Reed Hastings From Building Netflix to What Comes Next

In the 1980s I was in the AI wave that was expert systems and they were public companies and the fifth generation and the Japanese were going to be this big threat and you know and that AI didn't work but this one is. Anything that lives in the emotional realm will be impacted not as much by AI because we humans react to these things emotionally and so again I think we'll not watch robots playing basketball. STEM practically took over Stanford University okay and now maybe what we'll see is a rotation you know back to the humanities into understanding combination of history and literature. If I had a three-year-old today I would be like doubling down on the emotional skills. In 20 years robots will do maybe one percent of the plumbing at most. Reed Hastings is the co-founder and former CEO of Netflix the company that helped define the streaming error and in doing so rewired how two billion people spend their evenings. Under his leadership Netflix launched streaming, pioneered the original content model with house of cards, went global in 190 countries and produced some of the most watched programming in TV history. He ran it for 25 years. But Reed's ambitions have always extended well beyond entertainment. He served on the boards of Microsoft and Meta. He's currently on the boards of Bloomberg and Anthropic. He's given hundreds of millions of dollars to education reform and he holds a master's degree in artificial intelligence from Stanford from 1988 before most of us had AI on our radar. Today we're asking what does someone with that vantage point across entertainment, technology, AI safety and the long arc of institutional change actually think is happening right now? Where is the leverage? What are we getting wrong and what would it look like for this moment to go genuinely well for humanity? This is a conversation about technology as a civilizational lever about whether the people building AI and the people governing it are asking the right questions about what entertainment can teach us about human nature and what human nature can teach us about AI and about what it means to have spent 35 years watching technology reshape the world and to still believe the best is ahead. And now to our conversation with Reed Hastings. Reed, awesome as usual to talk with you. I thought we'd start with something a little light for both of us so I'll answer this too but we'll start with you. In various weird ways we get mistaken for each other. What was one of the funny ways that comes to mind for you about being mistaken for me and then I will I will also answer that question. I'll read up and read Hastings both in tech so I get introduced sometimes at conferences and someone's done the quick chat GPT and they you know do it a reader read H or something and they call me the founder of LinkedIn and I'm very excited because that's a hell of a business. Yes well and similarly because Netflix is a hell of a I think the last one that I got and it's out of you know many many was oh my god that Wednesday show is awesome you guys have done such a great job which I'm now passing along to you it's an awesome show but you know like that kind of thing and you know we've been doing this for a while so when we get the emails we just can't afford them to each other. Exactly. All right well people confuse you guys but let's see if you guys confuse yourselves with each other. So I'm gonna say a quote and you guys are gonna tell me who said it. Shout it out most entrepreneurial ideas will sound crazy stupid and uneconomic and then they'll turn out to be right. I think that's me. I would totally disagree. Most turn out to be wrong that's the whole point of the contrarian thesis and then occasionally they're right. Yes but they'll they sound stupid. No read Hastings you did not. I'm sure that's a misquote. Oh my god we're gonna fact check. Okay let's let's hit it from the top but the quote is you got to have a contrarian thesis that everyone else thinks you're stupid basically and then it turns out to be right which is rare. The whole point is that most of the time the entrepreneurs fail because the idea doesn't work. Oh my god they're so similar that they're confusing each other's quotes. All right the future isn't something that experts and regulators can meticulously design it's something that society explores and discovers collectively. Boring. So that means me and it's accurate. That was Reid Hoffman thank you thank you. All right we have a few more. Boring is frequently how Reid you know talks to me but you know it's the details. The entertainment part of Netflix the key to that was always not that I am but always trying to be thrilling and boring is the only thing. There you go all right stone age bronze age iron age we define entire epics of humanity by the technology that they use. Reid Hastings all right we got that. All right two more we are homo technae when we cross the river we are deepening our understanding of technology and ourselves. That was Reid Hoffman and last one companies rarely die from moving too fast and they frequently die from moving too slowly. That was Reid Hastings but I feel like you've said such similar stuff such similar stuff. Thank you for humoring me. Who's the better investor? Who's more entertaining? All right there you go. Well it turns out that operating personality is really different from allocating capital personality. So operating personality you're like a dog with a bone you never give up on a problem you just work it you work it and investing personality staying very broad not falling in love with an idea you know cutting your losses and moving on and like when I tried investing I just fell in love with all the entrepreneurs and kept giving them money and none of it worked out and when Reid tried operating you know we quickly found the right guy and Jeff to operate for him who was amazing operator. Fair enough. Reid I'll turn it over to you. So you were CEO of Netflix for 25 years and then when you handed over the role January 2023 what happened the next day? What did you what did you then go do? My schedule evaporated so you know I had first of all it was a secret and second you know I had a whole bunch of work meetings and a pretty full schedule that I then wasn't going to do a bunch of internal and external things you know first couple days it was just like be at home and shock and and you know a lot of calls and just people saying congratulations kind of nice sweet things and then you know I said well I've always wanted to ski a lot and I've only been able to ski five or ten days a year because of work so I'm going to take February and March and you know ski my brains out and so mostly that's what I did and that was a super fun release and fulfillment but it wasn't really planned and it gave space you know really to the company and you kind of in many cases it's good