20VC Data Collective's Matt Ocko on The Dark Side Of AI & What Happens When 34m People Become Unemployed Overnight

Summary Notes


In this episode of "20 Minutes VC," host Harry Stebbings announces the launch of his new blog, mojitovc.com, aiming to add a fun, Freakonomics-style twist to the VC conversation. He then welcomes Matt Ocko, co-managing partner and co-founder at Data Collective, to discuss the future of AI. Ocko, with extensive experience in tech entrepreneurship and VC, including investments in Facebook and Uber, shares his insights on AI's potential societal impacts, such as massive job displacement and the ethical dilemmas posed by advanced decision-making algorithms. Despite these challenges, Ocko remains optimistic about AI's ability to augment human capabilities and creativity. The episode also touches on the importance of sleep and productivity for founders, with Ocko highlighting the trade-offs between high performance and well-being. The show concludes with Ocko's investment insights, particularly in companies like ThreeScan and Tradeshift, which leverage AI for significant advancements in their respective fields.

Summary Notes

Introduction to the 20 Minute VC Blog

  • Harry Stubbings announces the launch of a new blog for the VC community.
  • The blog aims to be daily, short, and easily digestible, similar to Fred Wilson's blog.
  • It seeks to differentiate by adding fun to the VC narrative.
  • Upcoming blog pieces promise to mix VC insights with unconventional topics.
  • The domain name for the blog is mojitovc.com.

"Now, I know that the VC world is full of blogs, but this is slightly different. So first, like Fred Wilson, it's daily, and like Fred Wilson, it's short and easily digestible. However, the main difference is fun."

This quote explains the unique selling proposition of the new blog, emphasizing its daily, concise format, and the added element of fun.

Introduction of Guest Matt Ocko

  • Matt Ocko is a repeat guest on the show, a co-managing partner, and co-founder at Data Collective.
  • He has over three decades of experience in tech entrepreneurship and VC.
  • His investment portfolio includes Facebook, Zynga, Uber, and AngelList.
  • Matt holds over 40 granted or in-process patents.
  • The episode will focus on Matt's perspectives on the future of AI.

"Now, Matt is the co-managing partner and co-founder at Data Collective and he has over three decades of experience as a tech entrepreneur and VC."

This quote introduces Matt Ocko, highlighting his extensive experience and credentials in the tech and VC industries.

Sponsorship and Product Endorsements

  • The 20 Minute VC podcast is sponsored by Luma, a surround Wi-Fi system.
  • Luma's product is designed for speed, security, and control over home networks.
  • The Luma app offers network management features.
  • Headspace, a meditation app, is also endorsed for mental health benefits.

"Luma is the world's first ever surround wifi system that brings speed, security and control to your home network."

This quote describes the features of the Luma Wi-Fi system, explaining its value proposition as a sponsor of the podcast.

"Headspace is meditation made simple, and the headspace app provides guided meditations you can use whenever you want, wherever you want on your phone, computer, or tablet."

This quote promotes Headspace as a solution for mental well-being, emphasizing its ease of use and accessibility.

Matt Ocko's Entry into VC

  • Matt shares a story about how he entered the VC world.
  • He and his now co-founder, Zach, met at a mutual friend's birthday party.
  • They bonded over a shared investment thesis on deep compute and big data.
  • Their partnership began with personal investments and grew into a successful VC firm.

"We were both at a mutual friend's birthday party... Zach and I ended up sort of talk, yelling at each other about our deep compute and big data investment mutual thesis."

This quote recounts the serendipitous meeting between Matt and his co-founder, highlighting the importance of shared interests in forming business partnerships.

The Fundamental Problem of AI

  • The discussion shifts to a deep dive on artificial intelligence (AI).
  • A fundamental problem identified in AI is the unknown—what we do not understand about it.

"One of the biggest problems is that we don't know what we don't know."

This quote captures the essence of the challenge in AI, pointing to the limits of our current understanding and the vast potential for discovery.

Understanding the Impact of AI on Society

  • AI breakthroughs have tremendous potential but also carry the risk of unintended consequences.
  • Self-driving trucks could displace millions of non-college educated middle-class workers.
  • AI in legal and insurance systems could lead to decisions that lack human nuance and are difficult to appeal.
  • AI could lead to a post-scarcity society or a dystopian future, as depicted in the movie Elysium.
  • There's a debate on whether society will adapt to AI-induced changes as it did in the past with other technological disruptions.

