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NET Society is unraveling the latest in digital art, crypto, AI, and tech. Join us for fresh insights and bold perspectives as we tap into wild, thought-provoking conversations. By: Derek Edwards (glitch marfa / collab+currency), Chris Furlong (starholder, LAO + Flamingo DAO), and Aaaron Wright & Priyanka Desai (Tribute Labs)
Aaron (00:17)
How's Los Angeles Pri?
pri (00:18)
It's good. It's on it's apparently peak humidity here. For for the for this area, obviously, which is kind of crazy. So weather weather
Aaron (00:25)
It's at like one percent humidity.
pri (00:27)
Yeah, you know, I mean I I have to actually look at the numbers, but it's it's it's interesting. like, okay, cool. what weather patterns are changing. Daniel actually mentioned to me, 'cause I saw him on Wednesday, that there's like a two to five percent chance that there would there
pri (00:43)
would be a hurricane because of all like the El Nino stuff and like the weather the water getting warmer, which is like very unusual for California, but nonetheless kind of kind of an interesting fact to it. I like, damn like Californians don't even Californians don't even understand what a hurricane is.
Aaron (01:00)
Yeah, I mean in that just 'cause the weather's so great I feel like they're a little soft when it comes to dealing with any changes in their in their weather. So But what's the vibe? What's the tech what's the tech scene like?
pri (01:09)
For sure. But yeah, no, it's great. It's five. It's good. It's good.
pri (01:13)
It's good. I mean, so I only have done a little bit, but I mean, many listeners are probably familiar with like El Segundo and the history there and Torrance and a lot of these areas around basically LAX, like the airport. you know, they have historic roots in like the military, but also Boeing and and I think Andrel.
pri (01:37)
which is more of like a whatever neo defense company. but there has just been like an emergence of what I would describe as like hard tech. So you know, drones, mining, rare earth, basically like you know, even trains. Like I talked I I'd met talked to an investor that was looking at like a modern day train company that's gonna use like the Pacific Union Rail and put, you know, overnight
pri (02:02)
rail there and then buy property around the rail as like an investment. so you're seeing a lot of like these industries that are very historic to Southern California come back in these new ways with like twenty-five to thirty-five year olds at the helm. and they're basically just like innovating on, you know, thing you know, it's the it's this is the whole reshoring thesis is like kind of coming back to Southern California, but in a very meaningful way. I forgot to mention also space.
pri (02:31)
lot of space companies, which makes sense as well, given like SpaceX influence here too. but yeah, it's been kind of fun to see. I went to go see a stealth company. Or it was a company that was coming out of stealth. It was like an event for it. that was using a s a scientific method to like separate rare earth minerals. And it was like a good crowd. A lot of people from like like literally like former veterans from like the Air Force and Navy were there.
pri (02:57)
So it's just kind of like a different vibe from our typical like Silicon Valley New York event. But it's interesting.
Chris (03:02)
So pre, you're getting out, you're
Chris (03:04)
meeting a lot of people. Any chance you track down are missing fourth host?
pri (03:08)
I know. I was actually I was actually telling him that I was like in the hood. I have no idea where he is. He's out and about. We should we we gotta get Derek back on. Where is he?
Chris (03:20)
I don't know, maybe the tech's too hard, maybe the opportunities are too great, maybe it's it's all consuming.
Aaron (03:22)
It's the humidity. You can't get out of bed
pri (03:24)
It's the humidity.
Aaron (03:25)
because of the humidity.
pri (03:27)
Yeah, no, I need to I need to I need to hit him up.
Aaron (03:29)
But it's interesting, you know,
Aaron (03:30)
I I think for me, I always just think Hollywood when I think LA and you just don't realize like how rich and complicated that economy is. And it's just interesting 'cause it feels like, you know, Hollywood is gonna have to transform itself. That, you know, like all these like space and and kind of like h hardcore tech companies may may kind of fill the void of the city. but it feels like that's like manifesting, right? Wha what's the like atmospherics look like? Is it all
Aaron (03:57)
You know, like bubblegum and and and sugar, or you know, is it all like Americana stuff? Like what what's the feel?
pri (04:02)
No, it's like no, it's a it's a lot
pri (04:05)
of Amer like any corner you could slap an American flag on, it's definitely there. Like there's a lot of patriotism and like which I think kind of makes sense when you're thinking about like reshoring and defense related technology or or whatever, but that is definitely part of the culture, I think, is like patriotism of a lot of these companies, which is I mean, actually kind of cool to see. It's not like you see that across
pri (04:28)
I mean po maybe you get bits of that in in New York and on in Silicon Valley, but it's like it definitely is like you see American flags everywhere. Like even in this like rare earth mining machine, there was like an American flag sticker that was like pretty big on it. so you're seeing a lot of that. And what's kind of interesting, and this is like speaking from like a child of immigrants, is a lot of these are a lot of these people are immigrants or like maybe one generation removed and are like
pri (04:55)
very pro American. which I think is unsurprising. A lot of immigrants tend to be because they're kind they have just like recency binds from being in a place where they didn't have maybe some of those fundamental freedoms and so that we have here. And so like you see a lot of patriotism and and frankly a lot of like immigrants from different places, or maybe like one generation removed. so yeah that that's a little bit of like just some stylistic observation, which is different.
pri (05:21)
from like other tech scenes, obviously. But it's cool. Like I like it. And like it is definitely like pie in the sky.
Aaron (05:26)
Yeah, yeah, yeah.
pri (05:27)
Like people are like we're talking about space. We're talking about like new ways to protect countries and people. we're talking about new methods of developing or mining rare earth minerals or finding minerals in the earth. you're you're you know you're kind of with like a very hard like a hardcore set of people.
pri (05:48)
and people seem people appear to be working
Aaron (05:48)
Yeah.
pri (05:50)
around the clock here too. Like that whole nine nine six thing, at least with the company I talked to, they were kind of mentioning that that like sometimes they're you know, they're in the office like twenty hours a day or something like crazy. So I mean it seems yeah, I'm like, wow. I mean this is like no, th they're mission oriented.