to have the ex-CEO not be itching to like call in to make decisions and how about lunch Ted? Greg let's talk about strategy and so that episode of love is blind was terrible so I was able to just enjoy myself and and yeah focus on well snowboarding but was there anything that you found surprising that you missed? No the huge surprise is how much I was okay with moving on I thought I would like miss everything you know because it was my whole entire life I'd love to and what I was just realized I had done everything I wanted I had you know done this huge global rollout I had lived on an airplane around the world and every week in you know Seoul or Mumbai or Berlin and it was incredibly fun and exciting but I didn't need any more of it and so I was super surprised that I didn't like yearn to get back in the saddle you know and of course there's aspects you miss and the people I missed but uh you know I stayed I've stayed in touch with them on sort of a personal basis so it's surprisingly easy and because I certainly have heard of people who have a very hard time with it. We've certainly seen some CEOs who stepped away and then had to go right back because they missed it so much. Even in your former industry. But beyond Netflix you've been on the boards of Meta, Bloomberg, so many influential companies and these companies were some tech some less different business models different industries like what did you learn from being on the board of such diverse companies obviously in addition to Netflix about the AI and media ecosystem? Well the lucky break of my professional life in that way was that in the 2005 Microsoft was looking to get someone from tech on the board and but they have conflict rules so they couldn't have you know the head of Cisco on the board you know and so they started going down the list you know of tech people and after a year they had gotten down to the head of a domestic DVD rental service Reed Hastings for an interview and so I was like you want to interview me? And then I went up and met with Steve Ballmer and Bill Gates and we really hit it off and a little while after that they put me on the board of directors of the Microsoft Corporation which you know was a million times larger than Netflix at that time and super global and super long-term in their thinking so the stuff I got out of it was amazing because they were willing to work on projects for things 10 years ahead and like I had never been able to do that because the company didn't have enough profit stream to do that kind of thing and so it was such incredible learning for me. Then later as social became really important I thought oh you know I'm kind of old I should really get much closer to this is to transform Netflix like it to transform photos and things so I got on the board of Facebook and Mark Zuckerberg was very open in the company and I tried to do what I could to help and I certainly learned a ton about social but then it turned out that social really had very little to do with movies and TV shows and so it wasn't like this huge transformation of the rest of the universe like in the way to say AI is. So those were two long-term board assignments I did and I learned a lot on and I certainly encourage all the CEOs I know to do one or two other companies hopefully big companies where they can learn from and then I got on the Bloomberg board really as a favor to my friend Mike Bloomberg who's an incredible philanthropist he's been number one the last two years of most giving in the U.S. and you know just a great human being and a great philanthropist so that's been a favor and fun and then I'm on the board right now of Anthropic as well as Netflix and on Netflix it's pretty passive because the CEOs trust me and I trust them and so it's just kind of easy but Anthropic is really exciting and intense and you know I've really come to appreciate the team the mission and it's neat to have a seat kind of on the on the front edge of what they're doing. Absolutely. Well one of the things some people know but very early days in LinkedIn I wrote to asking you to join the board because you're one of the top board picks for Silicon Valley intelligent people but I want to go back to the Microsoft so so you were there before me I joined in 2017 actually called you and as usual got advice on the stuff what do you think speaking of long trajectories you know Satya has done a great job at Microsoft what do you think the the things were the were the right setup for Satya doing that how much of that's you know kind of Satya's own brand of things and how much of that's kind of the the patterns of work that were already present at Microsoft? Well let's think about why is Microsoft 10 15 times more valuable than when he started you know the profit stream has continued to grow but then it grew a lot before that under Steve Ballmer and so office has stayed a very strong franchise and they have withstood you know some erosion from Google but there was no wholesale change okay so they kind of won the office wars and they've made office good enough that you know fewer people are switching so they stabilize that. Windows didn't particularly get stabilized you know Apple in particular has continued to grow in the face of of Apple search has continued Google search has continued to grow so Bing and all those and so like Windows and Bing you know haven't really delivered. Azure has delivered in a big way it's delivered in a big way because of the AI workload okay that's the big validating workload so then that comes back to Satya made one incredibly ballsy insightful decision which is to invest in open AI back in 2018. I thought you were going to say buy LinkedIn but that's okay you know keep going. So you know he bet big on AI and that catapulted them both reputationally and in terms of other a little bit on the prop and in the Azure business so it was the workload that then has grown Azure into a monster and a big success which because Amazon had the had their own first their first party workload plus all the early adopters yes okay so it was really hard for Azure for a while. Early adopters like Netflix. That's right so where Satya gets incredible he also internally you know he just got people talking and working together more than Steve had been able to do but that I mean again IBM was a nice place to work but they just didn't take any product bets that really delivered yes and Satya took a huge product that did deliver. So talking about AI everyone is talking about AI and you have also joined the public conversation where do you think people are asking the wrong questions maybe having the wrong answers or like what is part of the discourse of AI that you think is totally missing that people should be talking about more? Well I'm not sure if whether AGI comes in 18 months or six years it really is going to make much difference so I think we should just sort of say you know it's