This Week in Startups - Tesla AI Day, SEC charges Kim Kardashian for unlawfully promoting token, Section 230 & more | E1576

Episode Date: October 3, 2022

Monday! First up, J+M go down the rabbit hole on Tesla AI Day, what impact some form of general AI might have on the world, and more! (2:09) Then, the duo covers the SEC charging Kim Kardashian for unlawfully promoting a token (35:29), before wrapping with the SCOTUS announcing they will hear two cases regarding Section 230. (59:05) (0:00) J+M tee up Monday's topics! (2:09) J+M open with some thoughts on Tesla's AI Day (11:48) Notion - Sign up for FREE at https://notion.com/twist  (13:21) What could the advancement of AI do for creating businesses and humanity as a whole? (24:24) SnackMagic - Get 10% cashback up to $1000 until October 15th with code HOLIDAY, and see more at snackmagic.com/twist (25:50) Examples of what impact general AI might have on the future, Tesla's AI advantage (34:15) Odoo - Get your first app free and a $1000 credit at https://odoo.com/twist (35:29) SEC charges Kim Kardashian with unlawfully promoting crypto token (59:05) SCOTUS will hear two cases regarding Section 230, how algorithms play into the publisher vs. platform debate FOLLOW Jason: https://linktr.ee/calacanis FOLLOW Molly: https://twitter.com/mollywood Subscribe to our YouTube to watch all full episodes: https://www.youtube.com/channel/UCkkhmBWfS7pILYIk0izkc3A?sub_confirmation=1

Hey, everybody, welcome back. It's Monday. God, there's a lot going on, Molly. What is on deck for today? It's almost becoming like a drinking game. Just like take a little, take a little shot of muscle milk or something. Every time we say it's a big week, big news week. But it is. First up, we're actually going to talk about Tesla AI Day and the potential sort of hinge moment that we're at with the development of general AI and what it could mean for the future of humanity and all the startups that have yet to be born. And the SEC is charging Kim Kardashian with unlawfully promoting crypto tokens. You got a big speeding ticket, but we'll talk about all the other SEC actions that are going on. And will this bleed over into the VCs, founders and boards and lawyers in tech startups? And then we wrap with a conversation that starts out heated and ends up in a great place about the Supreme Court, announcing that they will hear two cases on Section 230.

and we discover that all these things have a common thread. They do, they do. And I really wonder if the algorithm is the big issue here and Molly unpacks it definitely. It's going to be a great episode and an important conversation. Definitely stick with us. This week in Startups is brought to you by Notion is one place for notes, docs, projects,

and everyday work that goes way beyond a wiki. Get started for free at notion.com slash twist. Snack Magic and Swag Magic are global gifting platforms and the most stress-free and customizable way to delight employees or customers. Get 10% cashback up to $1,000 until October 15th with code holiday. And see more at snackmagic.com slash twist. And Odo is a fully customizable and fully integrated suite of business apps that lets you build and scale your stack as you build and scale your business. Your first app is free forever, and right now, O-Doo is offering $1,000 off your first implementation pack at O-D-O-com slash twist.

That's O-D-O-O-O-O-com slash twist. All right, everybody, it is Monday, eventful week. Last week, and this week, a lot of stuff going on, Molly. I was, I woke up this morning with this song called Odzar by the Bare Naked Ladies in my head, which is a deep cut. That's a deep pull on my part. But I'm pretty sure that it was just my subconscious waking me up with like, it's okay.

There's not going to be a global financial collapse and a nuclear war in the same week. Plus the Supreme Court reconvening to take away more rights. Or is there? Odds are no. Yeah. Odds are no. I suggest no Twitter week. That would be amazing.

What if we took a whole week? And we didn't look at Twitter. And I wonder what, Jason's just literally laughing. He's like, yeah, that's crazy. I can't do that. He's like, you can't. No, I did. I did it. I produced a book in 11 languages.

When I took three months off from Twitter, I got my book done. Yeah. This is the week to write a book and not look at Twitter. Yeah, the world seems crazy, but you can actually break it down. And I actually feel pretty hopeful. You know, I guess related to our first story on Friday, a friend of mine invited me he had like an event for his company, this Tesla AI day. Now, in regards to other things with my,

my friend, I just want to say, you know me. I would love to be talking right now, but I'm under basically like a gag order for legal reasons. So as much as I would love to talk, I am having to restrain myself. I can't believe you even want to tiptoe near. No, I can. With this. I kind of have no choice. I mean, I've got literally 50 press, you know, contacting me a day. You know, friends are generally cool about it, but on Twitter, everybody's just like, hey, what's going on, these things? And let's just leave it at this. I'll have a lot to say when the Twitter acquisition trial is over. And I will say plenty at that point. But right now, anything I were to say, including right now saying I'm saying nothing, is going to be handed back to me in a transcript for me to comment on. And so this circular thing, and I haven't been involved in any kind of deposition

or discovery literally since the last time it happened was 1995. So, just leave it to say, I'm Rod or Die. I jump on a Grande for you, Molly. We'll just leave it at that for now. Just leave it at that. But I will say on Friday, I got to see Tesla AI Day. And this was amazing. Really, really amazing.

It's a recruiting event. So if you're in AI, everybody knows. knows, you have, like, choices of places you can go to work. And some places you go to work, you might be working on AI to optimize ads. So more people click them. And other places, you might optimize for self-driving technology or a robot. And I think pretty obvious choice. If you were going to go work and, like, optimize ads, maybe not as interesting as creating a robot or a self-driving car. But boy, I have the self-driving, full self-driving beta on my Tesla. I was using it this weekend. And it is really scary how good it's getting.

Like, it is really getting smart. And I've met the team on the self-driving team. They watch this podcast, by the way. And the Tesla AI team is like really next level. And so it's really great to see them do the work. But I had kind of a revelation, Molly, which I tweeted about this morning since I got up at 4.30. I worked out a whole bunch this weekend. Let's go back to that. Oh, it gives you so much energy. Well, here's what happened. I did tennis and I did my normal workouts. And so I had this, like, very active weekend.

And my body was super tired last night, Sunday. And I never fall asleep before 1 a.m. I'm up until 12, 1 a.m. As people know, they get my tweets. You know, it's pretty easy to see that. I'm a night out. Anyway, I lay down and I was like, you know, asking the wife, like, hey, you want to watch House of the Dragon, the Dragon. And she was stoked to watch it.

And then she came, I fell asleep at like 10 o'clock. So, of course, I only need six hours of sleep. Maybe seven I try for. I wake up at 4.30 again, like C3PO. I just sit up like, boop. Okay, what's going on? I thought maybe something was wrong. And I was like, oh, I didn't watch House of the Dragon.

So now I'm up at 4.30, and I got a lot of work done this morning. But I was thinking about AI. And I was thinking about the profound impact. It's a little bit of a thesis I have right now. I'm just going to unpack it here. And it came a little bit from what I saw Friday, but then a bunch of what we've been talking about. Okay, so I'm watching Elon and his team show the robot.

Now, of course, people are like, oh, my God, that robot's not as good as Boston Dynamics. Oh, my God, that robot, you know, they had to roll out the 2.0, yada, yada. Oh, it's a starting step. People don't understand exactly how deep the AI is going there. They're doing such deep work in AI that they're making their own server farms that can process large corpus, such a large corpus of all the driving data. What I want to talk about here is what we saw with Dolly, what we saw is it GP3? GPT3.

GP3. GP3 is Gary Payton. Yes. So anyway, what we saw AI do at OpenAI with text and with Dolly. And then we just saw with video with Facebook's AI team and that we saw with DeepMind at Google doing chess, video games, and then go and poker. What we're seeing is each of the vertical AI is getting to a point. just in the last couple of years. And it seems like the pace of this is increasing.

Does it not, Molly? Oh, 100%. I mean, we just talked about this last week that it's, we're added sort of, it feels like a generational inflection point with AI. Correct. And so this reminds me a lot of what happened with broadband and the internet, having witnessed that.

