Reed walk

The 1.5 billion parameter model was supposed to be the end of this, and it was supposed to unleash this torrent of spam and misinformation. And that was the big bugaboo at the time. And so what happened, we went through this nefarious rollout over a 6 or 9-month stage, started releasing the smaller parameter models, and then we scaled up to the big 1.5 billion parameter model. And at the end of the day, we achieved nothing good. If you actually think that Mythos is capable of doing what it says it can do, two things are true. One is a very sophisticated hacker can probably do those things right now with Opus. And two, if these exploits are this easy to find, whether you use Opus or whether you use Mythos, the reality is we have to shut down the internet for about 5 years to patch them all. So when you see like a large multitrillion dollar GSIB bank. It's a bit of theater. Why? What do you think they can actually accomplish in 2 months? Do you actually think that if there's these vulnerabilities, it's all going to get fixed? Let's give them 6 months. Let's give them 9 months. But the reality is that capitalism moves forward, the funding needs moves forward, and the need for these guys to build adoption moves forward. And that's going to supersede what this is. So I do think that Saks is right, that they have figured out a very clever go-to-market muscle here and a go-to-market motion that activates hyper-attention and hyper-usage. And so I give them tremendous credit, and I'll maintain what I've maintained before. Anthropic is shooting the lights out. This is like Steph Curry going bananas from every— everywhere on the court. These guys are having a breeze. It's all Okay, so huge kudos, but we've seen it perform. We saw it from these folks, for the principal architects at OpenAI, who are now in the same playbook here. I think we'll look back and I think what we'll say are these two things. One is, if we're really going to catch all these superheroes, we need to shut down the internet for some number of years, honestly, literally years. And the second is an advanced hacker can probably do this today with OpenStreetMap if they really wanted to.

Okay, good grab. I'll get you into that further. That's right. I'm gonna go with, yeah, maybe they did, uh, drive them before, but based on what I see with these models advancing, using them on some of the open source phones right now from China, I think that this is the Code Red kind of moment. This is DEF CON. Like, we should be taking this deadly seriously, and I think these companies got to coordinate with the CIA. This is kind of equally offensive as offensive opportunity. Do you think this is—

You're asking for the nationalization of AI?

No, I actually, I don't think you should be nationalized, although I did see people sort of insinuating that. I think these companies need to build a blueprint that work in coordination with the CIA. I assume that they're already doing this. I'm assuming Neil Michael and, you know, Trump and everybody have these people in the room and that they've given the DEF CON and said, hey, how can our government use this to stop bad actors. And this is already being coordinated with the CIA and the FBI. I am 100% certain of that, that Daria went to them and said, look what we found. This is the real deal.

I'll give you the last one, Lance.

Go ahead, since you're the best one.

Um, the Frontier Model Forum, which was, which was put together in '23, um, is cooperating on anti-adversarial distillation stuff as we speak, right? They don't want to make it easy on, you know, so Google and OpenAI and Anthropic, they're coordinating on this stuff. You know, there are times where I push back on Anthropic because I thought it was, you know, perhaps regulatory capture or something else. This is very different in my mind, right? He could have easily— Dario could have easily come out and said, oh my God, we passed a threshold, we need to have a government moratorium. Remember, even our friend Elon called for a 6-month moratorium in 2023. Because of civilization risk. This guy didn't do that. Instead, he said, okay, what, what should we do? I'm going to get 40 of the leading companies together. We're going to spend 100 days sandboxing, hardening the systems, and then we're, we're going to keep pushing forward.

What do you honestly think is going to get accomplished in 100 days? How many PRs do you think are going to get pushed to the core structural internet in 100 days? What's the over-under number? Because I'll give you a number, you're going to say zero. My answer, I'm saying like $10,000, but it's going to be a meaningless thing.

Prevent your browser history from being released to everybody in the world, Shabbat. That may be something that you're willing to, you know, let $108,000 on.

I think you got Shabbat's attention when you said browser history.

What about the dick pics?

Shabbat is—

he's going to release them himself. Shabbat's like, hey, Chinese hackers, share my dick pics, please.

Oh my God, we have to be out there complimenting they're doing the right things and relying on the market rather than running to the nanny state and saying do more of this. So this to me was just an example of, of a, of a good balance. I'm sure we're going to have plenty of debates about this in the future, but yeah, this is what I'd like to see more of.

This is why, to use your word, TikTok, right, has a more nuanced take, is because we have no choice but to take this seriously. Whether it's total theater, whether it's fearmongering, and they do have a pattern around this, We can't take the risk, right? And it does logically make sense that as these models become more and more capable at coding, they're gonna get better at Cypher. And there's gonna be that one-time period where you're moving from pre-AI to post-AI and you need a patch for that. So my guess is we're gonna see a lot of patches over the next few months. I think that that will resolve the problem. I think this is a case where I'm gonna give them the benefit of the doubt. I, I think that, you know, I've criticized them in the past. I think that Blackmail study embarrassing to level of being a hoax. But I think in this case, I'm gonna give them credit and say that I think that it's legit.

