EVERY SPOKEN WORD
60 min read · 11,682 words- 0:00 – 0:47
Introduction
- EGElad Gil
(music plays) Sarah, welcome to No Priors. It's such a pleasure to have you here today with me as a guest. How are you doing?
- SGSarah Guo
Oh my God, I'm so happy to be here. Thanks a lot.
- EGElad Gil
I think you are now joining the number one podcast in... I actually don't know what.
- SGSarah Guo
The number one podcast amongst our friends. I'll take it. (laughs)
- EGElad Gil
Yeah, the number one podcast in our family. It's the number one podcast my mother watches regularly, so it's very exciting for all of our mothers everywhere.
- SGSarah Guo
I, actually, I'm pretty sure my mom is not listening to this, but if you are, hi Mom, thanks for your support.
- EGElad Gil
I feel, I feel happier for her. Um, so I think one thing that I've been really fascinated with that came out recently is NotebookLM from Google,
- 0:47 – 5:20
Google releases NotebookLM
- EGElad Gil
and, uh, you know, it's funny because about a year ago or so, me and, um, uh, David, who was on my team, decided to do this cohort at Stanford where we would, uh, just sponsor compute and other things for Stanford students to build interesting consumer apps, and then we'd meet every week and do, like, office hours and just talk through what they were building. And there was no financial transaction or ownership or anything. It was just, we just wanted to do cool stuff, particularly in consumer AI. And one, one of the people prototyped was a journaling tool, where as you wrote, the sidebar would start to interpret what you were writing in your journal, and you could choose the lens through which it would interpret it. So, it could interpret is as a, as a counselor, it could interpret it as a friend, it could, you know, it could interpret it different ways when you were getting real-time feedback of that journal entry in the context of all the prior ones through that lens. And it was really fascinating consumer behavior. Like, it really felt like something special. And, um, NotebookLM kind of feels like something special to me from the perspective of you can upload, um, different documents or information and it'll basically turn it into, um, two AI posts effectively, two AI bots, uh, using voice discussing it as if it's a podcast. Right? That's one sort of application area. It just- it just has this really interesting, um, feel of, how can you automate really interesting aspects of information discovery? How do you integrate audio in an interesting multi-modal way? Like, it just- it just kind of pulls together a lot of really interesting pieces of behavior that really resonate.
- SGSarah Guo
It's interesting that, um, I- I think you love the, uh- uh, like, voice podcast generation feature. I think other people do too. Uh, it's not... I- I... NotebookLM is my favorite new AI product of late, but that's not the way I use it. I just use it as, like, a really nice little pre-built RAG GUI attached to all my data.
- EGElad Gil
Oh, yeah, no, I agree. It's- it's not just the- the podcast adding of it, it's just... Uh, I think, um, the last YC batch, or two batches ago, they actually had two companies that would allow you to do that. So, you could upload a document and effectively you'd end up with a RAG index against it, and then you could interrogate it and interact with it, et cetera. So, um, I- uh, I guess I've seen a earlier version of that. I think- I don't think it's been as elegant as what NotebookLM is doing, but I felt that that plus the voice piece-
- SGSarah Guo
Mm.
- EGElad Gil
... really stood out as an interesting step forward. And I agree with you, like, the RAG piece alone and the ability to interact with documents and data and information is, you know, super interesting, and one could argue to some extent Glean provides a little bit of that, Answer provides a little bit... You know, there's a couple companies that kind of have been doing pieces of that, um, in interesting ways. But I agree, we're hitting the era where any piece of content can suddenly become something that you can interact with.
- SGSarah Guo
Also, it really helps with the cold start problem with consumers, right? If you insert it into an existing workflow, you use existing artifacts, you connect to existing data. Like, I- I just think end users, like, you- you shouldn't rely on them to be that creative about how to engage with these capabilities. And as builders, even Google builders, great job Google, like, um, enable more of these interfaces where we're just gonna get a step function increase in engagement on 'em.