It was slow, slow, slow, slow, slow. And then all of a sudden, everybody got broadband. All of a sudden, cloud computing happened. And then we saw Web 2.1. and people could build things very quickly. And then the number of got super fast too. And mobile broadband. So this broadband, thank you for punching it up, this broadband history combined with mobile phones,

processors, and cloud computing, this whole thing came together to make just so many experiments. And experiments is what we call startups. So if you're listening to this, keep that in mind when I say experiments. And that changed the world. The internet has on a technological basis. I don't think there's any technology or anybody who would disagree with this, that that has had the most profound effect on humanity, just the internet. Well, now I'm watching AI.

And the progress to me reminds me of what happened when we tipped over to broadband cloud computing and mobile. When those things happened, all of a sudden, whoop, and that's what's happening with the tools in AI. theoretically, AI should be able to take a bunch of inputs and give an answer, and then we don't know exactly what happened in that neural net machine learning. But what's happening right now as a stepping zone to that point is what they call narrow AI is toppling each of these cities, art, words, driving, poker, games of skill, chess, games of chance, poker, games of strategy. So we're starting to watch each of these cities crumble. And I get the sense that this next couple of years is going to be when it all, you know, sort of tumbles over.

And movement, which all things on the planet do, right? We move as humans. We walk. We get in cars, planes. The planet is moving. Everything's moving. Mass is moving. But moving is super complicated when you think about it as a task.

just like chess is complicated, but it's not as complicated as moving, right? It's not as complicated as the literal hand picking up the piece. Okay. Incredible. Incredible punch-up, Molly. Thank you. So here we go. You're here for a reason. I mean, you have great insights here.

Not just a pretty phase, folks. Some substance here, all of us. I know it's tough when you tune in and you see two charming blondes, you know, talking. There is so, you know, you're like, no. There is some substance here. Yes. And so what I think is happening is watching his team talk about each of those components and they're building models to test scenarios.

They're trying to figure out the world, depth, height, all of these things. And each one of those is taking years for teams to topple. But as they topple each one, each subsequent one gets easier. Just like when you put a bunch of cloud computing stuff in and you build the tools to publish to the cloud, it gets easier, easier, easier. and a startup being launched today cost a hundredth or maybe a thousandth of what it would cost in terms of engineering hours

than it did in 1995. That's happening big time in AI and machine learning. And so I think we're on the cusp of something very big that like you talked about, bankruptcy happened slowly and then all at once. Yeah, gradually and then suddenly. It's gradually and then suddenly is what's happening right now. And it feels like this is going to be a more profound.

this could be as or more profound, I suspect, more profound, than the difference between not having the internet and having the internet. Listen, if you're a startup, you need to sign up for Notion right now. I want you to head to Notion.com slash twist and sign up for free. At launch, we run our entire organization inside of Notion. Now, Notion is an all-in-one team collaboration tool. You can think of it like note-taking, document sharing, like a spreadsheet, a database, a wiki, all of those things put together, but with communication and teams built into it.

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And it's so beautifully designed. Everyone will want to use it. Learn more and get started for free right now at notion.com. Take the first step toward an organized happy team today. Go to notion.com to get started today. Yeah. These are the moments when I am so delighted not to be a journalist and excited to be an investor because this is a wide open lens to

apply to this topic as opposed to the narrow lens of, I thought it should look like this by now. This guy can do this and that did this and right. Like when you get to imply apply this. And listen, I wish more journalists could. When you get to apply this big huge wide lens, what is this? What moment are we in and what could it mean? Then an entire universe of possibilities opens up to you, you start to say, okay, what does the world look like and what are the businesses that can be born and the products that can be built when the cost of creation goes to zero? Do I, when we talk about wanting to back technical founders, what do we even mean anymore? Do they have to know how to code? Because I'm pretty sure our machine's going to be

able to do that, right? So, like, what do they actually just need to know how to harness? You know, I mean, granted, I sort of wish you'd stop talking about cities tumbling. That metaphor is a little, like, on the nose. When I, yeah, I mean, it's possible. We should be deploying this with, you know, a lot of thoughtfulness, obviously. Yes, for sure. I think that. Elon himself has noted. Well, yeah, I mean, it used to be, he did notice. It used to be the biggest threat to humanity. And now it's like, no, no, we'll just put it in a robot. Like, Well, I mean, and the great news is that he said this over and over is if you look at the corporate

structure, there are corporate structures in the world where you have Godkinks. New York Times, Facebook are the top two examples. You could buy as many shares as you want in both of those companies and you will have zero impact on the companies because they have super voting shares. You can't change anything about the New York Times as an activist investor or Facebook. You can have the most moderate impact on both those companies. Google, they have some super shares too, but that's waning a little bit. But Tesla has no super shares. You could literally buy the shares

and vote out Elon or anybody. And so I think looking at corporate governance of who figures this out is going to be also critically important. Which corporate entity? Okay. This is our red line. Okay, good.

But there is no universe in which he can credibly talk about God Kings. I'm sorry. I'm sorry. He's not talking about that. Okay, good. I'm like, what did it, bu,ba?

He is operative. as a sovereign, near as we can tell, in this world right now. And so like, um, capital al-cate. I mean, he's got competition. Yeah. Yeah. No, there's no corporate governance.

He could literally be voted out of Tesla. Very easy. Sure. There's no superstructure there. I know. If he doesn't perform. Happen. And then there's what will or would, would,

anyway, separate topic. Yeah. But I, I, I, it's an, it is, it is really important to have a lot of faith. let me just put this as generally as I can. It is really important to have a lot of faith in the people who are building this and for there to be a lot of guidelines. Well, yeah, and Elon did talk about that.

He thinks there should be people in government that are actually, there should be some sort of AI governing body, which makes sense. We have a governing body for food and drugs. We have a governing body for marketing and communications, FTC. We have a governing body for securities and finance, SEC. see, how do we not have one for AI and algorithms?

And this will come up later in the show as well. And then now imagine, if you will, after my brief regression into journalism brain, I like the balance. Now imagine, if you will, a world where AI can do all that it is right on the cusp of being able to do combined with, I think one of the NODES just pointed this out, actually, free energy, unlimited energy. Yeah. Right? Like whether that comes from massive deployment of the cheapest. electrons on the planet right now, solar, or in 40 or 50 years, fusion, and in 40 or 50 years really is still a blink of an eye when it comes to that, to the timelines, right, of the planet.

So like, it starts to get a little incredible in terms of what you can imagine. It's hard for the mind to conceive of this level of abundance. And so the abundance we're talking about is it was unbelievable for people to consider the abundance of having more food than you could possibly eat. There was a period of time when, you know, regularly millions of people, tens of millions of people would die of famine. So much so that like when we saw famines occur in the 80s and 90s, it was something where the world said,

why is this occurring? This doesn't make any sense. There's so much food around. And we're so good at producing food. This makes no sense that we had farm aid. We had live aid. We had, we are the world. We had just all these cause celebs and, you know, Manhattan level projects where we said,

yeah, wait, this doesn't make sense to us. We did this project for the dwarf weed in the 60s, 50, 60s, you can look that up. We figured out how to maximize per hectare acre, how much calories. Wait, why are there people starving? Oh, wait, we just can't get the food to them. Oh, okay, there's government issues. Okay, there's supply chain issues. Let's just fix that.

And then the idea of people starving is like very crazy to even think. of or a drought killing people. It's much more rare. Yeah. It's incredibly rare. You have Ezra Klein or Derek Thompson on or both. We had Derek on from the Atlantic. Remember, he was talking about kids and depression. They're writing a book about abundance right now, an abundance agenda.

Yeah. And so we are entering that phase. As much as we can think about scarcity and this and that and the supply chains and stuff you can't get. Like if we, it actually goes back to. what I was just starting to say about journalism. Like, if you change the mindset toward thinking about what you can do with abundance, oh my God, it's so much a more fun place to live.

