Inside a 'Weird Economy,' a Rare IPO, and the State of AI

From a business news standpoint, the first few months of 2024 had it all: the rare IPO of a social media company, a very strange economic situation facing founders, and enough developments in artificial intelligence to train a new LLM. Inc.'s editors have been chewing over all of it. In this roundtable episode of From the Ground Up, we hear from Inc. reporter Ben Sherry about the state of AI use in the American workforce, the latest in the AI safety debate out of Silicon Valley, and what's going on within OpenAI. New Inc. editor-in-chief Mike Hofman discusses the unusual state of the American economy, and how entrepreneurs are feeling amid wildly mixed signals from the Fed, consumers, and what seems like a cooling labor market. "We have a real mismatch, I think, in the labor market," Hofman says, "and entrepreneurs are trying to figure out how to both benefit from that by creating opportunities for their companies to supply larger companies, but also how to compete for talent with other folks," Hofman says. We also examine what's happened at Reddit since its March IPO--and how the massive community-based social network finally, after years of false starts, made its unusual public debut. For the full episode, click on the player above, or find What I Know on Apple Podcasts, Spotify, or anywhere you listen to audio. What follows is the raw transcript of this episode of From the Ground Up. Diana Ransom, co-host: I am Inc. executive editor Diana Ransom. Christine Lagorio-Chafkin, co-host: And I'm editor-at-large Christine Lagorio-Chafkin. Ransom: And you're listening to From The Ground Up. Today's episode, Quarterly Review. We asked a few key people here at Inc. about some of the most important topics in business for the past quarter. Lagorio-Chafkin: Right. We talked about some little-known factors in the Reddit IPO and the company's relationship with AI. We also spoke to staff reporter Ben Sherry about this quarter's AI headlines. But first, there have been some developments inside Inc. lately, and we have an important introduction to make. Ransom: Joining us is Inc. editor-in-chief Mike Hofman, and we have reporter Ben Sherry. Thanks for being here. Mike Hofman: I'm excited. This is fun. Ben Sherry: Thanks so much for having us. Ransom: Welcome all. So, Christine, let's kick off a little bit by talking about some things that are new at Inc. So we just, in April, launched our Female Founders package. Tell us a little bit about one of the cover stars that you covered. Lagorio-Chafkin: Yeah, absolutely. I love that we're starting with all about us instead of all about the business news. But yes, our Female Founders package came out in April and I had the privilege of writing about Cloudflare and its co-founder Michelle Zatlyn, who we put her at the top of the list for a couple reasons actually. Firstly, she's at the helm of this company that is one of the backbones of the internet, of the global internet. It protects about a third, almost a third of the global internet. And that's really important ... Ransom: That's shocking. Lagorio-Chafkin: It's a shocking number. I think it's between a quarter and a third right now, but it's really important this year in particular because in 2024, it's not just the U.S. that is holding national elections. It is half of the world. Ransom: It's like 64 countries. Lagorio-Chafkin: Half of the global population will be voting in a national election this year. And Cloudflare goes a long way for protecting even municipal sites online, keeping them up, keeping information up for voters in the face of election fraud and disinformation and attempted electoral interference. So very important company, but also I thought they were very impressive because they do a lot of giving back. A lot of that work is pro bono. They protect the work of journalists, work of organizations that keep factual information online around the globe, and schools too, municipalities as well. So they don't siphon out their non-profit work really. I mean, they don't call it a nonprofit internally. They don't have just one employee who is dedicated to doing that work, or as so many companies sort of do, they have it worked into their regular workflow. So as soon as a small government school, nonprofit is onboarded into their process, like regular engineers, regular folks in the company take on the work just as if it was a paid customer like Google. Ransom: Yeah. I also love that she's a female founder who runs a publicly traded company, and there are precious few female founders who do that. Lagorio-Chafkin: Yeah, absolutely. Ransom: And then the origin story with the lava lamps wall, got to love the lava lamp wall. Lagorio-Chafkin: Well, that's just a fun detail. In their headquarters in San Francisco, they have this sort of remnant of their early days, which is a bunch of lava lamps. There's about 100, and they're not just cute dorm room-esque decor. They provide part of the secure