U.S. AI Execs Warn as China’s AI Push Grows, Substack Adds AI Detection Tool | Diet TBPN

0:02 China, China, China, China is in the news. Top American execs are sounding alarms. The White House is divided on how to respond to recent advances in Chinese AI has weighed crackdown measures. we we talked about how this was coming. It is interesting. There's a there's there's a lot of like hurry up and pedal to the metal and then pull back and then ban the American model and then are we going to ban the Chinese model in the similar way? and lots of contradictions, lots of insider baseball, everyone's critiquing everyone else. Lots of interesting takes. Also, just some interesting data about what's actually going on with these models.

0:41 how advanced are they? Where do they come from? How cheap are they to make? What are the economic impacts in America? But the Wall Street Journal has a nice little roundup here we can take you through. So, Silicon Valley and Washington are debating a multi-billion dollar question. Should American companies be able to use Chinese artificial artificial intelligence models? They certainly have been able to. Hasn't been a problem for years, but now they're getting stronger. Open AI and anthropic executives are sounding the alarm about the rise of cheap AI, particularly powerful new models produced in China, suggesting that they will lead to quote a dystopian AI future and present unacceptable security risks without regulation. And that is the point of debate. Are you on the dis the side of dystopian open source or liberating open source? The George Hans frame.

1:28 >> some analysis some analysts who study the AI industry say the two companies which are preparing for public listings in the next year. They just want to eliminate the competition. The emergence of highly capable open autonomous AI systems including Moonshot AI's Kimmy K3 model and Alibaba's Quen 3.8 Max. And Alibaba is actually a massive investor in Moonshot. They have their own anthropic Google over there going on. Alibaba is like very much their the the the Google too in the sense that they they they have a large position there. which were released in recent days and viewed favorably by investors and users has turned the AI race on its head once again. Kimmy K3 was also competitive with US models on some benchmarks. the debate over the new models which are quote openweight but not yet. They're they're about to open source them. We'll see what happens next week. allowing users to download and customize them with company data for specific tasks. Very, very good. Very useful. Coincides with division in the Trump administration about whether to take steps to limit the use of models in the United States. Quote, "One probable outcome of an openweight model dominant world is full AI communism, which is precisely what China proposes rather than a market product. AI is a public good, which will ultimately be provided by the state as a kind of digital public infrastructure." Dean Ball, OpenAI's head of strategic futures said in an ex post Friday, Dean Ball made it to the pages of the Wall Street Journal. Now, the AI communism is just at the model level. Like there would still be a bunch of like a lot of people who are long compute, long neoc. They say like this is where the value should acrue. The data centers will acrue a reasonable margin and they will still continue to make money. And so it's not that this automatically leads to nationalization of compute in any way. People would still be paid but the but the margins might be lower is the is at least the formulation here. So B a former Trump administration official called such a scenario a dystopian hellscape and he said he expected the Trump administration to make moves toward reducing the use of open source models. Ball later clarified that he wasn't advocating for the United States government to discourage Chinese AI. He also highlighted a central challenge with the AI race. Top tier AI companies raise billions of dollars to pay for the vast computing resources needed to continue improving AI systems. If everyone uses AI systems that people largely don't pay for, there would be no way to finance continued frontier AI development. Ball, who started at the company earlier this month and focuses on policy and strategy and open AI, have said his comments don't reflect the company's official positions. He's just posting. The company has developed its own models, own open models, and chief executive Sam Alman had previously said that OpenAI's past approach of only developing closed tools was unwise.

4:16 Other top AI executives have warned that open models present huge risk since developers and policy makers lack control over how they are used and modified. A lot of risk of cyber attacks, a lot of risk of annoying spam attacks. The cyber thing is very concerning and annoying if that really ramps up. But the good news is that the closed source models have been available to cyber security firms and a lot of big major companies. The finance industry for example has had access to mythos and GPT cyber for almost six months. And then just today, Google announced a specific model flashlight cyber I think. So they're trying to offer a similar capability but really go down the cost curve because a lot of the cyber tools there was incredible breakthroughs with mythos GPT cyber like great benchmarks on those but could be very expensive. We heard I think wasn't it Nesh Aurora said I think he spent like a million dollars to find some zeroday bug and it was like totally worth it but that's expensive for smaller companies that might just need it would be great to just be able to go to a cheap cyber tuned model get approved by Google and say hey just go and read every line of code and just let me know if there's anything that's obvious and that could be good what >> yeah and just be clear they released 3.5 flash light and 3.5 flash cyber so it's not like flash light cyber >> okay but flash is still cheaper than the big model, right?