It is a much more world positive place to live. Now, if you think about the fact that we have more calories as humans that we could ever consume, we have unlimited free drinking water, we have unlimited energy almost. A lot of these things are just execution or regulation or, you know, dictators are blocking. We're blocking them. Yeah, distribution. There's different people blocking different progress in the world. But the fact is, we should have at this point already have unlimited energy because of nuclear

and solar. We just have not executed particularly well on those two verticals. We would have it already. And if we had those two, we'd have unlimited water. If you have unlimited water and energy, theoretically you have unlimited food. We already have unlimited calories, essentially almost free calories. This would just take it to another level. If you had unlimited work, there's really hard to understand what could happen.

right? Like if you had a million people who could go do something for 24 hours a day, what would that do? Just send a million people anywhere in the world to do something for 24 hours a day. Okay, we got a flood in Florida. Okay, you have a million people go down there who can work 24 hours a day and don't need sleep and they could clean it up. And they could rebuild houses and they could uncloged drains and, you know, shovel, you know, mud, whatever it is. Well, it seems crazy, but that's where we're going to be. Now, are we there in 10 years or 20 or 30 years? I have a feeling where to get there quicker than people anticipated.

I think we are. And we should not, by the way, overstate. You cannot overstate how hard this is. Like, back to your original point about motion and movement, like years ago, I was lucky enough, not even that many years ago, I was lucky enough to visit X. Google's lab. Yeah, exactly, the Moonshot Lab,

where I think I just wasn't allowed to photograph them. I think I can talk about this. Yeah. I mean, they've spent like a decade just working on a hand. Just working on robotic hands. Just the hand is so complicated. I mean,

there are however many muscles in the human hand. And so the ability to get the hand to move and also apply the right amount of pressure to a thing is a decade-long task. Yeah. It's pretty amazing. like it's crazy. For sure, for sure. And if you look at vertical, again, vertical applications, just narrow applications.

I'm not even saying narrow AI here. I'm just saying narrow applications. If you've ever been to, you know, a robotic factory, which Tesla has built a number of, they already have robots in there doing very tight, narrow things. Pick this up, move it over here. Pick this up, put it over here, paint this, spin it over, turn it over, you know, put these bolts on. So this is happening in all kinds of factories, all. around the world already. And in fact, CafeX, which is almost up to a million dollars a year

revenue rate for two machines inside of SFO. I mean, I can't believe this company made it through all of the hardship that it's been through. But I mean, I believe CafeX could change the world still, even after this, you know, pandemic and everything, because they're able to serve hundreds of cups of coffee, and they could do thousands once people get used to ordering from the machine. I think that's like the biggest hurdle now is people saying, like, I'm going to try the coffee from the machine without a human, 24 hours a day, and it takes about half an hour to restock the machine and wipe it down, clean it, and just make sure everything's functioning. So, and then we invest in those who don't know is the robotic coffee bar. Yeah. And we could, we should pull up

two videos of both of the videos. But we'll pull up the route AI one as well. You know, this is a company we invested in. They got bought by App Harvest and we invested in this four years ago, three or four years ago, I believe. And you know, this is again, a very narrow application. but computer vision, and this is a type of hand that's made specifically for this purpose, that can literally pull a strawberry or cherry tomato off of a vine without crushing it. So you have, you know, from MIT to plenty of other places,

the ability to build this kind of hand technology, and there's just so many different people working on it, that the idea that we would send people into a field to pick strawberries in the hot sun, breaking their backs, Making them cross the border to go do this in another country is going to seem insane to our children's children. It's not going to exist as a thing. The concept of people going into a field to work a field is just going to seem crazy in 10 years or 20 years.

It's already starting to. The idea that you would get an ox and start pulling wheat out of the ground. As opposed to an autonomous tractor. Autonomous tractor, right. And the tractors will be autonomous soon. All right, I want you to beat the holiday rush this year with snack magic. And its newest partner in crime, swag magic. Snack magic and swag magic are global gifting platforms.

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holiday gifts out early so people can enjoy them. Snackmagic.com slash twist. So this is just in the narrow programmed case, let alone when we start getting into AI, where, you know, the concept of general AI, you just tell the robot, you tell the AI, here's the outcome I want. I want you to win the chess game. I want you to win this video game, and then it has to figure it out. I want you to pick the strawberries, not crush them. It's got to figure it out. Well, there's going to be a bunch of precursors to that.

And it will be an emergent moment when that happens. And I think what we saw, you know, from the Facebook, Google, DeepMind, and Tesla and what they're doing, like, all of this stuff is the precursors to that emergent behavior. Now, will it be general AI or will it just be the culmination of so many cities falling? You know, each one subsequently. And then it's like, well, the AI has already figured out chess. Obstacles. Obstacles falling. Okay, whatever. I mean, okay, we figured out how to make cups of coffee. hurdles being overcome. Yeah, hurdles being overcome. But, you know, right now when we watch CafeX make this cup of coffee here, you know, that's not using AI. This is, you know, a very narrow application of robotics, much like a factory, where you program it, this is where these things are, this is where these things are. And you're using clever.

App Harvest, by the way. Like to be on the hand front, same with App Harvest, right? It's like, just use this amount of pressure that works for strawberries and tomatoes. It can't just flip over and all of a sudden be like, oh, I can do something even softer. Right. Or you just said, it's like just that amount of pressure. It's not.

Yeah. If you told it, pick those things. Adaptable. You know, if you took an apple after I picked a strawberry, it just said, now pick these. But only pick the ones that look like this, the red ones, not the green ones. Exactly.

These five you can pick, these five you shouldn't pick. And then it had to go pick it. But, okay, well, apples have a different firmness and they're a different size. And it could just figure it out. Oh, and they're different. height trees and, you know, navigating the ground is different that in a factory, a factory farm, you know, you're out in an orchard. That's the difference. And so we're well on our way now.

And it is, it is going to happen. Also, three little words, UBI. Universal basic income. We will figure it up, but it also needs to be said over and over. Yeah. I mean, this is the, for those of us who are investing in these companies, companies building them participating in this versus the people who are just consuming or reading newspapers and journalists who are on the outside or, you know, have 10% knowledge of all this. Like what's going to happen is we're going to be in a situation like we are in food. This is what I believe will happen. With food today, the issue is not do people in America or in the West have food.

The issue is, are they accessing healthy food or are they making bad food choices? And how do they make better food choices? And it's like, well, this food takes three minutes and costs $3. And this food costs $3, but takes 30 minutes to prepare. Okay. Yeah. You know, like, it's just an education problem, right? I mean, even I had the education problem of what I should be putting in my body.

And I think that's where we're going to get to, which is, I think everybody's going to be able to have one of these robots working for them. And then it's like, oh, okay. I own a robot. I live on a farm. It makes me all my food. It makes my bed. I have nothing to do all day.

how am I productive in society? That's where it's going to be like purpose, right? Yeah. And young people aren't dying from cars. You know, people are dying of, now young people are dying of suicide and overdoses and overdoses and overdoses that are kind of overlapping with suicide, you know, reckless behavior that, you know, some psychologist might say overlaps with that, like you're, I don't want to say definitely

related to purpose and abundance. Anyway, I'm not trying to be a journal. It's all, it's like a complicated. Well, no, you could be. It is related to purpose and abundance, right? Yeah, it definitely is. My parents are rich. becomes this like you don't, you know, when I bring up these like social side effects that have to be considered that aren't that are that aren't necessarily like for us as investors we could be like that'll get figured out and we don't have to worry about it. And on some level that's true unless and until it becomes the blocker for the technology and it can and will. Right. It's like if you don't if you don't solve those problems simultaneously, you get problems that end up being blockers for the business and the technology.

Yeah. Like you can address the social impact after the fact, but democracy will all already have been broken. Right? Like, people were wanting on social impact of disinformation or targeted advertising. And it's like, how do we take a worst case scenario approach to what we're building? Like, okay, what happens if this goes horribly wrong? Unintended consequences is definitely something to consider. And like social networks didn't take it in, take it serious enough, right? Right. And they can all be like, they can at least be anticipated. There can be scenario. that anticipates unintended consequences. They don't have to be unforeseen. There'll be some that are anticipating and some that won't, right? Yeah, I think you need to react to both. Like, yeah. You know, did we think that, I mean, I don't know that I thought, you know, people would make decisions that were not based on their own self-interest because of things

trending on social. Like, I never thought that would happen. Yeah. That they would make decisions that were literally against their own best interest. But here we are. In regards to. For a second that when people were like, buy all of this cryptis, at whatever price I tell you to

that that could go horribly wrong. Who saw that coming? Well, before we make that job, that's a good jump. Just for people who are like dunking on the robot and playing this video, let's play this 39 second video, no audio, we'll just talk over it. But yeah, they were showing the Optimus and...