coming fast and how do we want society to be what do we imagine in 10 or 20 years you know sort of get over the idea of like the intensity of how fast it's happening to it's here and what will we do and how does it work and you know how would the legal profession work like as an example in education people say oh it doesn't change at all and you know looking at medicine has changed from 50 years ago educators are you know recalcitrant because they don't want to change but if you look at the practice of law like you know pleading before the supreme court it's identical to 100 years ago and we're so proud of that right so I imagine things like that you know briefing before a supreme court will actually work identical in 20 years when AI is is fully ubiquitous right now the briefs will get AI edited and improved and the research will be a little faster but you know it's kind of like getting the noise and the way that today LexisNexis is yeah or or word for legal briefs so some areas of the economy has a huge change some areas not so much so I think again there's so much focus on you know is the current version of cloud code you know this or that and you know as opposed to okay it's going to happen and the robot side the humanoid robot's going to happen so then what will society be in 10 to 20 years well you're saying if so education medicine law those are either sort of highly regulated industries or industries with big unions like do you think that's why they might be affected less and others will be affected more or to actually throw your question back at you do you think there's a profession that will be the most affected by AI whether it's in three years or 10 well I was going to say least affected I think will be entertainment like you're not going to watch a basketball game of robots right March Madness is not going to be taken over by AI and that draws us in so most like a percentage reduction in employment one theory would be software engineers because everyone's working really hard on kind of automated software development but there's a substantial chance that while many companies will have reduced software engineering employment there'll be many other opportunities for more software so that kind of elastic response is well it's what we've seen in radiology which is an interesting example because radiology is image processing computers and AI are much better than humans at and have been now for several years okay and so you can now go into an MRI center and if you're self-pay 300 bucks and get an MRI it's dramatically down in pricing and so people are getting many more scans and they're being read by AI with a radiologist approving them so I had thought four years ago going to be devastation in radiology it's going to be the first you know everyone talked about this right yes obvious well we have a shortage now we have 35,000 radiologists we need about 40,000 wages are high and so it's a good example of it's easy to get focused on you know the disaster case with you know Armageddon we love movies about Armageddon we have them in our religions you know it's like we love disaster so we're drawn to these scenarios of AI wiping out things okay and again hasn't happened in radiology maybe it will eventually but not in the last five years so I'm gonna my hunch is that many professions will be resilient and that there's certainly much more demand for health care so now is there much more demand for legal services maybe I mean poor people are definitely under lawyered that could take advantage of a lot um so maybe there will be a whole uh elastic response there and and we'll see but if I had to guess it might be lawyers as the kind of most affected because it's very verbal um and it's somewhat formulaic not as much as writing software but it's somewhat formulaic well and also if we thought about like what would be an increase in productivity if you had actually people shifting from legal work which is generally transactional costs on things are happening to actually production of things that would actually in a general positive thing in society and I say this is a child of two lawyers so I actually think it would be a good thing if the work shifted more towards how do we build more products and services what are the ways that we create entertainment create other work you know other kinds of things versus versus the transactional cost which is legitimately there on a number of things but they increase link transactional costs that's illegal well I think where we both are is no one quite knows exactly right which fields uh will be but what I think we both see is an era of great promise that the next 20 years will be super exciting and I think it will usher in this era of abundance through both scenarios which is again you've got the white collar symbolic processing stuff that's getting pioneered now like lawyering writing software and then we've got the android uh humanoid robots coming uh at some pace so that'll be pretty exciting so one of the things that you know obviously a lot of discussion of ai is on the question is is there safety issues and you know the safety issues range you know we've been in these conversations anything from various smart people being you know as you were referring to earlier you know apocalypse doomsayers you know whether it's it's it's it's terminator scenarios whether it's jobs etc so what do you think the right way of trying to navigate the development of all of these what we both agree are amazing future capabilities medicine amplification of software engineering a whole bunch of other things and navigating the safety how much of that should be technical work right constitutional ai etc how much of that should be incentives how much of that should be regulatory what what's what's what are the guideposts that you throw out there is to or principles by which people should think about how to navigate both keeping up our speed in building ai for all the good things and also navigating safety well in the safety we can break it down in a couple categories so there's the super disaster sky netty case where like ai takes over soon to be a netflix film new year yeah and we you know absolutely have to prevent it it's not something that's going to happen in the short term but the danger is that we could slide into it as these things take care of more and more of our life so i think because the downside or recovery from that because we don't have time travel you know is extremely hard that's when we have to think about even it was low probability sort of like massive nuclear war we have to do some stuff about it to prevent it because it would be so disastrous okay so that's the kind of mass nuclear war equivalent case that they take over then the other case is you know north korean soldiers use it to design a virus and you know a lot of people die so think of it as in the hands of the wrong people it's very powerful one