- EGElad Gil
Yeah, it's kind of interesting. I feel like the main consumer ats- apps were either, um, unintentional or kind of prosumer-ish, right? So, ChatGPT was kind of an experiment that was launched and became a major consumer app. Perplexity, you know, is- is kind of this prosumer consumer thing. You're using it for research, you're using it for search, you're using it for a couple different things. Midjourney kind of started off consumer, but I think it's actually has a lot of use cases, uh, that people pay a subscription for that are a little bit more professional in nature, you know, if you're- you're building out graphics for a pitch deck or whatever it may be. Um, so it's interesting to see that a lot of these things are starting off more as utilities, while in the consumer social era obviously there's a lot of just social apps, right, that were the main consumer wave. It was basically commerce, search, and- and social. And this time we're seeing a lot more around information utility, information and content generation, you know, this wave of technologies enabling different consumer behaviors.
- SGSarah Guo
Are you excited about anything that is, like, entertainment? You know, games, social media?
- EGElad Gil
I'm excited about a lot of it. I haven't seen anything yet that I think is, um, fully there yet, and there's a lot of concepts that people have been talking about for a couple years. Uh, you know, I remember when, I can't remember if it was GPT-2 or 3 came out, uh, people were already talking about, "Well, what if you can create NPCs that are intelligent and interact with
- 5:20 – 9:11
Integrating AI into consumer apps and gaming
- EGElad Gil
you in a way that makes them feel like people?" So, if you're in the context of a video game, you should be able to just interact with all the characters even if they're machine generated as if they're people, right? And so eventually you blur the line, you know, you create a guild or you create a group that goes and does something, who's real and who isn't in that group, right? What's a bot and what isn't, and at what point do most of your social interactions for ce- s- a subset of people just become interacting with machines versus interacting with humans?
- SGSarah Guo
Yeah. I- I saw, um, uh, two demos, one public, that, um, were, like, kind of interesting or triggering of a- a thought here. Uh, one was the first actual, um, uh, like, AI integration into gaming that I thought was pretty good, right? Like between, um, coach and NPC, but more importantly the ability to trigger actions, like agentic actions, uh, in context with the la- latency that makes sense in a game. Like-
- EGElad Gil
Mm-hmm.
- SGSarah Guo
I think that's finally coming in, like, high-skill games. And so that's pretty exciting.
- EGElad Gil
Yeah, that's the most interesting step, I feel, is the- the characters taking on attributes, because obviously people can use-... these things to generate, you know, um, uh, in-game, uh, you know, images or backgrounds or, you know, there's, there's... Actually, in this group that we had at Stanford, one of the teams did a generative approach to different levels of games.
- SGSarah Guo
Uh-huh.
- EGElad Gil
So you could create infinite- infinitely many levels of game, of a game using this. And it's similar to, you know, you look at the Angry Bird franchise and there wasn't really that much difference between Angry Birds 1 and Angry Birds 17 or (laughs) whatever. Angry Birds Star Wars, although that was my favorite one.
- SGSarah Guo
You just said there wasn't a difference. It makes a big difference to you. But the, the core mechanics are the same.
- EGElad Gil
The, the core mechanics are the same, it's just the levels are different and the, um, the art is a little bit d- you know, there's tweaks, right? But the mechanic is the same. And this basically automated that, right? So as you develop the game, you could describe a layout and it would generate the layout for you, you could ask it to randomly generate thing. And you have the same game mechanics, but then the gameplay was a little bit different because of the setup and what you had to do. And so, I think there's a lot of that coming, too, where you should be able to create a mechanic once and then have it infinitely scale it in terms of levels.
- SGSarah Guo
Yeah. And, yeah, maybe you're only doing, um, mech- mechanic design, but I think that also really will tap into, uh, a large existing behavior in gaming, like modding. There are entire platforms for this, right?
- EGElad Gil
Mm-hmm. Mm-hmm.
- SGSarah Guo
Like create levels, create, um, different, um, expansions, visual changes, uh, a- and so, you know, the ability to give users, like, uh, these powerful, like, AI-based expansions to worlds or mechanisms they love, even beyond the publisher, I think will be a big deal.
- EGElad Gil
Yeah, so there's exciting stuff coming there. And then, again, I think there's things like journaling or other types of things that happen every generation, right? There's a product like that. There, there was, in some sense, GeoCities and personal websites and there was Tumblr and there was LiveJournal and there's no modern equivalent I know of right now. And so I do think AI will also modernize some of these things that are generational, where every 10 years there's a new one of these and it becomes really trendy for the kids. (laughs) And then, um, you take a, you take advantage of the latest technology to do it.
