions is nothing for the, for the opportunity and the missed cost. We've talked about this on a past episode. I know, because I think, I don't remember who we quoted on this, but it was like, it might have been Zuckerberg, it was Satya Nadella. Or it might have been. I don't. Might have been Sam Allman, whatever. The whole idea of it might not work. We might spend a trillion dollars building all this out as an individual company, and it might not work. But what's the alternative? We sit on the sidelines and do nothing and we're not part of the conversation. So this is why Meta and Zuckerberg has to be a part of this conversation. It might not work, but the alternative is they do nothing and they're irrelevant in three to five years. So all of this opportunity, this possibility of massive growth is in large part what is driving all of the investments, all of the actions that we talk about every week on this podcast.
- [38:28]
Mike Kaput
Yeah, and to that last point, if you are routinely scratching your head or scoffing at the fact people are investing so much money in AI companies, some of whom do not turn a profit or like Cash on fire. This is why it's a very logical move. It's not stupidity. It may be optimism or mania, but it is not ending anytime soon. Everyone has to do this.
- [38:52]
Paul Raitzer
Yep, yeah, if you have the money. And this is why, like last week I said there's basically five companies that can pursue the biggest models because we're, we're talking about hundreds of billions and not too distant future trillions. Like Sam Altman kind of came out jokingly last year that he was pursuing 7 trillion. I don't think it was a joke. Like I don't know that the number was 7 trillion, but they raised a half a trillion already. Or, you know, that's what Project Stargate is supposed to be. And I can promise you that was just one phase of the grander vision. So I am sure that they are at least discussing trillions as what it's going to take over the next four to five years to build the infrastructure needed to build the models they envision to unlock all this growth.
- [39:36]
Mike Kaput
All right, our third big topic this week, OpenAI is gearing up to launch GPT5 as early as August, according to a new report with some rumors in the Verge. Sam Altman said recently on X as well that, quote, we are releasing GPT5 soon. And he previewed recently GPT5's abilities in a recent podcast with the comedian Theo Vaughan. And he told the host on that podcast that he let GPT5 take a stab at a question he didn't understand, saying, quote, I put it in the model, this is GPT5 and they answered it perfectly. He called this kind of a, quote, here it is moment and said he, quote, felt useless relative to the AI because he felt like he should have been able to answer this question. Right around the same time, a post on x revealed that GPT5 had been spotted briefly in the While the Verge says the full rollout is expected to include three tiers, there's a flagship model with integrated O3 reasoning, a lightweight mini model, and an API only nano model. It's assumed that GPT5 could consolidate OpenAI's kind of fragmented model lineup into one unified system. It's still kind of unclear what that looks like, but that could be a move towards this long term goal. OpenAI has of AGI and obviously if we declare AGI at any point, it could shift OpenAI's business relationship with Microsoft as well. So Paul, if the rumors are true, we're getting GPT5 very soon. The unified system thing we've heard about, known about I'M not sure if that means the system itself will determine which model to use for tasks like what else is worth getting ready for here if you're kind of a business leader or a user getting ready for GPT5.
- [41:21]
Paul Raitzer
Yeah, I think just paying attention to what, you know, OpenAI is talking about when it does come out, you know, understanding the impact. It's hard to know until we know if it's a unified model or a router model. I don't know that's going to make a difference, but I think we discussed the distinction. There is. When you put the prompt in, it may be multiple models still. There may still be a chat model, reasoning model, an image model, and it just automatically decides which model to route it to versus it's actually just a single model with all of those capabilities built in. Again, I don't know as the user, there might be some latency issues. It might be a little slower if it's a router model, but I think it's still going to do the same things, generally speaking. The other anecdotal piece is there was some rumors that the models were being tested in the LM arena, so under code names like Zenith Summit, Lobster, nectarine, starfish and O3 alpha, which wouldn't be. Be too much. I mean that, that's pretty obvious what that one would be. So those have gotten pulled. As of last night, I think they were no longer in the arena. I don't know how long they were active, but it appeared they were testing some new models that people had pretty positive responses to. My general feeling, as I. I've kind of mentioned a couple times recently, is I. I think we're kind of at AGI, roughly that, you know, I think OpenAI probably believes GPT5 is or will be AGI. They're. They're kind of alluding to that. It would explain part of their shift to the talk of superintelligence. So I don't, Yeah, I don't think that they're going to call it that per se. I think they'll probably do a lot of cutesy tweets of like feeling the AGI and things like that. But I just feel like if you take these models and whatever GPT5 is going to be and you post train them on some specific things or give them agentic ability to take actions, it likely would qualify for any reasonably historical, historical definition of AGI. Like, I, I don't. So again, I think it's just semantics at this point. Whether it is or isn't, it's hard to really measure. A couple other things that Altman said on the Theo Vaughn podcast that I thought were noteworthy. He said, GPT. GPT5 is the smartest thing, smarter than us in almost every way. Meaning