Keech Hagee (7:58)

Hi.

Mike Pesca (7:59)

Let's start by. Can you situate Sam Altman among the firmament of tech billionaires in terms of his background, his expertise, but also his personality?

Keech Hagee (8:10)

So Sam Altman is sort of a new tech billionaire on the scene. Right. For a lot of people, I think he kind of came out of nowhere when ChatGPT launched in 2022. But for people in the tech industry, he's sort of the insider's insider, because for many years, he ran Y Combinator, which is a startup accelerator. It's an investment entity that has launched a lot of the companies that are the most successful in tech. So things like Airbnb and Stripe and things like that. So he had this incredible Rolodex of all the most important people in tech and is a prodigious fundraiser. And he was able to build outside of this sort of monolith of the faang companies. Right. Of the Microsofts and the Googles, a new tech company using this amazing fundraising that came out of nowhere and really challenged the big guys.

Mike Pesca (9:04)

Yeah. So was his genius as a finance guy or a coder and product builder.

Keech Hagee (9:09)

Guy really a finance guy? He did study computer science and he was interested in science, and he did his own startup out of college. So he is a tech CEO, but his real skill is raising money. You know, he got funded by Sequoia when he was a sophomore in college. He's been doing this for a while.

Mike Pesca (9:28)

So he was. But. And he got funded not because at that point he had the connections, because he had the insight, because he had the ideas. And what were his. What was his idea as a sophomore that they liked?

Keech Hagee (9:37)

So he had this company called Looped that was from the Flip.

Mike Pesca (9:40)

I hope it was spelled wrong. It must be spelled.

Keech Hagee (9:42)

Oh, definitely. Right. Lop. T. Right. Everything has the.

Mike Pesca (9:47)

And a small letter and two words mashed together. This is how you know it's a good company.

Keech Hagee (9:50)

Yeah. So it was basically trying to be kind of like Foursquare. It was like a social network that was map based, but for the Flip phone era, which was technologically extremely difficult. They had to create relationships with every single wireless carrier for it to work. So it was just constant negotiation. So his life was just going in front of these wireless companies, these dudes who were like twice his age, telling them that he could see the future. And over and over again, they believed him and they invested and agreed to partner with the startup company. But ultimately Loop was not successful because, of course, the iPhone came out, and a mapping app for a flip phone was no longer really that necessary, so. But he made relationships during that experience that helped launch his career.

Mike Pesca (10:34)

Yeah, in a way, you don't want it to be easy in the beginning. I'm sure it. What do you. What's the phrase about forging harder steel through or steel forges steel? I don't know. There's a forge metaphor that probably applies to how frustrating it was for this young guy to talk to a person who had never even heard of URL.

Keech Hagee (10:53)

Totally. And it was a painful experience. He's talked a lot about how painful it was to spend seven years running a company, and basically it was sold for parts or roughly whatever they raised. But out of that came these relationships with venture capital companies and just experience in Silicon Valley, and especially this relationship with Y Combinator. That, again, is the root node of the power in Silicon Valley that he was then able to. To sort of for to. He was able to build a power base that made him a successful leader of Y Combinator.

Mike Pesca (11:26)

Right. And it's interesting because the person who's usually in the position to greenlight the hopes and dreams of others, usually young upstarts, is often the seasoned billionaire, but he was the young guy, too. So Peter Thiel, who's his mentor and a billionaire, you can understand how he gets to pick and choose and be an angel investor and have some mentees. So Altman doesn't exactly have mentees, but he's in this position that is unusual for such a young person to be a dream maker.

Keech Hagee (11:56)

Absolutely. And it was a little bit because of Peter Thiel's own help that put him in this position. So he does a startup, it fails. He meets tons of people in the course of doing that. And then after he sold his first startup, Peter Thiel actually bankrolled him to the tune of millions of dollars, tens of millions of dollars to start his own venture fund. So then he becomes an investor and kind of surprises himself by realizing, like, this is the thing that I'm really good at is investing.