5:38 >> There's like the pro and there's >> and so I have to imagine that if you I given the choice if you're like a midsize company and and and you're and your choice is like go beat down the door to get into Project Glass Wing to spend $5 million to have Mythos read every line of code or you're like, "Oh, well, I'm already a Google partner. I have a really solid business relationship with them because I've been buying ads and I have Google web master tools set up and I just want to go set up flash cyber, not flash light cyber. I imagine that the cost would be cheaper because they've fine-tuned this model for this specific thing. So, Anthropic CEO Dario Amade for years has worry warned about the risks of powerful and open AI systems, saying in a recent Bloomberg interview that having AI models with advanced cyber security capabilities that are free to download, could be harmful. He said it's a serious concern. Use of Chinese models, which are far cheaper than US counterparts, is surging at US companies, prompting some investors to question the staying power of top model makers such as Anthropic and Open X. The current US open- source frontier is starting to catch up with China's. On Wednesday, Thinking Machines Lab, led by former AI technology chief Mirror Morati, released its f first AI model as openweight. Nvidia's Neotron 3 Ultra is starting to see traction.

6:54 That's interesting to hear. I haven't heard nearly enough buzz around Neotron. I know Jensen has been investing in it. He's also investing in a lot of up and down the stack. >> I've been hearing buzz about the name, John. >> Neotron's a good name. >> Neotron. Why? Very cool name. There people are, you know, there's there's some talks bubbling. People are saying it's it's it's one of the best names for for a family of models ever.

7:18 >> What comes after Ultra? Isn't that what the the Didn't Apple first do that with the the M4 Pro, the M4 Max, the M4 Ultra. So, we got to come up with an even better word for what happens after Ultra Giga maybe. And then EXA. The market's faith in anthropic and open AI continuing to build more cable models that push the frontier AI frontier has been the at the heart of the boom helping justify trillions of dollars in spending on infrastructure in the coming years. The threat that new players will vastly undercut what they can charge for advanced AI push down some tech and AI company stocks prices last week. David Saxs, the venture capitalist and White House AI advisor, suggested that he read Ball's post as a confession to a regulatory capture strategy. Saxs and others have long seen calls for AI regulation by companies such as Anthropic as efforts to use new laws and policies to sty competitors. The weaponization of regulatory uncertainty as a competitive tool should be completely unacceptable, he said.

8:16 Security focused administration officials in the past year have considered a slew of measures to crack down on Chinese AI companies developing open models. People familiar with the discussion said they've weighed adding the businesses to trade blacklists, security warnings on Chinese AI companies, and a potential executive order targeting open models. So, it does seem like even though Tyler Cowan, we were going back and forth with him about this about like can you even ban it? You can't really ban anything in the land of the free. Like the solution to piracy was not really to ban piracy. Like you can still torrent things, but it's just so easy to use Apple TV and Spotify and Netflix that most people just wind up just paying $5, $2 for a song or or $10 a month for something that it effectively killed it just because the product experience was better. This morning, our Treasury Secretary, Besson was on Fox and said, "This administration supports open source models, but what we do not support is IP theft.

9:18 >> If we see, especially that overseas models are stealing from our great companies, we have the ability to sanction them because of this theft." So it will be if the admin does take serious action here, I would expect that to be the line of reasoning where they could just sanction the companies behind these models >> which I imagine would create a real opportunity for American open source. You would ultimately see a lot of these you know neoclouds unable I imagine to serve the you know traditional >> Chinese open source models. I imagine that even open router would probably have to >> yeah maybe >> stop supporting that >> but again with an open source model like how do you even define it because if there's a research paper and then you go and implement that and you train it or you take it you fine-tune it or you use the data to bootstrap your own model like just like where where in the supply chain how many steps away do you need to be to like not count on there? Didn't Perplexity do like a 1776 Deep Seek very quickly? They did a fine tune. I think you did a fine tune on Deep Seek as well.

