66 Min Read

[The AI Show Episode 216]: Google I/O, Musk v. OpenAI Verdict, Andrej Karpathy Joins Anthropic & Meta Layoffs

By Claire Prudhomme on May 26, 2026

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Google just declared the AGI Agentic Era has begun, and then Demis Hassabis walked off stage saying we're at the foothills of the singularity.

Meanwhile, Andrej Karpathy quietly joined Anthropic, Elon Musk lost his $150 billion lawsuit against OpenAI, and companies Cloudflare and ClickUp are telling the world they're replacing roles with AI while posting strong revenue. It's a lot.

Episode 216 breaks down the Google I/O onslaught, the Karpathy move and what it signals about the race to recursive self-improvement, what the Musk v. OpenAI verdict actually means for the industry, and what the new wave of AI-driven layoffs — from Meta to Cloudflare to ClickUp — tells us about where every organization is headed.

Listen or watch below and see the show notes and transcript that follow.

This Week's AI Pulse

Each week on The Artificial Intelligence Show with Paul Roetzer and Mike Kaput, we ask our audience questions about the hottest topics in AI via our weekly AI Pulse, a survey consisting of just a few questions to help us learn more about our audience and their perspectives on AI.

If you contribute, your input will be used to fuel one-of-a-kind research into AI that helps knowledge workers everywhere move their companies and careers forward.

Click here to take this week's AI Pulse.

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Timestamps

00:00:00 — Intro

00:02:49 — AI-Pulse Survey

00:04:41 — Google I/O 2026

00:21:12 — Musk v. OpenAI Verdict

00:27:43 — Karpathy Joins Anthropic

00:37:17 — Meta Layoffs

00:46:52 — Cloudflare CEO on Replacing Employees with AI

00:59:34 — American Opposition to Data Centers

01:09:34 — AI's Political Civil War

01:14:37 — Anthropic v. the Department of War (Again)

01:17:35 — AI Use Case Spotlight

01:23:24 — AI Product and Funding Updates

This episode is brought to you by AI Academy by SmarterX.

AI Academy is your gateway to personalized AI learning for professionals and teams. Discover our new on-demand courses, live classes, certifications, and a smarter way to master AI. Use POD100 at checkout. Learn more here.

This episode is also brought to you by MAICON, our 6th annual Marketing AI Conference, happening in Cleveland, Oct. 13-15. The code POD100 saves $100 on all pass types. Use POD100 for $100 off the current rate.

For more information on MAICON and to register for this year’s conference, visit www.MAICON.ai.

Read the Transcription

Disclaimer: This transcription was written by AI, thanks to Descript, and has not been edited for content.

[00:00:00] Paul Roetzer: My belief is a lot of these AI leaders are going to be viewed as the villains, and it's hard to overcome that when you are literally building it and admitting it's gonna reach the singularity and like,

[00:00:14] Mike Kaput: but

[00:00:15] Paul Roetzer: you don't have a plan for what that means. Welcome to the Artificial intelligence Show, the podcast that helps your business grow smarter by making AI approachable and actionable.

[00:00:26] My name is Paul Roetzer. I'm the founder and CEO of SmarterX and Marketing AI Institute, and I'm your host. Each week I'm joined by my co-host and SmarterX chief content officer, Mike Kaput. As we break down all the AI news that matters and give you insights and perspectives that you can use to advance your company and your career, join us as we accelerate AI literacy for all.

[00:00:54] Welcome to episode 216 of the Artificial Intelligence Show. I'm your host Paul Roetzer with my [00:01:00] co-host Mike Kaput, we are recording a little early. We're doing Friday, May 22nd, about 10:00 AM Eastern time due to the Memorial Day holiday weekend. So our team is off on Monday, so, so we didn't wanna make Claire and Cathy have to work in the production side on their day off, so we're recording today early.

[00:01:18] so yeah, if anything crazy happens on Friday and it's not in here now, you know why. All right. Today's episode is brought to us by AI Academy by SmarterX, which helps individuals and businesses accelerate their AI literacy and transformation through personalized learning journeys and an AI powered learning platform.

[00:01:36] New educational content is added weekly. So you're always up to date with the latest AI trends and technologies. The AI four departments collection features seven core series and professional certificates designed to jumpstart AI understanding and adoption. Those include marketing, sales, customer success, hr, finance, operations, and legal.

[00:01:58] The series are an ideal [00:02:00] launchpad for organizations that wanna level up their teams and accelerate AI adoption and impact individual and business account plans are available now. You can also buy single courses and series for one time fees. As I've said on the show before, the cost of a single core series is actually.

[00:02:17] I mean, for a business plan, it costs more to buy an individual series than it does the entire year of programming. So we've tried to make the pricing as affordable as possible so that everybody can get in there and start taking the courses. So check out Academy dot SmarterX dot ai to learn more. And for individual plans, you can use POD 100 to take a hundred dollars off of that annual subscription.

[00:02:42] So again, that's Academy.SmarterX.ai, and POD100 on those individual plans.

[00:02:49] AI-Pulse Survey

[00:02:49] Paul Roetzer: Alright, every week we go through an AI pulse survey. We give you the survey at the end of the show. and then we cover the results on the following week. So the pulse's, informal polls of our audience to see how they're feeling about topics that we talk about on the podcast.

[00:03:04] Last week we had two questions. How concerned are you about AI's impact on your own job over the next year? 36%. Not concerned at all. 33%, not very concerned. 22% somewhat concerned and 9% very concerned.

[00:03:25] Mike Kaput: Hmm.

[00:03:25] Paul Roetzer: I got those right, Mike? Yeah.

[00:03:26] Mike Kaput: Yes.

[00:03:26] Paul Roetzer: Yes. That's good. Okay.

[00:03:27] Mike Kaput: Yeah.

[00:03:28] Paul Roetzer: And then are you personally ahead of your organization on AI adoption?

[00:03:33] Well, this is interesting.

[00:03:34] Paul Roetzer: so this mirrors Mike, the state of the industry results that we Exactly. Yep. Okay. So again, the question is, are you personally ahead of your organization on AI adoption? Keeping in mind our audience is generally AI forward professionals and leaders, so it makes sense.

[00:03:50] They would be ahead, but 60% answered way ahead of their organization. 24% somewhat ahead [00:04:00] and 16%, roughly on par. No one said their organization is ahead of them. Six. So 60%. Wow. That are way ahead. That, and again, that's not surprising actually for this audience.

[00:04:15] Mike Kaput: Yeah. Yeah. That's pretty validating for our, state of AI for business research too.

[00:04:20] Paul Roetzer: Yes. Which we will talk more about, but you can also go grab that research if you miss it. What is it? State of business.ai, mike, is that right? That's

[00:04:27] Mike Kaput: it. Yep.

[00:04:27] Paul Roetzer: Grab the report. Okay. So we had, The Musk and openAI's trial came to conclusion, this past week, but we're gonna kick off first with a big week from Google and their IO conference.

[00:04:41] Google I/O 2026

[00:04:41] Mike Kaput: Yes, Paul. So Google IO had wrapped this past week with what CCEO, Sundar Phai framed as the start of the AGI Agentic Gemini era. He was basically signaling they are shifting from chatbots that answer questions to AI agents that take action [00:05:00] on a user's behalf across Google's product stack. So a ton of announcements related to this and other Google in initiatives.

[00:05:07] So first up, Gemini 3.5 Flash was launched and it's generally available May 19th, 2026. It's now the default model in the Gemini app and Google's searches AI mode. Google says that flash outperforms last generation's 3.1 pro on coding and agentic benchmarks, and it's roughly four times faster than other frontier models in output tokens per second.

[00:05:34] Gemini 3.5 Pro is currently in internal use at Google. It is also rolling out next month to users. Google also introduced Gemini Spark. This is a 24 7 personal agent running on a dedicated Google Cloud virtual machine that is deeply wired into your Gmail docs, slides, and calendar. Spark begins beta next week for Google [00:06:00] AI ultra subscribers in the us.

[00:06:02] So I believe that's their highest paid tier. It's a couple hundred bucks a month, and so if you have the cash and wanna try this out next week, that might be a good, spending of your money there. Google demoed Spark, doing things like parsing credit card statements to look for hidden subscriptions and monitoring school emails for deadlines with, any high stakes action requiring user confirmation.

[00:06:26] Now, another thing that has everyone talking is Google announced what it called the biggest upgrade to the search box in 25 years. They are turning this into, in some cases, a dynamically expanding query field that accepts text, images, files, videos, and chrome tabs. Now, AI mode currently now defaults to Gemini 3.5 flash and has also surpassed a billion monthly active users one year after launch.

[00:06:54] And they're also talking about these new information agents that are going to monitor the web [00:07:00] 24 7 for you and look at user picked topics and actually report back on those. And those are rolling out this summer for AI Pro. Ultra subscribers on the media side. Google launched Gemini Omni, which is an any input to any output model that has character consistency, physics accuracy, and conversational video editing.

[00:07:22] And that also, they talked about Google Picks, which is a new image tool built on Nano Banana 2. And what's interesting here is that Omni Flash will be free inside YouTube shorts, and YouTube creates starting this week. A couple final things here. Google also demoed anti-gravity 2.0, the kind of second iteration of its AGI Agentic developer platform.

[00:07:47] It demoed that by building a functional core op operating system core in roughly 12 hours using 93 parallel subagents for under a thousand dollars in [00:08:00] compute Closing the event, Google DeepMind, co-founder and CEO Demis Hassabis told reporters that Google is quote at the foothills of the singularity. He cited rising machine autonomy, working agents, working co-generation and ai, acceleration of science and math as evidence that the singularity era has already begun.

[00:08:21] So, Paul, tons being announced here. We can unpack a couple of these. thought it was interesting Demis straight up saying, we're kind of approaching the singularity. This is definitely an aggressive Google io. What'd you think?

[00:08:34] Paul Roetzer: Yeah, Demi's messaging was very intentional. I'll, I'll kind of come back to that.

[00:08:39] we covered in April the Google, cloud next event that I actually attended. And this CEF certainly continued the messaging from there with this focus on, on agents 3.5 flash as they describe it on, like the developer page says, it's a sustained frontier level, intelligence optimized for real world tasks at a higher [00:09:00] speed and lower cost.

[00:09:01] And then as you alluded to Mike, it's specifically designed for the Agentic era and it excels at sub-agent deployment, multi-step workflows and long horizon task at scale. There is an oddity about this model, though its knowledge cutoff is January, 2025.