Mike Pesca (12:23)

So a. As an idea, is this apparent, that this is the north star of tech, that this is going to be the next great leap forward? Not to quote Mao Zedong, but there are many different tech ideas floating out there. And, you know, for a time, Elon Musk would always try to convince you, and this is what he wanted, X to be the app for everything. But I have sensed that there is a convergence that there was the Internet, and then the next thing was going to be AI and So my question is, when did people begin to realize that and when did Sam Altman begin to realize that? Was he on the forefront? Did he recognize it just from meeting with all these other people who are doing all these companies? And then he said, you know, if we could have a I, this would change everything. How did that come about?

Keech Hagee (13:10)

So Sam has been interested in AI since he was a kid. A lot of these techie folks, they read science fiction and this concept of AI and the singularity has been a huge part of science fiction for decades. And that's where it pretty much.

Mike Pesca (13:22)

And it's a dystopian concept.

Keech Hagee (13:24)

The singularity depends. It depends. He has been interested in it since childhood and when he was actually in college, he wrote down on a sheet of paper, what are the things I really want to work on? And AI and nuclear energy were near the top. So he's had this in the back of his mind for a long time. But the actual technology out there during that time, this is like 2005 just wasn't there. And in fact this was kind of still during the winter, as it was called, when it was really hard to get funding for AI and the technology itself sort of seemed like a bit of a dead end. What changed is there were these huge leaps forward around like 2012, there was this really important paper, the Alexnet paper, that show that this neural network form of AI could really, it could identify images and it could make these leaps that suggested that the dream of AI might be coming true. And because, you know, Sam is very interested in like the forefront of whatever is going on, he saw those little things happening and was able to throughout the year of 2014, 2015, start to gather folks together to go after this new technology. I will also say that a big impetus for all of us, of course, is that it was happening inside Google DeepMind.

Mike Pesca (14:41)

So I originally asked you give position him in the firmament personality wise. So I don't know how much this matters. The, the range of different personality types of founders of world changing tech companies is probably kind of limited. You won't find, you know, the kind of the broad range of humanity. They're very driven, they're very smart, they, they probably have ideas about reshaping society that someone who's, you know, takes picks up a lunch bucket and goes to work at the foundry doesn't have. Fine. And then there's also the concept of a lot of them think of themselves as good people. And then push comes to shove and maybe the rest of us wind up not thinking of them as good people or Google, which is founded on the don't be evil ethos. What does it really mean? But as much as you can get at that question, if we met Sam Altman and he was given some sodium pentothal, would you say, okay, this guy gets it? This guy's kind. This guy's extremely egotistical. What we say about him, I mean.

Keech Hagee (15:43)

It'S there in the title, right? Sam is extremely optimistic. This is like the real thing that isn't set him apart from the rest of Silicon Valley. Everyone in Silicon Valley claims to be optimistic, but Sam is really unusually optimistic. If you talk to people who are around him, let's say what distinguishes him is if there is something that there's only a 1% chance that it will work, but it will really, really, really work, he will take that bet. He will take on levels of risk that other people just couldn't even begin to stomach. And that especially when it talks, when you start to think about how things work exponentially, the normal average human brain can't really process risk in that way. But he has this intuitive sense that if something is going to really, really, really work, even if it's vanishingly unlikely that it will, he's going to back it.

Mike Pesca (16:31)

Is he optimistic and happy? Is he optimistic and hopeful and sunny? Does he have a sunny disposition?

Keech Hagee (16:41)

It's a little of both, right. Like he has this public Persona. You can see it from his. His blogging when he was at Y Combinator. That is, it is actually very sunny. Oh, I think this is going to work. AI is going to be great. It's going to transform society for the better. Our lives are going to be better. But there also is a deep undercurrent of anxiety that he has. It really comes from his childhood. His parents marriage was a little tough and they ended up splitting up. And so he will respond immediately if you reach out to him. That's one of the signature things about him. So he's kind of tightly wound. But underneath it all of this is this idea that technology will make the world better.