scenario sort of combined with synthetic biology another scenario is cracking into other computer systems so it turns out ai is very good at breaking in finding bugs in open source things through code analysis or finding bugs through closed things by probing in the way that national security agencies do today but instead now it's in the hands of you know terrorists or or other people so again think of it those are two specific examples of bad people using ai as a powerful tool to do very bad things and so there we've got to make sure that the whole industry does tech prevention that it's hard to do now right now they're sort of everyone is doing that because they don't want to see these scenarios but you could imagine that it might need to be regulated over time to insist that all of the sufficiently powerful ai systems protect against these kind of scenarios and probably they some of them will happen and then we'll set up a protection regimen afterwards to prevent that kind of thing but no one of them is going to like destroy all humanity at once like massive nuclear war might all right we're going to go from nuclear war to ai writing which some people think is nuclear war but it's fair so the new york times recently ran a blind test and 86 000 people took it and i don't know if you saw the results but they were showing folks snippets of ai writing versus human writing and 54 percent of people preferred the ai writing and so some people argued like that was short firm that wasn't novels like that's what ai is particularly good at other people were so devastated that more people preferred the ai writing like what do you think that like what does this mean does this mean that most writing is going to become ai in the future or like what are the implications of a test like this where regular people preferred the ai writing you know i think short form writing on a specific topic is a very different yeah writing a story sure and developing character and a character arc and a conflict and a resolution just look at how shakespeare still has a huge impact uh you know when it was 400 years ago and no one's been quite as good as him at a certain broad range of things so i think it's a extremely rare talent um of of the very high-end ai but like average writing is i don't think the way to analyze it and i'm not surprised that the ai is better than the average writer today right fair enough and so thinking of like thinking about all these creative revolutions it's like you were there for a dvd to streaming and now obviously lots of people they're concerned about ai is the entertainment industry so forget the tools that people use whether we'll you know use ai for editing or scripting or whatever but the actual stories that are being told like do you think the ai era ushers in new stories or different people who are telling these stories like what will the effects be well in people have been talking about democratization of film for 50 years and so like the early wave of democratization was in the 90s when you could take it with digital instead of celluloid film sure and so you could do more takes and the cost of filmmaking was going to come down and that was going to democratize film um and you know it really didn't change because we got you know bigger budgets higher special effects uh we did so it turned out that the constraint really wasn't the film cause there's lots of student films produced today produced back then and they just don't break through and take our recent success with k-pop demon hunters i mean you know in some ways i have a 10 year old and eight year old and five year old i certainly know about it it's like our 28th animated film right okay you know it's for us it's really really hard and god knows we want to repeat k-pop but you know other than we'll do the sequel but other than it's like right lightning strikes lightning strikes so i mean we are really working hard but think of it as it's a very subtle set of high-end things so it'll help a little particularly in tv when you got to do a lot of episodes and you know it'll help a little bit in the scripting uh where it'll help particularly is then script to screen okay so you've got a big crowd shot you know and like you know a big stadium okay that might be you know a very expensive vr shot now special effects shot but you know now it'll be ai right and that'll be lower cost so the mechanical parts yeah or industrial parts will be lower cost but the backbone the story and then the back to the basketball example so we don't want to watch robots right i think we're gonna want people will pay for real actors absolutely um and people they recognize in that way so but we'll see i mean you know there's definitely a threat of short form you know does do young people only go on tiktok okay and never you know watch a podcast or a netflix we'll see i mean we'll also see val kilmer has a new film out and he's been dead for several years and so ai val kilmer we'll see if that's a success or not recovering past ip and extending it is a niche yep and by the way people will watch robots one of the great netflix love death and robots series right you know etc so like there are it's what do you watch robots doing is the interesting question there you go now what do you think are some of the interesting more side effects like obviously you know if you came to me today and said hey ai will be have a will help us improve identification of potential hits early that's like seems unlikely unless there's some like analysis of major data streams that you know the humans don't do yet but what are some of the more like side cases of how ai comes into this you know it could be you know also like you know and i discuss the content with i mean like what are some of the things that kind of not just reinventing the process but thinking about ai at the corner cases or add a corner case that may become big is there any of that that you've had musings on yet we haven't found say the equivalent of sports betting so bet sports betting is a whole kind of value emotional engagement layer on top of sports yeah it's not really ai enabled and kind of nothing to do with ai but we're always with entertainment looking for things that what's a layer of conversation what's a layer of engagement you know that enriches the experience so you know maybe ai will improve that but it's not obvious what that will be and and to some part the beauty of a show or a movie is that it is you know kind of self-contained and you know that it's it's this you know it's been more than 100 years we've had films and so it's like a novel where the novel as an art form has really stayed constant and so there's something about you know the size and the capability that people are used to it sure there's short stories and sure there's epics but like almost all the business is novels and what people read and i think there's a lot of that with film and tv