- SGSarah Guo
I'm still a kid, Elad. I'm gonna be, I'm gonna be part of it.
- EGElad Gil
I think of you that way. I think of you that way.
- SGSarah Guo
GeoCities V8, guys. Um, actually, I have, I have one test for whether or not you're a real AI kid. I was talking to, I was... You know, I had this dinner at my house.
- EGElad Gil
They didn't invite me.
- SGSarah Guo
You're invited. You just ignore your texts. Um-
- EGElad Gil
That's sad.
- SGSarah Guo
A good friend of mine who is a researcher at one of the labs, he just had a kid, so he's not actually, like, 20. Um, but, uh, uh, I don't know how we got on this topic. Uh, it w- we got on the question of, I think he brought it up casually. He's like, "Well, like,
- 9:11 – 14:45
Future of AI companionship and procreation
- SGSarah Guo
you know, my, my son is probably gonna have an AI partner instead-"
- EGElad Gil
Mm-hmm.
- SGSarah Guo
... "of a, um, you know, like a human romantic partner," as one might believe in 2023. Uh, and he's like, uh, was like, "Oh, how do you and your, how do you and your wife feel about that?" And like, no grandkids and just embedded in the AI. And he's like, "Oh, like, if they get, like, support and love and the, um, emotional structure and fulfillment they need from that, who am I to say that that's not right?" And I'm like, this is a very, like, seemingly, um, I, uh, I would have said, like, middle of the road opinion guy, except for the fact that he works on... You know.
- EGElad Gil
Give him 10 years and he's gonna want grandkids. That's just me. (laughs)
- SGSarah Guo
That's what I said, but I think this is actually like a really, um, uh, I think this is like a, uh, uh, more of a philosophical and political question. Like, do you, do you care about, um, uh, grandkids and continuation of the human race and should, should you have any opinion on that for your kids? I want grandkids. But, um, but this researcher made me feel like it w- in some... I think is a relatively uncommon feeling for me where I'm like, "Oh, man. I'm, like, really, uh, feeling very conservative on this topic." But how do you think about it?
- EGElad Gil
You know, there's a CEO of a, of a well-known AI company who actually, this is, like, his dinner question.
- SGSarah Guo
Mm-hmm.
- EGElad Gil
Where he'll just ask people around the table, "What proportion of you think that your kids will, at least at one point in their life, date an AI bot or have them as, like, a romantic interest?" You know, I think that will definitely happen.
- SGSarah Guo
Yeah.
- EGElad Gil
But that's separate from the degree to which people reproduce and, you know, there's a, there's a broader question, 'cause sometimes people talk about artificial wombs as well, right? There's advances in science where, you know, you can now grow, I can't remember if they use lamb or what, you know, up to some, you know, number of weeks, um, of gestation, right? In a, in a literal kind of membrane that's fed it nutrients and stuff. And if you'd asked me 10 years ago if I thought that was a good thing, I'd say yes. Now I actually think it's a bad thing and I worry a lot... And it's good in terms of, you know, people can reproduce and, you know, there's obvious application areas.
- SGSarah Guo
Mm-hmm.
- EGElad Gil
I just mean is everybody mainstream using it for everything in terms of how they have kids? And the main reason I have trepidation about it is I actually feel like the movement over the last 20 years has been disso- dissociation of people from society and dissociation of h- uh, human-human interaction. And I personally think that's valuable. And there's a bunch of people who don't think that's valuable, you know, particularly in subsets of the AI community. But I feel like that really breaks some aspects of how you think about kids and who they, um, are related to and why and how and... You know, it just really shifts things pretty dramatically. It's, uh... In Star Wars, back to Star Wars again.
- SGSarah Guo
(laughs)
- EGElad Gil
That's actually the Clone Wars, right? They basically just start cloning one person at large scale and that's all the, um, all the rank and file fighters on the side of the empire. Um, but you, you do start wondering about human connection and where is it important and why. And I do worry that artificial wombs is kind of a step in... A- again, if it's mainstream. I think if it's like, "Hey, we c- we are having trouble reproducing," or somebody had a placental accretion or something else, I get it. But if it's like every single person should just do this, it, I just worry about what that means societally. And it could just be me being a little bit ladada-ish on this, on this topic and in five years I'll change my mind and I'll think the opposite, so.