Mike Pesca (17:22)

Is his optimism a question about his optimism? There is a certain kind of optimist, I guess, Elon Musk would call himself optimistic in so far as he thinks his things are going to work, but he also thinks if his things don't work, we are all doomed. Mark Andreessen essentially the same thing. So there's sort of an optimist who thinks they will be able to deliver us from impending doom. What does he think of the general state of the world. If his OpenAI doesn't and his dreams of a techno utopia doesn't come to.

Keech Hagee (17:55)

Pass, he does not really share that with Elon Musk. I think the biggest difference between Sam Altman and Elon Musk is, is this sort of like emotional state that they have. You can see in these emails, in the lawsuits between them that Elon Musk is writing to his co founder, Sam Altman in the team there that, you know, he, he has a lot of pain. I think we, we all know, like from his childhood. And he just gets very angry and if something doesn't go his way, he immediately is like, well, we're all, we're all screwed. Yeah, right. And you can see that's Musk.

Mike Pesca (18:25)

That's Musk.

Keech Hagee (18:25)

That's Musk. Right.

Mike Pesca (18:26)

Who goes into demon mode.

Keech Hagee (18:28)

Totally goes into demon mode. And Sam is a conciliator, you know, he's, he will say, oh, no, you know, I did, I didn't mean that like, everything's going to be fine. This is going to be great. You know, so he's, he's always sort of trying to nudge everyone back to their happy place. That said, he does have, you know, there are flashes of anger that come out and he has, you know, glint in his eye sometimes about that, but he's nothing. Nothing like the emotional reactivity that Musk has.

Mike Pesca (18:56)

I do want to ask about. You had an excerpt in the journal that a lot of people paid attention to because it was about the short period where he was fired from the board. And this is exactly everyone in the tech world and everyone in the business world wonders just what the hell happened. And you fill in the blanks. And I think that I recommend that everyone read it. It's out there for everyone and maybe it'll inspire you to buy the book. But I want to ask a couple of things. Not exactly about the details, but about the structure of the company and what it says about Sam Altman and the people on his side of things. It seems to me, and you lay it out, that there was a board that was down to six people for a number of reasons. And there was this dynamic of the people who are worried about the dangers of OpenAI and Sam Altman says he's one of them versus OK, so the people who are worried about the dangers and are going to do something about it versus the Sam Altman side, which is more excited by the possibilities now, is that too reductive or do I have that about right?

Keech Hagee (19:59)

You're right that that dynamic happened. Not Just on the board, but like throughout the entire company. Yes, yeah, yes, that's true. And you know, the big question in everyone's mind is like, how much was that? What was behind the firing? And it's not, not behind it, especially because the people who ousted him, not only were they associated with this thing called effective altruism, but they, they saw that the stakes were getting higher as the technology was getting better. And suddenly what they were perceiving as lies from Sam were a much, much bigger deal if the company was about to embark on AGI, artificial General intelligence, which is this sort of North Star that the entire company was set up to achieve. So in a way, yes, their fear was there and was a driver behind the firing, but the details were not so specifically about safety or anything like that.

Mike Pesca (21:00)

My instinct, my predilections are to be more worried than, or to want more caution in this potential world changing technology than maybe the people who are incentivized to make billions of dollars want. And so therefore I would side with the ones who are more into guardrails than glide paths. It's complicated though, because Elon Musk associated himself with the, with team guardrails. And if you look at Elon Musk, not to overindex for the personality of one guy, he doesn't seem to be characterized by caution in much of what he does. And when you look at a lot of what Sam Altman's done, it's. It is for the benefit it has benefited humanity thus far. So I just wonder how, how much our instincts or how much our heuristics of we should want for more guardrails in this endeavor and therefore we're going to root for team guardrails. We the livers of humanity, not the beneficiaries of OpenAI. What are the flaws of thinking that way, do you think?