series that they're not artifacts they're really reflections of human attention span and stories i feel like people have been complaining forever about you know you have one superhero movie hit and then you have 25 more superhero or like barbie hits and then all of a sudden you have toys like toy stories like you're not we're not getting sort of the diversity of hits because people are looking at an algorithm or they're well you know you got to put this star with this story and then and so you don't maybe get a k-pop demon hunters which like you said was the 28th and no one could predicted it obviously we're in sort of the the time of heated rivalry when no one could have predicted that do you think ai will will flatten things like will ai lead to people just you know betting on past success because the algorithm told it to and so they'll take less chances or that's already happening like how does ai affect it from a data perspective you know very very little we're really predicting for a kind of that human conflict and something you know you want something that's both familiar but also fresh so those are our tensions in terms of like over sequelization if you look at the amount of new content that netflix is producing that's really gone away in other words sure we'll have some sequels and think of season two of wednesday was you know season three etc so that's always been a part of the business it's very enjoyable for people because it's a story they already know and you see more of it but you don't want to be the only thing and that's certainly not true today today we have an incredible set of new films coming out all the time yeah and do you like how well do you think netflix can predict a hit like sometimes things come by surprise but you're like no no we got it we know or you're like we sometimes we don't yeah it's a mix of both okay so uh season twos we have much more yes you have more data there all right fair enough one of the many smart things that ted sarandos said is that there's a much better business in increasing the upside the quality the volume of the reception of content by 10 percent than cutting cost by 50 and it was a way of kind of lensing to why is ai potentially really amazing what are the kinds of things in terms of thinking about how ai can be additive that you think that the entertainment industry should be thinking about broadly given obviously there's a lot of concerns and uncertainty around it you know in entertainment there'll be a lot of work on special effects and sort of things that didn't fit in a budget uh before can now be done uh you know using ai um so that's a good example but more or less i think anything that lives in the emotional realm will be impacted not as much by ai because we humans react to these things emotionally and so again i think we'll not watch robots playing basketball and so it's the easiest example for people to get that things that are emotionally stiff pleasure emotional stimulation will still do so you know you like to give and get real flowers not fake flowers so it's like i don't think that's changing just because of ai so our ai is very good is that thinking and logic like coding wow it's really it's breaking too so i think there's just think of it as tremendous excitement in medicine in biology and things that are very factual logical hard um and complex and things that are emotional you know will be it's not that it won't eventually be able to add value but that's certainly not the big thrust of the ai world all right this is something i'm very excited to talk about you and i share a deep passion for education and i feel like education is like at the center of ai it's like is it gonna usher in a new era where everyone has amazing tutors and education is supercharged or are public school students especially perhaps just gonna have ai slop constantly like as a philanthropist who's invested a lot here and sort of studied the education especially in the united states how do you think ai is gonna affect education well there's two kind of big questions which is one what are we educating kids for what kind of society are we educating them for what skills should they have so the kind of goal state uh you know in the past was passed a lot of ap exams sure okay um and that's probably not the right goal state for the future world so there's a big discussion to have which is what are the skills that you're trying to target for your kids and then second is implementation which is can we use ai tutors to whatever we decide is important to teach more of that to make teachers lives better to have kids learn more so they're two different discussions that get kind of mushed together i would say on the second like how to teach more then there's some relatively clear paths of doing you know different kinds of ai tutors and you know just like we're an ai doctor ai lawyer they'll be ai teacher and that will come along and it'll be it'll be easier in private schools it'll be easier in charter schools it'll be harder in in school district schools because of all the regulations they have it'll be easier outside of the u.s where they're more willing to to do some of these things so you know that will happen it's unclear the first question which is what's what if you have a three-year-old or five-year-old what do you want them to learn because the hard skills like that we used to value stem okay that's probably like coding like we you know we spent 25 years learn to code learn to code oops don't learn to code don't learn to code so it's probably true that like all the hard facts of you know biology chemistry physics will be extremely specialized and not necessary general knowledge um and and probably not that valuable let's say if you had an ap result in this yes the things that are more emotional how you read people how you work with um probably are quite valuable because they're much harder for the computers to do and humans like doing them with other humans more often so i think we'll see a kind of shift of the value you know stem practically took over stanford university okay and now maybe what we'll see is a rotation you know back to the humanities into understanding combination of history and literature but also kind of the the physiology of the brain and um you know how we interact with each other if i had a three-year-old today i would be like doubling down on the emotional skills there's some great middle schools one's a charter school valor another's a private school flourish and you know they really focus like in seventh grade on these emotional circles we sit around talk about your feelings and because they feel like this kind of skill and knowing yourself they interact with other human beings is going to be the thing that sustains those kids you know through their working life do you i feel like when people talk about ai and education alpha school always comes up we had mckenzie on the