"for every wonderful AI breakthrough, whether it's embodied in hardware like self driving trucks, or whether it's embodied in software that goes into the bowels of government or corporations, there are huge potential unintended side effects."

This quote highlights the dichotomy of AI's impact on society, suggesting that while AI can drive progress, it can also result in significant negative side effects, such as job displacement.

"you have surrendered what used to be human decisions to a black box that is mostly but not completely understood by its software authors, and is certainly not at all understood in its full nuance by its users."

The quote expresses concern about the delegation of critical societal decisions to AI systems that are not fully understood, which could lead to unaccountable and potentially harmful outcomes.

"the stuff that everybody is investing in, including us, could be marching us towards a Star Trek like future of post scarcity almost oversufficiency of human time and resource. Or we could be marching towards a future like Elysium."

This quote presents the contrasting futures that AI could enable, suggesting that while AI has the potential to create abundance, it also has the potential to lead to a divided society with significant inequality.

Economic Disruption and the Pace of Change

  • The displacement of jobs due to AI could occur at a much faster pace than historical job displacement, such as that in agriculture.
  • The speed of AI-induced changes does not allow for the gradual generational shifts seen in the past.
  • Retraining and adapting to new industries is challenging without economic stability and resources.
  • Traditional education and hiring criteria are slow to adapt to the changes brought by AI, which could leave many people behind.

"the pace at which AI today can disrupt entire industries, if not even entire national economies, is measured in single digit years, low double digit at best."

This quote emphasizes the rapid pace at which AI can disrupt industries compared to historical shifts, suggesting a need for faster adaptation mechanisms.

"the near term likelihood that global corporations or even startups, whatever engine of economic growth you want to point to, are going to accept a udacity degree from an unemployed welder or unemployed truck driver whose job was just taken by a truck driving robot is effectively zero, because those institutions change extremely slowly along with their criteria for hiring."

The quote highlights the gap between the pace of technological change and the slower pace of institutional adaptation, implying that those displaced by AI may struggle to find new employment due to the inertia of hiring practices.

The Timeline and Impact of AGI

  • AGI (Artificial General Intelligence) is not required to cause significant job displacement in the near future.
  • There is a misconception that AGI is a prerequisite for major economic impact, which could be a dangerous assumption.
  • The timeline for AGI is uncertain, with some studies suggesting it's 35 years away, but substantial disruption could happen much sooner.

"you don't need AGI to unemploy 30% of all pink collar and white collar workers in the g 20 within the next ten years, presuming that it has to be AGI and therefore we have some kind of buffer zone, is, I think, a dangerous assumption."

This quote argues that waiting for AGI before addressing the potential economic impacts of AI is a risky strategy, as significant job displacement could occur with the AI technologies currently in development.

AGI and Human-Level AI

  • AGI (Artificial General Intelligence) may view humans indifferently, not malevolently.
  • Machine vision reaching near parity with humans only took a few hundred lines of code and a single brilliant insight.
  • As AI improves, human insights in AI development become exponentially more productive.
  • Assistant AI for discovering algorithm spaces also improves exponentially.
  • Semi AGI, even if not fully autonomous, can be weaponized in non-military ways.
  • Weaponized AI could be used in finance or to influence societal preferences.
  • Whoever gains control of such AI first has an insurmountable advantage.

AGI that is so super intelligent that it views us not malevolently, but indifferently, the way we may or may not kill a gnat that is fluttering around our monitor on a late summer night that might be many, many decades, but near parity for machine vision with human beings was a matter of a few hundred lines of code that one brilliant person had an insight into.

This quote illustrates the potential for AGI to be indifferent to humans and the rapid progress in AI capabilities, such as achieving human-level machine vision with minimal code.

And as low level AI becomes better, that human insight into pushing the boundaries of AI begins to become exponentially more productive.

The quote highlights the increasing efficiency of human contributions to AI development as AI itself improves.

The assistant AI for discovering algorithm spaces becomes exponentially better.

This quote suggests that AI is becoming more adept at exploring and creating new algorithms, which enhances its own development.

And you might have something that, even if it's not full AGI, is weaponized. Semi AGI.

The quote introduces the concept of Semi AGI, which refers to AI systems that have significant capabilities and can be used strategically even without being fully autonomous.

And when I say weaponized, I don't mean the skynet of the Terminator films. I mean something more like what happened to Lee Sedal facing DeepMind Alphago.

The speaker clarifies that "weaponized" AI does not imply military applications but rather strategic dominance in competitive fields, as demonstrated by AI in games like Go.