encryption keys that make Cloudflare run. Ransom: They actually do? Lagorio-Chafkin: Yes, they work. Okay. So there's cameras facing them in the lobby area. And so ... Ransom: I thought it was metaphorically. Lagorio-Chafkin: No. Ransom: Wow. Lagorio-Chafkin: So these cameras are sort of taking images every few seconds of the lamps, and therefore the movements, which are inherently random, but it's not just the lamps, it's people walking in front of the lamps too that are forming the image which forms part of a secure encryption key. Hofman: It's like kitsch with a purpose! Lagorio-Chafkin: Totally. Hofman: Strategic kitch. Ransom: I love it. That's a great detail. So another thing that's new at Inc. is Mike. Mike Hofman. Welcome aboard. Hofman: Hello. Hello. Ransom: So two months now on the job? Hofman: Yeah, yeah. I joined Inc. at the end of March and my first day was actually going to South by Southwest to host the Inc. Founders House there. And also just recently hosted the Inc. Founders House in Philadelphia, which was great to get out and to meet the founders and entrepreneurs who love Inc. and who we love. It's been really fun so far. Ransom: Yeah, absolutely. We've been keeping you busy. This is impressive. Hofman: Yeah, yeah. And this is also a return for me. I spent the first 15 years of my career at Inc. as a young reporter. Inc. was at the time headquartered in Boston and still owned by our founder, Bernard Goldhirsh, and then moved to New York with Inc. And so I'm really delighted to be back and this is such amazing brand and such an amazing audience to write about and think about and to interact with. Ransom: So speaking of our amazing audience, when you were in Philly, what kind of conversations were you having? What were some themes that jumped out at you? Hofman: Well, it's really interesting. It was a great audience and people were really upbeat and excited and enthusiastic about their companies. And at the same time, they were talking about how running their companies was difficult. This is a weird economy right now in a difficult time. And it's sort of a tale of two economies where you can have Nvidia have become the second-highest company in terms of valuation on the public markets right now, which is amazing. And obviously the AI boom, which Ben's going to talk about and the chip boom. And then at the same time the GDP is slowing down and was just revised downward for the first quarter. And the jobs reports are, we have another one coming up between the time we tape this and when this is published. But there's obviously a sort of tightening or cooling labor market. And it'll be interesting to see as we go into the summer, is the economy still growing? The folks in Philadelphia were really upbeat and excited and ... Ransom: As entrepreneurs are. Hofman: Yeah. Doing things with TikTok. But that was a big theme, but it was really interesting to talk about. Ransom: They were filming TikToks while you were there? Hofman: They were both making TikToks, but also everybody had a TikTok marketing strategy. It's definitely something that this generation of companies is really focused on. So it was great to be there. Ransom: Wow. And I also love how small businesses in particular, the Fed is really looking to see in terms of the labor market and whether they're going to move rates. So this is to be, we're sort of at the leading edge of what's actually going to move the needle for interest rates. Hofman: It's also, it's such a funny job market because the job market for engineers and developers and nurses, and there are lots of categories where people are really desperate to hire. And then there are at the same time with mass layoffs in tech and other large companies, you're seeing people have a hard time finding a job that fits their skill sets. And so we have a real mismatch, I think, in the labor market and entrepreneurs are trying to figure out how to both benefit from that by creating opportunities for their companies to supply larger companies, but also have to compete for talent with other folks. Ransom: Did you get any sense of the strategy for dealing with the uncertainty? Hofman: Well, entrepreneurs are exuberant and optimistic by nature and have this sort of, can-do, I-can-fix-it attitude. So I was talking to one group and they were really funny, I thought, because I said, "Well, what's the hardest thing about sales right now for an entrepreneurial company?" And they were mostly in software and they said, "Well, it's really hard because nobody has any budget." And I was like, "Okay, well that seems like a big problem if you're selling into companies and they don't have any money to pay you with." And they were like, "Right, that's totally a big problem. But what you have to do is ..." And then they sort of laid out the pipeline that they have for nurturing possible accounts for the future. So they have this sort of spirited can-do attitude that even in the face of a lot of noes, obviously entrepreneurs are very resilient. And