[00:09:18] Mike Kaput: Hmm.

[00:09:19] Paul Roetzer: Which is peculiar because GPT five point five's knowledge cutoff is December 1st, 2025, so full almost 12 months later.

[00:09:30] And then sonnet 4.5 has a cutoff of around August, 2025. So what that tells me is this is an old model. Yeah. Like this, this, they stopped the training in January of 25 and it sounds like maybe the harness is what is different about it? I, I don't know. Like it's just peculiar that they have

[00:09:49] Mike Kaput: That would be my, that would be my guess, because I think that's Gemini three point ones cutoff too.

[00:09:54] So I think it could be built on. That would be my guess. It's

[00:09:57] Paul Roetzer: just a more efficient model that's [00:10:00] trained. Yeah. With the harness to do the agentic stuff in essence.

[00:10:03] Mike Kaput: Yeah.

[00:10:04] Paul Roetzer: there was a lot of talk online that 3.5 Pro was supposed to be announced this week, but it's actually being held up in review, potentially tied to the, what was supposed to be an executive order yesterday about the government's involvement in reviewing the latest models.

[00:10:20] So there's some talk that they plan to release something else and it just didn't get there. I've had very limited experience so far with Flash, but it wasn't. it was, a lower quality, I would say for the one use case. I tried, yeah. it didn't know it could do something that it definitely has the ability to do, which is extract text from A PDF and it was just like, I can't do it.

[00:10:49] And I'm like, no, you, you absolutely can. And I at one point told her, I was like, listen, Chad, GPT did it without a problem. Like, I was just like, because I was getting annoyed, I was like, I'm just totally straight up, right? So I [00:11:00] actually flipped over to, 3.1 Pro to do the same thing. And I had a really weird experience.

[00:11:06] Now, this is not, this is just like a, a, a glitch and it, I'm just like noting 'cause it's to, to kind of demonstrate how weird AI models can be. So when Flash wasn't working, I went into 3.1 Pro with the same personal project that I was working on, that I needed to extract this text out of this thing. And this is what it said to me.

[00:11:26] So not, it didn't just say, I can't do it replied, here's the text extracted from your screenshot. And then it was like, text messages, bro, that, so it's like, bro is saying this, we need to find out about his pension and social security. I don't know who to call for that. And then the next bubble was you.

[00:11:49] It says you Blue Bubble. Okay, I'll figure it out. So instead of extracting the text, it like made up. Like a text [00:12:00] chat between bro and me apparently. And then I was like, I replied, I was like, that is completely incorrect. Like look at the attached image. So it replied to me, I apologize for the mistake to be completely candid about how my AI systems are working in the current setup.

[00:12:17] I cannot actually see or process the image file you attached. Instead of accurately telling you that I lack the ability to view the screenshot, I generate a completely fabricated response. If you are able to type out the text from the image or describe what it says, I am ready to help you navigate those specific details.

[00:12:34] So this is 3.1 Pro. Asking me to type out the text that I'm asking it to extract and then telling me it's just like made up an entire response. I was like, what the hell?

[00:12:46] Mike Kaput: That's crazy.

[00:12:47] Paul Roetzer: It was just a weird, so totally just side note on how weird these models still are after all this time. so a few other notes.

[00:12:55] The significance of Omni huge deal, it's a bit of a [00:13:00] flex for them because OpenAI has had to pull back on their world model efforts and their video generation efforts because of the lack of compute. Google realistically is the only one right now that can really race forward on the world model side because of the infrastructure strength that they have.

[00:13:16] And De has talked about a lot about world models. We've talked about on the PO a lot on the podcast about this. He sees this as many researchers do, including, including like Jan Koon as like a necessary step for the next phase of AI advancement. The other note, and we were kind of joking internally about this yesterday, Mike, this, the product portfolio from Google.

[00:13:36] It's like you need an advanced AI model just to understand the product portfolio at Google. Like I have no idea how any of this fits together. Like it is, it's so hard to navigate their offering and all of these features. we were actually working on trying to upgrade to Google Enterprise this week and our team went through hours of work just to try and even understand how to do that.[00:14:00]

[00:14:00] Had to talk to a Google rep to even help us figure it out. So. And that's just a straight up like upgrading our standard platform to enterprise. And then when you get into all these other announcements and like, well, is it available or is it not? Is it built into Gemini app that I already have or is it not?

[00:14:15] Is it antar? Like it's dizzying to try and keep track of how this all fits in and what I'm actually supposed to be using. So the product people at Google, you know it is tough. Like the innovation's moving so fast. Yeah. It's hard to figure this out. And there's, the innovations are coming from all these different areas within the company and then like someone has to try and.

[00:14:36] Make sense of it all for the consumer and so far it's, it's tough. Like it's ha it's hard to figure out. and then the last notes I'll make is just this whole idea of the singularity. So we have talked, at length about the singularity of concepts before. We've talked about Ray, Ray Kwe and you know, his original book, the Singularity is near was I think 2005 Mike, if I remember correctly.

[00:14:57] And then the singularity is nearer [00:15:00] was 2024. And so the basic premise is it's this like hypothetical future point where AI becomes so advanced that it surpasses human intelligence and then just like hits escape velocity, its ability to improve itself. Like the recursive self-improvement we touched on a lot lately starts to play a role.

[00:15:18] This is actually part of, we'll talk about Andrej Karpathy in a couple minutes. Like this is all connected, that these AI can now start building smarter versions of themselves. And when that happens, you hit the, you hit that escape velocity and it leads to what some believe is this future of abundance.

[00:15:32] But it also leaves to potentially. Uncontrollable. Issues of, something that's smarter than us is, I guess a simple way to say it. And so the timeline, Kurzwell has often given his AGI so matching or exceeding human level intellect around 2029. And he stayed pretty true to that. And as of right now, he's looking like he nailed it two decades in advance.

[00:15:56] And then anticipating the full realization of the singularity, Kurzweil has [00:16:00] said by 2045. So then why would Demis float this? Like again, Demis doesn't usually say anything that isn't calculated. So in a semaphore interview, he actually said the decision at the end of the show was a very deliberate run quote.

[00:16:17] We debated it back and forth, has said in an interview a few hours after the event, he said I was closing and I wanted to be authentic about what I'm thinking with AGI, the singularity, at least my interpretation of that word. And that term means the era that we're in. Hmm. so then it goes on to say, this year I really felt that it's the.

[00:16:36] Beginning agents are starting to work, becoming useful. Harness coding is starting to work properly. Areas of science and math are being accelerated. I've been reading Mike, I don't know if you've read this one yet, the Infinity Machine by Sebastian Malibu. It's really good. it just came out last month, I think.

[00:16:54] I think I'm on chapter 14 now. Maybe. if you wanna understand Demis [00:17:00] DeepMind the mission, how world models and recursive self-improvement and singularity play into it, I would highly recommend reading that book. And then the other couple quick quotes was from an Axios article. he said, he thinks AGI, when the machines are about as intelligent humans will arrive as soon as 2030, which he's been pretty consistent with that timeline lately.

[00:17:22] he also said the impact of AI is still underestimated, declaring that it will be 100 times as impactful as the industrial revolution. And that while it poses some risks, he said humans. We'll harness the technology to solve many problems, especially in science and healthcare. So yeah, in synopsis, Google io, an onslaught of updates with like dozens of features and products, continued confusion on the consumer side of what to do with all of these innovations and where they live and what they're available within and things like that.

[00:17:54] And then the grand vision that DeepMind is continuing to race forward and build this [00:18:00] AGI and beyond future. With all of us being left to try figure, like what does this actually mean for everybody?

[00:18:06] Mike Kaput: You know, to that last point there, I did wanna really quickly double click further into the search announcement because there's a lot of people being like, what does this mean for us in the more very near term where, you know, I was doing a little research on what they actually announced and what they're kind of talking about here is, and I'm just kind of quoting from some articles, from like Time and TechCrunch is like, instead of just that classic list of blue links and the typical AI mode, Google search will now also generate, in some cases, not all cases, a custom page with an AI generated summary of what you're searching about, which is like AI mode, but then trigger a conversation with AI mode on the main page.

[00:18:49] So allowing you to basically just like chat conversationally with. Gemini 3.5 flash at this point. which is really interesting. And again, it's they, Google [00:19:00] actually posted a response to somebody on X saying like, Hey, just to be really clear, basically you will absolutely continue to see blue web links and search results because the question everyone's got is like, well, okay, AI mode is already eating into people clicking through to websites.

[00:19:14] But also if you can then start chatting with follow-up questions and conversations right there in the search box, it's like, what is the point of a website anymore and are, is your web content just feeding Google responses? So we'll see how that all plays out. I'm sure we'll talk about it more, but I think it's worth noting and I just like can't escape this.

[00:19:33] Fact, Paul, that like long, long term, like not today and tomorrow, but longer term, I feel like I'm just operating under the assumption that a hundred percent of the time nobody will ever click through to your website from Google search again. And a hundred percent of the time someone will engage with your website through an AI agent.

[00:19:52] So like, I don't know how much that'll come to pass or how fast, but like assume those things are true as a thought experiment and a lot of things [00:20:00] change.

[00:20:01] Paul Roetzer: Definitely the organic traffic part. Like we've touched on this before, I, I've just been under that assumption for like two years. Yeah. When they started experimenting with AI mode, you could see it coming and they were just doing this gradual experiment to get people used to it and then, you know, going from 10% of users seeing it to 20% to 50% and then like how many times it shows up in search is the dominant thing.

[00:20:23] And so, you know, you can zoom out and just watch this happening. They're just trying to one, get the model efficient enough and that's where 3.5 flash comes in. Yeah. Get an efficient enough model that they can serve up AI on every search without it. Bankrupting them, basically. Okay. Yeah. so that was one key is they had to get the models good enough and efficient enough to be able to do this.

[00:20:47] And now as the models keep becoming smarter and more efficient, it enables the user experience to be good. And then you deal with the ramifications of what does this actually mean to search and to media companies and publishing companies. [00:21:00] And I think that it just has to work itself out over time.

[00:21:03] But they're, they're obviously going in this direction and. Brands need to be preparing for this.

[00:21:12] Musk v. OpenAI Verdict

[00:21:12] Mike Kaput: Yeah. Alright. Second big topic. This week you alluded to Paul. So we've been covering the o Elon Musk v openAI's trial the last several weeks. this past week, the jury came back and deliberated and gave a, a verdict.