- SGSarah Guo
Yeah. Uh, but I-I think the, um, the implication you're describing where people just don't, uh, have as much attachment to other human beings because they don't need to, to, you know, get, um, fed socially and emotionally, I think that will have an obvious impact of being less concerned about society.
- EGElad Gil
Yeah, COVID was a good example of that, where I feel like a lot of people went a little bit crazy-
- SGSarah Guo
(laughs) Yeah.
- EGElad Gil
... due to the lockdowns and isolation.
- SGSarah Guo
Yeah.
- EGElad Gil
And in this case, it's a different form of isolation. It's, um, no longer social isolation because you're getting, um, social interactions with bots, but it is human isolation, and I think that's a interesting concept to explore. And again, in the extremes, when we shut down society, I think there's a lot of bad behavior and a lot of anxiety and stress and unhappiness. You know, there's all sorts of reasons for that, but I think part of that was just shutting off human contact and making people scared to interact with other people.
- SGSarah Guo
I- I do think, even in the, um, like, very near term, no artificial wombs required, but some human AI dating or emotional dependence to come, uh, I- I think the premium put on human-like communications i- is- is gonna decrease, right?
- EGElad Gil
Mm-hmm.
- SGSarah Guo
Just by volume of how- how, uh, possible that is. Um, and so I- I- and- and, you know, I definitely think, like, the quality and taste and all of that will- will still matter, but, like, as- as one example, uh, I'm- I'm trying to cure myself of this, but when people email me, and it's a real human being, I feel some obligation to respond, even though I've never met this person.
- EGElad Gil
Mm-hmm.
- SGSarah Guo
Um, and I- I think that because, um, somebody on the other end, trying to be kind, and I- I think that is gonna decrease over time because you're just gonna get an infinite volume of communications that feel.
- EGElad Gil
Yeah. It's gonna be bots emailing bots. Um, I guess the other, um, model, product, et cetera, that came out very recently is o1 from OpenAI. Uh, and so, you know, I'd love to hear what you think about that.
- SGSarah Guo
Let's just, uh, set context of the reaction from the world and, like, why it might be important. The description from OpenAI and the use of it is, it can do,
- 14:45 – 18:06
OpenAI o1 model improves on iterative reasoning
- SGSarah Guo
um, longer term planning and thinking. So it can scale compute usage at, um, at test time. And, um, this makes it better at a certain category of tasks that require, let's say, like, uh, iterative, um, reasoning, uh, and that tends to be, like, mass, code, problems that you just need to think harder about. So, like, a favorite example from other researchers is crosswords, right? Because, like, you know, all of these-
- EGElad Gil
Mm-hmm.
- SGSarah Guo
... all of these questions are- are interlinked, um, uh, versus it just being a- like, a recall-based answer or something that you can stream to the- to the right answer with next token prediction. And so that's great because it, uh, opens up a category of, um, use cases that I think are, you know, less well-served today. I think there has been, um, both some enthusiasm and some mixed reaction from the industry or end developers. It's still very early, right? And so I think, uh, you know, every warning in the world from OpenAI about, like, "You can't use this exactly the way you use 4o," uh, is being ignored. Um, but when people test it, it's not, you know, significantly better on every dimension. And so I think there's one school of thought that is like, "Well, like, the base model is just not as good, and that is the important thing." Another school of thought is, um, which I- I do subscribe to, by the way, is, uh, you know, new scaling law, right? So um, will allow us to do an important range of new tasks, and how good it is exactly at this moment is not, uh, the- the important thing. It's a new dimension of competition.
- EGElad Gil
Yeah, it's kind of like GPT-2 for that approach, and the idea is that that could scale further over time, and it's- it's kind of the initial early proof point that you feel like something really real is happening. And then it's just gonna be subject to the same scaling laws of more compute, more data, et cetera, and it'll get dramatically better really quickly. So, it's very exciting.
- SGSarah Guo
I do think on, uh, how it- how it is received and how people use it, as- as, uh, the labs, you know, attach tools and function calling to, um, the ability to do this type of planning and iterative freezing, I think people are gonna get a lot more excited.
- EGElad Gil
Have you been using it at all?
- SGSarah Guo
Yeah.