10:27 >> Yeah. Sparse autoenccoders. Okay. I did it first. So, >> but but and and what what nationality was the model that you used as the base? >> Well, it was Deep Seek. IT WAS CHINESE. >> WOW. CONFESSION. you can go now. yeah, people are are already angry at at at Besson's comments in our and are saying funny that he's not mentioning >> that yesterday US judge approved Anthropic's $1.5 billion copyright lawsuit settlement for >> I don't think they they I think they settled that they were in possession of books that had been torrented or or basically acquired unlawfully. Yeah, >> I don't believe that. You're unlawfully sound like they stole the book. I think they bought the books.

11:14 >> No, no, no, no, no. I think this was No, they they separately they bought a bunch of books, >> trained on them and destroyed them. >> And that just made people upset because no one idea of books being destroyed, of course. Yeah. >> I think those were rare like rare rare books. >> The Wilmanitis collection was destroyed. Rare PDFs. Judge William Alup of the US District Court for the Northern District of California issued a preliminary approval of the settlement last year after ruling that Enthropic had illegally downloaded and stored millions of copyrighted books. And the settlement was signed off on by a different judge yesterday. The payout will deliver $3,000 per work across an estimated 500,000 works shared among the authors and publishers who hold rights to them.

11:58 Anyway, there was some news about like whether or not Kimmy K3 is distilled. Tyler, can you take us through this Lissan Algib post? >> Yeah, so he he didn't actually make this chart. It was from someone else, but basically this shows a bunch of models compared to another and it's like the kind of semantic similarities between them. Okay, so it's like if you use similar kind of diction or or phrases, stuff like this, >> you just like pump the models a bunch of times and and you kind of can tell what's similar to each other. Yes.

12:26 >> And you can see in this version it looks like like Kimiki 3 is is very similar to Fable 5. >> Fable 5 and then also Opus 4.7, Opus 4.8 and Sonnet 5. So they might have gotten tokens from like all four of those models sort of mixed. >> Also I think this exact example like only like a few prompts were used. It's not like super involved. It's also like this is very much just like correlation.

12:46 This this is not like proving that they still learn anything. They could have just used like similar you know post- training techniques or something like this. >> Totally. But notably GPD 5.4, 5.5, 5.6 share very little similarity to the anthropic models and vice versa. The enthropic models don't seem to be correlated with the OpenAI models. Although the OpenAI models are correlated with them with with each other. So, 5.6 Luna looks pretty correlated with 5.4 for because they probably were like, well, we're building on the shoulders of the work that we've been done. And and it's the same thing with anthropic where Fable has some of the same flavor as an Opus or a Haiku.

13:29 And that makes sense. >> That makes sense because people have like been saying, oh, maybe those models were actually distilled from the the big like mythos pre-train, right? >> Yeah. Or orthos or vice versa. you have a bunch of users that are doing rollouts on Opus trying to vibe code different things and you take all that training data and then you feed that into Fable and Fable sort of like picks up on a lot of that because that's what the the the user said, "Wow, you really did a great job on this opus or you did really poorly." It pulls that out, but it's still learning the the the textual similarity. Well, people will go back and forth on this and and debate the level of distillation and also what the punishment for distillation should be. Should it just be a slap on the wrist or should it be something bigger?

14:13 >> The only thing I would say here is like distillation against against the terms of service. >> Yeah. >> And I think that suing Chinese companies Yeah. >> it would be a complete and total waste of time. Ask anyone who's built a product that's been knocked. >> I disagree. Incredible. or a farm. If you if you personally serve Cunping the next time he's in San Francisco meeting with a a world leader, you show up. >> You have been served.

14:42 >> You show up to the UN, >> serve the world leader. There's something about that that's, you know, extremely bold. >> But no, I agree with you. very difficult. I don't even know if you went to your law firm and you said like, "Hey, we want to sue this Chinese company." Like how they would trace that down. Jim Kramer says, "We must not let our companies use these Chinese models to save a few bucks. Open AI and anthropic are correct. This is vital national security. Please break. Please read Bing West's just released Cat 5. I respect the Chinese people greatly, but these companies are run by the PLA for heaven's sakes." George Hotzfire's back under the tiny grad handle. He says, "Is this a joke? I'd be happy to use anthropic if they put their weights on hugging face like the Chinese. American tech companies are rent extraction machines that have lost the plot. No point continuing to defend them. They need to change if they want to win people back.