[00:21:25] The judge ended up giving a verdict influenced by the jury. That happened like literally right after our podcast episode, I think on, Monday. but basically they deliberated for less than two hours and the judge rejected Elon Musk's $150 billion lawsuit against openAI's and Sam Altman finding that Musk has failed to file his lawsuit within the legally required timeframe.

[00:21:47] So. His claims are now dismissed after the jury's verdict. he had accused openAI's as a reminder, an Altman and President Greg Brockman of stealing a charity by attaching a commercial company to [00:22:00] openAI's, which was founded as a nonprofit and taking more than 13 billion in investments from Microsoft.

[00:22:06] Between 2019 and 2023, Musk was asking for about 150 billion in damages. He wanted Altman removed from openAI's board and wanted OpenAI to unwind its move to a for-profit structure ahead of their potential. IPO. Now, neither Musk nor Altman was in the courtroom when the verdict was read. Musk's lead lawyer, mark Tober, gave a one word comment outside.

[00:22:30] He just said, appeal open AI's. Lead lawyer William Savitt said he was delighted with the verdict. openAI's had basically argued throughout the trial that Musk's suit was a case of like sour grapes from a competitor who could not beat openAI's in the market. a few hours after the verdict, Musk started attacking the judge on social media, calling her a terrible activist Oakland Judge.

[00:22:52] and saying the decision creates such a terrible precedent. He later deleted that post, but he repeated to [00:23:00] Forbes that the decision set a dangerous precedent. in a separate post, he wrote that the judge and jury never actually ruled on the merits of the case, just on a calendar technicality. 'cause basically they were saying like, you waited too long to file this suit after you had issues with them, you know, abandoning the nonprofit approach.

[00:23:18] this basically removes the last major roadblock to open AI's IPO. one piece does remain unresolved antitrust claims that Musk made against openAI's and Microsoft. The judge said she was skeptical of those claims given aggressive AI market competition, but has not yet ruled. So, Paul seems like at least the major first round of this battle is over in favor of openAI's.

[00:23:43] Paul Roetzer: Yeah, it, and I don't, you know, Musk obviously didn't get the outcome he was hoping for. I have to imagine he knew the statute of limitations was a likely barrier to this going anywhere, and maybe why he reached out to Greg Brockman a couple days before the trial to try and negotiate something. [00:24:00] Who knows?

[00:24:01] but he obviously created plenty of chaos a along the way. And then I think the irony of all this is, you know, comes up throughout the trial about him creating a competing lab against openAI's and this whole process. And then he basically pivots away from Xai being its own AI lab and trying to be a Frontier Lab in the middle of the trial and, you know, condenses it into SpaceX and makes it part of that, you know, forthcoming IPO.

[00:24:29] And then he goes and does this massive deal with Anthropic. So it's almost like, all right, fine. If I can't like ruin openAI's and trial, I'll just go deal with, go do a deal with Anthropic and give them all the compute resources that I built for what was gonna be. My Frontier Lab. And so we'll touch on this, you know, in the end too, Mike, with the, you know, product and funding notes.

[00:24:49] But, so OpenAI is, now preparing for, to file for their IPO as soon as today, May 22nd. So that's coming, when [00:25:00] they, IPO is TTBD, but they're gonna file very soon. SpaceX has filed, they're racing toward a, June IPO, but in the process, they disclosed that their deal with Anthropic for compute is going to pay, Anthropic is going to pay them $1.25 billion per month.

[00:25:23] The why this matters, SpaceX revenue for all of 2025 was 18.7 billion. So their deal with Anthropic worth about 15 billion per year is almost the equivalent of all their other revenue combined. So when we go back like two episodes ago. Where we talked about Elon Musk two months ago was basically saying that Anthropic was the Antichrist, and then like now he's given all his Colossus one compute, and now apparently leasing out Colossus two Compute to Anthropic.

[00:25:55] Why? Well, because he needs to IPO, he's becoming a cloud [00:26:00] infrastructure company, basically an AI infrastructure company, and the future of SpaceX is an AI company. So even in their prospectus, they highlight that their total addressable market is $28.5 trillion. By far the largest total addressable market in human history, maybe ever in human history to to come and space only makes up 370 billion of that.

[00:26:22] There's starlink connectivity satellites only 1.6 trillion, so all the other, whatever that is, 27 trillion or so comes from them being an AI company. Hmm. And so like, it all starts to make much more sense why he folded XI in, why he basically just walked away from being a frontier lab. Because to get the valuation of, he's hoping to, you know, IPO like a $2 trillion valuation.

[00:26:45] You have to be this and you have to have that revenue coming in from Anthropic. So like, a lot of things can be forgiven if someone's gonna give you 15 billion a year to, you know, make it go away. So I, yeah, I just like the trials, the [00:27:00] trial, whatever, it was a soap opera, it exposed a whole bunch of stuff that I'm sure nobody involved really wanted to have exposed.

[00:27:06] But I almost feel like Elon was playing a game of poker and just kind of like. Waiting to like call their bluff and open it. I was like, fine, let's go. Like it's all out anyway. Like let's just have this thing. And then Elon was stuck having to go to trial and all this other stuff came out that even he probably didn't even want out there is what it is.

[00:27:26] They all move on with their lives and you know, go become trillionaires. I guess I, I don't know. It's weird. But yeah, the numbers for the Anthropic thing I think is like the hidden lead here. It's like that's Elon's alternative was just screw them by doing this deal with Anthropic.

[00:27:43] Karpathy Joins Anthropic

[00:27:43] Mike Kaput: Yeah. So speaking of Anthropic, our third big topic this past week, some, some big, big news, AI researcher Andrej Karpathy announced that he is joining Anthropic.

[00:27:54] So, as a reminder, we've talked about Karpathy quite a few times. He is a founding member of openAI's, [00:28:00] former director of AI at Tesla, where he led the full self-driving and autopilot programs. He also founded an education startup called Eureka Labs. he posted on x. I've joined Anthropic, I think the next few years at the frontier of LLMs will be especially formative.

[00:28:14] Very excited to join the team here and get back to r and d. So he's starting on anthropics pre-training team under team Lead Nick Joseph. This is basically the large scale training runs that give Claude its core knowledge and capabilities. It's the most expensive and compute intensive phase of building frontier models.

[00:28:31] an Anthropic spokesperson told TechCrunch that Karpathy will launch a new team focused on using Claude itself to accelerate pre-training research. Interestingly, part of this kind of industry wide race to automate parts of AI development. just as a quick reminder here on kind of all the stuff we've talked about with him and what he, what his trajectories looked like.

[00:28:52] He, so I said, he is a founding member of openAI's. He worked there from about 2016 to 2017. During this early stint, we [00:29:00] talked about this quite a bit'll be relevant. He led a project called World of Bits, where he was basically making this attempt to teach neural networks, how to use a keyboard and mouse to take actions on the internet.

[00:29:11] That sound should sound familiar today, but at the time it was, it was considered a little too early. in 2023, he returned to openAI's. he basically thought the rise of large language models would actually start making World of Bits, a possibility. then he left openAI's again in February, 2024, and basically pursued personal projects.

[00:29:35] He was kind of serving as like AI's most prominent independent educator for a bit here. he was launching Eureka Labs to build what he called an AI native school. At the time, and then now he is coming back to. and he's coming to Anthropic for the first time here. And as a reminder, I was just thought this was interesting, Paul, then I'll kind of get your thoughts.

[00:29:57] Like, you know, I knew all this stuff in my [00:30:00] head, but it said, you know, as I was looking through Notebook, LM to fi figure out, when we talked about him in the last year alone, he's coined the term vibe coding, which is everywhere. He had this whole conversation about intelligence versus agency, which is a huge part of kind of how we start thinking about ai.

[00:30:16] And he built that auto researcher thing. We talked about, several, you know, several episodes ago where he is basically using AI to conduct autonomous research experiments. Like, this guy's been so busy, even in his, outside of the major labs, like what's gonna happen when he goes to Anthropic?

[00:30:33] Paul Roetzer: He's, he's the AI influencer that all the AI influencers follow.

[00:30:37] Yeah. Like, you know, it's, he, he moves markets in the AI industry just with like simple tweets. So it's a, it's a huge deal. I think I tweeted at the time, like, man, anthropics valuation just skyrocketed. Like he could have gone. And started his own lab at a five to $10 billion valuation at the seed round.

[00:30:55] Like easily, like he, he could have just said, all right, I'm back in the game. I'm gonna launch my own thing. I'm [00:31:00] gonna raise $2 billion or whatever. And he would get it. So everyone would have taken Andre, like he, he could have gone to any lab he wanted. There's been, I, I mean, I'm gonna say pressure. People have been tweeting, influencers have been tweeting at him.

[00:31:14] Like, man, you gotta get back in the game. Like he's, you're, you're missing this greatest opportunity in human history to build and be a part of it. You gotta be at a frontier lab. Like, what are you doing out there? And so I think everyone kind of assumed at some point he would, Elon's tried to recruit him on X.

[00:31:29] he would've been welcome back with open arms to openAI's. Google would do anything to get, like everyone would take him. the last time, Mike, that I think we talked prominently about him, I went back to episode 180 9, which was sort of a pivotal episode for us. It was the first episode in 2026. And that was when we told the story of how something had changed over the holiday break and everything.

[00:31:51] and we tried to kind of piece together like what exactly had happened. Well, it was Andrejthat happened. Yep. Yep. He tweeted that like something was different. So the [00:32:00] couple of tweets I mentioned back then, I'll just flag them. So we had Igor, Bashkin who was an XAI founder and former DeepMind in openAI's.

[00:32:09] So on December 26th. He had tweeted open it. Opus 4.5 is pretty good. and then that's when Andrejtweeted, it's very good. People who aren't keeping up over the last 30 days already have a deprecated worldview o on this topic. And so that was like, people are like, whoa, wait a second. If Andre's thinking that what is going on?

[00:32:31] And then, Ronan Anil tweeted on January 2nd, my current theory. So he was trying to explain like what the hell just happened over this like week period. Why is everyone going crazy and thinking everything is now different? He said, my current theory is that everyone was secretly using Claude code to do real work and seeing improvements from sonnet.

[00:32:50] Then Opus then once Karpathy said he used it over the holidays, everyone else followed my entire timeline is Claude Code heaven. Someone replied even Google [00:33:00] engineer, which Ronan was a Google engineer. And he replied. I used to be a Google engineer too, leveled all the way up and feel, if I had agent decoding and particularly Opus, I would've saved myself first six years of my work compressed into a few months.

