YouSaid · the spoken record

David Luan

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2024-06-24
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2024-06-24
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  1. “You're doing awesome. The fact that you're able to do this after a Wisdom Tooth removal is insane. I had so much fun. I thought you asked great questions across business and tech. And yeah, I'm excited to see how this all plays out from here.”

    2024-06-24 · The Twenty Minute VC · 20VC: Why Foundation Model Performance is Not Diminishing But Models Are Commoditising, Why Nvidia Will Enter the Model Space and Models Will Enter the Chip Space & The Right Business Model for AI Software with David Luan, Co-Founder @ Adept · IDENTIFIED FROM THE TRANSCRIPT · source

  2. “I think the question is what percentage of work done today is addressable by RPA? It's very little, but what's a percentage of work done today that's addressable by agents? It's like 1,000 X that, 10,000 X that? I don't know, something in that order of magnitude. It's just, it's a very different market. It's like saying, should we work on self-driving when self-driving didn't exist? And then looking at the market for those autonomous rovers and warehouses.”

    2024-06-24 · The Twenty Minute VC · 20VC: Why Foundation Model Performance is Not Diminishing But Models Are Commoditising, Why Nvidia Will Enter the Model Space and Models Will Enter the Chip Space & The Right Business Model for AI Software with David Luan, Co-Founder @ Adept · IDENTIFIED FROM THE TRANSCRIPT · source

  3. “I think one way it won't happen is that fundamentally agents are a reframing of how software is bundled. Today we bundle software in these functional ways, right? Like you've got Notion or Google Docs for your docs and then you've got Salesforce for sales and then you've got Workday for HR and all of this stuff, right? But the work that we do fundamentally spans all these different domains. And then agents just should bridge those domains. Otherwise, you can't become a higher level thing. So if we're locked into like end walled gardens by incumbents, then that vision will not happen.”

    2024-06-24 · The Twenty Minute VC · 20VC: Why Foundation Model Performance is Not Diminishing But Models Are Commoditising, Why Nvidia Will Enter the Model Space and Models Will Enter the Chip Space & The Right Business Model for AI Software with David Luan, Co-Founder @ Adept · IDENTIFIED FROM THE TRANSCRIPT · source

  4. “Agents in five years' time, I mean, it's kind of going to be like a non invasive brain computer interface, basically. I think that's what an agent will be. All of us are going to be up-leveled. It's going to feel like the same transition from DOS slash command line to the GUI, but from GUI to agents. We're going to interact with them at a high level at the level of goals. And they're basically just going to let us, I think, have basically new kinds of thoughts, like the ability to go reason at one level abstraction beyond what we all do today.”

    2024-06-24 · The Twenty Minute VC · 20VC: Why Foundation Model Performance is Not Diminishing But Models Are Commoditising, Why Nvidia Will Enter the Model Space and Models Will Enter the Chip Space & The Right Business Model for AI Software with David Luan, Co-Founder @ Adept · IDENTIFIED FROM THE TRANSCRIPT · source

  5. “Biggest misconception is that this is just going to be something that at every step takes another human capability and fully automates it. The implicit goal of AGI right now is replace human work. But like so much of human work, I just don't think will be neatly captured by AI. And instead, it's going to be, it's just like AI will be a tool to level up human intelligence.”

    2024-06-24 · The Twenty Minute VC · 20VC: Why Foundation Model Performance is Not Diminishing But Models Are Commoditising, Why Nvidia Will Enter the Model Space and Models Will Enter the Chip Space & The Right Business Model for AI Software with David Luan, Co-Founder @ Adept · IDENTIFIED FROM THE TRANSCRIPT · source

  6. “I think it's going to look like you're going to have these rich interactions with these increasingly smart systems that can do things on your behalf. And then you're going to go have other systems that you talk to for like therapeutic or fun use cases.”