In many of the matches, DeepMind had already beaten Lee Sedal, but he and a panel of brilliant human observers had no idea that they were already beat in the moment of the game.

This quote emphasizes the cognitive gap between AI and human perception, where AI's capabilities can surpass human understanding in real-time.

DeepMind's ability to outplay them was beyond their collective cognitive horizon.

The speaker uses the term "collective cognitive horizon" to describe the limit of human comprehension when faced with advanced AI strategies.

And if that's in the hands of Goldman Sachs, life gets pretty unpleasant for every other trading and money management entity on the planet.

The quote implies that if advanced AI falls into the hands of powerful financial institutions, it could disrupt the industry and create significant competitive imbalances.

Likewise, if it's in the hands of somebody that wants to promote or attack a specific societal preference or taste in food or accumulation of resources, whoever gets that AI first not only has a huge advantage, but an advantage that is beyond the reach of human intellect to perceive until they have, quote unquote, lost the game.

This quote suggests that AI could be used to influence societal behaviors and that those who control such AI have an advantage that others may not recognize until it is too late.

The Future of Work and AI

  • AI's increasing ability to replace simple human functions raises concerns about mass unemployment.
  • Investing in AI that augments human intelligence and capability can mitigate unemployment.
  • AI could reduce the time required to become an expert in various fields.
  • AI-combined tools can enhance even unskilled individuals' abilities.
  • The future of work may be hopeful if AI tools are accessible and not limited by external factors.
  • Restrictions on AI tools could lead to grim prospects for employment and fulfillment.

And I do want to touch on one final thing, and as you said, the kind of increased scale in terms of availability of AI to replace human simple human functions, as we said, truck driving jobs, I'm sure, assistant roles.

This quote introduces the discussion on how AI is poised to replace jobs that involve simple human functions, such as driving and assistant roles.

So what is the future of work with such potential? Mass scale unemployment. How does that look to you?

The speaker asks about the implications of AI on the future of work, specifically regarding the risk of widespread unemployment.

Well, so we are trying consciously as a firm, to invest in things that augment human intelligence and augment human capability.

The quote reflects a proactive approach to investing in AI that enhances human abilities rather than replacing them.

So that even as people may become unemployed, the people who are creative or have an interesting idea may find themselves lifted up by even this simpler AI.

The speaker suggests that AI has the potential to empower creative individuals and those with innovative ideas, despite the risk of unemployment.

So that the 10,000 hours required today to become an expert in something can be vastly reduced.

This quote implies that AI can significantly decrease the time needed to master a skill, challenging the traditional notion of the 10,000-hour rule for expertise.

I know you know Samil Shah. He has a portfolio company that uses AI in combination with heretofore unavailable because of both expense and size. Precision motors that can turn even a complete klutz like me into something approximating a master cabinet maker.

The speaker provides an example of a company that combines AI with precision tools to enhance an individual's craftsmanship, even without prior skill.

It's a set of hand tools that are self guided across a hugely complex set of operations on wood and metal and other things that go into cabinetry and other piecework like that.

This quote further describes the AI-enhanced tools that assist in complex tasks, demonstrating the practical applications of AI in skilled labor.

So that's the kind of stuff that makes me hopeful.

The speaker expresses optimism about the positive applications of AI in augmenting human work.

On the other hand, if that is too expensive or is somehow restricted in its sale or use because of trade union rules or other political black swan emergence of restrictions, then you're going to have a lot of people out of work.

The quote highlights potential barriers to the widespread adoption of AI tools, such as cost, regulations, and unforeseen political events, which could lead to unemployment.

And their route to reemployment and fulfilling lives may be very grim and.

This incomplete statement suggests that without access to AI tools, the path to reemployment for those displaced by AI could be difficult and uncertain.

Personal Preferences and Work Habits

  • Personal favorites and work habits reflect individual inspirations and productivity strategies.
  • Favorite books can offer insights into human innovation and history.
  • Productivity can be influenced by sleep patterns and personal discipline.
  • Founders may have unique abilities that allow them to succeed with less sleep.

My favorite book is a large volume called the Way Things Work, recently updated by the great architect illustrator David McCauley.

The speaker shares their favorite book, which celebrates human innovation and has been a source of inspiration since childhood.

I love it because it's inspired me since childhood and continues to do so by showing intimate details of a huge panoply of human innovation.

This quote explains the speaker's affection for the book, emphasizing its detailed exploration of human creativity.

Never sleep.

The speaker humorously suggests that forgoing sleep is a productivity tip, though it is likely an exaggeration of their commitment to work.