[00:33:12] So that sort of set the stage for this like chaos that has ensued since January, where agents just all of a sudden started being more reliable, more autonomous. Claude Code started getting all this love, and then everyone started chasing Anthropic. Anthropics valuation went from like, I don't know, 200 billion or something in December to 900 billion.

[00:33:34] They'll, they'll IPO at 1.5 to 2 trillion all since December when Karpathy basically tweeted like everything changed. Yeah. So yeah, he's a wildly important person in the deep learning era, let's say. So since 2011, if you made a list of the 10 most influential people, he's probably on the top 10 list of those people.

[00:33:58] Mike Kaput: It's interesting [00:34:00] too to just connect some dots with him working on pre-training, potentially using Claude to pre-train and also his work with auto researcher. He's certainly not the only person to invent trying to use AI to do research, but you have to wonder if Andrejis the one that cracks, like, recursive self-improvement, basically.

[00:34:18] Paul Roetzer: My, my guess is he thinks he knows the path and he needs the unlimited compute that Anthropic can bring to the table to do it.

[00:34:25] Mike Kaput: Yeah,

[00:34:26] Paul Roetzer: because why else are you going and reporting like you're three steps away from the ceo? Like, you're not, you're not like the number three guy. You're not coming in as like the guy.

[00:34:34] Mike Kaput: Yeah,

[00:34:35] Paul Roetzer: but he's, he's like, he doesn't even care. Like I, he seems like a very humble, like, genius influence. Like he's he's amazing to listen to.

[00:34:43] Mike Kaput: Yeah.

[00:34:43] Paul Roetzer: And I really feel like it's just, it took him seeing the, I feel like he did with World of Bits, like he went back to openAI's in 23 because he thought World of Bits was close.

[00:34:53] So for him it's all about the pursuit of. Unlocking the intelligence.

[00:34:58] Mike Kaput: Yeah.

[00:34:59] Paul Roetzer: And if he looked and [00:35:00] is like, Claude Code's amazing. I get unlimited tokens. I'm in. Like, I don't even care what you're paying me or what my title is. Like I, I'm, I'm back. So it'll be really fascinating to see what he builds.

[00:35:11] Mike Kaput: No kidding.

[00:35:12] All right, Paul, before we get into rapid fire, this week's episode is also brought to you by MAICON, our marketing AI conference for marketing and business leaders. This is happening October 13th to the 15th here in our home base of Cleveland, Ohio. Big news, this past week, we are thrilled to announce that Kevin Roos, the award-winning technology columnist for the New York Times, has joined our 2026 speaker lineup.

[00:35:36] Kevin writes The Shift, which is the Times' Column on the intersection of tech, business, and culture. He's the co-host of Hard Fork, the Paper's Weekly Tech podcast. He is the bestselling author as well of three books, including Future Proof, and he's currently writing a new one documenting the Race to Build AGI.

[00:35:53] His keynote at MAICON is called the AGI Chronicles. He will share the inside story of that [00:36:00] race and how to navigate what comes next. Now, what's really cool is Kevin joins a a stellar 2026 lineup. That also includes Karen Howe, the award-winning AI journalist and author. Andrew Yang, former presidential candidate and tech and economic futurist, Dan Slagan, SVP of Marketing at Zapier.

[00:36:18] Paul, you of course. And we also have a ton of other people within the marketing and business and AI worlds who are gonna be speaking and more speakers soon to be announced. So this event is just the thing we look forward to most every year. It's three days of keynote sessions, workshops, conversations built specifically for marketing and business leaders who are actively figuring out how to adopt and scale AI across their organizations.

[00:36:43] So. One really important note when you listen to this this week, ticket prices go up at the end of the week on May 30th. So if you register before then you get the best price possible. You can also use the code POD100 at checkout [00:37:00] and save an additional a hundred dollars on top of the current rate.

[00:37:03] So to do that, go to MAICON, MAICON.ai That's MAICON, MAICON.ai to register. Okay, Paul, let's dive into some rapid fire topics this week.

[00:37:17] Meta Layoffs

[00:37:17] Mike Kaput: So first up, unfortunately, this past week meta announced it was reassigning 7,000 employees into four new AI focused organizations. Then it went ahead and laid off roughly 8,000 workers, which is about 10% of its workforce two days later.

[00:37:32] That has been kind of rumored for quite a while, and we finally saw it come to pass. So, Meta's, chief People Officer Janelle Gale, described the new organizations that are these kind of AI focused organizations in internal Memo as using AI native design structures with fewer managers per employee than other parts of the company.

[00:37:53] for some context here, meta employed more than 78,000 people at the end of 2025. The company [00:38:00] had also told workers in April that it would be closing 6,000 open roles. Employees in the US received 16 weeks of severance, plus two additional weeks where every year worked. If they were part of those layoffs.

[00:38:11] Zuckerberg has basically bet the future of the company on AI in January. On an earnings call, he said meta plan to spend 115 to $135 billion this year. Much of it on AI development and data centers. The company has also dialed back its metaverse work and started including AI use in employee performance reviews, like we talked about on a previous episode in the weeks before, these layoffs, meta employees were already a bit on edge because the company had disclosed in April, they had a new internal policy authorizing meta to record keystrokes and mouse activity from company devices.

[00:38:47] In order to train its AI models, unfortunately a leaked audio clip of Zuckerberg defending the practice surfaced the exact same day the layoffs began. [00:39:00] So Paul, I've both read online and actually heard from people. I know that this was a very rough round of layoffs. It sounds like morale at meta is truly awful at the moment.

[00:39:12] Paul Roetzer: it does not sound good. there's been some people who have been let go, who have posted about their experience there and kind of being happy to, to be out of there. I'm sure there's pockets of it that are good. Like it's, you never know, like if we're not there, we don't know the full story. But from the things that are public, it's not great.

[00:39:31] The leaked audio you mentioned, I'll just read quick excerpts said, this is Zuckerberg speaking. The eye models learned from watching really smart people do things. The average intelligence of the people who are at this company is significantly higher than the average set of people that you can get to do tasks.

[00:39:46] So if we're trying to teach the models coding, for example. Then having people internally build tools or solve tasks that help teach the model how to code, we think is going to dramatically increase our models coding ability faster than what others in the industries have the [00:40:00] ability to do, who don't have thousands and thousands of extremely strong engineers at their company.

[00:40:04] So it, when you're told that you're training the AI to replace you, it generally isn't gonna go super great. I, I would think. Yeah. And it doesn't give people the greatest motivation to teach it properly. And then the memo that was sent by Zuckerberg on May 20th, to employees, I'll just read three quick paragraphs.

[00:40:24] It said, this is the most dynamic I have seen our industry. I'm optimistic about everything we're building to give billions of people the power to express themselves and connect with people they care about. I'm also optimistic about delivering personal super intelligence to everyone. We've always focused on putting power in people's hands.

[00:40:41] This is how we believe progress is made in the world. These values are what makes us different and they're why Meta has been successful. But success isn't given. AI is the most consequential technology of our lifetimes. The companies that lead the way, we'll define the generation. We're transforming our company to make sure we'll always be the best place [00:41:00] for talented people to have the greatest impact.

[00:41:04] So I guess if you're still there and you're one of those people, maybe you have some confidence. I don't know. But then the one thing I saw, Mike, that just sort of took off last week, DEI, is the Twitter handle. He is a guy I think based in San Francisco, tapped into the world. I dunno if he's an engineer or not, but plenty of AI people responded to this tweet and it was 13 million views as of this morning.

[00:41:25] So I think this maybe captures those of us who don't live in the Silicon Valley bubble. What is going on there? Because again, it's a very different world than most of us experience. So here's what he tweeted. the vibes in San Francisco feel pretty frenetic right now. The divide in outcomes is the worst I've ever seen over the last five years.

[00:41:44] A group of about 10,000 people, employees at Anthropic, openAI's Xai, Nvidia Meta. founders have hit retirement wealth of well above 20 million back of the vo ai estimation. He's saying everyone outside of that [00:42:00] group feels like they can work their well paying, but less than $500,000 job for their whole life and never get there.

[00:42:07] Worse yet, layoffs are in full swing. Many software engineers feel like their live skill is no longer useful. The day-to-day role of most jobs has changed overnight with AI as a result, number one. The corporate ladder looks like the wrong building to climb. Everyone's trying to align with a new set of career paths.

[00:42:27] Should I be a founder? Is it too late to join Anthropic or openAI's? Should I get into ai? What company stock will 10 x people are demanding higher salaries and switching jobs more and more. Number two, there's a deep malaise about work and its future. Why even work for all the peanuts, quote unquote, will my job even exist in a few years?

[00:42:47] Many feel helpless. You hear the permanent underclass conversation a lot, and that's in quotes, and that actually got retweeted a lot. That whole permanent underclass idea, especially from young people, it's hard to focus on doing [00:43:00] good work when you think, man, if I joined Anthropic two years ago, I could retire number three.

[00:43:05] The mid to late middle managers feel paralyzed. Many have families and don't feel like they have the energy or network to just quote unquote start a company. They don't particularly have any AI skills. They see the writing on the wall. Middle management is being hollowed out in many companies. Number four, the rich are particular, aren't particularly happy either.

[00:43:26] No one is shedding tears for them and rightfully so, but those who have quote made it experience a profound lack of purpose too. Some have gone from less than 150 KA year to 50 million in a few years with no ramp. It flips your life plans upside down for some. Comparison is the thief of joy. For some, they escaped to New York to quote live life for others.

[00:43:48] Still, they start companies just 'cause often to win status points. They never imagined that by age 30 they'd be set. I once asked a post economic founder, someone who had made it, I guess [00:44:00] friend, why they didn't just sell the company and they said, and do what? Right now everyone wants to talk to me. If I sell, I will only have money.

[00:44:08] I understand that many reading this scoff at the champagne problems of the Valley society is warped in this tech bubble. What it is often well off anywhere else in the world is bang average here. Unlike many other places, tenure intelligence and hard work can be loosely correlated with outcomes in the bay.

[00:44:26] Living through a societal transform, transformative gold rush in that environment can be paralyzing. Am I in the right place? Should I move? Is there time still left? Am I gonna make it? It psychologically torments many who have mo moved here in search of success. Ironically, a FA frequent side effect of this torment is to spin up the very products, making everyone rich in hopes that you can vibe, code your path to economic enlightenment.