    2024-06-24 · The Twenty Minute VC · 20VC: Why Foundation Model Performance is Not Diminishing But Models Are Commoditising, Why Nvidia Will Enter the Model Space and Models Will Enter the Chip Space & The Right Business Model for AI Software with David Luan, Co-Founder @ Adept · IDENTIFIED FROM THE TRANSCRIPT · source

  7. “Actually, a little bit we were talking about earlier. I actually think agents and chatbots are going to speciate and turn into two different products.”

    2024-06-24 · The Twenty Minute VC · 20VC: Why Foundation Model Performance is Not Diminishing But Models Are Commoditising, Why Nvidia Will Enter the Model Space and Models Will Enter the Chip Space & The Right Business Model for AI Software with David Luan, Co-Founder @ Adept · IDENTIFIED FROM THE TRANSCRIPT · source

  8. “Questions along the lines of like as these models get smarter and smarter and they sort of know more and more about the world and have more and more ability to do things in the world, how do you interact with them? How do you supervise them? How do you give them corrections and teach them to be more aligned with what you want? Questions like that.”

    2024-06-24 · The Twenty Minute VC · 20VC: Why Foundation Model Performance is Not Diminishing But Models Are Commoditising, Why Nvidia Will Enter the Model Space and Models Will Enter the Chip Space & The Right Business Model for AI Software with David Luan, Co-Founder @ Adept · IDENTIFIED FROM THE TRANSCRIPT · source

  9. “Waterfall sequential method, which I don't think is a very good way to develop the technology. I think we should start back from ultimately how should humans use these things and then create the whole solution end-to-end that way. And so that's why the HCI problem, like people just aren't spending enough time thinking about, like chat is obviously not obviously not it.”

    2024-06-24 · The Twenty Minute VC · 20VC: Why Foundation Model Performance is Not Diminishing But Models Are Commoditising, Why Nvidia Will Enter the Model Space and Models Will Enter the Chip Space & The Right Business Model for AI Software with David Luan, Co-Founder @ Adept · IDENTIFIED FROM THE TRANSCRIPT · source

  10. “Okay, so what I mean by that is that I personally find a world in which increasingly generally intelligent systems run around with their own agency and goals and not involve what humans most care about to be not a world that I really want to live in. And I think because of that, and this goes back to what you were saying about like selling AI by work versus as a software tool, right? Like I would much rather live in a world where we have sort of these like AI teammates and assistants that we interact with instead. And then I think the question becomes how do you find the right interface between smarter and smarter AI systems and people? And how that interface is defined actually changes a lot about what training data you collect, how can humans align these systems towards the preferences of what humans want, also ultimately like how these models are even built and what their architectures are. And so in a weird way, the way the field is moving is let's make models smarter and let's make use cases smarter and then let's go put them in people's hands and then let's figure out what this means for people. It's kind of this”

    2024-06-24 · The Twenty Minute VC · 20VC: Why Foundation Model Performance is Not Diminishing But Models Are Commoditising, Why Nvidia Will Enter the Model Space and Models Will Enter the Chip Space & The Right Business Model for AI Software with David Luan, Co-Founder @ Adept · IDENTIFIED FROM THE TRANSCRIPT · source

  11. “Actually, be developed in the next five years. And I think in the next five years, Open will always lag closed. And because Open will always lag closed because Open just has fewer resources behind them and fewer incentives for people to go make things to be open as these things become more and more expensive. Ivue Open really as a way for the rest of the field to keep up with the biggest incumbents. And therefore, I think it's actually pretty darn important.”

    2024-06-24 · The Twenty Minute VC · 20VC: Why Foundation Model Performance is Not Diminishing But Models Are Commoditising, Why Nvidia Will Enter the Model Space and Models Will Enter the Chip Space & The Right Business Model for AI Software with David Luan, Co-Founder @ Adept · IDENTIFIED FROM THE TRANSCRIPT · source

  12. “I think two things. One, I think the broader set of concerns about use and misuse and safety are extremely important. And I think that what was a good thing about all of this is that people are having these discussions more openly, which I really strongly appreciate. I think with a lot of these systems, you can already see clearer ways to go misuse them, right? Like spin up a bunch of servers, take the best code model you have out there, use them to go try to find vulnerabilities in software systems. Like that's already happening, it's going to really start kicking into gear. So like things like that, I think make me very concerned. At the same time, I think that AGI is just a really difficult thing to reason about because the way that many people define it is almost defining it as an infinity. And like reasoning about infinity is really hard because you multiply infinity by 0.0001%. And that's still infinity. And so I think it's a very brain-breaking thing. And so I think a better way to go look at it is to look at the path dependence. Like how will this technology?”