15:36 >> Meanwhile, >> China is also thinking about export controls >> in the Financial Times. Apparently, Alibaba, Bite Dance, and keep >> going back and forth. Moffcom, >> Moffcom talked to AI companies including Alibaba, Bite Dance, and Zepoo on limiting the transfer of key data for the training of their models overseas, >> as well as allowing their model weights to be downloaded by >> Ministry of Commerce, probably their Department of Commerce. >> That seems more like it. China would still let overseas customers access the models and services, but sounds like they're leaning towards not making the weights open. We're going to we're going to see with the new Kimmy K3 if they actually release the weights next week.

16:14 Dean Ball says, "Wow, two days in a row where things I said are likely to happen seem likelier to happen from two adversarial countries. Almost as though my analysis was right and as though people should not have deliberately misinterpreted misinterpreted me as of making prescriptions. Huh. >> Dean Ball victory laugh. >> You got to take a victory laugh for Dean Ball. He called it. No, he I mean he was saying like I I don't necessarily agree with this, but just from his experience, this is how things might play out.

16:43 and people were very upset with him about that. >> In the chat says Ministry of Commerce, People's Republic, >> it's their department of commerce. >> That would go hard on a business card. >> It would. >> The great slop wars slop wars >> continue. Let's pull up this video from Substack. They say, "Today, Substack is launching an AI detection feature via an integration with Pangram. Going forward, you'll be able to scan posts, replies, and comments on the Substack app to see an estimate of how much of it was written by a human or with AI assistance.

17:13 >> We care about this at Substack because it gets to the core of our mission to build an economic engine for culture. >> This is going to be bad for Tyler since he's mastered the ability to write exactly like an AI. What was that sentence you wrote by hand that was like, "According to studies, you're absolutely right." and you just threw in every possible AI ism and got flagged 100% by Pangram. No. I think people will enjoy this. The the revealed preference is probably that people don't care if it's good and they enjoy the the content. But we'll we'll we'll go back and forth and debate it with Chris Best today and see where all of that is going. Now, do you think that Substack writers should admit when they hire essentially ghost writers?

18:02 probably >> because sometimes you start a brand under a name. Like not every post on bloomberg.com is from Michael Bloomberg. In fact, none of them are. They're all from other people. But they disclose this is from, you know, some writer. This is from Joe Wesenthal, right? But some new influencer brands have grown even in the pre-ai era. I had a writer on my team when I was doing YouTube videos where I would write something, he would do a draft, we'd sort of go back and forth. I'd put him in the credits. but I wouldn't like kick it off with like, hey, just so you know, >> in the chat says book authors don't.

18:42 That is certainly true. >> That's 100% true. some book authors will put like this is written by this person and this person. It depends on like the aura of the ghostwriter. Some ghost writers actually do get credits in the book, but yes, most book authors like Tom Clancy, I think, passed away and they still producing books. There's a number of writers where their their individual brand grew so big that they can you can have like a new business.

19:05 Yeah. They become their own brand. And so, >> yeah, I would I would imagine that 30% of the books in like an airport bookstore are just 100% ghostritten and probably >> Yeah. >> don't disclose it. I think I I I do think it should be it should be possible to get to the truth if you hunt hard enough, but I don't necessarily need you to put it front and center. >> For a Substack author or creator, just put it somewhere. Yeah.

19:31 >> That you have a team of people that help you create >> Yeah. >> your work. >> Well, Dave Edgars took to the Financial Times saying that no one is going to read AI books. He's of course the author of The Circle. He's an American writer, editor, publisher. a heartbreaking work of staggering genius is his 2000 memoir bestseller. Final for finalist for the Pulit surprise. he says, "Gullible and ridiculous. No one will read AI novels." I think people are already reading AI novels. So, he maybe he means like no one who's cool or no one who he likes or something. let's read through a little bit of this Financial Times article. Dave Edgars offers a hand so I can clamor aboard his 23-foot sailboat mored in the shadow of San Francisco's Golden Gate Bridge. It's a grand setting with few frills as we sit on the stern a meter apart. Fuel cans and fishing nets at our feet. There is no one around to disturb our conversation. The nearest toilets are portaloos, a short bike ride away. The birthing fees are negligible, making it one of the cheapest places to live in uber wealthy Silicon Valley. I hadn't thought of that sailboat. If you're at a tech company, this has got to be the next big lockin trend.