it's the smartest thing in the room was kind of the. The perspective here, you know, and, And. And yet here we are. So this is Sam Altman talking to Theo. So there's like the. It's so hard to read Sam's quotes sometimes. There's something about the way the world works. There's something about this doesn't mean it's true forever, but there's something about what humans can do today that is so different. There's also something about what humans care about today that is so different than AI. And I don't think the simplistic thing quite works now. Again, by the time it's a million times smarter than us, who knows? So he's basically saying GPT5 is smarter than him. It's smarter than anybody else in the room, but yet he's still there as the CEO of OpenAI, doing his job every day. You and I are still here doing the podcast. And so, like, there's something unique about what humans bring to the table. He can't put his finger on it, but, like, it's. Humans still seem to be needed. Even though this thing's probably AGI, based on his own previous definitions of it, he just doesn't know if that holds true, you know, three years, five years from now. And then the other one that had had me really thinking. I thought this was a really interesting analogy he gave, I guess. On Joe Rogan's podcast, Altman had mentioned something about eventually having an AI president. And so Theo Vaughn asked him, like, hey, do you think that's actually, like, a thing? And so Sam said, I hadn't really taken my thinking to this extent. Everything that it takes to be a president, but I know what it takes. A lot takes. A lot of people are willing to. Man, I really struggle to read his quotes. So, okay, I'll just summarize this part because it doesn't make any sense. He's basically saying, I know what it takes to be the CEO of OpenAI, and so I can better evaluate this on being a CEO versus being the president. Okay, so CEO, because I know what that job is like. Okay, that should be possible someday, maybe not even that far. Like, I think the idea to look at an organization to make really good decisions, there's a lot of things that you can imagine that an AI CEO of OpenAI could do that. I can't do meaning Sam Altman can't do. I can't talk to every person at OpenAI every day. I can't talk to every user of ChatGPT every day. I can't synthesize all that information even if I could. But an AI CEO could do that and it would have better information, more context, it could massively paralyze this and I think that would lead to better decisions in many cases. So that just got me thinking, I was like, oh my God, he's right. Like imagine if every morning you could do like a one question poll of your workforce and then like get all that feedback back and like synthesize it in five seconds. A CEO could never do that. Like a human CEO could never do that. And imagine that with your employees, your customers, your board, your, your analytics data. Like imagine having real time intelligence and synthesis of that information on any data point you want as a CEO. And it's like, wow, okay, like that. In that example you can now start to see where a co CEO, that is an AI truly starts to take a greater role in the leading of companies. And then you could apply that to basically any role and say what data do I need? What are the KPIs I'm looking at every day? What's the data I would love to have that I don't have? What's the data I have that I can't possibly synthesize every day and find meaning in? Find insights from, make decisions based on and imagine a generative AI model had access to all of that and could synthesize it into three bullet points at any given moment. It's like, yeah, I hadn't I really thought about it that way.
- [47:05]
Mike Kaput
Yeah, that would be quite the game changer. I also, as we're talking about this wonder as well, depending on how GPT5 looks, how it uses different models, I wonder if it could be a wake up moment for your average person. Because not only being smarter, but I feel like right now people are not already understanding the full capabilities of reasoning models. For instance, because people half the time aren't even picking the models they're supposed to be using or picking incorrectly which models they should be using.
- [47:34]
Paul Raitzer
Yeah, I agree. Like if you ask a harder question, something that requires like deeper thinking and you don't know to go to the O3 model, right, then the new model just does that for you and it's like whoa, that's different.
- [47:45]
Mike Kaput
Yeah, yeah, I could see that happening quite a bit.
- [47:47]
Paul Raitzer
If that's interesting. Agreed.
- [47:50]
Mike Kaput
All right, let's dive into this week's rapid fire. So first up, you are not imagining it says Forbes AI is already taking tech jobs. So they talk about how in recent months a wave of layoffs have swept across the industry with CEOs as we've talked about growing more candid about AI's direct role on jobs. So we've covered plenty of this before Forbes mentioned the Fiverr CEO's AI memo, Klarna cutting 40% of its workforce, citing automation and then walking actually parts of that decision back. Duolingo, IBM, Microsoft. Forbes details how essentially thousands of roles have started quietly disappearing and AI is increasingly cited as the reason. According to Forbes, the impact right now in tech is sharpest among entry level developers. They say that a Stanford study found employment for 18 to 25 year old coders has dipped since ChatGPT launched. And they also talk about how companies are moving from mass hiring to kind of precision hiring, prioritizing top tier talent and letting average performers go. But they also say there's a bit of a silver lining here. AI is also creating new demand for engineers, specifically outside of tech in finance, healthcare and manufacturing. Now Paul, just some more evidence here that we're not the only ones seeing this and talking about this. And tech seems to be a bit of a canary in the coal mine here. Do you think that this speeds up and starts to go a bit beyond just tech?