    2024-06-24 · The Twenty Minute VC · 20VC: Why Foundation Model Performance is Not Diminishing But Models Are Commoditising, Why Nvidia Will Enter the Model Space and Models Will Enter the Chip Space & The Right Business Model for AI Software with David Luan, Co-Founder @ Adept · IDENTIFIED FROM THE TRANSCRIPT · source

  13. “I think that what happens is that it becomes harder for the general field to go build on open source. It'll become harder for new companies to get started that have new AI ideas that they want to go train and scale up. I think what really happens is just another concentration of power moment.”

    2024-06-24 · The Twenty Minute VC · 20VC: Why Foundation Model Performance is Not Diminishing But Models Are Commoditising, Why Nvidia Will Enter the Model Space and Models Will Enter the Chip Space & The Right Business Model for AI Software with David Luan, Co-Founder @ Adept · IDENTIFIED FROM THE TRANSCRIPT · source

  14. “I think my main concern right now is actually one of regulatory capture in the same vein we were talking about earlier about how there will be only a few sort of frontier model companies that can exist at Eddie State. I think the move to go pull up the ladder behind them is already beginning. Lawmakers don't really understand this technology at all. And so their default instinct is sort of listen to the most credible source and usually those credible sources have”

    2024-06-24 · The Twenty Minute VC · 20VC: Why Foundation Model Performance is Not Diminishing But Models Are Commoditising, Why Nvidia Will Enter the Model Space and Models Will Enter the Chip Space & The Right Business Model for AI Software with David Luan, Co-Founder @ Adept · IDENTIFIED FROM THE TRANSCRIPT · source

  15. “No, I don't think so because I think the third bucket of like economic upside is still early and I think that bucket is the companies that then turn the use cases that have product market fit into repeatable products. Right now, right, imagine a very large company X, right? And you need capability Y. And then you've got the base model over here, right? That's pretty darn smart. GPT-4 or Gemini or whatever, right? And this is giant gulf in the middle. In every one of these cases, the first we would go fill that gulf are sort of consulting ye service providers, right? But then the moment that Gulf starts getting filled and you start seeing, ah, okay, like this is the really useful thing for an enterprise, then people just go productize that thing. And that becomes a startup. And so then that becomes eventually a company that's a conduit between the base intelligence and the customer. So today that might be true for services, but I feel like a lot of these things will be turned into generalizable products. And then when they do, those companies will then be the real economic winners.”

    2024-06-24 · The Twenty Minute VC · 20VC: Why Foundation Model Performance is Not Diminishing But Models Are Commoditising, Why Nvidia Will Enter the Model Space and Models Will Enter the Chip Space & The Right Business Model for AI Software with David Luan, Co-Founder @ Adept · IDENTIFIED FROM THE TRANSCRIPT · source

  16. “Those breakthroughs are visible. And as a result, what I think has a hope of preventing this from just being a hype cycle that falls flat like AV is that those things are, those shoes are yet to drop. And as they do, the capabilities of these models are going to continue to improve. And on top of that, there's not a technology that you need to get to that level of reliability before it can be deployed. It's already deployed today.”