20:46 >> Antonio Garcia Martinez did this. He talked about in his book, Chaos Monkeys. >> I'm not I won't be satisfied until I see larpers posting images on Twitter being like, "Hey, I just moved to San Francisco. I'm building the next oneerson $25 billion." >> I'm finding a house in San Rafale. >> Yeah. How much >> for 1,000? it it actually works out to $1,483 a month apparently if you finance it through Boat Trader. >> Goodbye. >> It's only about $200,000 to live in a 2022 houseboat.

21:19 >> 2022. That's a brand new housebo. >> Yeah. So you have to think about the Yeah. the slip fees, but >> you could easily come in, have your own house on the water. >> No. The average the average onebedroom rent in San Francisco is like two grand, three grand right now. >> Yeah. You could have a whole house and a boat. >> And a boat. It's amazing. This is the hack. If you get a job in tech and you're printing, making six figures, >> move into a housebo.

21:44 >> Let's pull this up. >> Wait, is this an option in LA? Should members of the team be doing this? Should we Should we recommend this to >> Look at this brand almost brand new 2024 La Mer Modern 11. It's 36 foot housebo. We have a video here. >> Well, Dave Edgar says they call it a $10 dock with a million dollar view. Look at this, John. This >> Yeah. >> Couple thousand bucks a month. >> This is where the next great startup will be born for sure.

22:13 >> Garages are out. >> Be out. And also like, oh, take your shoes off. It's natural to take your shoes off when you're on a boat, you know? Right. Unless you got boat shoes. Wear boat shoes to >> the La Mer Modern 11 offers reliable performance and strong power with two Yamaha 25 high thrust engines providing a total of 50 horsepower. Two cabins and one head ensure overnight comfort for extended stays. How about year-long stays? How about a decade long stay? The boat's design includes an upper deck terrace with flexit teak flooring, enhancing its appeal for relaxation and entertainment and might I say locking in standard features such as air conditioning. We have air conditioning on our house boats.

22:53 >> Mhm. >> with reverse cycle heat, heated floors, LED lighting. >> Heated floors. LED lighting. >> The inclusion of foam filled composite floats and galvanized steel subframe ensures durability and stability. >> Did we just talk about the housing crisis? Send this to sager and jetty immediately. This is seasteading. This is the teal thesis. Everyone living in house boats just more >> boattrader.com is saying that this is amazing >> modern housebo would come out to just $2,259 with only $52,000 down. I promise that we have no financial relationship with boattrader.com.

23:33 >> Yeah, >> even though I'm making a pretty strong pitch here >> yet. I love it. should you recline your airplane seat? What do you think? People are going back and forth on this. >> Brandon Duck says, "I don't remember subscribing to this channel, but I've been listening for 10 minutes. I'm having a good time." >> Welcome. >> Last name Ducks comes on just for laugh. >> Yeah. Make it make sense. >> Make it make sense. I think it makes sense. He's just like, I just happen to be here for the duck section of the of the show.

24:01 >> Andrew says, I'm going to need a double wide housebo. Lol. Bootlegging distilled anthropic models on the housebo. >> There we go. >> Living the dream. >> This is crazy. >> Okay, so should you recline your airplane seat? there's a central investigating the central dilemma of our time. Joshua Rothman in the New Yorker wrote a a piece. Imagine this scenario. After a long drive to the airport, you've just taken off for a 15- hour flight. Where are you going? 15 hours is so long. How long was the flight to Austria from LA?

24:35 >> I think it's like 12 hours. >> So, you're going >> I think you're going to the Middle East. >> You're going to the Middle East, maybe. Okay. you're in coach and a family of three is sitting behind you. A man, a woman, and a toddler. They seem nice, but as the flight continues, the kiddo grows restless. He kicks your seat and pokes her toys into your shoulder. Stop that. You hear the father say. The toddler incredibly quiets down. The cabin lights dim. It's time to sleep.