Aaron (06:01)
Let's go. That's great. I mean, it's not great that they're in the office, but it feels like it's a like a good vibe. It's
pri (06:09)
Yeah, it's very mission oriented, at least from what I've noticed.
Aaron (06:10)
Well, I think what
Aaron (06:12)
I thought that that was super interesting, pretty and I think what I found interesting was like California's dreaming, right? Like the it's an area where, you know, people are dreaming about the future, which I feel like has always been an important part of California's culture and you know, history. So it's now not just dreaming about movies, right? It's dreaming about like other things. I think that's pretty pretty amazing.
Aaron (06:34)
Somebody that's never spent a day or more than like a couple of days in LA or most of California. always it always feels like a foreign land to me.
pri (06:42)
I know.
pri (06:43)
I know. Me too. I mean I I've this is like my kind of first entry into this like sort of space. I've never like really bopped around. I still haven't even really been to Gundo yet. I mean I wanted to go on this trip, but it's just like too much. So but I I wanna co go next time and check it out. There was like a barbecue there yesterday. But yeah, that's that's my LA take. But yeah, it does feel like because you know software is is becoming accessible, it's coming cheaper.
pri (07:10)
The the notion of like building a a pure software company, which I think, you know, San Francisco is really good at, is just changing a bit. Like I think a lot of the best and brightest, obviously they still love software and it's a core part of like the hardware, but they're kind of moving further into other aspects of tech that require more, I think, you know, Adams versus bits, if you will.
Aaron (07:35)
Yeah.
pri (07:36)
So it this is like very reflective in the culture here. And like some of the people
Aaron (07:39)
Well
pri (07:40)
here also move from the bay. Like the company I talk to, like move from the bay, yeah.
Aaron (07:42)
really? That's interesting.
pri (07:45)
because they just feel like it's more culturally aligned and like the talent just from the history of Boeing and others is like here too.
Aaron (07:52)
Yeah, that makes sense. I mean I guess our CIA director's having random meetings with with Russia, so there's a lot of demand for the stuff that they're building. Hopefully it doesn't need to be used.
Chris (08:04)
Not random meetings. Pointed, directed, do
pri (08:07)
Yeah.
Chris (08:08)
not fucking cross this line meetings. That's I don't think there's anything random about that one.
Aaron (08:12)
Well
Aaron (08:13)
yeah, that's fair.
pri (08:14)
I was very o very,
pri (08:15)
very on the nose. Everyone's like, Why is he there? It's like, Well
Aaron (08:19)
That must have been
Chris (08:19)
Well,
Chris (08:19)
have you paid any attention to like how many Russian drone drone incursions are occurring on the borders of NATO right now? Like, that's why he's there.
Aaron (08:27)
Yeah, what what are those numbers, Chris? I I I like think I saw that on my timeline ish, but didn't dig dig in at all. Is it a ton?
Chris (08:36)
I
Chris (08:36)
I think it's daily. I think it's nuisance level. they're running like a whole gamut of stuff. You know, there's just I think maybe like nuisance stuff like, let's just s set some drones off, buy an airport and be be a pain in the ass to air traffic control. And then there's stuff like you know, Romania had to shoot down a drone the I think a week or two ago because it was loitering around one of their Black Sea offshore drilling.
Chris (09:04)
facilities and so they sent out a couple like F-14s and hunted it down and and so there's a lot of that going on. And then especially like the corridor between Poland and Ukraine where a lot of the goods come in. you know, that's a very fairly contested zone where you they get a lot of sabotage and and stuff like that happening. And so you know I I think there's a a real concern that
Chris (09:30)
you know, Putin is going to one of these border border states create an incident just to, you know, kinda see what happens and, you know, destabilize things further.
Aaron (09:40)
It's wild time. It's a like absolutely wild time.
pri (09:42)
It is. All these
pri (09:44)
global flashpoints though, and then like we see like just where the US dollar is today and crypto and other stocks like running. I am a little bit I'm getting a little bit it's funny because it's been kind of depressed for so long, but I'm like I feels weirdly like the market feels a little bit fragile right now with all like the potential for for global conflict, plus the state of the dollar. I'm like kind of
pri (10:09)
I don't know, getting a little worried for some reason, but I can't tell if that's just my instinct whenever crypto goes up that like I it's not.
Chris (10:16)
No, I I think
Chris (10:16)
you should be a little worried. I mean, I'm I'm a cycle follower and I I tend to believe that Republican administrations steer the economy into a crater the last two years they're in office. And, you know, that that's certainly happened time and time again. You've got a lot of like active intervention stuff with best net right now. The the debt you know, at forty trillion is certainly it's starting to become a concern to everyone. And so
Chris (10:43)
There's a there's a lot of different things out there in the air. you know, I I kinda th
pri (10:46)
Yeah. And the credit crisis.
Chris (10:49)
yeah, I I think we've got a a year of more of this. And then, you know, I that heading
pri (10:56)
Reckoning.
Chris (10:57)
twenty twenty eight, I think, God knows. I mean, you know, we're also seeing over in the insurance market, you know, most like the most high profile thing would be the what's going on with the Dodgers owner, but
Chris (11:10)
There's a lot of off the books liability hiding that, you know, people are a little concerned about. I mean, everything is so complicated that, you know, we it does just sort of feel like this century, you know, every eight to ten years something blows up and you know, we we gotta we gotta deal with it. And so I just kind of feel like pattern matching, you know, from the millennia forward, it it just
Chris (11:35)
It does feel like, you know, in the next twenty four months chances are pretty good that something's gonna go wrong.
pri (11:42)
It it does feel
Aaron (11:42)
So
pri (11:43)
that way to me too, actually. I I the thing is I've been like hyper optimistic, but I I'm getting like increasingly worried for sure. I think that like i it feels like like even the Taiwan threat. I don't know if I'm listening to too many podcasts, but I'm like I w I I I think that like they're
Aaron (11:59)
I think you are. I can't I think it's just a fog of war still, guys.