I think that they just sort of feel like the uncertainty right now is perplexing, but let's just push through it. And, you know, some group of them will and others I think will have a hard time. Ransom: Yeah. I love the can-do attitude. It's so reassuring for all of us regular people. So speaking of totally opposite from regular people, irregular people, let's talk about AI for a second. You, Ben, not you. Obviously the topic of conversation recently has been about Google's changes to overviews or even just the adoption of overviews. But I'd love to have you give us a sense of the land in terms of how small businesses are reviewing what's happening right now and how are they using it? Sherry: Yeah, so I've been pretty heavily reporting on AI for the last roughly two years, pretty much since right after I got to Inc. And basically have seen the transition happen a few months after I got here, ChatGPT launched and kind of everything changed after that. And so I think that what I've heard from entrepreneurs is that 2024 is the year of actually taking all of the experimentation that they had been doing in 2023 and actually codifying those policies and putting together plans. And that's a really big deal because there are a lot of studies out, there's this Microsoft study that basically says that 78 percent of the workforce is using AI at work, even if their workplace doesn't tell them to or have any policies in place around it. So people are going ahead and using the tech because they see opportunities for it to be useful at work. Ransom: But they're also being secretive about it? Sherry: Yes. And I think that a big part of that is because people feel that it's a cheat or a hack or a shortcut, and that if they were found or outed for using generative AI, they would be looked at as lazy or not really doing the job that they were hired for. And I think that most entrepreneurs and business leaders would say, "If the work is getting done and it's getting done faster and cheaper, then I'm all for it." But I think it's really important for companies to be putting together policies and guidelines so that anybody ... There's no confusion about whether or not AI is allowed or where AI is allowed. Ransom: Or you're going to get in trouble if you do adopt it. Sherry: Yeah, exactly. I think people are worried. Yeah, they're worried about getting caught getting in trouble, and it definitely is a problem that needs to be addressed. I say that to a lot of entrepreneurs, just, "Your employees are using AI, even if you don't know about it, they are using it. So it's better to understand how they're using it and how they're using it to do their jobs better and then make a policy from there." Ransom: But aren't we all really using AI all the time? Even if you do a Google search, based on this overviews AI thing, aren't we? Lagorio-Chafkin: Yeah, it just comes up. It's in your search. Absolutely. Ransom: Yeah. So I feel like whenever I see those stats of, "75 percent of your employees use AI." It's like, yeah. Lagorio-Chafkin: Of course. Ransom: Why isn't that more? Sherry: At the end of the day, obviously there's a lot of marketing speak. This is a product that they are aggressively trying to sell to enterprises, to individuals. So I think that yes, it probably isn't as prevalent as some of these studies would lead us to believe because of some of the vagaries and the ways that things are stated. Companies have been using AI and machine learning for decades. We recently ran a story in a recent issue of Inc. about ways that companies are using AI, and we didn't just look at generative AI. We looked at machine learning, and one of those companies was Neptune Flood Insurance, which is a company that basically developed a quote generator to basically give people quotes for flood insurance. Lagorio-Chafkin: This is an unlikely company because it's a very difficult market to do flood insurance in Florida, which is where he's based, but yes, absolutely. Ben, I was just talking to this serial entrepreneur who said immediately at the launch of ChatGPT, he talked to his employees. He said, "Listen, you guys are all allowed to use this. Use it for anything. Try it out, but know that you are responsible for your own work and the quality of your work." Hofman: I think that's interesting. I talked to somebody at one point who said that generative AI makes being mediocre very easy, but if you don't then take the next level of your mediocre work and turn into something special, that's where you're falling short. And maybe that's where either some of the disconnect between CEOs and the people who work for them, or managers and their staff, or clients who are getting decks from you. If the work is not great, it doesn't matter if you spend all day working on it or if you cooked it up on ChatGPT in just a couple of minutes. Sherry: Yeah, If I'm putting together a website and I want to outfit it with photography of a product or of people, maybe I'm putting together a concert company or