- [49:22]
Paul Raitzer
Yeah, I think it already has started moving beyond tech. I think that the most interesting part of the story is probably just the continued coverage from mainstream media that it's expanding now. And this is stuff we've known been talking about for two years. You know, I think earlier this year we finally started getting CEOs admitting to this and now we're starting to see mainstream media pick it up. And I've said on a recent podcast episode, I still think this maybe becomes the most important issue of the midterm elections in the United States in 2026. And so going into this fall, I would expect coverage of this to pick up. I would, I would expect some pretty high profile stories on it. And I would probably anticipate some increased negative reactions from society, I would imagine, around this because I think it's going to become just more apparent where this is leading in the near term. And again, I'm, I'm an optimist when it comes to like, I think we'll figure it out. I do think it's going to open up all kinds of incredible possibilities and career paths that we do struggle to define right now. Yeah, I just don't think that's going to happen fast enough to offset this, the, the negative impact it'll have in the near term. And so I'm, I would say I'm a realist when it comes to jobs in the next, you know, I don't know if it's like a one to three year time period. I'm not even sure what that near term time frame is that I think we go through some really painful parts. But 1 to 3 probably seems pretty realistic. And then I think over time we figure it out. And now that all these major labs and non profits and governments are accepting the impact this is going to have on jobs, we might get some really smart people together who figure out how do we solve this. Like we just, we weren't, we weren't admitting that it was a problem and now that we're sort of admitting it, maybe we can get to like working on solutions. And that's been my biggest thing all along is like, let's think about that. It does go bad for a little while in jobs and let's like come up with some plans. And so at least I think we have people working on plans now and that's a really good direction.
- [51:32]
Mike Kaput
I also like your point about just the overall narrative here being covered more by mainstream media. The narrative piece of this matters because this is now going mainstream and your employees, if you are a leader, are going to increasingly be reading these headlines or watching this on the news. You need to have some type of AI communication plan. You need to be talking about your perspective. We talked about this last week, your vision, your perspective on AI. Because I guarantee you, if layoffs start happening at your company, even for necessary reasons, AI is increasingly going to be seen as a scapegoat here too. I think employees are going to assume the worst by default if all they're consuming are headlines like this.
- [52:19]
Paul Raitzer
Yeah, most CEOs are going to, if they haven't already, connect the dots that AI equals efficiency and productivity gains, which equals fewer people doing the same amount of work, which means your return to work policies five days a week are just veiled attempts to get 10% of the workforce to quit. So you know, you can, you're just going to do these things, but at some point we're going to run out of those things to do the leverage points that the C suite holds without saying it's because of AI. So yeah, I just, I think it's going to be a reality and I think we will adjust to that reality. And I think we will solve for it. As a society, we're resilient, like, we'll figure it out. I just think we have to be honest about what's happening. And it's the only way to then kind of move to the what do we do about it? Phase, which is what I think is the most important part of it.
- [53:08]
Mike Kaput
All right, next up, Nvidia CEO Jensen Huang, we mentioned earlier, has some interesting advice for today's students. He was asked about this and said if he was starting over, he wouldn't focus on software in his career, he'd study the physical sciences. He thinks the next great wave of AI is physical AI. He explains the industry has already moved through perception AI, where AI was recognizing images and the current generative AI phase. The next frontier, in his view, involves teaching machines about the real world, concepts like physics, friction and inertia. That's the understanding, the understanding here of that is the foundation for true robotics. And he thinks that intelligent machines will be essential for running the automated factories of the future. Now, Paul, I mean, advice from Jensen Huang, always worth taking seriously, but really we wanted to highlight this topic because it's something you get asked about a lot in your talks and discussions with business leaders. Like advice, like, if you were in college, what would you be studying and why?