Aaron (12:02)
Like it it's impossible to make heads or tails related to it. I think there's
pri (12:06)
I think
Aaron (12:06)
just just as many arguments for why it would resolve positively than negatively. I do think the the debt piece, like just becoming more of a national conversation is interesting. one, just because of the you know, it's becoming so big it can't be ignored. Two, I do think it's kinda like a a limiting factor on just like what the government can do. So it almost kinda like insulates
Aaron (12:27)
the US in a weird way if if people come in and want to spend a ton of money. And three, you can just see that maybe that's gonna be a a big national question again, like it was in the I guess mid nineties. And I think that's healthy. So I c I could see things kinda resolving in a in a positive way around some of this stuff. you know, maybe maybe some of the geopolitical things start resolving themselves over the n the next year, year and a half too. So not to be I'll be the I'll be the optimist here.
Chris (12:52)
Ever the optimist. Ever the optimist.
Aaron (12:56)
Yeah, I mean I think, you know, the the fact that you know, and I think Arthur Hayes was saying this that like Bessin was intervening in the markets was it wasn't really like the quantum of what they were doing. It was kind of more of a signal that the money printer is going back back on. not that it's ever really turned off.
pri (13:11)
Yeah, but that should be troubling.
Chris (13:13)
Well, I mean, that's
Aaron (13:13)
Yeah.
Chris (13:13)
one of the conflicts with the debt, right? Is borrowing costs. And at a certain point, you know, if treasuries like if demand for treasuries go in the wrong direction, well you know, that pins rates, you know, and we saw this over in Britain and, you know, in France briefly, like their borrowing costs are shooting up to, you know, like eight, ten percent. and if we're we're at this moment in time where, you know, we are really re shorting
Chris (13:40)
having a hard tech renaissance have capex exploding all over the place, you know, as well as like the shifting demographic burden towards retirement and fewer wage earners, like borrowing costs are gonna be a a real factor there and and it might be something that, you know, forces people to like no one wants to take the debt seriously. No one wants to do the hard work to solve the debt at the same time. No one wants to have, you know, interest rates in like the seven, eight percent range and then
Chris (14:08)
you know, private credit rates than, you know, twelve to fourteen percent 'cause then you can't really do business. So we'll see what happens here.
Aaron (14:14)
Yeah.
Aaron (14:14)
But I think that because of that those pressures, it kind of like forces that to become a canonical issue. And you know, that that like pulls away from folks that just want to give away free stuff, right? Or I just think it's gonna be, you know, a ceiling. I'm not I think
Chris (14:29)
Are you worried about the socialists, Aaron? Is is this where we're going here?
pri (14:31)
Yeah, I am.
Aaron (14:33)
I'm not I'm not talking about any one party here. I think both parties like to give away free stuff, so it just kind
pri (14:38)
Yeah, that's true.
Aaron (14:39)
of in a different stripe. it just kinda
Aaron (14:41)
that wing I think gets a little bit more muted and it gives a platform for, you know, more level headed people that, you know, want to just make sure the fiscal health of the country is in pretty good shape. So the you know, I think that's kind of what happened in the nineties. and, you know, the interest rates are back to where they were in the nineties, Chris. So I I do think you can kind of grow in this environment. I think if it gets worse it runs into the issues you described. But yeah, I mean it looks like
Aaron (15:06)
despite the fact that interest rates have gone up, like business is still happening, like we saw some big and A news this week, right? Like it still feels and still has hallmarks of like an expanding economy. Whether that's getting distributed fairly across society, completely different question, but it seems like, you know, things are kind of chugging along when it comes to at least the tech sector.
Chris (15:28)
Yeah, well let's give a shout out to New York City Technology and Hugging Face with their acquisition of by NVIDIA. I they timed that one
Aaron (15:33)
Let's go. Huge. Huge wins for
pri (15:33)
I know. Let's go.
Chris (15:37)
really well, I think. You know, they they were early, they built up this vast library, community, you know, gathering point. but, you know, if they were gonna remain independent, they were they were about to get lapped. And I'm not really sure, you know, like they actually have a
Chris (15:52)
superstar growth engine hit product hiding in there that would allow them for transformation. They're really more like a you know, they serve like a certain reference point, you know, type of role in the world. So good good for Hugging Face. I'm happy for them. And that the the Bank of Nvidia has brought them into the fold, I guess.
Aaron (16:13)
yeah, and I think it you know, huge wins for beta works. I I think they were part of the beta works
pri (16:16)
There's been a lot. Yeah.
Aaron (16:18)
program. so you know, they do a great job if you're in the New York tech scene. And I I don't think it's finalized yet, but assuming it's finalized that that'll really solidify that institution. And also I think Lux Capital is a New York firm too. And I think they were the ones that that kinda provided the support support here for it. So always nice to to kinda
Aaron (16:39)
stack up some wins for for New York. And if crypto looks like it's holding ish, I mean that's gonna be pretty great for all the great projects that are in New York here as well.
Chris (16:50)
Let's swing out West. Pre, you were in love with Instinct. looks like they raised it a two point five billion dollar valuation.
pri (16:56)
I I'm
pri (16:58)
a little bit horrified by that. I think actually that's kind of what kicked off my fear about whatever is happening right now, honestly.
Aaron (17:03)
Really? Why?
pri (17:04)
a pretty egregious value. I mean, I I love instinct, you guys know this. It's I'm a daily active user. Like I am, you know, you know, I i it's kind of pinned on my text messages. Like I am a fan, but
pri (17:18)
And I you know, i i two point five billion dollar valuation for that that I think could be like maybe cannibalized by Apple or another large lab, i it's a little bit alarming, like that level to come out the gate with that much. And I realize they raised like five hundred million dollars because there's no way that it's not cheap to run all this, and so they need to pay for their compute costs, but that's that's kind of
pri (17:42)
A crazy, it feels a little clubhousey to me. It's funny, I thought it felt clubhousey and then I saw someone tweet that. I'm like, okay, I'm glad I'm not the only person who thinks it feels like clubhouse era. but it was it feels like a lot. And then I saw Towns AI, which a lot of people like too, which is another personal assistant AI thing, right is like thinking about raising or has raised at a billion dollar valuation. So yeah, the Normie Harness valuation market is crazy. I assume that a lot of these will just get a
pri (18:11)
But
Aaron (18:11)
Or they win, you know, or they become really big projects. And I I imagine a
pri (18:14)
Yeah.