- EGElad Gil
Yeah. I've been using it for all sorts of stuff.
- SGSarah Guo
Finding the bounds is- is really interesting, and, like, I don't know if you have this emotional response with, uh, AI models, but, um, uh, one of my colleagues, Panov, gave us, like, a- a brain teaser the other day. It was like one of those coin flipping games-
- EGElad Gil
Mm-hmm.
- SGSarah Guo
... that you- you know, you have to simulate and think through a bunch of scenarios. And, um, uh, I got it mostly wrong, personally, and then I wanted to see, like, how much better is the model than I am. And the, um, I think the inability... Uh, I'm very bullish on, you know, test and compute in general, but the inability to force the model to get the answer correct, even with clues, was driving me insane. I spent, like, three and a half hours on it, and so-
- EGElad Gil
Mm-hmm.
- SGSarah Guo
... I- I look forward to the labs innovating on, um, the ability to better guide these models.
- EGElad Gil
The one other thing that's happened, um, since we last spoke is the- the Nobel Prizes came out. You know, the Nobel Prize in Physics was awarded to two people who've done some pioneering work in AI and AI models. The Chemistry Prize went to Demis and other folks working on protein folding and the applications of AI to protein folding. What did you think of those prizes? It's the first time AI has been recognized with Nobels, like, right?
- 18:06 – 21:23
Sarah and Elad reflect on Nobel Prizes going to AI researchers
- EGElad Gil
Turing Awards have gone to Yann LeCun and others, right? But I think this is the first time that, um, a Nobel Prize has gone for AI.
- SGSarah Guo
I- I think, let's start with, um, uh, like the- the obvious but should be recognized premise of like, these people are amazing and their work is- is world-changing. That being said, I think the criteria of the Nobel is like, moved that particular field, and so-
- EGElad Gil
Mm-hmm.
- SGSarah Guo
... it's not clear to me that...... the, the award for physics was necessarily advancing the field of physics versus saying, you know, there are principles that apply from the field of physics, right?
- EGElad Gil
Yeah, 'cause there's a lot of physics that's been applied, right? Like, so for example, diffusion models are basically... which have been wh- where a lot of that really, really good image and models were basically a statistical physics model applied to machine vision, machine image gen- generation and understanding and things like that. So, to your point, a lot of it's almost gone the other way.
- SGSarah Guo
Yeah. So, you know, what, what... I guess, m- the, it begs the question of like, well, what's going on actually in physics that is interesting? And maybe, maybe it's just a loop, right? Like, we're gonna go use these... That's what a lot of people believe about AI for science. We're going to use these models to make advancements and discovery including in, you know, fundamental fields. So I, I look forward to that. I think on the chemistry side, y- I mean, you, um, you are actually a biologist from a while back, so I wanna hear your opinion on this. I think that is like much m- um, uh, more obvious even, you know-
- EGElad Gil
Mm-hmm.
- SGSarah Guo
I think these awards are all deserved, um, because it... in the ability to predict structure, uh, predict function from structure, and, um, in, in, in m- much more sophisticated ways beyond AlphaFold hopefully, uh, changes, like, what the industry can do, but perhaps I'm being, like, too practical about it.
- EGElad Gil
Yeah, no, I think, um, AI being applied to chemistry and biology, particularly around protein folding and protein drug interactions and things like that, really was a breakthrough. Um, so I think that, that probably merits it. I was wondering who would get the Nobel Peace Prize from the AI community. Is it Adam D'Angelo for sort of bridging the different regimes at OpenAI on the board? Is it, uh, Mark Zuckerberg for releasing LLaMA? Is it Open... Like, who should get the... (laughs)
- SGSarah Guo
Yeah.
- EGElad Gil
Who should get the Peace Prize? We should just do an all-AI Nobels, like the literature prize, you know? Is that GPT-4 for writing marketing copy?
- SGSarah Guo
Hey, we're gonna do live poll, guys. Just email in to No Priors and nominate your, um, your Peace Prize winner.
- EGElad Gil
Yeah, I'm actually surprised that there weren't... that the, the, the AI community didn't sweep this year. I'm actually kinda disappointed. We can do better, guys. I think Gary Tan should get the Nobel Prize. He's done good work at YC.
- SGSarah Guo
And in San Francisco.