[00:44:50] So I just wanted to read the whole thing because I think it's one, it's a view of the valley. Two. I think there's elements of that. That you can extract out the extravagance and the [00:45:00] crazy salaries and you can actually start to see some similar ideas for the, for the non Silicon Valley knowledge worker.

[00:45:08] Like, is this corporate ladder real? Like, is this stable? Can I go get that job and stay at a company for 10, 15, 20 years? What the hell is the future of work? Like, am I even prepared for it? Yeah. I'm a middle manager. Like, what am I gonna be doing in three years? Do they need middle management with all this AI stuff going on?

[00:45:25] Like, so maybe not the like, Hey, I, I went from making 150,000 to having 50 million. We got, maybe that's not like relatable to people, but I feel like everything else in here is somewhat relatable, where we're all sort of in this, like, what is, what is really gonna happen in the next three to five years?

[00:45:40] What am I supposed to do? What are my kids supposed to do? Just remove that extravagant, financial outcomes from the equation and it actually has a ring of truth to it.

[00:45:51] Mike Kaput: Yeah. It's super interesting. It's, it really gives you also some perspective into just what different lives people are living.

[00:45:58] Paul Roetzer: Yeah. Yeah. And again, if you're not out there [00:46:00] and you don't have friends in those circles, yes. You, it doesn't even. Register. Like I, I run in some circles with people like in, you know, back, we spent a lot of time in Boston. There was a lot of people who made a lot of money and like early in their careers being at HubSpot or places like that, or I've spent a lot of time with people out in the valley and you just, it's a different life.

[00:46:20] But there is a lot of what he said is so true. Like, if you know someone who's made it and they're in their thirties, it's like, whoa, okay. Like, I got all the money now, but like, what? Like no one cares what I have to say anymore. Yeah. I, I don't know what I'm gonna do with my life, so no one's gonna, like, everybody's got their own stuff going on.

[00:46:39] No one is gonna like, really feel bad for someone who's sitting on like $50 million at age 32. But in the valley, that is a real psychological issue.

[00:46:49]

[00:46:50] Paul Roetzer: Yeah.

[00:46:52] Cloudflare CEO on Replacing Employees with AI

[00:46:52] Mike Kaput: All right, so next up, somewhat related here. This past week, CloudFlare, CEO, Matthew Prince published a Wall Street Journal op-ed [00:47:00] explaining after he had sent out an employee memo why he laid off more than 20% of his workforce earlier this month, even as CloudFlare posted more than 30% revenue growth and strong free cash flow.

[00:47:12] Prince actually said he had not found another example in US business history of a public company growing more than 30%, laying off more than 20% of its workforce. But he predicted what we did is likely going to become the norm over the next year. So he references in this op-ed, framework from Peter Drucker, the Management Consultants 1954 book, the Practice of Management, and he goes into this and says, it divides every business into three roles.

[00:47:40] Builders who create products, sellers who sell them, and measurers, which Prince defines as everyone else, finance, auditing, legal compliance, middle management, operations, et cetera. Ai Prince argues is not coming for builders or sellers, but it is coming for measurers. He said that the vast majority of the people he laid off were [00:48:00] measurers.

[00:48:00] So CloudFlare cut middle managers across the organization, reduced its marketing team, trimmed back office, finance ops, other quote unquote measure roles. And in his original email, him and his co-founder. Said that, you know, AI is the reason that this is happening. They're restructuring around a world where builders and sellers are still very, very important.

[00:48:24] But AI is kind of increasingly filling that measure role. he actually said Cloudflare's own internal AI usage and increased more than 600% in the previous three months alone. Now Paul, this kind of happens, this was getting a lot of attention, but then something more recent happens that is getting probably just as much or even more, which is at the same time we had click up founder and CEO announce a 22% headcount reduction despite the business being the strongest it's ever been.

[00:48:55] Because, and this is very similar to CloudFlare, AI is fundamentally changing [00:49:00] both what is possible in a business and how organizations need to be structured. So this really does not sound like these AI washing claims that people have made in the past. These are really healthy businesses. Pivoting proactively towards what they perceive to be the new normal of like how a business needs to operate in the age agentic era.

[00:49:19] Paul Roetzer: Yeah, the people who are stuck on this, we're just solving for over hiring during the pandemic, are gonna need to find a new talking point because that is not what any of this is. so Zeb Evans is the Clickup one you mentioned. So Click Clickup is a project management software company. I'll, I'll just read a few excerpts from his because I, again, I, this one blew up.

[00:49:41] It was at 5,000,002 hours ago. It's at 6 million now, as I'm like looking at it before as we're reading this. So he talked about this reduction of headcount by 22%, but the business is strong as ever and he's gonna own this. He said this isn't about cutting costs. Most savings from this change will flow directly back [00:50:00] into the people who stay will be introducing million, million dollars salary bands.

[00:50:05] If you create outsize impact using ai, you'll be paid outside of traditional bands. He goes on to say, I only see two options. Wait for this to play out gradually in the market, or be honest about what I'm seeing in act proactively. Under a header, the a hundred x organization. He said the primary change is that we're restructuring on what I call a 100 x org.

[00:50:26] The goal is to 100 x output. The roles required to build at the highest levels are fundamentally different than they were a year ago. It goes on to say the common narrative is that AI makes everyone more productive. It doesn't. Many of the workflows of today, if left on change, create bottlenecks in AI systems.

[00:50:44] The roles are gonna evolve, but waiting for that to happen naturally means falling behind. In the a hundred x org, he says That actually is heavily dependent on people, infinitely more people than today. This is only possible with 10 x people that have embraced and adopted the new ways of [00:51:00] working. He then goes on to talk about what he calls these 10 X engineers under a header, the builders, agent managers, and the front liners.

[00:51:06] So, Based on what I was saying last week about the architect, the orchestrator, and the apprentice, I'm really intrigued by these like ways people are thinking about structure and everything. So he said, here's what we validated recently at clickup. The great engineers, the ones who can orchestrate, architect, and review, are becoming a hundred X engineers.

[00:51:24] They're not writing code, they're directing agents that write code. The skill is judgment. He goes on to say, the new world is about enabling your 10 X engineers to become a hundred x. He talks about product management and design, how they're kind of merging, how designers that have customer focus become more like product managers and product managers that have intuition for, user experience become more like designers.

[00:51:47] 'cause everyone can use AI to do everything. He said. Everything outside of managing systems, orchestrating AI and reviewing outputs becomes a bottleneck. Then he goes on to say, ironically, the people that automate their [00:52:00] jobs with AI will always have a job. They become owners of the AI systems or agent managers.

[00:52:06] we have many examples of these people at clickup. He said The underlying systems in which we operate are absolutely critical to get right. I think most companies are delusional to think they can iterate on existing systems and compete in this world. he said that in a world that becomes saturated with ai, with AI communication, the human touch will matter more than anything to customers one-on-one, meeting time with customers is something that shouldn't be automated.

[00:52:30] Systems around the meeting should be so that front liners spend 100% of their time with customers. This is actually. Exactly how I think about our customer success team with AI Academy. It's like, I'm gonna automate absolutely every piece of the customer success, success experience I can. So the more human element is that they're literally spending every hour of the day talking to people Yeah.

[00:52:50] And helping them in person on calls. Like that's what success to me should be, is like the human to human interaction. Yep. And so like, totally [00:53:00] like, automate everything else you can that doesn't devalue the experience to the user, to the customer. So, and then he talks about this whole idea of like, rewarding them with these crazy salary bands, which sound crazy today, but they're not, like, again, I, I think about my own, vision for SmarterX.

[00:53:18] It's like, you know, why can't you have one to 2 million in revenue per employee or even higher? Where traditionally it might be like three to 400,000 would be exceptional. It's like, why that's not exceptional anymore. Like, and then, but you take that. the profit gains from that, their operating margin that comes with the increase in revenue per employee.

[00:53:36] And you give that back to your employees, you cap what your profit is like. It's like, hey, we don't need to be more than 30% operating margin, whatever that number is. And beyond that, we're giving this back to our people. Like, and so that's, I think the kind of companies where people are going to wanna work that have this, it is not profit at all costs.

[00:53:54] We are going to run an extremely profitable company, but you will all benefit and hopefully have [00:54:00] an amazing culture in the process. Not live under the threat of, I'm just using you to record how to do your job so I can replace you in six months. Yeah. Yeah. and then I saw, I saw an interesting tweet as a follow up re retweeting Zbs, which was Howard Lehrman, who is the founder of Yext.

[00:54:16] He said everyone is obsessed with AI making a 10 x engineer a thousand x engineer. The recent reductions at CloudFair and and Clickup have me realize the plot is E. Equally about the inverse AI amplifies the negative impacts of poor performers, and this is really important. If a person with poor taste who makes mediocre judgment calls and doesn't properly build things, customers love is able to produce 10 x more work.

[00:54:41] Does the company even want that? Hell no. He said. Productivity isn't about as many people as possible. Token maxing AI is a double-edged sword, especially when it's used to produce net new work. If you give a bad artist a pen that can draw 100 times as fast, you're going to pile up with a lot [00:55:00] of junky artwork very quickly.

[00:55:02] And since it happens so quickly, leaders are now able to see who is Picasso and who is not, and adjust accordingly. So I just thought that was kind of like a cool perspective of like why, what I said last week on the show was, if you don't become AI forward, you have no job prospects in three years in any industry.

[00:55:18] Like whether you like ai, don't like ai, whatever your feelings are toward it. I, I, I, like I said then I totally empathize with people fearing the environmental impact, thinking it's stealing creativity and, you know, our, our ideas And like I get all of that and I'm a writer by trade. My wife's a painter by trade.

[00:55:35] Like I understand it. Hmm. But I'm just telling you that like you won't have a job if you don't embrace it and learn how to use it responsibly. And that's what this demonstrates. It's like every company I talk to right now is looking for the AI forward professionals in their current staff, and the ones who aren't won't be there in a year.

[00:55:55] Yeah. And they will replace them with people who are, who can do 10 x the work of the people who wouldn't [00:56:00] embrace ai. That is. Again, like I've, there's a few times where I've stressed on this podcast through the years, like what I think an inevitability is, and I have a very high confidence level based on the conversations I'm having every week, that that is what the future looks like across every industry.

[00:56:17] You are either AI forward or you don't have a job. And that's goes back to what I said three years ago about what does every company look like? It's AI native built smarter from the ground up. It's AI emergent, it's a legacy company that figures all this out and evolves or it's obsolete. And the obsolescence doesn't happen in like two months, six months, 12 months necessarily.