- [54:09]
Paul Raitzer
Yeah, and I, I thought, you know, I think it, what Jensen's giving is great advice. The reality is not everybody is equipped to go into the physical sciences. Like, like I, I was pre med at the start of college, that lasted about four weeks. I was like, I failed out of BIOS170. It was like the weed biology class. Now I didn't really go to class, so like, it's kind of my own fault. But like, I wasn't, I wasn't equipped for the sciences. I love the sciences, but like, I, it wasn't going to be my thing. And so just saying, like, yeah, there's going to be tons of jobs in this phase. It's like, okay, yeah, but like 5% of people want to go into those jobs maybe. So I think the bigger vision here is what are the industries and career paths where continually powerful, more advanced AI unlocks new areas of exploration, discovery and innovation. Like where no matter how smart the AI gets, is it actually going to drive opportunity? And so the sciences is a perfect spot because all this unanswered questions in biology, cosmology, chemistry, like, it's going to open up all these incredible, like golden age of, of discovery. Now I was thinking about this over the weekend. I'm not even sure what drove this. I was, well, I don't know what day is today? Monday. So I was with my family last week in Toronto. We were on a trip. And so I spent a lot of time with my kids and just like a lot of conversations come up. And somewhere in that trip I really started thinking about how I think I want to guide my children as much as I can to focus on entrepreneurship. Like I want them to go to high school, I want them to go to college, I want them to get the degrees and have the life experiences that come with it. I don't know what career path I would personally make a bet on being viable by the time they got out of college in six years and seven years. But entrepreneurship I think is a whole nother realm. Like I think we all the barriers to entrepreneurship come down. And so they're 12 and 13 and I am proactively teaching them business fundamentals and as of like this weekend, trying to think strategically of ways to ramp up my efforts to teach them about entrepreneurship. When I was so I didn't even know entrepreneurship was a thing until, let's see, eight when I was in eighth grade. Going into ninth grade, I started caddying at a local country club. And that was like the first time my life I met entrepreneurs. Like where I, where I came from, we didn't know people who ran businesses. Like that wasn't what I grew up around. It was a very blue collar town and, and that's what we knew. And then I was like, oh, you can own a business. Like I didn't even really realize that. And so I wasn't exposed to that. And then my mom started her cookie franchise my junior year at Ignatius and that was the first time in my family, you know, I really saw entrepreneurship. So my thinking now is like, I really want to expose my kids to have the opportunity to be entrepreneurs at an early age because I think AI is going to make that way more possible than it was when we were coming up. And like an example here, my daughter found she's very creative, you know, an artist, a creative writer. And so she found this really cool website to help her visualize the story she was writing. And it was a very specific niche product. And she said, can I get this? And I was like, okay, well I'm going to teach you how I would assess this. And so I actually showed her CB insights, which Mike and I used to analyze tech companies. And I went through, I ran analysis, I used AI, their AI agent to write a brief on this company. And then I walked her through the brief. I was like, okay, here's Mike. And I would look at funding. Like, let's look at what funding they have. That's like a. Who are their investors? Let's look at the competitive landscape and what are the other companies we could be looking at. And so I felt like it was an opportunity to say, here's something she's interested in. So I'll explain competition and funding in the context of whether or not she can use this website to do this. And so I thought that that's a learning experience. And so I'm going to proactively look for those things and try and build on top of what their interests and passions are in life and help create the opportunities for them, if they choose to, to just pursue an entrepreneurial path instead of thinking they have to go work for corporation. So that's kind of the ways I'm starting to think about this is. And I did something recently with a family member of mine who's in college connecting them to like a head of entrepreneurship. Because it's like, just get to know this person when you get to the campus. Like, that's. You go study whatever you want, get a business degree, whatever, but, like, understand entrepreneurship while you're there. So I think that's a really important aspect of, of where this all goes.
- [58:41]
Mike Kaput
I love that. And I would also say, if you're any age listening to this and you are an employee at a business or corporation, this kind of thinking is critical. Like thinking like an entrepreneur. They might say intrapreneur, right? Someone who's an employee. I think that's such a differentiator, especially in the age of AI, because you're going to proactively seek out opportunities to use the tools to create value, which is not going to end poorly for you if you do that.
- [59:07]
Paul Raitzer
It's a great point, Mike, because not everyone's cut out to be an entrepreneur. And I would say that, like, while I think entrepreneurship is going to be fundamental, it's hard as hell and it's lonely to be an entrepreneur. Like, it's really difficult. And so some people just need that entrepreneurial spirit within a company that they're at so they can raise their hand, say, hey, what if we did this? And maybe the CEO says, mike, it's a great idea. Why don't you take the lead building that and like, just having that perception that, like, you can build things and. And then understanding the basics of business. It's like, okay, is the CEO going to Agree or disagree? Like, let me build a business case for this. So, yeah, you can have that mindset without having to do your own thing.
- [59:45]
Mike Kaput
All right, next up, Instacart CEO Fiji. Simo is about to start her new leadership role at OpenAI on Aug. 18. She is starting as the company's CEO of applications, which we've covered in the past. She reports directly to Sam Altman, and her mission will basically be to lead at least a third of the company, focusing specifically on product growth and scaling the real world use cases for OpenAI's technology. This is part of a broader reorganization that allows Altman to concentrate more on core research, compute, and safety systems. Simo, who has also joined OpenAI's board as of March 2024, has been vocal about the need for responsible development. So at the same time, as we approach her start date, she shot off a recent memo to staff emphasizing that AI leaders must make choices that lead to broad empowerment, rather than concentrating more wealth and power in the hands of a few. So, Paul, what is her role, this new role, even mean for OpenAI moving forward? Are there big changes we should be expecting here?
- [60:49]
Paul Raitzer
I think when they first announced this, I said it seemed like a prelude to Sam stepping back.
- [60:54]
Mike Kaput
Yeah.