So it's not being a proper hoax. This could be legit, you know, looking at—

we have no choice but to treat it that way. Of course. Yeah.

I mean, even if two things can be true at the same time, Zach, they could have used this tactic before. It could be performative, like the video with the dramatic music in the background. It does have a little bit of drama to it. And the way they presented it is very dramatic. But it does make logical sense that the one company that made the bet on code bigger than anybody else would be the one who would discover this quickest. And, you know, in 100 days, that's a pretty good— that's a pretty big advantage versus the hackers. But let me make one more point there, Jamal. The most important thing that people haven't talked about here is the amount of code being push right now because of these tools is 10x, 100x in most organizations. So we need to have this type of security embedded in these new coding tools to do it in real time. That's the opportunity. There should be real-time correcting of this.

If this is real, they picked the wrong companies. Meaning there are energy companies, folks that control nuclear reactors, there are airplane companies that are flying hundreds of thousands of people in essentially manufactured missiles of like screaming gas going at 500 miles an hour. None of those companies were the ones that were included in this. And so I think if you really thought that this was end of days, at a minimum we can agree maybe we shouldn't expect the Circle of Dutch—

well, maybe those are customers of the ones that are coming here anyway. This is a really important story to obviously try to income boost, to see what turns out to be reality. And Dario did come on the program at some point. Hey, Brad, will you get Dario to come on the program? I've invited him like 3 times. I got a strong police ghost in me.

I'm like, he's ignored you?

I've literally got an introduction from the number, like one of the number one venture capitalists in the world. He's on the cafe very early. He just won't respond. I don't know why. I'm gonna tell you.

Dario's podcast with Gorkish, who I think is an excellent podcaster. I've listened to that 3 or 4 times, taking notes every time. It is a really exceptional piece, really exceptional piece of work by the way.

All right, let's keep moving.

We got a lot on the docket today. J Cal wants to get into the tare of your affiliation with us.

Who are you?

I mean, I don't care.

Literally, I've got friends on both sides of the line. I have friends everywhere.

Of course you do. Even J Cal.

Even J-PAL has friends everywhere.

Let me ask a broader question here, just while we're on the topic of Anthropic. There was a really interesting story or tweet, I guess you could say, by the founder of Open Claw that—

Peter.

Peter, yeah. What's his name? Peter Steinberger.

Steinberger.

Steinberger. Renowned coder, created Open Claw, which is kind of the thing that launched this whole agent era now, I guess you could say. Anyway, he said that Anthropic was cutting off his access —to, to move to Quad.

Is that the next topic? This is on the docket. It's a little bit nuanced. Everybody using OpenQuad would take their $200 a month subscription to Entra Office, which was essentially like a— people were using more tokens than it's an average. The people from OpenQuad is very verbose, and those people are 100x the usage of the average subscriber. So he said you can't use Here's your $200, you have to use the API. You move from the $200 plan to the API, add a zero to your token history, so, or more. And so they essentially anchored Open Claw, and then 10 days later or less, they released or announced their new agent technology, which is, according to them, a safer, better version of Open Claw. So they had to false flare it one level more, and they have basically shot A huge can across the bow of OpenCore.

Edward, if you just explain that exactly so I get your right back. They systematically copied feature by feature of OpenCore, incorporated that into Quad, and then the coup de grâce was basically cutting off OpenCore.

Yes.

Can you just explain exactly what they did? Okay, very simply. When you buy a subscription to these services, they have blended your usage across many users. So there's, you know, 9 out of 10 users use less than the tokens they're paying for, and the top 10% use much more. When OpenBLOQ became a phenomenon, the number one open source project in history on GitHub with all of this usage, people went crazy. And you heard me talking about how crazy I was going. Those people with the $200 subscriptions were using $2,000, $20,000 worth of tokens. So they said you can no longer use your subscription to, you know, your professional or enterprise subscription at $200 and plug that into your OpenFlow. You now have to go to the API and pay for usage. So no more like—

I'm assuming that if you're using Dropbox's own agent harness, are you part of a bundled flat rate?

You can assume that that's what they'll do, which if you were thinking on an antitrust level, might be token dumping or price dumping. I'm not saying I'm radical. Price dumping or bundling. When you price something under the market price in antitrust, that would be price dumping, right? And if you bundle, it would be like the bundling issue. Critically important.

You can use open call via Quad 8.

Oh, it's— it's just saying that you were for— under the current regime, they were selling dollars for 10 cents via open call because these were such power users. And now they've been saying we have to price this rationally. But we're happy to have you guys use the API.

So, okay, okay. But Brad, when you use the open vault competitor that Advantix now offers, are they subsidizing that? Are you paying?

We don't know yet because it's in closing.