[00:56:37] But you wake up one day, you're like, oh, our business is cooked. Like we have nothing now. And I think that's how a lot of people's careers are going to be if they don't figure this out and like find a way to. Balance their own beliefs about ai, but still leverage it to, to be an impactful person within an organization.

[00:56:57] And that might mean going and working at a company that's [00:57:00] taking the most responsible approach possible to it. You will not find a company three years from now that isn't doing AI because they will be out of business.

[00:57:09] Mike Kaput: Yeah. And one just quick final note here, especially in light of the meta layoffs being the previous topic, I actually highlighted this in the CloudFlare CEO's message to the company.

[00:57:19] There was something really interesting, and I realize like layoffs are really fraught and there's a lot of PR out there, so take it with a grain of salt. But he wrote at one point, if we are asking our team to be world class, we have a reciprocal obligation to be world class in how we treat them. We are pairing the directness of these measures, meaning the layoffs with severance packages that lead the industry.

[00:57:42] The packages for departing employees will include the equivalent of their full base pay through the end of 2026. And then there's a bunch of other stuff in here. Only point being like if you are making these announcements while your business is doing really well, this seems like the appropriate messaging to pair with it and reading his letter, [00:58:00] whether you agree with it or not.

[00:58:01] Compared to the letter we read from Mark Zuckerberg is night and day and really, really interesting of like, I think there are ways to maybe do this in a more human centered way.

[00:58:13] Paul Roetzer: And I think that along those lines, Mike, of the BioPack and stuff, Jeff Bezos made a lot of headlines this week.

[00:58:21] Saying that he thinks that we should be eliminating federal income tax for the bottom half of us earners. That the people making all the money should just bear the burden of paying all the taxes. And that he was actually gonna lobby Trump personally on this idea. And so, I, I feel like we're entering a phase where you're gonna start hearing a lot of ideas Yeah.

[00:58:41] About how do we find a balance in society when the rich are going to get significantly richer. Yep. and, and the people in the middle are gonna stay in the middle or, or really struggle. and I, so I just, I feel like we're gonna start every week. Like someone, one [00:59:00] prominent is gonna have some new idea.

[00:59:02] About like I think Mark Cuban a couple weeks ago was like taxing tokens, I think was his idea. Like, so you're gonna hear all these theories. It's part of the reason why we put Andrew Yang on stage at MAICON. It's like, I want to, I want people who have ideas to like present those ideas to people. They might not be the solution, but like, let's at least start thinking about all these different ways we can do this.

[00:59:22] And I believe organizations have a responsibility to be doing what you're saying where you're. Try, especially if you're benefiting from that reduction, you better be finding a, some balance there.

[00:59:34] American Opposition to Data Centers

[00:59:34] Mike Kaput: Yeah. Okay. Next up. A Gallup poll released this past month. For the first time, they have measured public opinion on AI data center construction, and they found that 71% of Americans oppose having a data center built in their local area with 48% strongly opposed only about a quarter favor.

[00:59:54] It Gallup set the data center opposition explicitly against something that's also pretty [01:00:00] polarizing, which is nuclear power. So in this survey, 53% of Americans said they oppose a nuclear plant being built in their area, so less than the data center.

[01:00:09] Paul Roetzer: Wow.

[01:00:10] Mike Kaput: the high point for nuclear opposition since Gallup began tracking it in 2001 was apparently 60.

[01:00:18] 3%. So data centers are already more pop unpopular than nuclear has ever been at its worst. among the opponents, environmental concerns are really the big concern. So half of them cite excessive resource use with water and energy, each name by 18% as a concern. Another 16% mentioned pollution. There's quality of life concerns like traffic, economic concerns, like higher utility bills, and those account for kind of the remainder of the big concerns here.

[01:00:48] Among the people that do support them. Two thirds say they have economic benefits, 55% specifically named jobs. And interestingly, and we'll talk about this in the next segment too, what, [01:01:00] how this gets complicated, this crosses every major democratic group demographic group, but Democrats are much more strongly opposed than Republicans.

[01:01:08] 56% to 39% women, more strongly opposed than men, 55% to 43%. Gallup's conclusion here is that overcoming local opposition is now a major hurdle in the expansion of AI computing and AI infrastructures on track to become an important campaign issue in state and local elections this year. So Paul, I, I can't say this is like surprising to me based on the anecdotal stuff we've been talking about, but it's really interesting to see hard data on this

[01:01:37] Paul Roetzer: and it's something we're just gonna keep digging into because last week when we talked about the.

[01:01:42] Eric Schmidt getting booed at these commencement, but he wasn't alone. There's multiple instances of commencement speakers getting booed, talking about ai. A lot of the feedback I got and including some people, you know, professors in college said that they don't really hear as much about the kids complaining about impact on jobs.

[01:01:59] It's, it's [01:02:00] almost always environmental and like data centers in particular is a hot button issue. I found that intriguing to where like you and I, Mike were just like, okay, we gotta. Start digging more and more into what's going on here in Cleveland. We're seeing this, there's an effort right now in, in our hometown, to put data center in particular near the airport, I think is the one that's getting some issues.

[01:02:20] and there's some public backlash to that. I've seen some things for, in, in Ohio, we have a lot of, of, farmland In Ohio, it's pretty, yeah, if you've never been to Ohio, it's pretty flat and there's a lot of farmland. and so there's a lot of spots to drop data centers. There's water sources, and you're seeing this, this public backlash.

[01:02:39] so yeah, it's, it's a challenging issue. The nuclear one is wild to me that they like. Right. I, man. But so you know, again, like I don't wanna get into conspiracy theory stuff on this podcast. We always try and like keep this pretty straightforward in terms of how we talk about these things. I would just note that there's a couple of things at play [01:03:00] here.

[01:03:00] So one is you have to find the wedges in political campaigns that move people. If you see data that 71% of people don't like data centers, it will 100% become a major part of a political campaign. The other thing you have to be aware of is the geopolitics of foreign actors influencing public perception in adversarial countries.

[01:03:23] The US does this to other co, countries and other countries do it to us. If you see an issue that causes division within the public, or if you see an opportunity to slow down AI progress in the United States, the number one thing you could do would be stop data centers getting built and slow down energy infrastructure.

[01:03:42] So. If foreign actors see that the US population is starting to divide over a topic and that same topic may actually have a byproduct of slowing down US progress, then you may start to see things on social media from [01:04:00] accounts that aren't created in the United States pushing negative connotations of a thing.

[01:04:07] That is not to say that it doesn't have negative impacts on the environment. It's not to say that concerns aren't real. It's to say that when an opportunity emerges. Foreign actors use that opportunity and so like, I'll just kind of leave it at that for right now. But this is one that will, that will have multiple layers of complexity, including very real concerns about these things being built in local communities.

[01:04:32] Mike Kaput: Yeah, it's really funny, Paul, I say this like mostly jokingly, but I couldn't help but think of like an analogy to, I know you like this as well, the three body problem. Yes. Whereas like, you know, like the aliens try to kill our science as a species to hold us back while they try to get ahead essentially.

[01:04:48] I'm like, well, it's kind of could be happening here too. I don't know.

[01:04:51] Paul Roetzer: Yeah. I mean, if you like conspiracy theories, you're welcome. Like go ahead and start searching for the gist of what I was just explaining. And [01:05:00] I can almost guarantee you there's all kinds of information. I haven't gone down the rabbit hole.

[01:05:04] No. I'm just telling you how I know this stuff works. Having studied misinformation campaigns in the past and, what foreign actors will do. So yeah, it's just something to keep an eye on and something to maybe educate. People in your family about if they're not aware of how social media works.

[01:05:23] Mike Kaput: And one final note here, Paul, you had mentioned the commencement speeches.

[01:05:26] I actually pulled some, like deep research we had talked about kinda looking into, you know, there were these people booing at commencement speeches that we talked about last week, and we were kind of curious with the emails we were getting people saying it was because students don't like the environment, environmental impact of ai.

[01:05:42] but we wanted to look into what was going on. So I ran a few of these and just again, take everything with a grain of salt. But I have vetted these stats against the credible sources we found. And you know, I kind of teed it up four deep research and said like, Hey, here was the segment. Here's what we're trying to look [01:06:00] into.

[01:06:00] We're just curious, w especially younger Americans, where is the animosity coming from towards ai? And just give me like Gallup polls, pew research, Harvard Quin polls, stuff like that. So I'm just gonna read a few quick stats. So interestingly, according to the polling. F. The biggest thing is still jobs because 59% of 18 to 29 year olds view AI as a threat to their future job prospects.

[01:06:27] That's from the Harvard Kennedy School Institute of Politics. They did a fall 2025 poll. 81% of Gen Z believe advancements in AI will lead to a decrease in overall job opportunities. Quinnipiac University did a poll on that in March, just this past March. That's actually, maybe they're all answering our state of AI for business report.

[01:06:48] Yeah. Seriously, we were

[01:06:49] Paul Roetzer: 71%. Yeah.

[01:06:51] Mike Kaput: environment was still a big thing, but in it kind of stack ranked all the factors and it was like four out of five interestingly. And number two was actually, [01:07:00] what, what deep research categorized as cognitive atrophy, skill erosion, loss of meaning, and work. 80% of Gen Z believed that relying on AI to complete tasks faster will make future learning more difficult.

[01:07:12] That's from Gallup in April. third was distrust of AI outputs. And critically, I think the institutions deploying them. This one's pretty wild. This is not just young people, but only 5% of Americans feel that AI development is being led by people or organizations that actually represent their interests, which is quite cynical.

[01:07:33] One final note here. According to Edelman, 70% of us respondents, again, not just young people, believe business leaders, it's more likely that business leaders are not being fully honest with employees about AI related job cuts. That's part of that kind of institutional mistrust. And then of course, there is the environmental, depletion, 72% of Americans Express concern about the environmental impact of ai.

[01:07:58] So not to say it's not a [01:08:00] huge issue, but there's more going on here too, it sounds like, with younger generations.

[01:08:04] Paul Roetzer: Yeah. One note I'll add to this, Mike, I actually, there was a, a lady on Twitter, Ashley Mayer, and she had tweeted about the issue with Eric Schmidt, and I thought it was, it was a pretty good observation.