- [60:54]
Paul Raitzer
And this memo does nothing to change my mind on that. This is a vision for the company and this is a roadmap for what they're going to build that would have come from Sam previously. So I don't know if there's like a formal plan in place or how this is all going to play out, but it does seem very obvious that this is a prelude to Sam stepping back from these kinds of memos and her stepping forward. So I know this is not meant to be a main topic, but there's some stuff in here we got to talk about. So you mentioned the power thing. She breaks it down into knowledge, health, creative expression, economic freedom, time and support. And I want to unpack each of these real quickly because I think that they're extremely important to understand where OpenAI is going and where AI as a whole is going. So in knowledge, she says, for the first time, AI has the power to truly democratize knowledge and the opportunity it brings. AI can compress thousands of hours of learning into personalized insights delivered in plain language at the pace that suits us, responsive to our specific level of understanding. It doesn't just answer questions, it teaches us to ask better ones. And it helps us develop confidence in areas that once felt opaque and intimidating. Growing both personally and Professionally in a 2024 OpenAI study, 90% of users said ChatGPT helped them understand complex ideas more easily. Once we put a personalized AI tutor on every topic at everyone's fingertips, AI will close the gap between people who have the resources to learn and people who have historically been left behind. So this goes to that personal tutor, personal assistant idea again. Every one of these, like this is well written, this is very intentional in its writing. And you can see that the ChatGPT OpenAI roadmap emerge out of each of these descriptions. The next one is health says I'm not alone. Nearly 9 in 10 U.S. adults struggle to understand and use health information, which leads to worse outcomes and more than 200 billion in avoidable healthcare costs every year. Patients often feel powerless in their own care and dependent on others to explain what's happening in their bodies. AI can explain lab results, decode medical jargon, offer second opinions, and help patients understand their options in plain language. It won't replace doctors, but it can finally level the playing field for patients, putting them in the driver's seat of their own care. I have personally experienced this. I don't Mike if you have, but like I had a medical condition earlier this year. I was in the hospital. I didn't understand what was going on and I was like sitting there talking with ChatGPT the entire time. I was uploading lab results. Like, explain this to me now I'm fine. Like everything worked out great, but there was this period for like 45 days where I didn't know what the hell was happening and I was trying to understand the condition. I use it for personal health planning, dietary things like protein, creatine, like trying to understand different things at the age I'm at, it's like, okay, I want to, I want to just like, like my health. I want like a great lifespan. I want to like enjoy life for a long period of time. And I'm in the active stage of like trying to figure all that out. I do that with AI all the time. So it went on to say, I can also make sure health decisions don't just happen in the doctor's office. Biggest levers, preventing disease and optimizing health outcomes, sleep, food, movement, stress management, connection, all depend on everyday habits. AI can help us build those habits through small, achievable daily steps with personalized real time nudges. That's a I bold faced that that is the proactive personal assistant where it's saying, hey, did you take this? Did you think about that? This is where Apple excels, by the way. Like if if anyone listening uses an Apple Watch like one of the greatest products ever. Like, the amount of what they're doing with health on the Apple Watch is incredible. The condition I mentioned earlier was related to heart. I would have never had the data I had if I didn't have an Apple Watch and hadn't been wearing it for two years. I had two years of data that I could share with the doctors and that I could interpret through myself. So personalized real time nudges which actually leads me to like what products or what hardware is OpenAI going to build? Because that might be an important indicator. Creative expression is maybe the most controversial part of this vision. So the problem is that our ability to express creativity is often limited by our skill sets. Not everyone has the resources, time and training to paint, write, compose or build. AI is collapsing the distance between imagination and execution. So they feel like giving everyone these abilities to create video, image, voice, audio. Like it is everyone's human right to be able to express themselves. This leads into yeah, but like whose creative expression are you stealing to enable everybody else to have this creative ability? That's kind of the issue here. And then the economic freedom one ties back to the previous note about entrepreneurship. Most people aren't aware of this. I'll throw this stat out. In The United States, 99.9% of all businesses are small businesses. 33 million bit small businesses in the United States, only 6 million of those have employees. So the vast majority of companies that exist in the United States are not the big enterprises that everybody works for. So small businesses employ 61.7 million Americans. About 46% of the workforce work for small businesses. Things that are made possible through entrepreneurship. So what the article said here is when people can independently create and capture value, they gain power over their economic destiny. Starting a company isn't easy. The average cost in the US is around $30,000. I can personally attest that is a low number, an impossible threshold for most aspiring entrepreneurs. And until recently, building a product or launching a service required technical knowledge. AI gives people the power to turn ideas into income, no matter their age, credentials or zip code. A 2024 Shopify report showed AI enabled solopreneurs launched businesses 70% faster than their peers without AI tools. So this is that whole idea of, you know, entrepreneurship the golden age and AI unlocking it gets into time and people having more time because of AI and then support which will lead us into the next item. So for many people the biggest barrier to progress aren't lack of access or opportunity, but self Doubt, isolation and burnout. Sometimes what's most empowering is support someone or something that can help us reflect, feel seen, or simply move forward with clarity and confidence. People are already turning to ChatGPT for support when they're preparing for a tough conversation, facing a career setback, working through grief, or just trying to untangle a spiral of thoughts at the end of a day. Being able to put feelings into words without judgment and pressure can be profoundly helpful. At the core of philosophy and religion is the idea of self knowledge. To become who we want to be, we have to understand who we are. If AI can help people truly understand themselves, it can be one of the biggest gifts we could ever receive. So again, little more extended rapid fire. But I think it's really, really important and really telling as to where OpenAI goes. And a lot of the same things talked about here would play out in the Gemini models and Claude models. Like a lot of these research directions and product directions are probably going to be running in parallel to what other labs are going to be thinking about and building as well.