I would, with joking but ever so slightly sincere rejoinder, say that our returns speak in favor of my strategy and not hers.

In response to a question about the importance of sleep, the speaker half-jokingly implies that their work success justifies their reduced sleep.

There are a handful of founders who are not only superhumanly brilliant, so they process and execute on information an order or more of magnitude faster than you and I.

The quote describes a rare group of founders who possess exceptional intelligence and productivity, setting them apart from the average person.

I think of them as kind of early examples of homo superior from a side chick, and a lot of people.

The speaker likens these extraordinary founders to a new level of human evolution, suggesting they are a different breed of people.

In that tiny class do wonders and.

The quote acknowledges the remarkable achievements of these highly capable founders.

Still get seven or 8 hours of sleep. Some of the really scary ones are short sleepers and are that smart and that capable and that relentless.

This quote contrasts founders who maintain a full sleep schedule with those who are highly productive despite sleeping very little, highlighting the diversity of work habits among successful entrepreneurs.

Start-Up Culture and Lifestyle

  • The intense and demanding lifestyle of working at a successful startup.
  • The unrealistic expectations of balancing personal life with the high demands of startup work.
  • The humor in the notion of being employed in a menial job after startups take over the world.

I hope they give me a job as a pool boy when they take over the world. Ordinary humans like us can't respond to the demands of a truly successful startup, one that has this hard, sharp arc of takeoff and sleep 8 hours and cook our own organic breakfast and get in a brisk six mile walk and then write a little bit of poetry for the significant other before ambling off to work.

This quote highlights the speaker's sarcastic take on how regular lifestyles don't mesh with the high-pressure, fast-paced environment of successful startups.

Information Sources and Learning

  • Reliance on information synthesis platforms like Nuzzle.
  • The importance of staying informed through prestigious publications and university magazines.
  • The need to constantly read and learn to support decision-making in venture capital and technology.

I rely on the synthesis that I get from nuzzle. Jonathan Abrams just fantastic information utility, but I would say within that subset there are probably a handful. Science and Nature, MIT Technology Review, the internal magazines of Carnegie Mellon and Stanford and Berkeley. I try to read as much as I humanly can because every now and then there's a little nugget there that either validates something that we're doing or says that we're being idiots and we need to change course.

The speaker, Matt Ocko, emphasizes the value of curated information from various high-quality sources for insights and guidance in the tech and VC industry.

Investment Insights

  • The distinction between follow-on and de novo investments.
  • The criteria for making follow-on investments in companies like 3Scan.
  • De novo investments in companies like TradeShift that use machine learning to solve global problems.

So follow on three scan, because they are transforming both drug development and medicine by delivering a 3d map from the subcellular level all the way up to complete organ systems 1000 times faster and with essentially infinitely greater accuracy than human pathologists. So that's a follow on that we recently did. A de novo investment you might have seen is one called trade shift, which is a company applying some very interesting machine learning techniques to massively reduce fraud and friction in the global supply chain.

Matt Ocko explains the reasons behind recent investments, highlighting 3Scan's impact on medicine and TradeShift's innovation in reducing supply chain fraud.

Industry Recognition and Under-the-Radar Companies

  • The significance of industry expertise and connectedness.
  • Acknowledgment of companies that achieve success while remaining relatively unknown to the broader public.

Well, you're speaking to your connectedness and expertise, that you are one of about 37 people outside of their customer base. That's.

Matt Ocko acknowledges the host's awareness of under-the-radar companies like TradeShift, implying the host's deep industry knowledge.

Personal Endorsements and Recommendations

  • The use of the Headspace app for meditation and mental health.
  • The benefits of Luma's surround wifi system for eliminating blind spots in home networks.

And meditation can help. And headspace is meditation made simple. [...] So I got Luma, and it came with three routers. I placed one in the living room, one in the kitchen, and one on the top floor.

The host endorses Headspace for meditation and Luma for improved home wifi, sharing personal experiences and the benefits of these products.

Show Promotion and Engagement

  • Invitation to explore the host's blog and Snapchat for insights into venture capital and startups.
  • The host's appreciation for the guest's time and contribution to the show.

Guest and do not forget to head over to mojitovc.com. See what goes on inside my brain, from the weird to the wonderful in all things vc and startups. [...] And I'm also on Snapchat at htebbings. It would be fantastic to see you there.

The host, Harry Stubbings, promotes his own platforms for additional content and encourages listener engagement outside of the podcast.

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