24:56 Yet, just as rest closes in, you sense motion. The seat in front of you is reclining. You watch as it comes all the way back. Now you feel cramped with someone else's seat in your face. You also notice some stiffness in your shoulders. Your fingers caress your own recline button. Surely the reclined upon are entitled to recline. Just as you start to lean back, you hear a clearing throat. You turn around to see the dad who fixes you with his gaze. Excuse me, he says. Would you mind keeping your seat up? I think it's game on. They put the button there. They would just take it away. I think I've always expected everyone to just recline.

25:30 >> Everyone recines. Everyone has the same amount of space. It's the conservation of space. And >> it's really hard to make the argument that the the vertical seat is more comfortable than the recline seat. Exactly. >> So, I think everyone commit to comfort. >> Everyone commits to comfort. >> And then the chat is sharing the real alpha. Stand up immediately when the flight lands. Have you seen those Meta Rayban videos where people sprint to the front? It's so rude. The guy is like like, you know, he's like as soon as he goes beep, he just bolts and passes everybody and gets to the front. Very rude. I don't think you should do that.

26:03 >> This is antisocial behavior. I don't think you should recline your seat. >> How is it antisocial? >> Because you're infringing on some. Just because you can do it doesn't mean you should. >> But they put the button there. Horrible take. They're >> horrible take. >> That that's like don't use the bathroom on the on the plane. My entire my entire life. My entire life. Even as a child, I was looking up waiting for for you know the the seat belt sign to to you know to be up in the air. Seat belt signs off.

26:28 You recline your seat. Everyone recines seat. All good. >> Yeah. >> what what about what about ordering a Diet Coke on a plane? If I'm sitting next to you, will you order a Diet Coke or is that antisocial behavior? >> That's completely different. >> Okay. What's your stance on JBL in the airplane? >> A little JBL. You know, >> I I I do think I do think that could be the next the next trend. >> The big question is, are you bringing on your, you know, smart portable beaker, >> maybe from a from a from an open AI, are you bringing that on the plane and talking to it the whole time? Is that offensive?

27:04 >> I think that's deeply offensive. >> Have you seen when like a a band is traveling and they start playing on the plane? >> Have you seen these videos? >> No. >> That sounds cool, though. >> I'll send you one. Yeah, >> I'd be down. >> That would make me jump. So, this all started because in 2014, 538, we got to have him on the show. U Nate, obviously, 538 asked around a thousand flyers what they thought about reclining their seats. 41% of them said that reclining was rude, so they lost.

27:31 It's not rude. >> It's over. >> That number seems to have risen, though. In 2020, Eric Jones, a math professor who writes about travel statistics on the website the vacationer, conducted a similar survey and found that 77% of respondents objected to reclining. Wow. Sheep. Shele over here. We got sheep. >> How about this? I think you should be able to recline if you're like dressed nicely. If you're wearing sweatpants, then you don't get to. >> You don't get to recline.

27:57 >> Should kids be able to kick the front the seat in front of them as much as they want? See, that's something I will put I will totally put up with. I'm totally fine getting kicked in the back by a kid because it's so brutal as a parent, as a kid to be on a plane. They're locked up in the plane. That's miserable. And just just tough it up. You You're reclined. You have multiple inches of padding. Unless you got Ronaldo back. Order that hot pizza pocket. Live life in the permanent underclass. Live a little for God's sake.

28:27 >> Ramp launched a model router. Brexton loves it. He says, "Ramp launching a model router is god tier product expansion. The winds are blessing it. The market is exhausted with token maxing, proliferation of new models, sovereignty. This is the first time I've looked at a launch and went, "Wow, this might be the start of a new core product." Yeah. there's been a bunch of speculation about this, but it makes a lot of sense. Ramp's prog promise is to save you time and money. The CFOs are increasingly annoyed by token routing. We talked to Eric Lyman about this last week. Are you using the craziest frontier model burning millions of tokens to answer the weather? Maybe that should have an expense report attached. And so very very exciting to see where this goes, how they roll it out. I know it's in alpha with a number of customers. And I believe that the product's actually available to non-ramp customers as well, so you can use their product exclusively.

29:25 >> you says going after everything time and money touches. >> >> I love it. I love it. Anyway, leave us five stars on Apple Podcast and Spotify. Sign up for our newsletter at tbpn.com. And >> we love you. >> We love you. >> Throwing flashbang. >> Goodbye. Flashbanging the horse. >>