So the Optimus is the one that's not coming out, right? This is the 2.0. I think... Or not coming out now? The one they're showing is, they show two versions. One is, I think they're both be called Optimus or whatever. But this Tesla robot, they showed one that was using pullies and joints and hardware that was not made by Tesla, and then one that was making hardware by Tesla.

So there's been a lot of this hardware that's available that you can buy, obviously. You know, CafeX doesn't make the robot arm. In the case of Rudei, they made the hand, but not the arm, I think. So they're making it from the bottom up for a purpose to work in the factories. And when you dog food something, this is another important lesson for founders. When you're dog fooding the product for yourself, the chances of it hitting the note and actually solving a problem becomes much higher. Why?

Well, because you need the product and you know exactly what you want so you can define the spec. So the spec for this robot is work in a factory, doing dangerous stuff that's repetitive and hard and heavy lifting. And don't break the cars when you do it and, you know, don't hurt the humans working around you. So that narrow focus, I think, is going to make this very successful. And I was watching people dunk on it. You know, it's always going to be critics who've done nothing in their lives, but complain.

But typically, the same critics I remember from the Roadster days. And they were like, well, that's just a Lotus Elise with a battery in it. And it was like, yeah, but it has a battery in it. And it has a motor that's not burning fuel and it doesn't have oil. and they're like, yeah, but it's basically like a glorified lotus. And I was like, well, that's like the negative, the most negative framing you could come out of, right? And so the negative framing here was,

oh, not as good as a Boston Dynamics or it doesn't do this or, you know, it's not ready. And it's like, I would be very careful judging the company Tesla and I'm not a shareholder. I'd be very careful underestimating what they're capable of, given what they did and the resources they have now. They have a different level of resources than they had then. And look what they did then. They literally destroyed the entire car industry and became the number one car in any sector where they were selling, you know, a competitive vehicle for something completely different.

And they did it like in most countries. So I would be very careful because they have more resources now and they're making it for themselves. So I don't think you're going to have this in your house like anytime soon. But I do think you're going to go to a Tesla factory in two years and see a lot of these doing actually meaningful work. Now, I think it's time for the segue. Listen, if you're a founder or an employee at a startup, it's critical that you become capital efficient at this time. Fundraising is tough right now, and cutting your burn is really important. And one great way to cut costs is to run all of your SaaS apps on one platform.

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K for, quote, unlawfully touting a crypto security. Yep. On her Instagram. Earlier this morning, the SEC kit said that Kim violated its rules when she posted about Ethereum Max's Emax coin without disclosing that she was paid to promote it. So, she didn't include, because the FTC has a rule that you have to include a hashtag ad. If you're being paid to promote something online, this is rarely enforced. It is occasionally... It's not enforced. I don't force. Yeah. Yeah. I think maybe there are like one or two cases ever previously of it being enforced, but it turns out that...

That's the FTC, but, okay, Gary Gensler is with the SECC. So it turns out that the SEC thinks that that disclosure is even more important when you're talking about tokens. which it is increasingly and now quite definitively saying our securities. Here's SEC Chair Gary Gensler on CNBC this morning talking about the charge in actually quite simple terms. It's 55 seconds. Congress passed a law many decades ago called the Securities Act, and it was to protect the public.

And part of that law said that if you tout a stock, you need to disclose not only that you're getting paid, but also the amount, so the source and the nature of those payments. And this law was passed in the 1930s. We've brought these types of cases over the decades, but even in the last five years with regard to crypto, it's really important that the public understand if somebody is touting a crypto security token, are they getting paid and how much are they getting paid? And we brought a case a number of years ago, I think four years ago against Floyd. Mayweather against DJ

Khalid Steve Seagal an actor and others over the years I like the fact that he has to say Steve Segal Khaled I know poor an actor

just because most of you have no idea who Steve Segal is she should have just said he's a bad actor from the 80s you haven't seen him unless you watch Khalid I mean I'm just dead

DJ Khaled. Kim is not the first. I remember the Floyd Mayweather one, right. I remember that one. Yeah. I mean, there have been crypto-related enforcements. Right. Definitely.

And then here's where Gary Gansler gets quite specific on this topic of securities. This is 48 seconds. Does that make the case more affirm that the SEC would then be the place where these are all regulated? Our agency is an agency that, oversees this basic bargain. When a group of entrepreneurs is raising money from the public, and the public's anticipating a profit, they need disclosure. Full, fair, and truthful disclosure. And that's the core bargain in our capital markets. You get to take the risk, but the person raising money or the person's raising money has to disclose various information to you. That

seems how our capital markets work best. The SEC is very good at this. And that's what we do. The case law is clear on this. The law is clear. I believe based on the facts and circumstances, most of these tokens are securities. Yeah, so there's two things going on here. Most of these tokens are securities. That was a big...

That was a bomb show. That was a big earthquake today, and a lot of people should be shaken. Well, by the way, Gary Gensler talked about this back in September of this year. He was at the Senate Bank Committee here, and Gensler alluded to the... the fact that Coinbase might have dozens of securities on its platform. This created a lot of brouhaha, a lot of lawyers started sending memos to their clients and I got wind of it. But basically,

he's observing that Coinbase did not have a license to operate as a stock exchange, quote, even though they have dozens of tokens that might be securities. So the saber rattling from the SEC and Gary Gensler has been frequent and specific. The reason he's mentioning that is because you keep bringing up the FTC rules about ads. We all know about that, right? Like, it's pretty much common knowledge. What we learned today is, in addition to that, there was an SEC mandate.

We don't know the act, but I'm trying to find the specific act because you heard and mention it, that if you are a influencer or you're promoting a stock, not only do you have to put ads, you have to put how much you were paid. This is something I was not aware of that clause

until today that you had to disclose how much you made so she not had to put ads she had to put how much she was paid somewhere in the disclosures so if you are doing some promotion

now this makes me wonder where is this law where is this act I'm trying to find it I asked our producers to go try and find it the touting provision of federal security law. Anti-touting.

Anti-touting. T-O-U-T-I-N-G. Touting. Let's see here. All right. Okay, I got it. The anti-touting, right. Got it. All right. And they have filed other. So it basically says, if you're going to promote this, you have to disclose all of the things that you just said. What's interesting about this, I think, and Gens. So there is a lot of focus on Kim K here and a lot of discussion of does this find, is it material? to Kim Kay and why her and anybody else?

The only question I think is relevant here is why her and not anybody else? Because I think actually it is a huge shot across the bow of the anybody else who's been touting. Like there have been a lot of tweets to the effect of like there are a lot of VCs shaking in their boots today. Okay. So she's not the first. So the question is what determines touting?

Yes. So this is this is the piece that I think a lot of people were not aware of. because Kim wanted to probably do the right thing, right? She put ads in it. So if she had known about the touting law, then she would have probably followed it. Right? Yeah, presumably, yeah.

If she had put hashtag ad on there, then she was obviously aware of, right? That's my point. And nobody knew, nobody knows if these things are freaking securities or not. Now he's coming out after the fact and we find you at $1.2 million because they're all securities like, yeah, thanks for the heads up, bro. Well, I think a lot of. the people on the crypto side knew they were securities because their lawyers told them they were.

They told them they were in a gray zone. And they came up with all these Fugazi, Foucaca, insane interpretations. And FACTA? Dang. Ridiculous. It was ridiculous. What a lot of these attorneys and law firms did. And a lot of entrepreneurs did what's called law firm shopping, partner shopping. You basically find a law firm that says, like, we'll be okay with this in this context. We'll tell you what you. want to hear, right? So there are crypto law firms that will advise startups to go one direction. There are crypto, there are non-crypto law firms who be like, I don't want to be involved in this.