- EGElad Gil
Yeah, exactly. Anyhow, I, I really would, would have wished that we had a sweep. So maybe we can do that next year.
- SGSarah Guo
Elad, one, um, more macro business question for you. Um, given more recent advancements or just the investments you're making, like, you know, sometimes we talk about what is most defensible. What do you think is most at risk? Like, uh, is that, um, services vendors, IT outsourcing, last gen software? Like, w- who's most threatened?
- EGElad Gil
Oh, sure. Yeah, no. I've been involved with a number of companies now that are basically doing, um, different forms of either horizontal or vertical applications
- 21:23 – 27:18
Jobs and businesses at risk of disruption
- EGElad Gil
of AI, and in some cases they're really eating away at preexisting SaaS companies or things like that. But I actually think the more interesting thing is where you're augmenting or replacing people at scale. And so, you know, examples of that may be, um, customer support and success. You know, we had Bret Taylor from Ciara. Decagon is a company I'm involved with that's doing a lot there in terms of, you know, really making customer service reps dramatically more efficient. Um, but I think in general when I look at these sorts of areas, I don't really think of them as SaaS software replacements. Hey, there's a S- there's a... already an existing software company like Zendesk and it's gonna displace that. I actually view it as augmenting the people that use the software. And so really the question is where there are large numbers of people effectively doing email jobs, right? They're cutting and pasting text or they're s- they're synthesizing information, they're moving it around, they're manipulating it. But I think more generically, I, I'm very interested in these markets where it's not even are you displacing an existing SaaS provider, you're just changing how people are used relative to this stuff. And there's big bonus points if, for example, you need people who can speak multiple languages, 'cause AI can do that really well. And there's bonus points if you want people to be 24/7 available, 'cause AI is really good at that. And so you almost ask what is AI really good at? And there's gonna be a big shift as we see real-time voice models sort of kick in, and it'll take some time, but people like Cartesia and others are working on that, you know, ElevenLabs and then the big model companies, OpenAI, Google, et cetera. Um, and that's another area that I think will really get revolutionized by, hey, suddenly you have a agent that can speak 20 languages 24/7, that doesn't get tired, that's always on track as customer support. So th- those are the kinds of things that I think are really interesting.
- SGSarah Guo
Yeah, I think it's, um... That all makes sense to me. I think it's a pretty nuanced question because you have companies where the value is replacing some amount of labor or making it much more efficient. And I think the, um, the dollar, like, the value to businesses there is probably greatest. But, um, I also, I also think you can take a lens that is, like, look at every existing category of, um, of software and I, I think not even just the traditional, like, high growth, you know, venture-backed-
- EGElad Gil
Mm-hmm.
- SGSarah Guo
... software categories that have, like, super high premium margins, but, um, uh, like, thinking about it, like, from a specific example perspective just, uh, like, what's good fit for capability, there are all these little vertical software companies that are essentially crud applications sold with some distribution to a segment of the market that has no technical capability, right? Um, and think, like, I don't know, like, campground management software or whatever it is. Like, some, some vertical like that.
- EGElad Gil
Yeah, it's basically Constellation Software did all this, right? They basically, um, they, they buy something, I don't know, it's like a hundred companies a year or something.
- SGSarah Guo
Yeah.
- EGElad Gil
Some crazy number and it's all these small niche vertical software companies and they just aggregate them up. And so they'll buy the golf course planning software company and the software company for window design-
- SGSarah Guo
Yeah.
- EGElad Gil
... if you build windows. And there's like... You know. So there's all these, you know, thousands and thousands and thousands of niches.... for truly niche, vertical SaaS, and they've just aggregated all of them and created a massive market cap.
- SGSarah Guo
Yeah. And I: I think that there's, um ... There's like several interesting ways to think about what happens to those categories of software, right? One is just like, if you think they're extractive and, um, you can, uh ... End users will be able to generate more of that software. Like, that could go away. If you think that a company can do it and, like, the distribution is the advantage, then you can replace it.
- EGElad Gil
Mm-hmm.