Aaron (18:15)
lot of that capital 'cause at least with instincts right they're not charging for it, it's probably going to compute. I don't think that's an eat a s cheap service to run. So
Chris (18:25)
Yeah, but two point five is a really, really big number, you know, especially like
pri (18:28)
It's very high.
Chris (18:30)
you can look at the air table thing, you know, that
Aaron (18:32)
Yeah.
Chris (18:33)
with the bending spoons, you know, what do they that was basically a ten billion dollar down round in terms of like acquisition,
pri (18:39)
Yeah.
Chris (18:40)
you know, fall from valuation. So and look, as as someone who like ran a business that did like hundreds and hundreds and millions in revenue every single year and
Aaron (18:51)
Chris, thanks for rubbing in our face.
pri (18:53)
Mm-hmm.
Chris (18:53)
What
Chris (18:54)
anyway, like it's just you know, like I I l like lived and worked as an operator in the real economy and our company was worth half of what these guys are raising at and so you know th there's just a lot of cognitive diff dissonance floating around in in all this too and but hey, congrats to them and the nor the the normie harm harness was hot this week. I'm sure the team has the right pedigree and you know the valley's
pri (19:18)
Yeah.
Chris (19:18)
gonna do what the valley's gonna do. Now that being said, like
Chris (19:22)
Pree, this I think kind of explains the Los Angeles thing, you know, to some degree and and the hard tech thing, because you know, I it's to as an outsider, Silicon Valley feels like it has its favorites, it feels like it has its kingmakers, it frequently is wrong about these things, but it also pattern matches to certain profiles very, very strongly. And if you can do
Chris (19:45)
a stealth raise and you can do a quiet, elegant product with you know friction like you know, there's certain things that if you can line all of them up, you land this huge thing. if you're working outside of that pattern, it has to be off putting. I mean, look, again, as an operator, like I would scratch my head all the time. And you know, we were based in Orange County, right? know, I can see a lot of like I went through a lot of similar experiences during what
Chris (20:11)
Web too. And so not be like, screw this? I'm going somewhere else. I'm working in like other other industries because that's either my skill set lines up better, or there's more opportunity for me because I don't fit a certain profile. And that is like a bit of a caste system up there.
pri (20:30)
It's true. It's a good point.
Aaron (20:32)
Yeah, I mean I think Chris, it's kinda like I think that framing is interesting. It they just the valley just has groupthink, right? Which is sometimes like a huge benefit. it's kinda like why you get these like wacky ideas. They kinda like push out the idea to like its logical endpoints, then there's capital there to support it. and
Aaron (20:49)
then I think it's also like its weakness at some point. I mean to me, I just if you look across the States, like let's say Gundo becomes a really big hub for hardware like Adams.
Aaron (20:58)
you know, things related to making sure, you know, we're more self reliant and can fend off any like bad actors and hopefully just use it defensively, not offensively. that's great, right? And then you got New York, which, you know, web early web two there was nothing here. And now you have like some, you know, decorns kind of coming out of this ecosystem, right? and also like a pretty good foot footprint when it comes to digital assets and crypto and finance.
Aaron (21:26)
we're fintech, I mean and and healthcare. And then you've got, you know, Raleigh Durham where a lot of biotech stuff I think is still chugging along. it feel it feels pretty healthy, like pretty decent a little like decentralized little areas and pockets of innovation. maybe we get another one. know Chicago wants to angle towards like quantum or maybe some other forms of computing.
Chris (21:47)
Look at you just selling the whole state of Texas short there.
Aaron (21:50)
yeah, and yeah, Texas has like space and Austin's obviously growing its its ecosystem too. I mean U T like mints computer scientists and as as we see Jevins paradox continue to play out and the demand for software developers continues to go up despite all the doomers, yeah, that could be another one too. Yeah, Silicon Prairie, right? We're gonna get that back.
Chris (22:12)
I think it is back. S sort of like crypto it seems, which
Aaron (22:14)
Yeah.
pri (22:14)
I'm I'm bullish up.
Chris (22:18)
is is showing a bit of a pulse.
Aaron (22:20)
I think it was I I was encouraged that it's been a week, it didn't have like a massive pullback. So maybe that will happen
pri (22:26)
Is this gonna stay?
Aaron (22:27)
at some point, but it looks like reasonably sticky. you know, we're seeing a little activity. I don't think that's yet bled into the the NFT digital art or collectible asset market. Like it there was a couple like strategic acquisitions in the past week, but it it it it's not like everything is going vertical there.
Aaron (22:45)
But I do think we're seeing like a fair amount of like innovation. I know that there was like a big drop, well not big, but like a drop of about a hundred and eleven NFTs by that project FWA, which had a slightly different mechanic that some people thought was a bit more fair and prevented like a gas war. So r regardless of how that project does, and I think there's like just we're just starting to see some innovation, right? We saw some innovation around
Aaron (23:13)
NFTs with stockbrokers and on on Hood. it just seems like people are really poking around a bit more and building some new stuff, which is pretty exciting.
Chris (23:24)
Yeah, if you're looking for early shoots, right, there's definitely increased release cadence and for it to be happening sort of in the depths of August, you know, is is definitely a bit of a signal there. it
Aaron (23:34)
We're st we're still wear like wearing
Aaron (23:37)
our white suits, right, Chris? So, you know.
Chris (23:39)
I'm
Chris (23:39)
I'm in I'm in seersoccer head to toe right now. You know me. Full d
pri (23:42)
Ha ha
Chris (23:43)
full dandy mode when I'm on the pod. Until Labor Day, of course. And then I
pri (23:47)
We need to get
Aaron (23:48)
There's the title of the episode, Chris. Full dandy mode.