And there's everything in between. And so the companies knew it. Their attorneys knew it. They knew that what they were doing was really at best gray. But they knew it was probably illegal and they tried to come up with every spin of why these were in securities and they knew they were. And the same is true for the VC firms because the VC firms were investing in tokens to get a return for their LPs. So they knew that these tokens did not pass the sniff test or the literal test of not being securities. So there are VCs who bought a bunch of tokens. I think they knew what that and knowing these VCs. They're the most savvy financially literate people in the world.

I think they suspended disbelief out of greed. I think that these celebrities suspended disbelief out of greed. They would have never bought these tokens with their own money, DJ Khaled, Stephen Seagall, if he's got any money left, any of these people, Floyd Mayweather, are grifters, and grifter's going to grift. And they just thought this is like me putting out some diet pills or whatever.

And they thought they would get away with it, and they wanted to secure a quick bag. She got paid $250,000. Her fans, if they were stupid enough to buy this stuff, knowing Kim Kardashian has zero credibility in crypto, just like this crypto people have zero credibility and the businesses she's in, they knew what they were doing too.

Everybody's guilty. And I guess the question is, but I guess the question is, is Kim Kay going to be the Martha Stewart here, and she's the only one that goes down for this thing that everybody's doing? She didn't go down. Okay, you see what I'm saying.

Is she going to be the only one who gets a $1.2 million fine? or is Gary Gensler signaling? And this is the question that's all over the internet today is, is the SEC signaling that it's coming for all y'all who have been promoted? Because the SEC hat, you know,

took an action. This is just like a random thing I found from 2021. Settled charges against the operator of coin schedule.com, a once popular website that profiled offerings of ICOs. Remember those back in the day, initial coin offerings for, and they were charged with unlawfully touting digital asset securities.

How many, if you really were like, okay, we're going scorched earth on anti-touting, then it seems to me a lot of people are in these crosshairs. When you do enforcement, celebrities. You know, having listened to Preit Barara as a podcast for the last couple of years, Joyce Vanson and Prit Barra often talk about how part of enforcement is to dissuade other people from doing these crosshers. crimes. Now, putting aside Martha Stewart, which did seem like maybe they were a little over-aggressive there, they've been pretty consistent here. Segal, Stephen Seagall, agreed to pay back the 157, which he got. They've been consistent on celebrities. The question is, hold on. Okay, sorry. I'll get there. I'll get there. I know you, I know where you're going. I like it. I like it. Walk us there. I don't need to run. No, it's all right. So, but he also got a pre, uh, a, uh, a, uh, a, uh, a, uh, a, uh, a, uh, a, uh, a,

pre-judgment interest and a $157,000 penalty. So I don't think Kim Kardashian is being treated any differently than Stephen Segal, other than she got paid more and she's higher profile. So nobody even expects that Steven Seagal would do anything on the up and up. If you've seen any of his last 20 movies, you know you got scammed by the guy. He's running scams. His very existence is a scam. Have you seen some of these movies?

I mean, the guy is like 300 pounds. He can barely move and he's flipping like five guys who were in perfect shape were in their 30s and he's wearing like, anyway, it's an embarrassment to martial arts. Putting that aside. I do think your point is correct. They are going after these people because they want to stop this because this is where harm directly connects with the public. So let's stop that promotion.

Ain't nobody going to be high in celebrities to sell some shit coins now. sorry, some isch coins. So what happens next? I think you're right. I think it goes to the CEOs of these companies, the boards of these companies, the attorneys of these companies, and to your point, Molly,

the investors in these companies. Bum, bum, bum. That's the, these are all going to happen. And if you're on the board of one of these companies, if you're an investor in one of these companies, and you didn't ask the right questions, and you approved certain transactions, you may be involved in a way,

lawsuit for the next five years, or you may have to pay a penalty or the company may need to be a penalty? I mean, you better have great insurance for your board, director's insurance, it's called. Shout out to a broker. I was going to say that. Broker.com. To a broker. You're probably going to a broker. Anyway, make sure you have good insurance, folks, especially if you're going to, and I don't even know if, like, uh, insurance companies are giving insurance to crypto companies. What, I mean, that would be, hmm. Yeah, I don't know. But anyway, this is not good for crypto. I'll leave it at that.

I think that's like, I don't even want to get into the Kim K part of this, right? Because everybody's like, it's not that much money and do-da-da-da-da-do. And okay, no, she didn't go down. What's a speeding ticket? It's a speeding ticket for her. It's a big speeding ticket, though. But it's got a sting. Earthquake for the industry.

I'd say. Potentially, right? It could be. So my question is, is it contained or is it actually the Earth? No, no. No, no. It's a way. We've moved from contained.

to contagion. This is a contagion now. Gary Genser is going after everybody. Southern District of New York. You know, San Francisco FBI. I mean, insider trading, open sea, front running the market. I don't know how many ways these agencies need to tell you these are securities and that you all need to stop with the shenanigans and the made-up-ish, bullish.

that you, the intellectual, the intellectual gymnastics it takes for certain VCs, I'm not going to mention any here, to pretend that these are not securities, while buying them and flipping those bags to the public is crazy. You can't be at the same time having invested in these marketplaces that are clearing the securities and investing in the people making up these tokens. and NFTs and everything. And you're making money hand over fist, buying and selling and flipping these things.

And it's like insider trading. You can trade on private companies as we talked about here with inside information because it's limited to the number of people who can participate in that world. But with tokens, if they are securities and you have inside information giving you the ability to flip them,

man, this could get very ugly. And I wonder what the LPs in these crypto funds are thinking. right about now. They must be going to these crypto funds, right? That's what I think right? At the point at which you have bought these tokens, the whole goal of having the tokens is that the tokens

would go up. It's so shady and like, listen, when things are going up and to the right, everybody loves to suspend disbelief. And then when it comes crashing down and there's actual victims, that's when these agencies take action. Now you can criticize that. But the way we work in America

is innocent until proving guilty. Here's the rules. execute as you see fit if you're going to do something shady we don't advise it get legal counsel that's how America works I don't right you know we don't have and when you take it too far

and you cause harm then the cops come basically basically so far is a system that everybody seems to prefer it means you can get hurt but it also means that like a lot of innovation

can be born yes and you can take a little bit of chance I bring this example of all time. If Airbnb wants to say, hey, we think in this city, in this town, in this state, in this country, and they're operating in many different jurisdictions, we believe the interpretation of the law for how many days you can rent is X. Now some people can say, we think it's Y. The hotel chains can hire lobbyists to say it's Z. And then ultimately, there is a negotiation that happens.

In this case, I don't think there's going to be any negotiation that happens here. I think the law is the law. Gary Ganser's like, here's the law. You broke it. We're done. Right. And what he keeps saying, you know, take counter the argument that there's very little guidance.

What he keeps saying is like, actually, the rules on what makes something a security are very clear. Very clear. Those rules are crystal clear. And so if you decided that doesn't apply to me because I don't want it to, that's on you. Precisely. Yeah, it's going to be interesting times.

I think that this. we will look back at the get Kim K day and be like, this was when it started. This is when the avalanche came down. This is like a series of earthquakes. Like at what point are people going to change their behavior? I think that's what Gary Gensler is trying to figure out. And I think a lot of these enforcement agencies are like, when are you going to listen? Like, what do we have to do here?

Like, do we have to have a perp walk and arrest people? And, you know, listen, Kim Kardashian is not. not admitting any fault here. So that's important. She's just settling. She's cooperating, which is the right thing to do. I actually think if they had said to Kim Kardashian, or maybe any of these celebrities, hey, you have to put ad. And since you're promoting a stock, you need to put, I was paid $250,000 to promote this. And I got $250,000 in tokens. Now, you as a consumer, if you saw that, would you still have bought the tokens? Right. Exactly. No, No chance.

So that's why this law exists. Yep. You know, if you see George Clooney drinking an espresso, but he does these espresso ads, pull this, pull up George Clooney or Brad Pitt for doing whiskey ads in Japan, please. You never see George Clooney doing espresso, but you'll see George Clooney here in Japan. Yep. And he is selling the hell out of this espresso. Now, he didn't do it here, but in Japan, he's having major conversations about espresso.

Maybe this is in France. He's doing it. Does anybody think that George Clooney likes an espresso? No. Sorry. I didn't hear it.