- [68:04]
Mike Kaput
Yeah, and we've talked about this in the past, that OpenAI, to achieve the revenue and valuations that it's, you know, aspiring to, really does need to get into some very lucrative businesses to make money. And if you look at each of these as a market, I don't have any numbers in front of me, but I'd imagine each of these as a market is a massive opportunity for sure. So we can actually get a little bit of insight into the one of these markets because in our next rapid fire topic, we have a new AI startup in one of these areas. So Neal Parikh, who is the co founder who turned Casper into a billion dollar mattress brand, has a new venture back by $93 million. His startup, Slingshot AI, is tackling the mental health care crisis with a chatbot named Ash, which has now officially launched after 18 months in development. Parikh was inspired by his own experience with therapy and the massive gap in access to care. They estimate that only one provide, there's only one provider for every 10,000 people seeking help. Ash is his proposed solution. Unlike general AI like ChatGPT, Ash is trained specifically on behavioral health data and is designed to essentially provide therapy, even providing pushback, rather than just agreeable answers. The AI has learned from various therapeutic styles, including CBT and dbt, and it's even developing its own perspective on what a user should work on next to keep them moving forward. So critics are raising safety concerns because this is an AI therapist. Slingshot says it has clinical advisory board and protocols to redirect users in crisis to human professionals. And basically they want to create a new modality of kind of AI powered care. So Paul, we've talked a lot about AI being used for relationships, companionship, other deeply personal use cases. It seems like this is the next frontier and it's got its share of. It's both interesting but also controversial. Even Neil, the founder, posted on X about this company said they said it couldn't be done, they said it shouldn't be done and we tried anyways. So what do you think of Ash here?
- [70:13]
Paul Raitzer
Yeah, I think this is an inevitable market that will be explored and built out. I also think as a society we're very, very early in understanding the impact of this and what it means. One of the things we're early in understanding is the legal impact of this. So Sam Altman addressed this in his podcast with Theo Vaughan that we referenced earlier and TechCrunch covered this said ChatGPT users may want to think twice before turning to their AI app for therapy or other kinds of emotional Support. According to OpenAI CEO Sam Altman, the AI industry hasn't yet figured out how to protect user privacy when it comes to these more sensitive conversations because there's no doctor patient confidentiality when you're doc is an AI. In response to a question about how AI works with today's legal system, Altman said one of the problems of not yet having a legal or policy framework for AI is that there's no legal confidentiality for users conversations. Quote people talk about the most personal stuff in their lives to ChatGPT. People use it, young people especially use it as a therapist, a life coach having these relationship problems and asking what should I do? And right now, if you talk to a therapist or a lawyer or a doctor about those problems, there's legal privilege for that. There's doctor patient confidentiality, there's legal confidentiality, and we haven't figured that out yet for when you talk to ChatGPT. This could create a privacy concern for users in the case of a lawsuit, Altman added. Because OpenAI would be legally required to produce those conversations today, Altman said, quote, I think that's very screwed up. I think we should have the same concept of privacy for our conversations with AI that we do with a therapist or whatever. And no one had to think about that even a year ago. So again, you know, it just, it's early and people are taking risks by, by doing this sort of thing. And that's just on the Legal side also consider the fact that there's nothing saying humans on the other end can't read all the, your stuff you're putting into here. So.
- [72:09]
Mike Kaput
Right.
- [72:10]
Paul Raitzer
And maybe you don't care. And I get it, like a lot of people are just like, hey, the benefit's worth the risk. But there's, there's people on the other side reading these things. Like there, there's no obligation for them to not, they have to train these models, they have to understand how they're being used. Whatever you put in there, you, you can assume someone in an AI lab might, might be reading it and know it was you that put it in there.