So in other words, what I'm saying is if they charge for API usage, right, their own first-party agent harness or system, then that would be apples to apples. But if, if they end up charging a bundled flat rate, let's say, then there's stuff, but then charge the metered rate for third-party stuff, you could make a fine argument. Sure, sure. And then you could say it's agent-dependent assuming that Anthropic has dominant market share in encoding, which I think most people would say they do at this point.

I would assume it's the same product. I mean, the reason most enterprises will probably use the Anthropic version of this agentic product is because it meets all of your security parameters, right? So Altima runs, you know, a lot of stuff on Anthropic. They're already in within our data warehouse or data lake, things of that nature. So just letting Open Claw loose on the altimeter dataset would not be wise. And so it's a different fundamental product.

No, I get that. And I think that Anthropic has a huge advantage, let's say cloning Open Claw and just building it into Claw. I'm not denying that. To me, that would be the reason why they don't need to do price discrimination is because there's already a very good reason to use the, let's call it, the bundled offering on a feature basis. But the question I specifically asked you was, whether they're giving themselves the price of innovation.

Because I think you're just giving the most generous interpretation. We're taking the more cynical one. I'm with you, Sax. I'm 100% on the cynical side. Open Claw is so powerful, it's got so much momentum that not only is Antropic trying to angle it, I believe when Sam Walton bought it, it was, uh, needed by Open Claw itself to hire— Apple hired Peter. I believe it was to subvert the open source project to get Peter's next set of genius ideas inside of Open AI as opposed to letting you go there. People are going to say I'm a conspiracy theorist, but this is the number one focus. And let me just give you a list of who is trying to poke and prod slash compete with them. Obviously you have Anthropic, but also Perplexity Computer launched. It's awesome. I've been using it. Anthropic has the Squad Language Engine. They dropped it on Wednesday, April 8th, or yesterday, as we started to tape. Nice listening on Fridays. And then you have Hermes Agent that was released on February 25th. That's also open source and very good. So that's in the open source camp. Alibaba is coming out with one that's going to be based on the QYN model. Then you have Elon, who said he's got something called Brock Computer coming out of MacroWire, which is a play on words for Microsoft. In addition to that, Amazon and Apple are preparing new releases of their, uh, repartnered machine assistants Alexa and Siri that will be less retarded in this new version. And then nothing out of, uh, Saki and Microsoft yet. So the number one goal, I believe, in large language model, frontier model space is to kill this tool and switch problem.

No, I mean, come on, like, why? They're building multi-functioning agents that can move from answering questions to actually doing something for you. Like, you've got to do that because that's what consumers and enterprises want. It doesn't mean it's about killing OpenAI. It's just, this is an obvious thing that the world—

but this is a giant movement to stop it because this is the equivalent of having an open-source Android-like player in the market. And that could be incredibly disruptive because I believe open source is going to win the day on the large language models and taking 90% of the token usage. And I think the entire frontier model space could be undercut by open source. And I think they realize that SLMs, the smaller language models that are verticalized now, that will run on, you know, desktops and laptops, and it's even starting to run on the top ones. That is their biggest competitive threat, and I hope it happens. All due respect to you, investor Brad, I think this technology and the interface is, uh, you know, it plays fast, but I, I think it's imperative that the agent level, which is essentially your entire life, you don't give that to Improfit. You don't give that to OpenAI. That's your entire business, your entire life. It is foolish for you, Brad, to give your entire business and all the knowledge you have to Improfit today, unless you're just willing to boost your, um, your, your investment in those companies is that I would be very concerned if I were you with putting all of your knowledge that you've earned over a lifetime into any of these large language models.

All right, Jake, let me ask you guys a question. Thank you for that impassioned monologue.

Actually, I want to ask—

I think somebody said TED Talk. Yes, thank you for that TED Talk. I have a yes/no question for each of you. Do you believe that Groq has dominant market share in coding right now? Yes, ma'am.

In coding? Yes. Just the lead, but not— they have the lead, but not dominant.

I think it's a trillion-dollar market, and these guys have less than 10% of it today, so it's hard to make a case. What percent of coding tokens do you think that Anthropic is providing the market right now? 3.5%. Okay, that's called dominant market share. I don't know about that. You're getting 50% of the market.

I mean, there are a lot of people who provide, you know, that are in the business of helping people make software.

I'm not saying it's a permanent condition. You're telling me that today Anthropic is delivering over half of the coding jobs that we see. That's clearly a dominant position in the market today. It's an early market, it could change, but—

If I were representing them, David, I would say 9 months ago everybody thought us, you know, out of the game. We were being destroyed by OpenAI. In 3 months now people are saying we have dominant market position. This is the fastest-changing, most competitive market in the world. I think it'd be very hard-pressed to walk into, you know, some district court and make the case that these guys have somehow already formed a monopoly against Amazon, Google, Microsoft, OpenAI, etc.

Well, I'm not saying it's a— it's already a total monopoly, but I am just asking about market share. And I do think you guys all agree that they all have a huge market share.