Frack no. George Clooney has six people work in his espresso machine at his estate at Lake Cuomo. He's pulling perfect shots with the freshly best espresso beans in the world he would never touch an espresso.

If there was an espresso in his house, he throw it right in the garbage. You buy him that as a gift. It goes right in the garbage. He gives it to his gardener. That's it. It's insulting. So when you see him doing these ads,

do you think he's really drinking that coffee? No, but it's not a financial product. You're not going to lose your shirt buying an espresso machine. Is the reason that they do them in Japan? Is it, it's not regulation, right? It's just brand protection. It's just brand protection. Yeah, yeah, okay.

100%. Yeah. But anyway, these people knew. It was all just an excuse to. And I'll will say this. Shame on Kim Kardashian. Shame on Steven Segal. Not that there's any amount of shame you can put on that person that would make any difference for this case. But these people are grifters.

Top to bottom. They are. This is where the money was. They're selling out their own fans. They know it's a garbage. They know it's garbage. And they sold garbage. Celebrity literally exists because fans get sold out all the time.

Like that's like, come on. I know. But you look at that. lip gloss or, you know, skims. These seem like great products. So stay in your lane and don't take the stupid money fire festival nonsense. Nick asks a really good question, which is like, who don't they have people to say no to this? Like who brought this deal to kill?

And what's amazing is for all of the people who are like, this fine is just a drop in the bucket. Okay, the fine is $1.2 million. She got paid $250,000 for this. It's a million dollar fine. Yeah. Nothing for her. It's nothing. Payback the two.

But I'm just saying if you think it's nothing, check yourself. Because this is how rich people get rich and stay rich is that they value every dollar. And $250,000 worth it worth it. Listen, man. And promote this BS. You don't think that I've gone, maybe not Kim Kardashian level offers, of course not. But a lot of times people are like, hey, can you promote this? We'll give you X.

We'll give you Y. And I'm like, you know what? You can buy ads on the pod. If the ads work for you. And if there's any claims in the ads, we give a disclaimer, yada, yada. And this doesn't mean I don't believe in technology cryptocurrency coming. Every other Wednesday, we have Sunny and ViniOn. We do a great job talking about the reality and the good stuff in crypto.

But selling these coins, bad on Kim, bad on Floyd, they all knew what they were doing. Now, are they going to go for, this is my big question. Matt Damon for Crypto.com. Fortune favors the bold. But Jim is pooping right now. How much do he get? What do you think he, what was the, if for a Super Bowl ad, for Matt Damon, or an actual movie star, he's A-List movie star. At least he was just talking about crypto.com, right?

Not a specific token. It was just the platform. So I think he's going to be protected. It was just a platform. I think he's going to be okay. I think that's probably smart. He got good advice. But he called his lawyer today.

Yes, he did to be like. I think he's fine. I think he's fine. I think the platform's okay. Because he wasn't selling a financial instrument saying, hey, listen. in you, but you never know. I'm just way, honestly, I'm way less interested in what future celebrity goes down and way more interested in what potential in what VC goes down, if anyone. I think it'll, I think what they're going to try to do, just practically speaking,

cleaning this up, I think it's just going to be a series of settlements. Hey, we're looking at the specific case. Yeah. You know, like, let's say some VC invested in DoQuat and this whole Luna thing, right? I don't know if he raised VC money or not. I'm just making this up, but it's a high profile one. It's obviously put money in it. You know, it's completely possible the SEC if we'll go and say like, hey, this thing went to zero.

Did you lose all your money? Were you on the board of this? Did you make any money? Oh, you sold your tokens? Oh, you cleared your position? Oh, you cleared your position? Oh, you clear five extra position. Okay.

All right. Can we have all the board docs and then every communication you have about this company? Thank you. Okay. And here we go. Now you're in an investigation.

You're being deposed. And did you do anything wrong? And here's your settlement. okay you made $10 million okay Kim Kardashian paid so okay

you got a you owe us 40 million and so this could be a speeding ticket that could get even bigger I don't know who pays that speed tickets a venture firm pay

does the LPs have to give the money back does it follow through to the LPs because it was that's what I really wonder that's what I really wonder

because that'll put a stop to the whole thing what a mess LPs should the LPs get involved yeah I could get real messy. We will, by the way, have another

crypto roundtable coming next week. Yeah, next week. Every other week. Although it does seem like we need to do every week. I know, I'm starting to wonder. I'm like, oh, you might end this every week. It just can't be all perp walks and all criminal actions. We need to keep it two thirds, you know, like what's interesting and then one third criminal actions. I know. Molly, anything else in the news that we need to talk about? Pretty big, pretty big week in all of the ways that we talked about at the beginning of the

show, not least of which is that there is a new Supreme Court session beginning. God's help us. Who knows what's going to come out of that? But we do know, and this is major, that the Supreme Court is going to hear two cases regarding Section 230, the most misunderstood law that has ever existed in the United States of America. Section 230 is part of the Communications Decency Act of 1996. It is the briefest possible sentence to have created so much issues, so many issues,

but it basically says that internet providers and internet companies are not liable for content that is posted by user. Section 230 is the tiny little statute that is the reason that, for example, Google could exist back in the day because Google could not be sued out of existence or weblogs Inc could not be sued out of existence because some user came along and posted something in the comments. that was problematic. It obviously since then has become a massive flashpoint for all kinds of people.

On the one hand, you have conservatives claiming that Section 230 enables inappropriate censorship of content, which to be clear, it doesn't. It does, Section 230 does not exempt platforms from having to take down illegal content, right? So like a lot of times people want to say, this means they can put anything. up there, even the prescription drug stuff that's illegal, like, no. The 230. You have to take down the legal stuff. Yeah, yeah.

So you still have to take down on legal stuff. But like a, you know, like Verizon is not, if you were to use Verizon to plan a bank heist, Verizon is not responsible for the bank heist. Right. If you were to use Amazon Web Services to put up, to dock somebody or to put up stolen material or whatever it is, you know, like the website is not responsible for. for it. Now, when it comes to YouTube or Facebook or Instagram, the question is, are they responsible? And it's pretty reasonable that they shouldn't be responsible if somebody puts

up something. They should be responsible if they don't take it down, of course. What happened with 230 though, is they politicized that. I think Trump really was using this as a saber rattling tool. Hey, I'll take away your section 230 protection. Which is completely logical. We all, none of us want to have. the way that conservatives have used it is to say we're going to take, because one of the things 230 does is protect companies if they do take something down in some ways, right? It says you will not be punished if you take something down, but you will not be held liable for things that your users post.

When they said, we'll take away your 230 protection, it was because they were saying, we don't want you to have any power whatsoever like that. Texas law is like, you have to leave it up no matter what. Which is why. It's just, it's been as an independent. As an independent. slash moderate. When I look at both sides and their approach to free speech, both sides are just

complete BS. One side is claiming their free speech. One side used to be free speech. They all are just using it to get votes and to rile people up. Anybody from first principles would say the paper and pen company is not responsible for what you write on the piece of paper. You're responsible for what you put on the piece of paper. So under no conception should a hosting provider or a publishing platform be responsible for how people use that tool. That's just insane. Nor could they be because there's so much, you have billions of people online. How on earth would the internet exist if every time I published a blog post, medium had to have

vet it or they were responsible for what I said? Now, conversely, no, that is literally what we are now saying to Facebook and YouTube, though. They do have to have moderation, and they've always had to have moderation. You have to take down illegal content. You have to. You have to take down copyrighting content. Are they responsible for it being put up in the first place?

The answer should be no, you would agree. Yeah, absolutely. Right. I'm pro 230 all the way. Does it, you know, do we need some guardrails or something like maybe? But I think people deliberately distort everything around 230. I will fight the both sides fight with you to the death, but not today. However, it has come under loss.

It couldn't be more cynical than the other. I'm freely admit that. I mean, the side arguing for more violent-inducing disinformation and, you know, anti-backstuff is, no. That's a, that's a no for me. For you? For you. For me? For me? I'm fine with a comedian interviewing any scientist he wants about.