Keech Hagee (22:08)

Well, it's been interesting to see how that whole idea has really gotten quieter since Donald Trump was elected. And the whole debate is not nearly as centered around safety and speed, safety versus speed, like it was in the years leading up to it. And I think part of it is because the technology has just gotten out into people's hands and this, this idea that it could, you know, jump out onto the Internet and kill us all seems far fetched, I think, to a lot of people, not all people. There are definitely many people who still really fear that. But I think a little bit of it is just comfort with the technology that makes people less, less stressed out about the, the safety of it all. And the other thing Is like, well, what are we, what are we talking about when we talk about safety? Like, that word migrates, the meaning of that word migrates around as the company got more. More powerful. So I think at the very beginning, people were talking about existential risk, right? Like, is this going to kill us all or not? That's the big worry. As things went forward, they would change the meaning of it to mean more like alignment just means, does it do what you want it to do? Does it behave properly? Does it say please and thank you? Does it not say racist things? This tension between, are we worried about existential risk or do we just want it to work? Well, that also just a tear at the company.

Mike Pesca (23:36)

Are we sure that as people got more used to it, it was. People were making the rational deduction that it's not that dangerous. Are we sure that it was an actual bona fide conclusion to come to or more like, as we played with Gizmo, we got. We thought he was cute and didn't realize that the gremlins were right around the corner. If you'd have fed it after midnight.

Keech Hagee (24:04)

I mean, it could be both, right? Definitely. I'm definitely not sure. And it's not like the safety issue is completely gone, but it's a lot quieter.

Mike Pesca (24:11)

But the other part of the safety issue is, okay, it won't like rise up. Maybe it won't rise up like T2 and kill us all, but could unemploy most of us. Isn't that part of safety?

Keech Hagee (24:21)

Absolutely. I mean, I think the real risks here are economic. Right? Like, how is this going to reorganize our society and how is this going to concentrate power in the way that technology basically has done at every stage so far? Right. Technology has not really served to like, distribute. It's especially in the last few decades, like it has concentrated power in Silicon Valley and among the haps. So I think in many ways that's the big risk.

Mike Pesca (24:47)

Who. What happened to the members of the board who wanted him out and then were overruled when he came back quickly?

Keech Hagee (24:55)

Oh, they were ousted. All but one. One is still on board, but that's Adam d' Angelo. He remains on the board, but the other three are all removed from the board and are gone.

Mike Pesca (25:10)

Name them.

Keech Hagee (25:11)

That's Helen Toner, Tasha McCauley and Ilya Sutzer.

Mike Pesca (25:14)

Right. So that's. There are two women of this on the board. Both are out. And then another main person in this who was very worried about Sam Altman is Mira Moradi, who is the chief technology officer it does seem to me that you don't have to have taken a women's studies course to see this dynamic where the women were acting a bit, like, cautious or, you know, maybe the men would call them school moms, and the boys were acting naughty and breaking things. But the boys won.

Keech Hagee (25:48)

I mean, you're right, that. That did happen. You know, there are women on the new board as well. And the company made. It was. It was a very awkward moment right after the firing when the old board was thrown out. They had. They had a new, much smaller, temporary board, and it was all dudes.

Mike Pesca (26:05)

Yeah.

Keech Hagee (26:05)

And, you know, they said, well, we're going to get some women eventually. And they eventually did.

Mike Pesca (26:08)

But no, real women, not AI generated women, which can happen. Right?

Keech Hagee (26:15)

But look, this is a truth about Silicon Valley. Y Combinator, the very first class. So Sam was in the first class of y Combinator in 2005. There were no women at all. None. There are, like eight startups, zero female founders. And, you know, even now, like, maybe 11%, something like that, after all these years, like, it is a massive, massive, massive imbalance in Silicon Valley between the genders.

Mike Pesca (26:41)

Just. Just an excellent book and of course, important figure who will be, I assure you, at the center of our consciousness for a long time to come. This is. I've been playing a lot with Chat, GPT and Claude and the Rivals, and it's changing things in a hurry for me, and I think that so many people are having the same experience. So an excellent guide to all of this is key is Keech Hagee, and she has written the new book called the Optimist. Sam Altman, Open AI and the Race to Invent the Future. Thank you, Keech.

Keech Hagee (27:15)

Thank you.

Mike Pesca (27:23)

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Keech Hagee (29:01)

Toured the new plane this past February while it was parked here at the West Palm Beach International Airport, calling it, quote, a flying palace.