- [72:32]
Mike Kaput
All right, next up, in a push for industry wide transparency, Mistral AI has published a first of its kind environmental report detailing the lifecycle impact of its models. So they conducted this with sustainability consultants and this study quantifies the cost of both training and using AI. And the report reveals that training its Mistral Large 2 model generated 20.4 kilotons of CO2 equivalent and consumed 281,000 cubic meters of water. In contrast, generating a single 400 token answer from its chatbot uses about 1.14 grams of CO2 and 45 milliliters of water. And the study found a strong correlation between a model size and its environmental impact, highlighting the importance of choosing the right model for the right tasks. So Mistral is now advocating for a global standard where AI companies publish environmental impact reports for their models. Now Paul, I know you in particular get a ton of questions about the environmental impact of AI. This seems like a positive step forward to at least get some clarity here. Though I would have liked more about like how much is this actually in energy? And I think you had found some stuff on that too.
- [73:46]
Paul Raitzer
Yeah, they, they weren't super clear about it. There was one thing I found that said I think I ran through Gemini. I was like, can you explain this like in context? And so the 20.4 kilotons of CO2 equivalent is roughly the same as the annual emissions of 500 French households. Was the one I got, um, Simon Willison, who we've quoted on the, the podcast numerous times, he did a blog post and he apparently tried the same thing I did.
- [74:11]
Mike Kaput
Yeah.
- [74:12]
Paul Raitzer
And in his analysis he said I'm not environmentally sophisticated enough to attempt to estimate myself. I tried running it through O3. So he used open Eyes Reasoning model which estimated approximately 100 London to New York flights with 350 passengers or 5,100 US households for a year. Okay, so yeah, yeah, we don't know. And then the water, the cubic meters of water, that one's probably a little closer because that's an easy, like a straight equation. Enough to fill about 112 Olympic sized pools. But the thing I thought was interesting here that I hadn't really thought about and I liked this was they tried to give the context of generating like one page of text. So this is straight from them. And they said generating a single page of text. So this is about 400 tokens. So that's what, about 300 words? 320 words. Something like that is the equivalent of watching online streaming for 10 seconds. It's like, okay, like that, that's something you can wrap your brain around. So if you're watching hours of video or if you're watching a bunch of like, you know, Instagram reels, whatever, basically like you're probably doing more than you are using a ChatGPT model or something like that. But then the thing I liked is they said, well, what can we do? So there's always things like as users, what can we do? And they gave some pretty solid responses. So one is the AI companies themselves need to be more transparent about the environmental impact. Two, users should be more mindful of their AI use, choosing the right size model and grouping queries to be more efficient. What they mean there is like, hey, if the mini version of something works, then use the mini version. Like, you don't need O3 Pro just because you have the license for O3 Pro, because that's definitely going to have a greater impact on the environment over time. So use the smaller model when the smaller model is all you need. Which again goes to, we probably need the AI companies to push us to the smaller models when that's sufficient versus the user being expected to know that. And then public institutions can drive market by considering the environmental efficiency of AI models and their purchasing decisions. In theory, the government would play a role in this also. But at least in the United States, we know the government doesn't care about the environmental impact. So they're not likely to like drive that. So then it might be more like a educational institution level, nonprofit level, corporation level, sort of demanding that stuff. But yeah, I thought that was like, interesting. And the other one that I thought was interesting is it says get better at prompting. Like as the user learn how to properly prompt your model so you get the thing you're looking for on the first prompt instead of having to like go through it five times to get it. So I was like, oh, okay. Prompting efficiency is Actually a way to drive efficiency models like, that's good takeaways.
- [76:47]
Mike Kaput
Yeah, for sure. And yeah, I definitely couldn't help reading this in the context, but in the context of the AI Action plan with the US Government because it bears noting that Mistral is a French company. They're kind of seen as like an EU AI champion. My gosh. Very different perspective.
- [77:03]
Paul Raitzer
Very, very different.
- [77:05]
Mike Kaput
All right, next up, a new study from the Pew Research center confirms what many online publishers have feared. Google's AI generated search summaries are significantly changing user behavior. So the research provides some clear data showing that when an AI overview appears, users are far less likely to click on links to other websites. According to this study, users who saw an AI summary clicked on a traditional search link in just 8% of their visits. That's nearly half the rate of users who did not see a summary. Users who do not see a summary Click on links 15% of the time on average. Furthermore, users rarely click on the sources cited within the AI summary itself. This happened in only 1% of visits. The data also shows that users are more likely to end their browsing session entirely after viewing a page with an AI summary. These summaries appeared in about one in five Google searches conducted in March 2025 and were often, most often triggered by longer question based queries. So Paul, we've kind of long suspected this is the case. It seems like it's confirmed. Definitely is not in line with what Google has said about this, but that's pretty sobering data.
- [78:19]
Paul Raitzer
Yeah, I mean it's certainly logical that this would be the outcome I did. I'll have to see if I can find it. We can throw in the show notes if I can find it. But there was a research like over the weekend or the end of last week that said, yeah, like this is true, but we're seeing the quality of visits rise. So yes, you're getting fewer people to your site but, but the people who are coming are seemingly far more qualified than the ones who, who, you know, maybe have come just from the random click through search results. So yeah, I don't know, I think like it's still going to take time to play out. It's probably different by industry of like the impact. And then the other thing that's going to, you know, really change this is how much of that traffic is AI agents. Six to 12 months from now. I just feel like we're going to be in this perpetual state of revisiting this data, you know, every three to six months of like, okay, well now, what's the impact with AI agents having a higher adoption rate and things like that?