That's not a 230 argument. That is a totally different argument. Okay. I'm fine with somebody putting up a clip. where they think is amazing. Oh, God, I just got us. This video is going to be taken off. You know, now we're going to be struck.

No, but I mean, for me, I'm just like, I'm not taking my information from the internet. That's just me. That's, you and I can differ in that regard. But this is what's so interesting about the 230 case is if, if Section 230 protection goes away, no way does that thing come up. It will never get posted. There will be way more censorship.

This was one of the big arguments. Actually, when the DMCA, we're old enough to remember a time when the digital Millennium Copyright Act was introduced that caused a lot of preemptive censorship, right? Like, how much, how often does it happen that one of our videos gets taken down over a copyright strength? They actually censor first. Yeah, yeah. They take it down and then you have to, what's the procedure now?

And then you have to appeal it. You appeal. They have a copyright strike appeal. Right. And then you win. So imagine that strategy being applied to the vast majority of speech online. This is never going to happen. Right. Well, I don't know. I mean, it's right.

Well, it would break the entire internet. Because consumers would be like, wait, I can't use YouTube. I can't use Twitter. I can't use Facebook. It's like, no. It would literally break the internet. Nobody wants to see the internet. That's why this is such a huge deal. So this is all just silly. Now, the case that they're doing is not silly. The case is quite serious. And I think this does bring up a rub, which is if you want section 230, you don't get to do editorial selection of the content and promote it.

Once you do that, you break your 230. This is why YouTube has been very very. very careful, to never editorially pick the winners. And when they did, like, their grant program or some things, they had to, like, really contain it in, like, this little side unit that they weren't doing an editorial process and then presenting it. Because once you do an editorial process, like a newspaper, a magazine, a TV channel, you are responsible.

So CNN and the New York Times are responsible. They're not a common carrier. They're not 2.30 because they do choose everything that goes on. air, right? They have humans picking everything that's on air. Now, where does an algorithm sit? Where does the algorithm sit between a human picking? A human picking means you're responsible, right? You made an editorial decision to put this on the front page of the New York Times or, you know, YouTube just saying, here's videos we think you like. Let's say they don't do that. They just put up videos and you have to search for them. And then the algorithm comes along. Well, the algorithm's making better choices

than humans or more targeted choices. They're more effective than humans at finding what you like. So where does that fall on Section 230, I think, is going to become the overriding question? And I think that is, that's a huge part of this first case in which there was a college student who was one of the 130 people that was killed in those horrible. Remember those ISIS terrorist attacks in Paris? Where they, I mean, just almost too terrible to talk about. But so they are arguing that on the one hand, YouTube knowingly, quote, knowingly permitted ISIS to post on YouTube hundreds of radicalizing videos inciting violence. and then they want to pursue claims that YouTube violated a federal law called the Anti-Terrorism Act, which lets people then sue if people did help aid and abet terrorist acts.

And then there's this question that because it recommend, and the argument, and this is where they get to 230, is that because YouTube recommends videos, it is now a publisher. And that is a huge question. And when you consider conservative sentiment around, these platforms right now and the makeup of the court, I feel like I don't know what's going to happen here.

Like, this is going to be kind of bonkers, potentially. Here's a thing. Nobody is giving up YouTube. It's just too core to people's lives. So the question is... I don't think they're going to shut it down. I think

the question is, what are they going to say to these platforms, yeah. Here's what they could say. And other countries could do this, which is they could say, turn the algorithm off. or the algorithm is off because remember defaults manner the algorithm is off by default if you want to turn the algorithm on you have to pay for YouTube premium and you have to click the button to turn it on in other words if we're going to break our 230 because of this we're going to have a paid product where the algorithm works on your Chrome browser it works on your desktop and you're doing it right so I can take whatever contents on my phone and I can put

it into this app that I'm using that turns text into speech. That's my right to do. I can edit a webpage on my desktop. I can do whatever I want with it on my desktop. I can't republish it. So you could say if consumers choose to take the action of doing the algorithm, that's up to them. Therefore, and that is a possible path forward, Molly, is that you could say, hey, consumers, if you want to do this, you can turn it on. You can do it. We sell an algorithm over here. You can by the Google algorithm for YouTube. Or better yet. Exactly. Albert Wenger from Unit Square Ventures argued in his book and talked about it on the show,

the idea that I should get to program my own YouTube. Sure. YouTube should make an API so that I or somebody else can create an agent to act on my behalf to go and find the yoga videos that are all I ever want. So stop giving me all these weird YouTube bros. Well, and you and I had this discussion right now. I might be okay. Like for me, I have a different view than you in this case.

I think when idiots post stupid stuff where they're pretending that they understand the vaccine and they understand this, I'm like, okay, that person's a, that person's a random person on the internet. I don't care. Now, you think, well, the goodness of society, I think I don't put words in your mouth. No, I just think all I want when I go to YouTube is yoga videos. So why is YouTube always recommending those other videos to me? That is the question. I am asking you an algorithm question, not a content question. So do not confuse those two things, because I'm not saying. So you're okay with like, kooky people saying is going to cure them. What I'm saying is, why are those videos always showing up at the top of everybody's algorithm? And it's because people watch the crap out of them. And you get engagement views over them. But don't confuse me with somebody who's trying to make all that content go away.

I'm asking you, if you, I'm asking the question. Hachshag cowgirl. Okay, cowgirl. That's fine. I'm just asking. I don't think the audience is a little confused by your position as well. I just want to make sure I understand it here. There can be a little tension here.

So you want an algorithm where you just say, more cats. yoga, whatever you're into. And you want a slider for ISIS and vaccine misinformation. Yeah, I want a lot more ISIS, but a lot less. It's so dark. I actually think that ISIS recruitment videos, not beheading videos or anything horrible like that, I'm such a, I don't know if I would call myself a free speech absolutist, but if there was an ISIS recruitment video, I would want to understand in an, you know,

educational way, how they're trying to recruit people. Now, that doesn't mean I want the algorithm putting it at the top of people's pages after they watch like an anti-Semitical comedian from France and then they jump from that, you know, to ISIS. But in the proper context, like here's a university professor talking about how ISIS, you know, recruits people and here's their techniques. Like, that to me is fascinating. I would like to watch that. Right. And understanding. So context matters. is if two and if two 30 goes away that video of the professor talking about it will never go up it'll never get posted yeah uh correct yeah so anyway i i think this is a situation where under no circumstance is the supreme court going to turn this over i don't think they want to get rid of 230 because there'd just be bad law but i do think youtube and the rest of the industry is going to have to get in front of the algorithm issues Big time, big time.

And if they don't regulate, I've talked about this before, the MPA, say what you want about censorship, et cetera, and the MPA's MPA's too heavy-handed. They have too much influence. There's been a lot of criticism

of the Motion Picture Association, whatever, where they put those ratings on things. What it did do was it kept Hollywood out of like, you know, the regulatory spotlight because they police themselves.

Hey, dummies, with algorithms. Publish your algorithm. them. Tell us how it works. Give us some freaking sliders. Yeah. So dumb. Why are people so dumb? Or let me program it myself. Exactly. Because they and yeah. If you want a really, really, really great explainer about section 230. The book is called the 26 words that created the internet by a guy named Jeff Kossif, who is a fantastic speaker on this topic and who relentlessly and diligently debunks free, you know, weird free speech related arguments and things about

and information about 230 on the internet. Follow him on Twitter.com.com slash J. Kossif, K-O-S-E-F. He is amazing and has some cute cats. So there you go. But that book is fantastic on this topic. And here he is four hours ago. My initial reaction to the Gonzalez cert grant is that at least a few justices, not just Thomas, want to narrow 230 scope, despite the claims in the court petition, there was not a circuit split on this issue. So the grant was fairly surprising. That said, I have no idea how or if a five-justice majority would agree as to how courts should interpret 230. There are too many dynamics and questions against accepting any confident predictions. I think he's referring to this case. The Gonzalez case is the ISIS case. Anyway, there are two separate. The

Supreme Court's going to hear two separate cases on the Section 230 topic, and the Gonzalez case is the ISIS-related case. This is part of the messy process of a society figuring out what we want as technology changes so rapidly. Right. And what people who are running startups and investing in them, the audience of this program need to understand is take ownership of your is. Yes. If you're Pinterest and people start posting self-harm and you become aware of it, you need to, need to get on top of that. And, you know, if you're YouTube and people are putting ICE stuff in there, man, you've got to get ahead of that. How far ahead of it can you get?