something, and I say, "Generate some images of people having fun at a concert." I think it's very obvious when an image is AI-generated at this point. It's been enough time that we're all pretty good at figuring that out. Unless it's been very heavily prompted and engineered, then it might look a little bit better. But if you're just going to go very rudimentary and just sort of say, "One sentence prompt, it has what I want. I'm going to put it up," that might be seen as being cheap or lazy. I think that it's definitely important to think about how your AI use is being perceived by your customers, and also your investors and just your employees even. How are they feeling about how much effort and work is being put into the presentation of the company? Lagorio-Chafkin: But we're not in full AI backlash yet, right? Hofman: I was going to ask, where do you think the AI safety debate is right now? Are people still really worried about it, or do you think that that has cooled a little bit in sort of the post-OpenAI? Ransom: Wasn't there just another open letter calling for the end of humanity or saying that AI was going to--not "calling for." Sherry: Bring it on, honestly. Hofman: A bot wrote that. Sherry: Yeah. Did an AI write this? Ransom: No, it was DeepMind. Sherry: Yes, some former DeepMind and OpenAI employees. Ransom: Yeah, and even some anonymous OpenAI employees. Sherry: Yes. And a few Anthropic employees, I believe. Ransom: Right, right. Sherry: Yeah. I think that ... Ransom: And to be clear, they were not calling for the end of humanity. They were just saying that AI is going to bring about the end of humanity, just that. Sherry: They were basically calling for their NDAs to be lifted so that they can talk about the concerns that they have, about the ways that some of these bigger companies like OpenAI are potentially chasing profits and being first to market over very rigorous safety standards. Sam Altman had made a very big deal about dedicating 20 percent of OpenAI's compute to the Superalignment team, that it was supposed to be fully dedicated to exploring all of the potential issues and societal problems that generative AI could come up with. And it came out pretty quickly that they were getting a fraction of that compute, and that team pretty much entirely left. And now I think there's a lot of worry that these companies, that OpenAI was founded as a nonprofit, then became a for-profit company because it wanted to fundraise enough so that they could develop the technology to create artificial general intelligence, basically an AI that's as capable of completing tasks as a human. They needed to become, they needed capitalism, basically. They needed the public's money and consumers and enterprises. And so at what point does chasing dollars sort of supersede ,,, Ransom: Yeah, the profit motive? Sherry: At what point does that supersede the very high-minded safety standards? And also, how much do businesses care? If you look ... Yann LeCun, who's the Meta's chief technology officer, I believe we'll have to check that, he basically has come out and said that a lot of these people that are kind of forecasting doom and saying, "Maybe the world is going to end in a few years are," he basically calls them doomers, and that's a word that I've seen a lot online, is basically there are people that have very strong feelings about the potential for harm of generative AI. And then there are people who say, "Imagine if the Wright brothers were so concerned about planes carrying bombs back in 19, whenever they were creating their first airplane ..." Ransom: That's so dismissive. Sherry: Yeah. Ransom: Isn't it? Sherry: Yeah, right. It is dismissing it. It's saying like, "Oh, well, if we were going to be worried about future technology, why would we innovate ever?" And to a certain extent, I get that; you can't be so worried about the future that you do nothing, but you also need to be cognizant of using dangerous technology and how to use it responsibly. Ransom: Yeah, I agree that we're sort of in this netherworld of whether ... is it a good thing? Is it not a good thing? We don't know at this point. I think the concern, Mike, to your point, I don't think that has been resolved yet. Hofman: Yeah. I would say too, whether it's a good thing or a bad thing, it will be misused. And so then what guardrails, if any, exist to prevent it from being misused? And that to me is sort of an interesting, important question that is really hard to know, because the equities on both sides are pretty strong. Ransom: And we also kind of got into this in a past episode we did with Shira Lazar. She's sort of like one of these OG influencers, and she was talking about how as AI becomes more and more prevalent, people are going to be more and more interested in the people behind the companies, behind the machines, even more so than they are now, so people in our role actually telling these stories; people really want to know about Sam Altman because he's got his finger on