- SGSarah Guo
I think there's a, like a sort of, you know, different, um, category that might face the same dynamics is like, uh, some, uh ... The web hosting companies that exist today, I think they either need to dramatically change or we will have a new generation of them. Because w- uh, you know, w- uh, web development is probably the first to be attacked by code generation. To your point about like, you know, what is the work versus the software itself, um, I think for some set of outputs you won't want the, um, infinite control of something like Adobe, and you'll trade off those controls for cost and speed. And so, I think it's mostly attacking the people aspect, but I think it's also taking away some of the tools aspect, because you just-
- EGElad Gil
Mm-hmm.
- SGSarah Guo
... don't need all of that power for some set of use cases, right? It's like the Canva-fication of some of these industries.
- EGElad Gil
I think that's true. I think the other piece of it is there are gonna be companies that I: I call like AI durable, the ones where AI doesn't matter that much. And so the: the negative of it is that also means that maybe AI isn't that important for them as a tool. But the positive means that they're completely robust in the face of AI. The extreme example of that in the non-software world would be like a railroad, right? You have to-
- SGSarah Guo
Yeah.
- EGElad Gil
... lay down a track. You'll never be able to do it again in the US due to regulatory perspective. It's just there forever, you know. You'll probably have the same rough railroad footprint for the next 20 years as you do today. And then within the software world, there's a set of companies that just use very AI durable. You know, Rippling may be a good example of that. They rolled out a recent AI product that we talked about with Matt McInnis, the COO, a few weeks ago. But the flip side of it is a new AI HR company isn't gonna make headway against the beautiful bundle that they provide. And maybe the biggest risk to a company like Rippling is its headcount starts dropping.
- SGSarah Guo
(laughs)
- EGElad Gil
And their customer base due to AI, then they lose per seat, you know. Um, they lose some seats. But the flip side of it is somebody trying to attack them using AI seems like a tough lift. So it d- you know, it feels like there's companies that also are: are gonna be very durable in the face of this coming wave.
- SGSarah Guo
I: I think Rippling's a great example of this. I do think that just categorizing, um, uh, sort of categorically saying the system of record of companies are protected is, like, I think at first blush
- 27:18 – 29:28
AI-durable companies
- SGSarah Guo
okay, but I actually think in: in some areas, um, you have a real chance at disrupting these anyway.
- EGElad Gil
Yeah, I think it's more vulnerable than that. I just think Rippling is especially robust. Um, but I do think there's some areas which are basically like a data store pretending to be something more.
- SGSarah Guo
Yes. Yeah. I agree.
- EGElad Gil
And they have an ecosystem wrapped around them, and the ecosystem is most of the value and most of the functionality. I think those people are much more, um, at risk.
- SGSarah Guo
I agree with you. I think a shape of company that I'm interested in is, if you are coming at it from like a ... I think this is: has to happen in the, like, SMB or mid-market first versus the enterprise.
- EGElad Gil
Mm-hmm.
- SGSarah Guo
But if you're generating, essentially, the database that you describe from the source material, um ... Because if: if what you had was a database and then people putting information into the database with some, like, you know, approval flows and, um, ecosystem and transactions wrapped around it, uh, if you can generate a higher quality dataset from the source material, that might be, you know, communications-
- EGElad Gil
Mm-hmm.
- SGSarah Guo
... for m- example, or documents-
- EGElad Gil
Sure.
- SGSarah Guo
... then you end up with that software replaced. But, um ... But I: I think that has to happen in the low end first. Um, and then I think in the high end, the, uh ... Like, some of the reasons the core systems of record have been so durable, and I think they're generally still pretty durable, is, uh, all of the, um, like, business process maintenance-
- EGElad Gil
Mm-hmm.
- SGSarah Guo
... customization on them, and I think that's, like, generally still true, but I think you can attack the: the services spend with AI as well. Well, I mean, listeners, you heard it here first, like Clone Wars, artificial wombs.
- EGElad Gil
That's all I got.
- SGSarah Guo
The episode in which you find out Sarah and Elade are Luddites. Good.
- EGElad Gil
The future is here, it's just not equally distributed. That's the takeaway, as always.
- SGSarah Guo
Thanks. (instrumental music plays) Find us on Twitter @nopriorspod. Subscribe to our YouTube channel if you wanna see our faces. Follow the show on Apple Podcasts, Spotify, or wherever you listen. That way, you get a new episode every week. And sign up for emails or find transcripts for every episode at no-priors.com.
Episode duration: 29:29
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