pod a few months ago and i feel like some people are like the criticism is like they're not even using the cutting edge ai other people say look at their test scores they're doing you know twice as well as anyone else some people complain about equity you know for forty thousand dollars a year the thing sixty thousand it's fantastic if you can afford it go so why do you like the thing i love about it is actually less about the ai but more just about the like giving agency to kids focusing on other things like what do you why do you think alpha school is so great well it starts with mckenzie and joe's philosophy that the kids have to love school and they love vacation so the number one goal if the kids don't want to go on vacation they want to stay in school because they love it so much then they start from okay if we want them to love it and we need them to know the basics up to do well on tests what are we going to do and so they do two hours on software a day where you know it's relatively practice and drilling and these kinds of things but they have a coach really motivating and helping and then they get the reward for that is they get to spend the rest of the day doing stuff they want either a set of the schools are for athletes and people for sports or they spend the rest of the afternoon doing like watching ted talks and talking about a range of things um but i would say they're kind of like the tesla roadster that was the first tesla over a hundred thousand dollars sports car yeah specialist thing but it set electric cars as the aspiration then they were cool because the first electric car was this you know extremely fast accelerating thing so that's alpha school is our tesla roadster for ai schools and you think it can be done we can go down the cost chain and we can do it at a lower amount 100 model three will be coming i love it so there'll be more and more innovation at that end cool so reid we talked about education and how there's enormous opportunity for change alpha school which is operating within the united states how is education going to change outside the united states with ai well i think what we'll see is tremendous flourishing of ai teacher in an international situation so we have pretty good teachers in the u.s and pretty high satisfaction and rich countries generally sure uh but in lower income countries the education budget might be 300 per kid per year and the class size might be 50 to 70 kids and there's just not a lot of learning going on and i think the combination of a star link on every school and tablet for every child and then really good ai software will close the gap so think of the way mobile phones are ubiquitous in the developing world i think ai learning will be ubiquitous and that will help i don't know that they'll leapfrog the advanced countries but they'll certainly close the gap that we've seen historically um and in places they may leapfrog i feel like lately there's been like breathless articles everywhere about how one laptop per child was the hope and then it was really a failure and we put so much money into it and it didn't work and then other people are saying like well that's really nice that you want that but you know the cost of compute is too much like what would you say to those people who think that like we've heard tech solutions in education before but it's not going to happen this time yeah there's always the crash dream phenomena uh like you know in the 1980s i was in the ai wave that was expert systems and they were public companies and the fifth generation and the japanese were going to be this big frat and you know and that ai didn't work but this one is so just think just because it failed before it was too early it doesn't mean it won't work so i think the one tablet per child around the world is very scalable built on the mobile phone platforms um and it is some of the same ideas that one laptop per child had but that was just 20 years too early yep and i assume you think the cost of compute is just going to go through through the floor and so that it won't be a barrier to entry for folks in the developing world um that's right the costs are really driven off the phone market so you know we have 800 phones in the us but in most of the world you know there's 50 phones um are quite usable um and so think of it as 50 hour phone and a star link per school um and some solar panels you know uh so it's very scalable fantastic so one of the things you said earlier which i i completely agree with and one of the things i think i would partially reframe and it's kind of a question leading into education i think our human skills um you know how we collaborate getting in the humanity understanding these things i do think will amplify up and the skill of learning coding obviously goes away because it's like oh this does the code but i think the various two things that i think will still be pretty deep and what we're doing is one is a good systematic understanding of what truth in the world is around so like biology physics chemistry etc because that kind of iteration of understanding the nature of the world we're in i think is pretty familiar scientific thinking is it like the patterns of thinking i think are important the patterns of strategy are important and i think actually even coding will go that way because part of the thing is is while people say well should i study should i stop studying computer science like well no you should study computer science not coding right like more of the kind of the thinking about the the system of the pattern of it in terms of how we operate and i think that will become more general i'm curious what you think of my modest reframing of your earlier statement i think i'd just study math you know if you want to get to like alarms are terrible accounting so yes so you know whether it's a algebra i mean there's so many interesting things in math yeah if you want to help people like kind of learn abstraction or search for truth um you know look there's gonna be some role for science and a few people will be drawn to it but think of the last 20 years we've been as a society stem stem stem learn to code stem stem stem so i just think that as everyone sees that coding is overdone my guesses will see that stem is overdone um and the kinds of things that you do with a biology background will be done so much better and faster by ai that it'll be hard to compete for jobs in that space so shifting to another thread one of the things i think ai will do is it will break us a little bit of the industrial model which is the industrial model tends to be the you know go to high school go to college learn now go work and learning then now work and i think ongoing learning will be one of the key things do you think that will also be part of not just like i have this one learning period but it's like i'm constantly interweaving learning with what i'm doing absolutely so