the button, and if it's really that consequential about what he does and what his company does, we really want to know he's the right person for the job. Sherry: And when you think about the Scarlett Johansson debacle, where that was sort of why he was originally fired by the board was they said that he was not being consistently candid with them about things, and it came out the board did not know that he had asked Scarlett Johansson to be the voice of GPT-4. There's definitely some worry about if you're going to have somebody that's in charge of this world-changing technology, if you yourself are saying, "I'm worried that this technology will end humanity," and then you're continuing to not be honest with your board and sort of be sneaky,. I think that I saw some people recently saying that at Y Combinator, which Sam Altman ran at the age of 29, I'm 29, that's terrifying. Ransom: You're highly competent. Sherry: I don't have that level of scary ambition. I think I have a normal level of ambition, but they talk about being sneaky at Y Combinator, or not sneaky, but sort of crafty, where you're willing to bend the rules just a little bit to get what you want. And I think that if you think about the way that GPT-3, GPT-4 have been trained, it's all about asking for forgiveness rather than permission. They've trained on everything, and then they went and made deals. Lagorio-Chafkin: Right. Reddit had to cut them off before, now they have a big deal with Reddit. Right? Sherry: Yeah. Lagorio-Chafkin: It's interesting. And Sam has been a long-time friend of Reddit .. Sherry: Oh yeah, and owner. Lagorio-Chafkin: ... and Steve Huffman. Yeah. I mean, he's a very big stakeholder. Ransom: So speaking of Reddit, Christine, you've been busy. So if you don't know to our dear listeners, our co-host here, Christine Lagorio-Chafkin is also the writer of book called We Are the Nerds, which is the definitive book about Reddit. So you're the perfect person to talk about their IPO. Let's do it. Lagorio-Chafkin: Yeah, absolutely. I actually went to the New York Stock Exchange on March 21st in the morning for the bell ringing, and it was really fun to see the guys who I'd been reporting on for years prior ring the bell, although they did not ring the bell themselves. Steve Huffman, the founder, did not get up there, the co-founder did not get up there. Ransom: Did he send a Snoo up? Lagorio-Chafkin: He sent a guy in a giant stuffed Snoo suit up to ring the bell, which was a very Reddity thing to do, have the everyman figure go up and ring the bell. Sherry: Are they really into Snoo inside of Reddit? Lagorio-Chafkin: Yes, they are. Yes, they are. They call employees Snoos. Sherry: The gritty of business. Lagorio-Chafkin: Yeah, right, right. Sherry: We need a gritty. Lagorio-Chafkin: So anyway, it was an exciting day to see that. So anyway, it was an exciting day to see that Reddit actually could finally pull off this IPO because ... Ransom: It's been like 15, 17 years in the making. Lagorio-Chafkin: It's 18 years old, and they filed to IPO in 2021. Then the market started to look really shaky, and then there was the real slowdown in IPOs. Last year, something like a quarter of companies IPO'd than usually do. Ransom: Right because there was this SPAC bubble and then nothing. Lagorio-Chafkin: Everything slowed. Right. And especially tech companies were not going public. So, I talked to Steve after the bell ringing and after, before the company sort of celebrated, but after the bell ringing, and I asked him about this that time period, and he said, this waiting game actually made us a lot stronger because we had all these false starts. We kept saying, we're going public, and we kept doing a thing called testing the waters, which is sort of a pre-IPO road show. You go and talk to groups of investors, gauge their interests, answer all the hard questions about your company, which if you're Reddit, there are a lot of hard questions that investors need to learn, wrap their heads around ... Ransom: Like, how do you make money? Lagorio-Chafkin: Exactly. How do you make money? What's with all the porn? There's a lot of dark corners of Reddit. But they had actually done this process and had these false starts five times in those years, and they were also ... Ransom: Was Steve there for all of them? Lagorio-Chafkin: Yeah. He was there. He was leading it. He had brought on a new finance team, and they had started to act like a public company too. They were doing their quarterly earnings calls and trying to get in shape. After two years of that, the investors knew who they were, had a solid placement, knew how they were going to act on opening day, and so did Reddit. So I think that really helped them secure that opening day market. Ransom: They had a pretty good pop, right? Lagorio-Chafkin: It was a good pop and then it declined a bit, but it's been remarkably sort of steady for this place that birthed so much meme stock mania, and is inherently sort of unstable. It's been