[01:08:18] She said, I'm seeing people trying to wordsmith Eric Schmidt's commencement address, and sure there was a lot of room for improvement, but my hot take is that there is no way that he or any leader in tech could deliver a broadly inspiring pitch for AI in this moment. These speeches are not. Happening in a vacu

[01:08:35] And anyone who is seen as an architect of this technology revolution has too much to gain to be a credible messenger. Mm. And so I actually replied, I said, this is a major challenge for the AI labs, that they are the ones building it. So it's really hard for them to be trusted to say the positive things if, if people have this negative perception and no matter what you say, they're just not gonna trust you.

[01:08:58] And that's why like [01:09:00] neutral voices are so important. It's part of why we do our very, very best on this show to be as objective as humanly possible and tell the good and the bad. Because my belief is a lot of these AI leaders are going to be viewed as the villains. And it's hard to overcome that when you are literally building it and admitting it's gonna reach the singularity and like.

[01:09:24] It, but you don't have a plan for what that means. Like it's a slippery slope for the AI labs right now, and the PR and comms is gonna be very, very challenging.

[01:09:34] AI's Political Civil War

[01:09:34] Mike Kaput: Yeah, no kidding. Alright, next up, kind of related just on the social and political level, there's two stories this past week about kind of how fractured a, the AI political debate has become.

[01:09:45] so first, there's, the new AI industry pac, leading the future, which we've talked about before, has actually poured more than a million dollars into the Democratic primary to defeat state assemblymen Alex Boris. it's a lawmaker who [01:10:00] championed New York's recent AI safety law. This PAC is backed by Andreessen Horowitz openAI's President Greg Brockman and Palantir co-founder Joe Lonsdale.

[01:10:09] But interestingly enough, Boris has also raised more than $364,000 from employees at top AI labs and $420,000 from workers at AI safety organizations. Anthropic employees led the corporate giving with like $168,000. But even Google, openAI's, Palantir, Microsoft, and Meta employees also chipped in. Now second, we had a bunch of stuff come out this past week about the Trump White House preparing an executive order that would establish a voluntary pre-release review process for frontier models that basically they were proposing under this framework, labs would share new models with the government at least 90 days before public release and grant access to certain critical infrastructure providers.

[01:10:54] it looks like though, Paul, right before we kind of went on air, that last minute [01:11:00] lobbying by the tech industry may have killed this fully. So I kind of just wanna get your sense of like, what's going on here. We've got literally, I feel like people in AI are both divided, but also we don't know where, this is not a, the US or them issue.

[01:11:14] There's people on all sides that are lobbying for and against and everywhere in between.

[01:11:20] Paul Roetzer: Yeah. I was kind of shocked that the executive order was gonna happen because, There is so much backlash even within the Republican party to this. And so on Wednesday it gets leaked that they've invited like a dozen or more executives, including Amodei and Altman and Musk and all these people for the next day to the signing of this executive order.

[01:11:40] Yeah. And I was like, one, that's a really weird list. There's no way all those people are showing up on like 24 hours notice. Yeah. but then, yeah, it comes out that David Sachs calls Trump because he gets read into the executive order earlier this week and calls him direct and he's like, you can't do this and it's basically gonna destroy our efforts to take on [01:12:00] China and whatever else.

[01:12:01] And then there was a couple articles 'cause it's all happening so fast. It's like, oh, Elon Musk also called, well, Musk tweet. He's like, no, I didn't, like, I didn't even know about it. Like I still don't know what's in the executive order. I didn't call him and like tell him not to do it. So yeah, it's like some of the labs want.

[01:12:15] Like more governance. Some don't. Some Republicans want more governance, some don't. Some Democrat. It's so wild. And then the only executive order that actually happened this week ends up being Governor Gavin Newsom in California.

[01:12:29] Mike Kaput: Yeah.

[01:12:29] Paul Roetzer: So his is about, to explore an overhaul of labor policies to deal with potential mass job displacement from ai.

[01:12:36] So. Wild and like, it doesn't, I don't know. The executor doesn't get, I mean, it's, it's Washington shit could change by the time we finish recording this, but like, it sounded like sex talking points were the same talking points he's always had around this. I don't know why it would make a difference, like morning of or night before that you got a call and said the same thing and now all of a sudden it [01:13:00] like means something different.

[01:13:01] I don't know. The whole thing seems like a cluster. I, I have no idea what they're doing. but I think that that, that executive order anticipation of it is what was holding up, potentially holding up the 3.5 Pro from Google. And Sam Altman has said publicly now that they have another model internally at OpenAI that is doing crazy things.

[01:13:21] And so there's rumor it's 5.6, like GPD, 5.6, but that, that also is being held up by what was gonna be an executive or around voluntary vetting of these models. So who knows?

[01:13:34] Mike Kaput: Yeah. We'll, we'll see how it all plays out. But I want, I do just speculate and wonder how much of the societal or narrative backlash is starting to affect the administration because there are cracks appearing in the facade.

[01:13:46] Yeah. Because previously it was just go, go, go.

[01:13:48] Paul Roetzer: Yep. Yeah. They're gonna have to do something. Especially, yeah. If the data centers, and I don't, I mean, I don't, I don't know. I don't even write the, what you even say this, [01:14:00] There's a lot of like rural areas where data centers would go.

[01:14:04] Mike Kaput: Yeah.

[01:14:05] Paul Roetzer: And so you politically, you have to like understand the demographics of where these would be built and what voting base that is.

[01:14:13] Mike Kaput: Yep.

[01:14:14] Paul Roetzer: And so, yes, I would imagine there might be polls that are coming out that are saying, whoa, we gotta be really careful here. Yeah. That would push for regulations.

[01:14:24] Mike Kaput: Yeah.

[01:14:25] Paul Roetzer: And then there's where all the money's coming from that drives the campaigns.

[01:14:29]

[01:14:29] Paul Roetzer: that don't want the re I don't know, man, it's so bizarre.

[01:14:34] It's like so many levels of complexity to this one too.

[01:14:37] Anthropic v. the Department of War (Again)

[01:14:37] Mike Kaput: Well buckle up. 'cause you know, speaking of complexity in politics here, we also have kind of a resurgence, or at least the continuation of this Anthropic versus the Department of War debacle that's been happening. So on May 19th, the DC Circuit Court of Appeals held heard nearly two hours of oral arguments in anthropics appeal against the Department of War, which we have talked about [01:15:00] at length.

[01:15:00] the May 19th panel of three circuit judges appeared divided on what they heard. So one of the judges was the most pointed against the Department of War. They called this designation of a supply chain risk spectacular overreach. this judge, said they saw no evidence. The Department of Words supported its claim that Anthropic is a bad actor.

[01:15:22] The other two judges were more skeptical of Anthropic. One of them noted that this is the first time the underlying 2018 statute is being interpreted by a court and stressing that this panel needs to be clear about what is even reviewable by them. So the court essentially ends up issuing a written opinion here.

[01:15:41] and one, until that happens, this is kind of still in limbo. And I'm curious, Paul, like if Anthropic like loses this appeal, like they're, they're, they're still in the doghouse, right? They're still designated a supply chain risk.

[01:15:54] Paul Roetzer: I don't know. Mike. All I can picture is that the executive order actually was signed on Thursday and [01:16:00] Dario Ode, who was invited to be there, was there in the, in the Oval Office.

[01:16:05] Right. While the government is considering them a supply chain risk. Right.

[01:16:08] Mike Kaput: Right. Like

[01:16:09] Paul Roetzer: the optics of that would've been amazing.

[01:16:11] Mike Kaput: Yeah.

[01:16:11] Paul Roetzer: I have no idea man. I, I like, again, the way the administration functions is you can be their, their. Their villain and their hero like in the same day. Like, we've seen it with Elon Musk.

[01:16:27] Like they, they just like hated each other and they're trashing each other and like the worst things you could say. And then like a, a week later it's like sitting at a game together, like, I don't know. Right. It just, it literally is just which way the wind blows. I'm sure they're talking to Anthropic daily across all, like NSA, like all these other departments are in conversation with 'em because of mythos and where the max models are going and things like that.

[01:16:51] and then like simultaneously they're like, oh yeah, yeah, sorry about that lawsuit, but like, we'll just keep going. We'll figure that out. Like, but yeah, let's do a deals in the meantime. And I don't know, it's just so [01:17:00] bizarre. It's, it's kind of like Silicon Valley without living there is really hard to.

[01:17:05] Process that, that, that's reality. Yeah. I feel that way about Washington all the time. I'm like, I, unless you're there, and even when you're there, it probably doesn't feel like reality a lot of times to people on both sides of the aisle. It's probably just totally, every day you go through you're like, this is like not real.

[01:17:21] Right? Like what, what we do every day.

[01:17:22] Mike Kaput: Right. It's like more of, comedy or drama than anything you see on tv.

[01:17:28] Paul Roetzer: Yeah. It's like, yeah. It's like, yeah, like TV shows and you just, like every day you, you shake your head like, I can't even believe that that was my day today.

[01:17:35] AI Use Case Spotlight

[01:17:35] Mike Kaput: Yeah. Yeah. Okay. So next step we have our AI use case spotlight.

[01:17:39] So every week we're giving you a quick look under the hood at the real AI use cases we are exploring, building, or deploying in our work at SmarterX. So Paul, I'm going to share a quick one and I think you've got one too to share and we could talk through that

[01:17:52] Paul Roetzer: Sounds good.

[01:17:53] Mike Kaput: So for me, this one is not actually like a single tool and use case.

[01:17:57] this is more like around workflows and like [01:18:00] methodology that I've kind of started to experiment with, and rebuild kind of my entire workday around what AI enables. Now, I'm not remotely close to the final vision of this, but I wanted to kind of share it in case it's helpful. So, you know, I kind of like sit down at my desk every morning and start thinking about like, what should AI be doing for me or could be doing for me while I'm working on kind of my most, one most important thing for the day.

[01:18:23] Because like, I personally think even in the age of ai, like single tasking is more important than ever in certain contexts because there's things I like need to put my full attention on with like sustained maximum cognition and deep work and not be interrupted. And even if I'm using AI to do that, it's gotta be like one thing at a time.

[01:18:44] I think for me to really create as much value as possible. So it's really hard to just say, let's fire a swarm of agents. And go do your work while they work because then you're getting pinged every like three or five or 10 or 15 minutes, your context switching. You have to switch [01:19:00] complete completely how you're thinking about problems.

[01:19:02] There's no way to do deep work this way. So I've been trying to figure out like what is the balance there? So I kind of just started experimenting with how to restructure to draw some type of balance. And where I've kind of landed on is like every day my workday starts by sorting work into two piles.