you know trying to think through the ongoing skill acquisition you know by by learning things has probably you know been important for a long time because the stuff you learned in high school changes so much and the knowledge in the field changes so much and that's only going to continue so certainly learning will need to be for people who want to make a living intellectually constant but i don't think that's it's like a more of the past because that's been true for a while it's just going to be even more true uh you know in the in this new world so we learned earlier that you were the one that said stone age bronze age iron age we define entire epics of humanity by the technology that they use and so we're entering the age do you think even more than previous ages that now if you are left out of the age either personally or sort of as a country like that that now is the time that some folks might actually fall behind and there's going to be a bigger divergence between those who embrace the ai age and those who fall behind well i don't know that just embracing it like if you're a small country in europe that has a glorious past i don't think it's whether you embrace it or not that it's going to change the outcome i mean you know you got to try to figure out a strategy because um you know and it's going to be dominated you know by china in the u.s okay how does the middle powers like canada you know thrive um and i think we owe you know we're part of that uh thinking and solution to be able to build a world that we all want to live in and so what would you do for these middle powers like they don't want to live in a world where it's just just china in the u.s i don't know that they have much of a choice yeah so i think it's i mean what they're doing is linking up together yep you know and i think that probably makes sense and certainly you know they'll embrace using you know american ai because they'll need to and you know maybe they will be able to get some local things going or they'll do it by treaty where they you know where they get they're not going to get shut off right but think of it as ai is going to accentuate income gaps both in the u.s right and between the u.s and other countries um so you know it's going to create tensions just like it does in one society it does between societies i do think that one of the things and i think you would agree that that that actually having an active ai strategy for the countries for the industries etc is actually in fact really important um i think it's less important to be going it isn't that you know so called digital sovereignty isn't also important but the most important thing is to actually be modernizing your your kind of industry your countries your companies your workforce because it's a little bit like the industrial revolution like one of the things i put in super agency is that you know england quarter of the population of france tenth of population in china multi-century industry you know and did not invent the industrial revolution but multi-centuries empire because they embrace the industrial revolution most robustly early would you also think that when you get to thinking about this from a countries or interest or industries or companies perspective that they should adopt that same thing of like we have to have an active strategy in being there early well your examples interesting so you said the uk which led industrialization so that's kind of the equivalent of america today right um so you didn't really phrase it as you know what should argentina do yeah about industrialization which is a very hard challenge because the uk did everything in its power to keep argentina from being able country to industrialize to maintain their strength of power so if you are a middle power like argentina should you have an industrialization policy sure probably that makes sense will it work not clear at all because the power imbalance in the uk was so high so they would they were laws preventing you know looms and various things from being in india so the cotton you know from india had to come and then get processed in the so i you know it sounds all great that belgium should have a you know an ai policy and estonia is a small country that's done a lot on say digital id and do good government tech so i guess that's better than not doing it but i don't know that it's actually much of an answer for a middle of a country i mean i think the challenges for a middle power country are quite substantial and i i don't have a good solution but i think you know in them linking up and doing things and working well and i hope that the u.s as the western leader of that is you know embracing in a very in a very important way you know which is not the current america first policy but i think it's much more in our long-term interest to have a long and strong allies so earlier you said that you think ai is going to usher in this great era of abundance and you whether it's 10 years or 20 years you know when when sort of agi gets here like what are the things that need to happen for that to be true are there conditions that need to be met now for that to happen and did you mean just in the u.s in terms of the abundance or could it be global abundance too depends kind of how the ip is shared or the rewards of it but i think it'll be pretty global so just like you saw in the industrialization it really did lift all boats you know it it's at a different level than in the host country yeah but so let's take nuclear fusion you know and if we can actually make it work you know which will be assisted by ai um you know then we've got a tremendous energy source if through it we're able to bring down the cost of solar you know or invent new types of batteries and storage you know it could really revolutionize energy usage and production which then brings us to you know age of abundance so in earlier in early nuclear we were a little bit naive and we thought electricity would be too cheap to meter okay so you know we're probably not gonna get to that um but you know that's the kinds of thinking for abundance that we want to do so if you think about housing and you know it's very expensive to build what if it was robots building it you know 24 hours a day so then you got okay you've got carpenters not working so that's a negative but you've got low cost very custom beautiful housing so that would be you know another example so you know i think in each industry we're going to see much lower costs for doing things and then incredible amounts of inventive energy because maybe we don't need to build a house that way maybe you just print it you know in some giant 3d printer so they'll be both tech revolution in that way which again would be like nuclear fusion yeah i'm going to shift to another zone of subject because i think this is something that people frequently misunderstand what do you think are why is so much of this innovation