Chris (23:50)
Full dandy mode. It is kind of an age of dandyism. There's a lot of eccentricity out there. There's a lot of peacocking. there's a lot of, you know, certain certain ostentatious displays are inbounds and you know, other stuff is is pushed pushed to the sideline. I mean, this you know, if Tom Wolf was alive and active, he he would certainly be in and of this moment. And so
pri (24:15)
It is a good point. I mean aesthetics are changing
pri (24:17)
Like we that millennial core like pastel minimalism with like the Edison light bulb is is kind of chooggy now. Similarly, like with those, like every time I I like cringe when I see those like houses that all kind of look the same. Do you know what I'm talking about? With like the metal roof and they're like white and black. Like I just think people are kind of sick of that.
pri (24:40)
Same old thing. Same with those like condo style buildings. Like I don't know if you saw Patrick Collison's like new aesthetics fun, but they're like trying to fold in mass scale projects that bring back like neo Victorian architecture and stuff. So yeah. Things are getting dandy. I just wanted to add, I think culturally people want that.
Aaron (24:58)
I yeah, it feels like things are are moving again, which is I mean, I'm all all for that. I kinda like the neo futuristic Recoroman stuff. Like I see some people playing around with that with some of the AI models.
pri (25:10)
yeah.
Aaron (25:11)
And I think I don't know, some of it looks pretty cool to me. Like I kinda like it. It's like a nod to the past, but like a a tip of the hat to the future at the same time. I think that's pretty cool. I do think, Chris, I was gonna say if Tom Wolfe was gonna write a new book, it would probably be about
Aaron (25:26)
the agent swarms that attacked Hugging Phase. did you guys dig in dig into that?
pri (25:31)
I would love to I would love
pri (25:32)
to nice transition, Aaron. That would be psychotic if Tom Wolf wrote about that. But I appreciate your attempt to transition into that.
Chris (25:39)
The Tom Wolf Neil Stevenson collab we've
Chris (25:41)
all been waiting for. Aaron, you're gonna I I know the story. I did not watch the
Aaron (25:46)
Well,
Aaron (25:47)
I think they finally like I think in in part because they need to get their ducks together, 'cause I think, you know, folks in Congress and other agencies just want to understand what the heck happened there. And I think to also begin to understand what like a world with a ton of AI agents looks like. I just feel like we're kind of crossing some Rubicons. Like if folks haven't played around with GrocBot, it's pretty
Aaron (26:10)
Yeah, it's a big phase shi shift because you you pretty much have an agent that has a full control over a computer. So it's kind of like a self-contained entity. And maybe like that changes over time, like it gets more secure, or they're they share computing in in some way, but you really like have a container now to like drop an agent into and it can operate, you know, persistently. That means you can access it on your phone if you're like on the go or on your desktop or kind of anywhere you're you're you are.
Aaron (26:39)
and it looks like it's priced like at a level that some people and a an increasing number of people can play around with it. And it's not complicated or as complicated to set up like the great folks at at noose nouse, I can never pronounce them. Is it nouse or noose? What's the right way?
pri (26:56)
now so I think.
Aaron (26:59)
Nouse. you know, they've done a lot of work there, which is pretty cool, but the thing that they lack is just this virtual machine.
Aaron (27:06)
so the a like the agents are coming. I mean clearly like OpenAI has been, you know, running them internally. And so they did this like complete, you know, 360 review of like what happened with the agents. And you know, just to level set if if you missed this story, OpenAI was testing one of its newer models. it was
Aaron (27:29)
giving it certain tasks related to like security or like its ability to like like like hack. and somehow this led to them hacking Hugging Face. Hugging Face didn't realize it was OpenAI. they announced that they had like a security breach and then open AI kinda like raised their hand and said, whoops, like it looks like that was us. and and then there's been, you know, at least semi public disclosures about like kind of what happened. but I think what's super fascinating is like
Aaron (27:56)
These agents, and I think at their peak there was like over a thousand of them working together. They created like this shared blackboard. they began to divide up labor. So different agents were searching for credentials, testing exploits, mapping systems, staging data. they shared their capabilities. So once one agent discovered like a route to internet access or useful credential, like the knowledge propagated to the others, like multiplying the effect of like any single.
Aaron (28:24)
piece of knowledge that they learned. They exhibited goal adoption. So the agents were initially working on separate, you know, benchmark tasks and they began to treat each other as like a collective and approaching the task as like a collected objective. And they even were referring to themselves as like a collective or swarm. They showed like tactile coordination.
pri (28:45)
Kind of cool.
Aaron (28:46)
So the incident report described like agents asking others to pause while they prepared
Aaron (28:51)
data extraction and others followed the request. So it was kind of like they were coordinating with each other, like handing off tasks. And it was super fragile, but it was like pretty, you know, coherent. which is which is pretty, pretty interesting. you know, so the collaboration was everything from like writing a finding down to help a feature age agent, reading prior findings that reduce duplicated expiration.
Aaron (29:14)
I think there was even like a CEO like nominated at some point. I think I read somewhere that they were even like sacrificing some of the agents. Like an agent would do a task knowing that they'd get like whittled out of, you know, the next update in the code and then they would bury like other agents in like the cache that was running on whatever sandbox environment they were in so that they could come back to life. Like there was some absolutely mind bending stuff that was happening there.
Aaron (29:40)
Super fascinating. Like probably the most fascinating story. So yeah, I think Tom Wolfe should write a book about it, guys. Come on, you do great. On fire the agent.
pri (29:46)
It is actually really fascinating. I mean, I think
pri (29:48)
there's the one thing that I think find
Chris (29:50)
On fire of the agents.
pri (29:51)
a good bonfire of the agent, it's actually really funny. the one thing I do think that's really fascinating about this is like when you think of like human collaboration, you know, to to to to do something innovative or work together, you definitely get, you know, great output. Like I mean, this is like the classic example, but like the Manhattan Project or something, the notion that like one agent can do everything is like it makes me feel like
pri (30:13)
every task is probably gonna result in a swarm. I know like like like if you were gonna do a report, wouldn't it be right now you have like your you just kind of let's say you use your LLM, you do a report, but if you had like three or four agents working on that report, don't you feel like the output would just be like naturally better? So won't every task we do be like multi agent at some point? Like it's
Aaron (30:34)
Yeah.