- [79:10]
Mike Kaput
That. So, yeah, and I think it's also important to think about context here, especially from a business perspective. It's like, I think Andy Crested talks a bit about this where he says, look like this is a real impact, but not every search is created equal. Right. It's disproportionately going to be for those more informational searches, which may have a very real impact on your website traffic. But like you said, you may be getting better traffic that has more intent or is more propensity to buy. So I mean, it's unclear at this stage, but there's a little more nuance to it than just AI is killing surge, right?
- [79:44]
Paul Raitzer
Yeah, definitely.
- [79:45]
Mike Kaput
All right, Paul, so in our last topic, I'm just going to run through some AI product and funding updates and kind of close this out here. So first up, just weeks after raising $10 billion, Elon Musk's AI startup Xai is working to secure up to 12 billion more to fund its massive expansion plans. This new capital would be used to purchase a huge supply of advanced Nvidia chips. And it's got kind of a creative finance deal going on where those chips would be leased back to XAI to power a new jumbo sized data center for its chatbot, Grok. Second, Anthropic is reportedly drawing investor interest that could value the company at more than $100 billion. They are not formally fundraising yet, but investors have approached Anthropic with preemptive offers. The potential financing would mark a sharp increase from the 61.5 billion valuation anthropic secured in a funding round earlier this year. According to a Bloomberg report, the company's annualized revenue has climbed from $3 billion to $4 billion in just the past month. Some other Anthropic news. In a leaked memo, Anthropic CEO Dario Amade revealed the company is reversing its stance and its plans to seek investment from Gulf states like the United Arab Emirates and Qatar. This marks a pretty big shift because Anthropic previously said it was not going to take money from Saudi Arabia back in 2024, citing national security concerns. In a candid message to staff, Amadei acknowledged that accepting the money would likely enrich dictators, but stated, quote, unfortunately, I think no bad person should ever benefit from our success is a pretty difficult principle to run a business on. All right. And finally, Perplexity AI CEO Arivan Srinivas has outlined a new vision to transform the company's browser product Comet into a personalized operating system. Beginning next week, the company will roll out shortcuts for repetitive tasks. Soon after, users will be able to create their own custom scripts and workflows using natural language and the goal is for each user's browser to feel like a mini customized computer that they built for themselves, complete with their own apps, scripts and dashboards. Perplexity CEO stated that this roadmap is the reason the company purchased the Domain OS AI which we talked about. They purchased it from Dharma Shah of HubSpot and their long term plan includes a hybrid approach to computing with the ability to run AI models both on the server and locally on a user's device. All right Paul, that is a wrap in a very busy week in AI. Going deep on some topics. Appreciate you demystifying everything thing for us.
- [82:24]
Paul Raitzer
Yeah the one observation I had just as you're going through the funding stuff is if you go through the five AI labs I highlighted last week of Meta, Google, Xai, OpenAI, Anthropic. I I don't mean this in like an overly negative way, but the only ones who don't have to sell their souls to achieve this, what they want to pursue is Meta and Google. The only, the only two of those five labs who can actually fund it.
- [82:50]
Mike Kaput
Yeah.
- [82:50]
Paul Raitzer
Without doing what Dario Amade is saying is like hey, we're going to take a bunch of money from people that we maybe don't think are the right people to align ourselves with, but we need the money.
- [83:01]
Mike Kaput
Right.
- [83:02]
Paul Raitzer
XAI has absolutely done that already. OpenAI is doing it like they're the only way they can get that kind of money is going outside of traditional vehicles of funding, whereas Meta and Google can fund it through the growth of their own companies. And that is maybe a completely overlooked advantage that those two have moving forward. Microsoft again, if they weren't limited through their contract with OpenAI, Microsoft could be in that discussion sooner. And maybe that's actually the out for Microsoft to figure out a way to renegotiate this contract with OpenAI is like what's the value to Microsoft being able to build their own frontier models and because they have the money to do it and it's not going to last that long. Like you got to get in there before all this goes, I guess takes off. So yeah, I don't know. Interesting. But yeah, good stuff Mike, as always, more to think about for next week. Thanks everyone for joining us. We will be back next week, same time, same place. Thanks for listening to the Artificial intelligence show. Visit SmarterX AI to get continue on your AI learning journey and join more than 100,000 professionals and business leaders who have subscribed to our weekly newsletters, downloaded AI blueprints, attended virtual and in person events, taken online AI courses, and earned professional certificates from our AI Academy and engaged in the Marketing AI Institute Slack community. Until next time, stay curious and explore AI.