[01:19:20] Pile one is everything that can be like essentially handed to an agent, and I'll come back to that in a second. I fire that off in the background first. Close that window away, like put it outta sight. Pile two is like my sequential list of like, here's the most important thing I need to focus on and complete.

[01:19:37] Then the next thing, then the next thing. Go do that with your full focus while these agents run. The agents then come back with the results and I review those when I'm ready to take a break from, you know, my single tasking and all of that. But the key here is like you have to be essentially iterating constantly because the agents can only really go do stuff they've been taught to do.

[01:19:59] If there's [01:20:00] any requirement for review, refining, going back and forth, I need to actually stop everything and build a skill for Claude code, for instance, to go do that thing before this can work at all. So I've kind of got this almost like iterative cycle. It's like, Hey, do we have skills for it? Great. Go do those things while I work on this important thing.

[01:20:19] If we don't have skills for it, I gotta drop everything, build one, and so on and so forth. So I kind of try to do this every day. It's working reasonably well, but it's definitely like a weird thing to get used to, I would say.

[01:20:31] Paul Roetzer: Now, is this primarily in cowork or where, what are you using as platform? It's platform.

[01:20:34] Mike Kaput: Yeah. It's like a, a range of different things, but mostly like either Claude, the web app or Claude code, just to sometimes build skills faster, but yeah. but yeah, I would say combo those two. But you could, you could transpose this to basically any type of workflow, I think.

[01:20:50] Paul Roetzer: Yeah. That's cool.

[01:20:52] Mike Kaput: Yeah.

[01:20:52] Paul Roetzer: yeah, my, I, I would just, I'll give a brief one.

[01:20:54] So I've been working on a, a very high level. [01:21:00] Longer term project, I'll say that deals with finance, legal, operations, accounting, all sort of wrapped into one desired outcome. I, I guess I'll just gonna leave it at that. and so it requires me to quickly learn advanced topics and then be able to have very educated discussions with my accountants and my attorneys.

[01:21:25] And so I will have a meeting. I know we're gonna talk about like five topics that I am not an expert in. And so I will prep for that. It's like what questions do I need to ask? I will understand topics that we're gonna cover in real time in the meetings, I will have a thread open and it's like, okay, I don't understand this concept.

[01:21:42] Explain this to me in more simple terms, or because it exists within a project within Claude or ChatGPT, and this ex specific example using Claude. And so I have a project open, it's trained on all the knowledge base, it knows all the previous chats around it, so it has all the context it needs, and it's able to help me in real [01:22:00] time, like analyze things and ask the right questions.

[01:22:02] So I would just say. The, you know, the predominant use I often have for AI is as a thought partner and advisor. And this is like hardcore relying on it heavily in that role and then follow on documents and analysis of the meeting notes, things like that, where I'm just like, over the next three months, it'll be my sidekick for everything I do with this project.

[01:22:26] And so the continual use of the memory, the context windows, the knowledge base, becomes essential for me to, to execute the thing I'm working on.

[01:22:36] Mike Kaput: Yeah. That's so cool. I feel like people, underrate how valuable that context is over time. It's not just about getting like an answer or a support, support on a decision in the moment.

[01:22:46] It's about a month from now, you have this built up context that helps you make a better decision.

[01:22:51] Paul Roetzer: Yeah. And peace of mind. And there's artifacts that need to get created along the way. So like you, as a result of the meeting, I have to now go, go do things and I'm not, it's not [01:23:00] something I'm involving the team with.

[01:23:01] I mean, some of the teams knows what I'm working on that they, they will know what I'm talking about as I'm talking about it. But like, there's pieces of things that have to get created that I have to be the one to, to design and, and bring to the finish line. And so me and Claude are doing that together's awesome.

[01:23:15] Like whenever I need to, that's create something, an interactive HTML file, a deck, things like that. It's all just me and Claude pretty much.

[01:23:22] Mike Kaput: That's awesome.

[01:23:23] Paul Roetzer: Yeah.

[01:23:24] AI Product and Funding Updates

[01:23:24] Mike Kaput: Alright, Paul, as our final segment, AI product and funding updates. So I'm gonna run through these very quickly as we wrap up here. So first step openAI's is preparing, as we talked about, to confidentially file for an IPO as soon as this week.

[01:23:37] targeting potentially a September public debut at a valuation that could exceed $1 trillion. openAI's AI also said an internal general purpose reasoning model. Disproved an 80-year-old Paul Erdos conjecture. Indiscreet geometry is a very, very famous math problems. And basically this proof was validated by Fields [01:24:00] medalist Tim Gowers and other external mathematicians.

[01:24:02] So TLDR is that AI was capable of solving some of the world's hardest math problems. Now. OpenAI also launched something called guaranteed capacity, a new enterprise offering that lets customers lock in reserved OpenAI compute through one, two, or three year commitments in exchange for discounts that increase with annual spend available on a first come first serve basis until the reserve capacity sells out.

[01:24:29] openAI's has also announced it's become a C two PA conforming generator and is adding Google DeepMind synth id, invisible watermark to images generated through chat GPT Codex and the openAI's API, alongside a public preview verification tool that lets users check whether an uploaded image carries provenance signals.

[01:24:50] Anthropic disclosed a roughly $45 billion compute deal with SpaceX like we talked about, and SpaceX publicly filed its S one with the SEC for what would [01:25:00] be the largest IPO in history right now. they're looking to raise up to 75 billion at a roughly 1.75 trillion valuation with a roadshow scheduled for June 4th pricing on June 11th and trading as early as June 12th.

[01:25:15] The AI risk assessment nonprofit METR, published its first Frontier Risk Report based on a February to March pilot exercise inside Anthropic, Google Meta and openAI's concluding that the lab's most capable internal AI agents could plausibly initiate small unauthorized deployments, deceive monitoring humans and bypass security measures.

[01:25:40] Paul Roetzer: No big deal.

[01:25:41] Mike Kaput: No big deal at all. That alone could be a whole episode, I would imagine. CloudFlare, in addition to the other news we talked about, published a defensive evaluation Anthropics unreleased mythos preview model. This is under the Project Glass Wing access program we've talked about. They find the model could [01:26:00] chain previously low severity bugs across more than 50 internal CloudFlare code bases into single high severity exploits and write working proof of concept code.

[01:26:11] CloudFlare warn that the model's organic refusals were not consistent enough to serve as a complete safety boundary. Again, no big deal.

[01:26:18] Paul Roetzer: How does, how does cybersecurity experts sleep at night?

[01:26:21] Mike Kaput: Maybe they don't.

[01:26:22] Paul Roetzer: I get asked that sometimes with ai, but it's like, man, I look at that world and I just like,

[01:26:27] Mike Kaput: I mean, you just have to accept like something is always gonna go wrong, I guess.

[01:26:31] Paul Roetzer: Yes. And there's like a thousand things going wrong that you don't even know about yet.

[01:26:35] Mike Kaput: Yeah. I wonder if you're a cybersecurity person, chime in. I'd love to know. And also how we can help. 'cause it's not a, it's a stressful time, man. Nvidia reported some earnings. They reported revenue of 8 81 0.6 billion for Q1 FY 27, up 85% over year over year with data center revenue of 75.2 billion, up 92%.

[01:26:58] they raised [01:27:00] actually their quarterly dividend from 1 cent to 25 cents per share. So 25 fold increase. And finally, McKinsey announced something called the ACORN Plan, an overhaul of partner compensation that reduces the cash portion of partner profit shares, to from 95 to 90% and shifts more compensation into equity.

[01:27:22] And the important part is this is framed by the firm as a response to AI and outcome-based pricing, making consulting revenues more volatile, both points that we have mentioned time and time again as how would

[01:27:34] Paul Roetzer: you like to be an NVIDIA executive announce that your revenue is up 85% year over year when you're already on a historical like.

[01:27:43] Stretch and your stock goes down 1% the next day. It's

[01:27:46] Mike Kaput: Yeah, that's like,

[01:27:47] Paul Roetzer: that's

[01:27:48] Mike Kaput: just offensive. I mean, if you're one of that, I'd just buy more stock, I guess.

[01:27:51] Paul Roetzer: Yeah. I mean, all they care about is like, well yeah, but three years from now, is the demand gonna be so high? It's like, geez, man, you just can't win. I mean, you [01:28:00] can't, no, I don't, again, I don't feel sorry for anyone in Nvidia who have been minted a hundred dollar, a hundred millionaires, like a hundred million or more.

[01:28:08] Mike Kaput: Right.

[01:28:08] Paul Roetzer: 'cause there's a whole bunch of multimillionaires in that Nvidia staff, but. Tough go when you're putting up those numbers and people are like, yeah, nah,

[01:28:19] Mike Kaput: nah,

[01:28:20] Paul Roetzer: better luck next time.

[01:28:21] Mike Kaput: Yeah. And one final announcement here, Paul, our AI pulse survey, like we talked about, go to SmarterX.ai/pulse and this week we're gonna be asking about a little bit about your own search behavior, given Google's changes to search.

[01:28:35] And also we're asking about how you think about your employer's honesty, about how AI will affect jobs at your company. We'd love to hear your input. Takes a couple minutes to fill out maybe 30 seconds, honestly. So if you go to SmarterX.ai/pulse, we would love to hear from you, Paul. We, we, you know, made it to the end of another week.

[01:28:56] Paul Roetzer: I don't feel as depressed as I did after the last episode, so a

[01:28:58] Mike Kaput: hundred percent this is a lot [01:29:00] better.

[01:29:00] Paul Roetzer: It was a little bit more balanced and yeah, I'm feeling a little bit more upbeat about AI today. So hopefully you are all listening are also yes, feeling a little more positive today. All right, thanks Mike.

[01:29:11] Mike Kaput: Thanks Paul.

[01:29:13] Paul Roetzer: Thanks for listening to the Artificial Intelligence show. Visit SmarterX.AI to continue on your AI learning journey and join more than 100,000 professionals and business leaders who have subscribed to our weekly newsletters, downloaded AI blueprints, attended virtual and in-person events.

[01:29:29] Take online AI courses and earn professional certificates from our AI Academy and engaged in the SmarterX Slack community. Until next time, stay curious and explore ai.

 
Claire Prudhomme

Claire Prudhomme is the Marketing Manager of Media and Content at the Marketing AI Institute. With a background in content marketing, video production and a deep interest in AI public policy, Claire brings a broad skill set to her role. Claire combines her skills, passion for storytelling, and dedication to lifelong learning to drive the Marketing AI Institute's mission forward.

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