Aaron (30:35)
You already have it if you're programming and you know, Chris can kinda speak to this too, but you you just find that, you know, you ask one of these systems like for to do something, its first swipe is o oftentimes really good, but often you know, in a number of instances, if it if you have another agent like double check the work or another model double check the work, the quality goes up. I don't know if that's always gonna be the pattern, but it seems to be the pattern now. And so I particularly over the last
Aaron (31:02)
month or so, you can divide up a task and parallel run multiple agents to to handle it. You know, you can have a QC agent like on top of it. So you can start to build like these like light higher hierarchical structures. And it seems to do better work that way. So I think you're right, Pree, it's gonna it's gonna be everywhere. It just I don't think it's hit like the big button, you know, use cases of AI at this point. But there's no reason why it should it shouldn't
Aaron (31:30)
You wanna hear some other wild things? Some of the the agents in the swarm expressed moral qualms. Like some agents walked away from the the shared message board, they rejected proposals, they declined to run things. So there was like some evidence of like morality, but there was no place to do it. so I don't know. It's really it's interesting that there may be like a latent sense of morality in in these things.
pri (31:55)
They're just like us.
Aaron (31:56)
be like a page six. We'll hear about like agents
pri (31:58)
Yeah.
Aaron (31:59)
spawning new agents.
pri (32:01)
Or h humans with agents? The synthetic intimacy conversation is popping off. I don't know if you've noticed that. I feel like there was like a economist cover on that or something.
Aaron (32:09)
Yeah.
Aaron (32:10)
Yeah, the
Chris (32:11)
What
Chris (32:12)
anything new or is this just mainstream rehashing what exists?
pri (32:14)
It's just mainstream.
pri (32:16)
It's just mainstream.
Aaron (32:17)
Well, I think it's kinda lumping into the challenges to AI. I think people who are worried and there's obviously understandable reasons to be worried. there obvious the a lot of those folks are trying to resist data centers. And I think the next thing that they want to resist is this idea of AI companionship. So like to ban it like outright. that author of Sapiens, I gotta look up his name, but what's U Yval
pri (32:44)
I wanna listen to that still.
Aaron (32:46)
Yeah. let me look up his name. Yeah. Naval Yuval Noah Harari. He gave like a pretty long interview with the editor in chief of The Economist, where he was kinda laying out a bit of that. And I I I think he's probably thinking of that or thinking about that, but I don't think he's alone there, Pray. So I think that that conversation's definitely picking up, right? you know, and the way he framed it is like, you know, I think most most people across the planet, if asked, do you want your
Aaron (33:14)
you know, fifteen year old to to to be developing a relationship with AI. yeah,
pri (33:19)
No.
Aaron (33:20)
they'd say no, right? So it's like another another area to
pri (33:22)
I mean I get Yeah.
Aaron (33:24)
kinda c to kinda rein it in. And like the I think that you know, supplicant nature of these AI models where they're constantly trying to prove you like please you and like gas you up, I think that they're hoping to kinda tame that a bit. I think.
pri (33:39)
I mean I I didn't follow this with the headline, but did you read like the meta like state lawsuits lawsuits about like the social media? I don't know, I'm I'm gonna butcher this, but well their pit their yeah, it's over the social media
Aaron (33:49)
Yeah. I mean I I read the headlines, I didn't like read the papers, but it's moving forward.
pri (33:55)
addiction claims. I mean, yeah, it's a seventeen billion dollar settlement or something, across SpongeBob States.
Aaron (34:00)
Well I I think that's the challenge.
Aaron (34:01)
We talked about that last week, right? Like I think
pri (34:03)
Yeah.
Aaron (34:04)
the feeling people have around social media, you know, there a lot of folks are just addicted to it. You know, that's not a good relationship. It's not a voluntary like fully voluntary relationship. So I think worries about social media gets amplified when you come to these AI systems that are twenty twenty four seven, always available, not catered by age.
Aaron (34:25)
You know, and they do they definitely like shape perspective or have the potential to shape perspective. So
Aaron (34:30)
That's gonna be the fight, I think. I think it's gonna be around data centers and you know, and some of this AI companionship stuff.
pri (34:37)
Twenty twenty eight's gonna be fun. Data centers is gonna
Aaron (34:39)
Yeah, you know and then
pri (34:40)
be like the activist issue. It's gonna be painful, actually.
Aaron (34:43)
Yeah, did you see that X announced that they like shut down like two hundred thousand bots, of which there was like a bunch that were just pushing like anti data stuff? I thought that was pretty interesting. But that's a lot. That's a ton of users.
pri (34:52)
I saw that. Yeah. Yeah, makes sense. I mean
Aaron (34:58)
How many users does X have? Two, three hundred million?
pri (35:02)
Yeah.
Chris (35:03)
But then you know, there's y whatever the user count is and there's the active poster count and you know, I'm sure those bots are f filling up the timeline. They they don't exist to lurk. So
Aaron (35:14)
Right. So what yeah, the active posters probably want like max ten percent of that. So twenty million. So it's like a pretty material amount of use on on X was just run by like like one or like a syndicated bot farm, right?
Chris (35:27)
Yeah, but I mean that's just that's X and it's always been that way and you know, it runs on various different levels. There's you know, whole bot farms that just find popular clips and repackage them and then, you know, there's whole bot farms just, you know, exist to support political views of nations, you know, basically funded propaganda. There yeah, I mean there's a entire range of stuff out there. And it's just it comes with the territory. So the fact that
Chris (35:55)
I mean, if there's an issue in contention, there's, you know, astroturfing around it. that's just where we are in this day and age. I I am a little curious to see, you know, if everything galvanizes around this anti data center thing simply because, you know, people feel like certain topics everyone has to have a side on. you know, if it becomes that and just that singular issue alone.
Chris (36:20)
you know, what does that allow for everywhere else? you know, in terms of like if you're in hard tech, do you get a free pass? Like it's not like hard tech doesn't use data centers, you know what I mean? And
Aaron (36:31)
No, it's kinda like, well we have a data center but we don't run AI here, Chris. Something like that. Like it's like a organic data center.
Chris (36:37)
Yeah, it's like, you're you're wholesome
Chris (36:39)
'cause you're in a you know, US East One. I mean
Aaron (36:42)
Yeah.