I actually have to give a shout out to Twitter in this case. They have something called Birdwatch now, which I'm now part of, and I think I broke the news of it here because somebody had leaked it to me. I actually did on this podcast. And what Birdwatch does is, do you have Birdwatch? Do you see birdwatch notes? I haven't gotten it, but it's the one that lets you flag stuff, right? or put a comment. You can put a contextualizing comment. Yes. And so you pick an anonymous,

I picked an anonymous name. It gives you like three words. So like, you know, guerrilla, you know, blue tortoise or whatever. So it gives you like three random words. That's how you identify yourself

and your updates over time. And like somebody had said, oh, this person from the, you know, said war, nuclear war with Putin is inevitable, whatever.

And one of the birdwatch people in real time, like an hour after it happened, said, this person's not in the administration. They haven't been the Secretary of State for this many years or whatever it was. But when you read it, the way the person had tweeted it, they were like, you know, Secretary, you know, General whoever said this. And it's like, right?

Or, and this person is not actually in office right now. They were. So you should take this differently than it's somebody who's in our administration. They're not in the administration. They were in the Obama administration. It's sort of like. It's, we have, we have an accidental story arc in this conversation, right? There's this question of responsibility.

There's this question of what should you take money for? And that's kind of like where the algorithm comes in. The simplest, for example, the simplest sentence to explain my position on this topic is that freedom of speech is not the same thing as freedom of reach, which you start to hear some people say, right? Just because you post it doesn't mean that YouTube or Facebook or Instagram should promote it to me. Yes. And amplify the harm. that it could cause. You can post harmful content all day long. And if only six people see it in the basement, it doesn't do harm. But if YouTube's algorithm or Facebook's algorithm or Instagram's

algorithm, and to be clear, whistleblower Francis Hogan showed us that Facebook's response to this content was, well, it amplifies engagement. Yes. And so we will promote it, even though we know it's causing harm. That's freedom of reach. Yeah. We have to think about that. And that's the part. And That's the, so when people talk about narrowing the scope of 230 or how to deal with algorithms, it's two different questions. Like, there's the question of whether you should post it at all. Post it. If nobody sees it, it doesn't matter.

Then there's the question of what should happen after it's posted and whether these sites should use it to monetize no matter what the harm. Like you're saying, Jay Cow, I'm not going to promote the token for $250,000. No. But you could buy an ad and everybody will know it's an ad and then they can make their own call. I mean, I'll take $750 maybe, but I'm not. done for two things. Yeah, we all got it.

We all got a number. I'm not. We got a number. Here's a thing, Molly. Let me just say this. One more important. Here's a thing. Let me ask you a provocative question.

If we had controls over the algorithm, 100% user controlled. And maybe even default off. Let's make it even like the most aggressive case. Algorithms are default off. You have to turn them on. You have to read the disclaimer. And then you get to set them however you like. This would assuage much of your concern.

Correct? Yeah. Me too. 100%. Okay. Now, what if one of the choices was any user could promote their own version of the algorithm? You could have Molly's version, Jason's version, whatever, Nix version, producer Nix version. And, you know, I could borrow yours, just like the block list where I could borrow your block list on Twitter we were talking about last week.

Yep. That would be cool too, right? Yes. Okay. Where are you going with this? Exactly. Exactly. Because pretty soon they're going to make the most provocative one and get paid the most for it.

The problem is incentives, 100%. So now, let's say. I am, I don't know, bad actor. Yeah. Or let's say I'm like, I don't know, grifter. I'm Alex Jones. Perfect example. And I say, I'm going to publish the Alex Jones conspiracy theory, scumbag algorithm.

Yeah. And you can plug it in and your internet experience is through the lens of that disgusting, grifting piece of garbage. Mm-hmm. Are you okay with that disgusting, disgusting. human making an algorithm that young people can then click into. I mean, then I have to be okay with that, yes. Yes, okay. You know, like it's going to exist.

I think that's intellectually honest. And people are going to choose it. And I cannot say I'm in favor of speech and say I'm against that. No, 100%. Should YouTube be able to block it? Does YouTube have to host it or not? Of section 230, if it is illegal, they have to take it down. Okay.

So, I mean, the illegal, then they should take that. Like the ability to promote your algorithm could be part of a partner program like apps. So if they were treated like apps, you would have to get approval from the app sir. So I think they should be, the algorithm, you should, anybody should be able to make one, but you have to go through an approval process. And then you have to put into your approval process. Like, let's do some combination of like women hating, you know, in-cell, ISIS, extremism. And then I want to publish that as like, I don't know, empowering young men.

Right. Right. Then it would probably get started a self-harm algorithm. Oh, yeah. Wow, that's a really interesting one. Right. Like, because then moderation will still exist in many of the same ways it does now. And then the question is of incentives.

Like the thing that people don't understand about disinformation is that the incentive at the end of the day for to do it is money. It makes everybody money. It's like Kim Kardashian crypto. She doesn't care about crypto. She cares about $250. Exactly. That's why YouTube is promoting me stuff that I do not want to see when I'm just trying to do freaking yoga. And that's why Kim Kardashian is promoting this crypto that she doesn't give a crap about.

And that's why Alex Jones is saying all the stuff that he's saying. And everybody's getting more and more extreme because they get paid for it. Was it? Did they say he made like $10 million one day selling his prepper meals or whatever? It was 800,000. But yeah. Oh, 800,000 a day. Oh, 10 million a month maybe was the number.

I was like, yeah, what, how is that? Oh, right. He's getting like huge audience by spewing this grossness. And see, I love that we're having this conversation because that's why the free, that's why free speech as a blanket conversation as a blanket idea is totally misleading. Stop the grip. This is not about that. It's about stopping the grift. Yeah, just stop the grift. That's, that's what this is about. This is why I think not de-platforming, but demonetizing is YouTube's. best weapon. Yes. And I think if you add, if you take away de-platforming and you just get rid of your ability to trend. Just depromote. And yeah, so depromote and demonetize. Those two things would be great, I think, for dealing with this. And then if people don't like it, if you're Alex Jones and you don't like it, okay, go to Rumble or whoever else wants to host your, you know, particular

form of content and horribleness. All right, everybody, this has been an amazing episode. I think we accomplish some things. I hope we're interested in the world a little better. It was great story arc today. I think I feel positive about the world. I think I feel positive about the world. I think we're going to solve so many problems that

all this like hand-wringing and stuff we're trying to get through is going to be in the arc of history considered de minimis, not important or tiny, in comparison to the gains we make in AI, robotics, abundance,

energy, sustainability, all that great stuff is going to be so great that we will look in the arc of history and say, like, yeah, we didn't have to worry about that other stuff so much. It's great that we did, but just so many good things. I think good things can just outshine the bad stuff so incredibly. This is an excellent argument for taking a week off Twitter. Let's do it. Let's do it. One week without Twitter.

Oh, my God. That would be like a really. A week without Twitter. And then just to see what we end up putting on the show. Oh, God. Be so fascinating. I think I might go through withdrawal syndromes if I gave up Twitter for a week. Such a great platform.

I was saying there yesterday I was like, I'm going to spend three uninterrupted hours on this one project. I'm on it. I'm doing it. And literally like 42 minutes in, I felt myself just like my hand just creeping over toward the phone. I was like, let me, I just need to see what's happening. It was like a physical urge. It is a physical urge. We could ease off Twitter.

We could just, we could just lower the number of hours. Increasingly leaving my phone in a draw. going have dinner with my kids or watch the She-Hulk thing, whatever we're doing, play tennis. Sometimes I put it into airplane mode and put it in the draw or I put it in my jacket pocket, zip the jacket, pocket shut, and just try to create a little bit of space between me and the phone. All right, everybody, it's been a great episode. We'll see you tomorrow, Tuesday. Bye-bye.