Mike Pesca (29:10)

He wants his flying palace and it doesn't give a flying flip what anyone thinks of that. In fact, the President says a person would have to be goofy daft not to want to take a flying palace when offered a flying palace.

Keech Hagee (29:22)

I could be a stupid person to say oh no, we don't want a free plane.

Mike Pesca (29:25)

We give free things that we'll take one too. And Trump is not stupid. Maybe you're the stupid one. You everyone who ever criticized him for anything. Trump truth today. So the fact that the Defense Department is getting a gift free of charge of a 747 aircraft to replace the 40 year old Air Force One temporarily in a very public and transparent transaction so bothers the crooked Democrats that they insist we pay top dollar for the plane. Anybody could do that. The Dems are world class losers. Maga. Yeah, get it. It's out in the open. The plane will literally be up in the sky. It can't be a bribe. Bribes have to be secret. Like when Clarence Thomas took that RV from the rich guy. Everyone could see Clarence Thomas. They're driving. Beep beep beep. It's justice. Thomas can't be unethical. You know that Trump as President can turn any plane into Air Force One by dint of him stepping inside of it while it is aloft. I mean, shouldn't he bestow this mystical force on flying machines, both foreign and domestic? There are exceptions to the rule. If the President's flying in a marine helicopter, it's Marine One. When the Vice President is aboard, it's Marine Two. When the Secretary of Interior is on board It's Marine eight. No, it's not. I made that up. There was one time when the President wrote in, he actually supposedly took the controls of a Navy plane and then it was called Navy One. That was when George W. Bush took the controls and touched right down before the triumph of unveiling the Mission Accomplished banner. I wonder if President Trump jumps and you slip a piece of oak tag under his shoes, does that become cardboard one. I further wonder if President Trump jumps, how much would you pay to see Donald Trump jumping? An eighth of a Trump coin, I think. So most of the aye are directed at this acquisition and the Democrats are doing their part, launching investigations and so forth. Is at the bribery angle. But what about if you are going to be bribed? Aren't the Qataris far from the cleanest set of hands to do the bribing? I mean, we had a World cup in Qatar. There were about 10,000 stories about how the international soccer community was so immoral because they violated the ethical standards of the international soccer community by choosing to hold a World cup in a human rights abusing place. Now the President of the United States is on board, almost literally. And there's not really that much consternation over the thousands of workers who've died construction, constructing the jewel of the Arabian Peninsula. That jewel being a blood diamond. The Trumps do a deal with the Saudis like every other week. But golfers want a big payday from Saudi controlled live golf and they have to apologize over and over for just wanting money. And they're golfers. They wear slacks to play sports. They're not leaders, they're not role models. The word for what the Saudis and the Qataris do in that case is sports washing. And we wrung our hands over the washing. So here's how sports washing works. The Saudis or Qataris buy into popular sporting franchises. They hold tournaments in their countries. They give out lavish prizes in those tournaments. They put on a good show to make their country seem palatable so that the public softens their stance. And then eventually down the road, possibly a politician might not feel a backlash. So to retrace the steps you go through the sportsman to the public, reflecting on the leaders and maybe after millions of dollars in expenses and weeks or years of fending off bad pr, you get a toehold of respectability or you just give the big guy a plane. He wants it. He'd be stupid to say no. I'd say if the leader of the free world is 30,000ft above it, whoever is keeping him aloft has a credible claim at having some power and control over him. The Democrats should investigate, but not too hard. They should grouse but not quash. This is a great issue for them if you're trying to convince the public that the other party isn't truly the party of the people. I don't know. Flying palace goes pretty far, or not far at all. After his term, Trump says he plans not to use the Flying palace, just to keep it in his presidential library, which is, you know, using it. It will thereafter be available for viewing in the conflict of interest. Wings of the Griftsonian that's it for today's show. Cory Wara produced the Gist. Michelle Pesca CBSO Astro Green does Social Leo Baums Our intern Kathleen Sykes is the doyen of the Gist list. And thanks for listening.

Keech Hagee (34:23)

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