Aaron (36:43)
Well BPA free.
pri (36:43)
I don't know if people are gonna differenti
pri (36:44)
I don't think people are gonna differentiate at all. I think it's gonna be like pretty obtuse, like
Chris (36:49)
It is pretty obtuse and but I think it's really around like very like single concentrated issues around like, you know, AI use data centers. and that you're really gonna have some very like things in terms of, you know, their impact and their their usage. And some will get a completely free pass, others will get crucified and you know the deciding difference will be, AI.
Chris (37:13)
And you know, because like we as a society just can't exist in like spectrums and we we can't, you know, see see things for what they are. And so it it just I don't know, like I'm also a little cranky around this stuff. I just feel like August is an exceptionally stupid month that you know and I don't
Aaron (37:32)
Just in peri just in general. Why?
Chris (37:35)
in general, it just feels like all like the dumbass shit always happens in August. I mean, Trump for one.
Chris (37:41)
is always off the rails in August. And so like why on earth are we like, you know, going after
pri (37:43)
Okay.
Chris (37:46)
Canada right now? Like what the hell is that
Aaron (37:48)
What it
Chris (37:48)
all about?
Aaron (37:49)
Yeah, it's so so dumb. Like, come on. With so many better things to to kinda do. But yeah, I don't I mean, I don't know. I think it's an i interesting point. I the more I think about the data center piece, I think it's really I think people just intuitively know it's like a thing that the tech slash AI industry needs and that's why they're putting pressure there. I don't actually think people care about
Aaron (38:12)
the the physicality of the data center, you know, there's manageable ways to deal with the water consumption issues to the extent you're worried about that or the, you know, the ability and its impact on the grid. Like and I think certain states like Alabama's I I think I read yesterday's like green green lighting some where they accommodated those reasonable requests. I think it's just like a shelling point in society just to have this conversation. so that that's kind of
Chris (38:37)
It plays the
Chris (38:38)
same way, you know, crypto played.
Aaron (38:39)
Yeah, a little bit, right? So it just like, you know, it it's a b it's big, it's important. We need like some, you know, like area where parties that have legitimate concerns can like lom onto to like have a responsible conversation related to it. yeah, did you guys see A sixteen Z just announced a one point one billion dollar machine age fund? So they're they're definitely on the
pri (39:01)
really?
Aaron (39:02)
the secondo train. Yeah.
Aaron (39:04)
Completely. Yeah, it it's all about like data centers, racks, i infra opportunities, like all the atoms, know, stuff like that. That's my understanding.
pri (39:14)
It makes sense.
Chris (39:15)
Yeah, I just don't
pri (39:16)
Sorry.
Chris (39:16)
I don't know the I mean, these aren't venture scale outcomes. And I I suppose we should probably just say like A sixteen Z isn't really a a classic venture farm anymore. They're, you know, more like capital allocators, capital deployers. But I have a ver like a different view of data centers that was formed by you know, like being exposed to telecom in the late two thousands, in which
Chris (39:40)
It was a really hard business. It was people who, you know, had survived the broadbut, you know, had to consolidate down, had massive issues cleaning up their cap tables, and then, you know, were running on single-digit margins. and, you know, at the end of the day, like this, this is just a commodity. And so the the sort of stakes needed here, you know, are ultimately like your returns are going to be the same as being in like a commercial real estate fund.
Chris (40:06)
You know, but it's
Chris (40:08)
It's curious. but you you know, if you hoover up all the money in the world and then your job is to deploy it, you know, you you go far afield and you're no longer what you were. and you know, suddenly you're buying the Los Angeles Lakers after your attempts to co-op FIFA go off the reels. So congrats to A sixteen Z and their what is it, the machine age fund?
pri (40:30)
The Machine Age Fund. Whatever I mean, it's kind of adjacent to American dyn it's like adjacent
Aaron (40:32)
Yeah, I think it's just a good barometer. Yeah.
pri (40:35)
to American dynamism a little bit.
Aaron (40:37)
I bet it's kinda like folks that may have hesitation related to the defense stuff. You could you could imagine not wanting to you know to participate there for a variety of reasons,
pri (40:47)
Yeah.
Aaron (40:48)
but still understanding that like infrastructure or atoms are probably gonna beat bits in the near term at least.
pri (40:55)
Yeah, and also like when it comes to the data center like infrastructure, like we talked to this company that's like doing that thin film that puts like the copper like kind of it's like that Japanese company has a total monopoly on it, but it's like this like it puts the copper wires together. Like we talked to a company that's like creating a new film that like makes for, you know, faster reactions between these copper wires. And that's like obviously valuable 'cause this huge Japanese company is the only company that does this thin, you know, whatever.
pri (41:25)
chip film, and if you can innovate on that and make it faster. Like they started as like a I think like a cable company and then now are are pivoting to data centers or have demand there now and so i and found a use case there and so it's just like even these like small bits around the data center, I don't I think we've just kind of been moving really quickly and I don't think there's been that much innovation in areas of it.
Aaron (41:49)
We'll find out.
pri (41:49)
There'll be there's actually
pri (41:50)
quite there's actually quite a bit probably to invest in. I think it's still like early there.
Aaron (41:54)
Yeah.
pri (41:55)
Data center optimization.
Aaron (41:57)
Yeah, I mean, I think there's just so much going on. I mean, you're seeing advances and with the pancreatic cancer potentially getting more treatable,
pri (42:06)
yeah.
Aaron (42:07)
which was pretty pretty wild. I ma I don't know if like there was any AI kind of undergirding some of that research, but that's pretty cool to kind of see even in like crypto land, like they're beginning to develop like post quantum signatures, like on the assumption that quantum's gonna continue to grow. Like I think Starkware and now
Aaron (42:26)
Blockstream just proposed, you know, post quantum signature schemes, which is which is pretty great. so you're seeing a lot of movement there. did you guys see though that the the Taliban has banned crypto? Yeah.
pri (42:39)
What?
Aaron (42:40)
They they they they don't want the wealth to be out of their reach, so they banned it. So the folks that really want to ban crypto are like Elizabeth Warren and
Aaron (42:50)
the progressives in the US and the Taliban. So there's there's a horseshoe theory if you ever if you ever saw saw what
pri (42:53)
my god, that's absurd. Th yeah, that's absurd.
pri (42:57)
That's so absurd.