pretty stable all things considered. Ransom: Yeah, and so what led to the pop? I mean, was this the AI deal that they worked out with OpenAI? Lagorio-Chafkin: What was it, within the week, they had just worked out the deal with Google AI. Ransom: It was Google, yeah. Lagorio-Chafkin: Yes, absolutely. It was a $60 million deal. So I think that, I mean they again had a little bump recently when they made the deal with OpenAI. Ransom: I mean, how do you do something like that and try to square things away with your customers? Lagorio-Chafkin: Yeah, it's interesting because the Redditors would not have endorsed those deals. They don't want their information being crawled. Sherry: Yeah. And they're not even getting a cut. Lagorio-Chafkin: Exactly. Ransom: But it was being crawled anyway, right? I mean ... Lagorio-Chafkin: It had previously been then when Reddit cut off API access to third parties without paying, I would assume that angered OpenAI, but it didn't or it didn't significantly because now they have another deal with them. It angered a lot of users who prefer third-party apps to the ones that Reddit itself has built. It's been a huge Reddit user drama over the years, but certainly it's still causing a lot of grief on Reddit itself. Ransom: Yeah, I'm impressed that they hosted an AMA during the quiet period, or ask me almost anything. Lagorio-Chafkin: Yeah, they took the questions, vetted them by lawyers, and then made a video. So it was sort of an AMA, but a lawyered AMA. Ransom: But some of them were pretty tough questions. I was impressed. So Steve's pay package came up. Lagorio-Chafkin: Oh, sure. Yeah, absolutely. Ransom: $193 million in pay. Lagorio-Chafkin: Mostly in stock. I think his actual pay, the actual pay is really reasonable for a CEO. But he's making a ton of money off of the stock now, and they've all sold bits of stock. Some executives have sold more than bits. Jen Wong's pay package I was like, wow, that was amazing. Ransom: Oh, really? Lagorio-Chafkin: Yeah. Ransom: She's the COO? Lagorio-Chafkin: Yes. Ransom: Okay. Lagorio-Chafkin: Yeah. But yeah, Sam Altman, also, his family fund and several of his funds had a lot of money in Reddit, and a lot of that stemmed from this deal back when he had just taken over Y Combinator. And Reddit was in this really insecure time in 2014. It had a lot of infighting amongst Redditors and moderators and had a new CEO at the time, and its future did not look bright. And the CEO at the time, Yishan Wong went to meet with Sam Altman and said, we're in trouble. We need some help. And Sam put together a $50 million round for him, it sort of seemed like out of the goodness of his heart. Of course, he may have seen the future. There was no OpenAIs at this point, there was no ... Ransom: He's like if I do this favor, I'm going to call on you one day. Lagorio-Chafkin: Right, right, right. But I mean, this was more money than Reddit maybe even needed at the time. And he included a couple of folks that Yishan wanted in the package. He got Peter Thiel involved. He got Snoop Dogg involved. So he sort of really held Reddit up for a few years, joined the board, and ... Sherry: He was briefly the CEO, right? Lagorio-Chafkin: He was. Fun fact. For what? Eight days or something ... Hofman: Something like that. What strikes me as interesting, is that you talk about how so far the stock has been very stable and as impressive as that, I think it's really impressive that the platform has been stable, given that there's a lot going on there when you compare it with some of the other big tech platforms that had all kinds of dynamic things happening with them, I'm thinking of old-school ones like Digg that have sort of paled in comparison. At one time, Digg and Reddit were neck and neck competitors. Lagorio-Chafkin: Oh my gosh, yes, Quora. Remember that? Hofman: Yeah. Totally. Lagorio-Chafkin: When it was a strong place. Reddit is the last great remaining text-based place online, and I do think Google's new AI search is only going to be good for Reddit because people are searching now for, if they've got a real human question or a real logistical question, they will want to hear from other people rather than from AI. So they're like, what's this bolt on my dishwasher doing? Something's broken in my house. What is it? They search that on Reddit, you get a real person who's already gone through that exact same situation. Sherry: Well, I will say that one of the big problems with the AI overviews right now is that they are pulling answers from Reddit that are not accurate, or are sarcastic or jokes. So somebody will say, how do I make a pizza? And somebody will say ... Ransom: Glue. Lagorio-Chafkin: Put glue on it. Sherry: Put glue on it. And the AI will just kind of pull that and say, oh, we think that this is a legitimate answer. And it's because it kind of has trouble understanding humor. So it is interesting that Reddit is a very rich source of data for these language models to learn from. I mean, it's an incredible