happen in silicon valley what are the things that make silicon valley kind of a unique creator of these kinds of technologies why is it half of the nasdaq is within 30 miles of where we're currently sitting well i think if you look at the financial city of london or you look at new york or you look at detroit for cars this is not something specific about tech you get very positive reinforcement when you've got a whole lot of talented people that can switch jobs and not have to move and then they move the ideas so in the u.s we don't have very high protection against the ideas walking out the door so it makes it can be very hard for a given company because they feel like oh my secret spread but it makes it very productive for the economy and for the ecosystem that those ideas do spread so i think of it as liquidity and employees changing is probably the key ingredient which is a combination of things like linkedin of i wish we had non-non-employer based health care um so if you had it you know some other ways that employer based at you to have more liquidity the less we do non-competes the better is one of the things i think that the biden ftc had right making it easier to compete with existing companies by eliminating non-competes so those are the that liquidity of movement i think is the most important thing so one of the questions maybe a last question before we get to rapid fire on jobs is obviously the general discourse is loss of jobs you know and kind of other sorts of issues but there's way insufficient discussion on wages because even though in fact you know action back i think there will be a lot of creation of jobs a lot of translational jobs and so forth but what will happen a little bit like the earlier comment in radiology is there will be a okay which of these jobs are super valuable compensation goes up which of these jobs become less valuable compensation goes down have you had any thoughts because you're a systems thinker on the wages effects what countries companies industries but specifically also individuals should be doing in kind of navigating what will be happening within wages well let's see you describe as some jobs is valuable but like you know teachers are very valuable and not paid very much yes so i don't think pay follows value very much it follows shortages and demand and supply okay so the question is for wages what jobs will be in shortage and i think it's all those jobs that are emotional that computers are not very good at because we'll we'll have a lot of need in those and the jobs that are more administrative you know those are going to have lower wages because you're competing with computer who could do that so again it's really where ai does a job well it's cost done by a human or its pay will be less and where it's super hard for the ai to do it'll be you know continued high wages i feel like a lot of people are telling people that the solution to that is trades everyone's like oh become a plumber hvac electrician because those are in shortage right now obviously like the big question there is like how soon robots will catch up like what do you like it matters if that's going to be five years or 20 years or 40 years in terms of people getting wage premiums from the trades like what what would you tell people in that respect okay so let's look at electric cars so 2007 we had self-driving sorry i should say self-driving cars 2007 was the darpa challenge and it was like it actually did work and self-driving cars in a limited lab and now 20 years from now it pretty much works okay but the percentage of miles driven self-driving by the machines by high-end teslas and by waymo's it's got to be less than one percent of global miles you see that's after 20 years so we're not even to the stage of that darpa challenge that is we don't have a demonstration in the home okay they can do all these things so think of it as in 20 years robots will do maybe one percent of the plumbing at most right okay so it just takes a super long time to build deploy and then to get them to be lower cost higher safety than others but i think over 50 years it will happen so that's still going to be a great field for the next 20 years if we're talking plumbing specifically thanks so now rapid fire unless there's another question let's do it all is there a movie song or book that fills you with optimism for the future there's a cool movie i watched recently the queen of chess and it's about a eastern european 1980s who guy family who raises his three daughters to get out of poverty via chess and they all three become grandmasters and get to a middle class or better living through this dedication and so it's a situation where there's no reason they should have had hope being in 1980s you know romania and yet they did and they worked towards a future that has been great so it's a i love a documentary like that all right i gotta check that out what is the question that you wish people would ask you more often i think people focus a lot on business success which i've been you know super fortunate on and less on joy and so i think the question would be what gives you joy how do you increase joy in your life all right how do you increase joy in your life let's hear it i would say that i'm trying to do more on the mindfulness and on the appreciation noticing much of my work life was relatively frantic uh kind of lots of email short burst stuff and i think i could have integrated more mindfulness into that busy time but certainly now that i'm retired i can love it so where do you see progress or momentum outside of your industry let's call that tech entertainment that inspires you um definitely medical work i mean the amount of improvement in cancer therapies health understanding insulin resistance i mean it goes on and on what we're slowly learning of the brain of the body and then the brain's you know even slower but making some progress on that all right our final question can you leave us with a final thought on what is possible to achieve in the next 15 years if everything breaks humanity's way and what's the first step to get there well if everything breaks human humanity's way it's because ai has unleashed human flourishing and we find the political mechanisms to share that across within our country across different income groups and then between countries the world as a whole is enhanced and a first step for that would be to realize how interconnected we are between people in our country and then between countries and trying to get away from win-lose to win-win totally amen thanks so much reed always a pleasure indeed possible is produced by pallet media it's hosted by aria finger and me reid hoffman our showrunner is sean young possible is produced by tenaci de los katie sanders spencer strassmore imozu trent barboza and tafadzwa nimarundwe special thanks to surya yalamanchili 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