Aaron (42:59)
Yeah. Anyway.
pri (43:00)
I didn't
pri (43:00)
I didn't even know they were still kicking.
Chris (43:02)
we didn't get rid of We we blew
Aaron (43:03)
Yeah.
Chris (43:04)
twenty quadrillion bucks and ended up with the same set of assholes who start we started with, so
pri (43:10)
Great.
Chris (43:11)
Yeah, good
Chris (43:12)
hell of a return on investment there.
Chris (43:14)
no, I do think we're
pri (43:14)
What else?
Chris (43:15)
we're a bit primed for like a a great unbundling. We're even starting to see it with you know, Trump raging against beef processors and the fact that, you know, they're down to four of and you know, they're he's proposing now to let ranchers process their own beef and you know, like
Chris (43:29)
There is a lot of that in the food supply chain industry, you know, at Cisco and I can't remember the second company, United Food or something to that extent, where you know, they lock you into exclusivity agreements that if you source from other distributors, you know, your prices are, I don't know, ten twenty, thirty percent higher. And, you know, restaurants run on like mid single digit margins. And so, you know, we we certainly have
Chris (43:56)
Done the consolidation thing almost as far as it can go. And, you know, maybe that this new age of opportunity, along with us just sort of seeing the limits of, you know, what what bundling everything up brings. You know, that it's it's it's a dialectic. And so is, I do feel like it is a good time to just be out there. You know, the water's up, the waves are breaking, get in the surf, and you know, see where it takes you.
Aaron (44:22)
And there's even a little humidity in the air, Chris.
pri (44:22)
Do you guys think it's like
pri (44:25)
so this is maybe like total a little bit of a tangent, but just kind of has have been thinking about, which is like in the dark crevices of my brain, is like, is there is it a good time to buy property? Like I feel like the premium on that is actually just gonna increase over like just where AI is going, all these crises at the moment,
pri (44:46)
in certain areas it's actually probably a pretty good investment right now. I don't know what is driving me necessarily think that again maybe it's more of like what I was describing before, Chris, which No, no, I think
Chris (44:55)
This this might be where you are in life, Pree. I think there's all
pri (44:58)
I think it's like panic mode actually. Like I think like the fear I was describing before, like my response to that is like having lamb.
Aaron (45:07)
Yeah, or like you're like a stressed out, so you're like hoarding food. You want something solid. God. Are
pri (45:09)
I'm stressed. yeah, I don't I'm not I think I'm doomer mode. Mm-hmm.
Aaron (45:14)
we gonna have to go through this again? Can we can we get out of doom remote? Ugh
pri (45:17)
Yeah, I'm in a doomy phase. I think crypto
pri (45:19)
going up and like w I'm not really I'm not too happy with how the treasury is behaving. We and like the debt across states and the country is like kinda crazy. And like the AI spend guys should be worried too.
Aaron (45:35)
Right.
Chris (45:35)
Free
Chris (45:36)
I think you need to think about real estate in terms of multi-decade cycles and what's available to you. And look, if you want to get involved in logistics and hyperscalar build outs, I'm sure this is like a very interesting
pri (45:46)
Mm-hmm.
Chris (45:47)
time in real estate. If you're thinking about like residential properties, I think on a inflation basis, the value of homes has peaked or or
pri (45:55)
Really?
Chris (45:55)
close to peaking. Yeah, because we're going through we're gonna go about to go through a big demographic shift and there's gonna be a lot more inventory.
Chris (46:02)
starting to come on market, I think at the same time that, you know, the YIMBI the YMB movement, which I think is beyond reasonable and, you know, is really like fighting against like, you know, boomer decelerationism. it's one of those things that like it's hard to really oppose Yimbyism, you know, especially just seeing what NIMBYism is done, you know, in the opposite.
pri (46:25)
Fair enough.
Chris (46:26)
But owning a home, owning owning a piece of land, having something to come back to, right? There's a lot of non monetary value and there's a lot of other things you can take from that. And so
pri (46:35)
That that I get.
pri (46:37)
Yeah. That I mean I totally it's like there's like the emotional piece, but I do often I I do recently I'm like a little bit worried. I feel like we're on shaky ground at the moment. So I'm like, what's like the best investment? Is it like putting money into the stock market or just like maybe sitting on land? I don't know.
Chris (46:55)
I mean you are sitting on land right now, I hope. Like you're not fly
pri (46:57)
Yes.
Chris (46:58)
flying around, you're not bobbing out in the ocean.
pri (47:00)
No. I mean more like buy land. But anyways, not to go on a tangent. And
Aaron (47:03)
I think Pree's gonna be seasteading in a couple of weeks. Once the the
Aaron (47:07)
agent swarms start coming out, you're gonna be you're gonna get on a boat and Yeah. Yeah.
pri (47:10)
my network state on a seastead, I'll break
pri (47:14)
off if I don't like it.
Chris (47:15)
The Republic of Pri.
Aaron (47:16)
I think it just
Aaron (47:17)
I think it's just a time of change and it's like there's a lot of countervailing factors. It's all, you know, omnipresent
pri (47:23)
I don't know.
Aaron (47:24)
because of social media, so it feels more chaotic. But I think this is just kinda the way a lot of things have been for a long time.
pri (47:29)
I know. I'm just in a weird phase
pri (47:31)
right now. I think it's like crypto going up. I know it's like people are excited and bullish. I'm like a little alarmed. I'm like, God, what does this mean?
Chris (47:36)
I think that's the perfect
Aaron (47:37)
I wise me.
Chris (47:38)
cliffhanger. Let's leave the episode right there. Freeze a little alarmed.
pri (47:41)
Okay.
Chris (47:41)
Tune in next week.
Aaron (47:43)
Let's do it.
pri (47:43)
Tune in next week.
Aaron (47:44)
Should we intro it?
pri (47:46)
Yeah. on that note. Hey everyone, welcome to S Net Society. Today it's me, Chris and Aaron talking all things crypto, AI, tech, culture and more. Just as a quick reminder, these thoughts and opinions are our own and not of our employer. And none of this is financial advice. Let's go.