source of data, Lagorio-Chafkin: But perhaps more useful if you're a human. Sherry: Yeah. It's not always correct. Not all that data is of the same quality. Ransom: Is artificial general intelligence expected to be funny or to understand humor? Sherry: I think it would have to. I think it would have to be able ... Because if you're thinking of an AI that is capable of doing anything that a human can do, stand-up comedy is something that a human does, and being able to find ... I mean, then you're getting into a kind of philosophical question about what makes something funny. Lagorio-Chafkin: Yeah, we're getting deep. Hofman: It's sort of interesting, right? On Reddit, sarcasm is a feature, not a bug. And in AI sarcasm is a bug not a feature. Sherry: Yeah. And so if you're training something, if you're getting a huge corpus and you're not going through and getting rid of all that bug data, it's difficult. I don't know if there's really a way of going through and sort of filtering or cleaning that data. Data cleaning is obviously a huge part of training large language models. But I think that's probably something that Google and OpenAI are dealing with right now as they kind of go through all that Reddit data. Hofman: So if we worry about whether or not AI is going to destroy the world, which I think we were talking about earlier, maybe it's like the snarky Redditors are the people who might just save us. Is that the idea? Lagorio-Chafkin: I love that. I love that. Sherry: I don't know. Hofman: They would like that too. Lagorio-Chafkin: My feeling about AI in general and the state of it right now is that it is not as useful as I would love to see a technology actually be. I mean, when we compare it to the airplane, oh my god, it's like a hunk of metal flying through the sky, that's amazing and we can go to different places and the use ... Sherry: It changes everything. Lagorio-Chafkin: It changes everything. And I think that we've seen the uses of AI be okay so far, right, in terms of the real world. And maybe they've caused harm to our gathering of information to universities, to various things. And I think that you usually see a technology launch and be a little more impressive. Ransom: I think it's picking its battles, in terms of AI being disruptive. It's certainly disruptive for the publishing industry. It's disruptive for universities. I mean, we had a Q&A with Reid Hoffman who's involved in AI obviously, but he was talking about how I guess he and Bill Gates have also talked. Bill Gates talked about this too. But basically, AI presents this idea or opportunity of having a tutor in your pocket because all smartphones can be AI compatible and who needs professors anymore, when your phone can tell you exactly how to code something or the philosophy or philosopher behind such and such. Lagorio-Chafkin: I have typed into ChatGPT some prompts asking for some jokes about OpenAI. "Why did the AI cross the road? To optimize the chicken's neural network." Sherry: Ha ha. Lagorio-Chafkin: "Why did the AI go to art school? Because it wanted to learn how to draw better conclusions." Ransom: Ooh. That one's ... Sherry: Okay. That's okay. Lagorio-Chafkin: A little self-deprecating. Sherry: Next level. Lagorio-Chafkin: "Why did Sam Altman start carrying a map? To navigate the constantly evolving landscape of AI." Sherry: That's pretty funny. Ransom: These are painful. Lagorio-Chafkin: Oh my god. I can keep going, but they're really not worth it. Sherry: I personally have used chat GPT mostly just to generate Frasier fan fiction. Lagorio-Chafkin: Frasier, the show? Ransom: Yes. Sherry: Yeah, like Frasier Crane. Hofman: That's niche. That's kind of a niche pursuit. Sherry: Yeah. Don't tell anyone that, but... Ransom: I'm happy to hear it. Sherry: But yeah, I've said it for a long time. I think that the truest use of language models is memes. It's creating memes. It is when you don't really have high stakes on something and you're just looking to create a funny little thing, a little song, a little image, that is where AI shines. Ransom: Well, thank you so much. This has been enlightening. I've learned a lot about you, Ben, and I really appreciate your time, Mike and Christine. Lagorio-Chafkin: Mike Hofman. Welcome once again. Hofman: Yeah, it's been fun to be here, yeah. Sherry: Glad to be here. Thanks for having us. Lagorio-Chafkin: That's all for today's episode of From The Ground Up. Ransom: Be sure to subscribe on Apple Podcasts, Spotify or your podcast platform of choice. Also, if you liked this episode or have suggestions of what topics you'd like to hear about, leave us a review on Apple Podcasts or reach out to us on Inc.'s social channels on LinkedIn, X, or Instagram. Lagorio-Chafkin: From the Ground Up is produced by Julia Shu, Blake Odom, and Avery Miles. Mix and Sound Design by Nicholas Torres. Our executive producer is Josh Christensen. Thanks for listening and we will see you next week. Sherry: Happy to talk about a Frasier Crane whenever.