    2024-06-24 · The Twenty Minute VC · 20VC: Why Foundation Model Performance is Not Diminishing But Models Are Commoditising, Why Nvidia Will Enter the Model Space and Models Will Enter the Chip Space & The Right Business Model for AI Software with David Luan, Co-Founder @ Adept · IDENTIFIED FROM THE TRANSCRIPT · source

  17. “So, I feel like in self driving, what happened was there was an aha moment where you could get the thing to work at all. And then you're like, okay, well, now it works 60% of the time. How do we get this to 99.99% of the time? Every day you show up to work and you just play whack-a-mole on what's not working. And you just like hope and pray that this converges to that like 99.999999 thing. That's not true for AI right now. Sorry, that's not true for specifically what I'm about to say is only applicable to building smarter and smarter models and a gentex systems that ultimately help you do work. That's the thing that I'm trying to talk about. For building that, that's not how the underlying dynamics are right now. Like every day, we go to work and there's like actually brand new scientific things we want to try that just dramatically improve the performance of the model. Some of those bets don't work and some of those bets really work. The reasoning bet we talked about earlier is an example of one. Think another example of one is like this like universal multimodality that you d40 is.”

    2024-06-24 · The Twenty Minute VC · 20VC: Why Foundation Model Performance is Not Diminishing But Models Are Commoditising, Why Nvidia Will Enter the Model Space and Models Will Enter the Chip Space & The Right Business Model for AI Software with David Luan, Co-Founder @ Adept · IDENTIFIED FROM THE TRANSCRIPT · source

  18. “I think the majority of it is extremely experimental. One of the things we do, for example, is we really try to not sign deals that are coming out of experiment budget because we want quality revenue, basically.”

    2024-06-24 · The Twenty Minute VC · 20VC: Why Foundation Model Performance is Not Diminishing But Models Are Commoditising, Why Nvidia Will Enter the Model Space and Models Will Enter the Chip Space & The Right Business Model for AI Software with David Luan, Co-Founder @ Adept · IDENTIFIED FROM THE TRANSCRIPT · source

  19. “This is a very, very good question. Harry, we should rewatch this podcast in 10 years and see how we feel. But I think like, you know, when we talk about AI, like, AI is so freaking broad. It's a little bit like us asking maybe in the early days of the internet a generalized thing about the internet as well. Like it's just, I think there are some use cases that are clearly hitting PMF within an enterprise. But for the most part, just when we go to enterprises to go to go to go sell them stuff, they've got so much stuff that's still on-prem. They've still got workflows running on mainframes. And it's 2024. And so I think even if technologies like cloud, which we probably look at as from a startup lens as being so freaking mature, still doesn't have full adoption in enterprises is like, I think that stuff is really interesting. And I think as a result, we're going to be on those adoption curve for enterprise AI for a very, very long time.”

    2024-06-24 · The Twenty Minute VC · 20VC: Why Foundation Model Performance is Not Diminishing But Models Are Commoditising, Why Nvidia Will Enter the Model Space and Models Will Enter the Chip Space & The Right Business Model for AI Software with David Luan, Co-Founder @ Adept · IDENTIFIED FROM THE TRANSCRIPT · source

  20. “Actually, this is something I'm going to steal from our Angel investor, Scott Belsky, who has just thought about this so much. He always calls it like this collapsing the talent stack thing. And the idea is basically that projects and teams where the same person is simultaneously the PM and the designer and or the engineer or the go-to-market person or the market or whatever, the more that like those different skill sets are smushed in the same person, the faster that thing moves and the more effective the thing becomes. So I think what it's going to do is it's going to make people humans at work much more like generalists and it's going to have like giving people sort of like larger and larger scope over various different like areas that are different functions today while they ultimately supervise like a cohort of like AI co-pilots that are the specialists.”

    2024-06-24 · The Twenty Minute VC · 20VC: Why Foundation Model Performance is Not Diminishing But Models Are Commoditising, Why Nvidia Will Enter the Model Space and Models Will Enter the Chip Space & The Right Business Model for AI Software with David Luan, Co-Founder @ Adept · IDENTIFIED FROM THE TRANSCRIPT · source

  21. “I think both these two things can be true. I think co pilots are a great incumbent strategy because it lets them morph their existing software business model with something that kind of looks the same while getting in on the AI thing. But even separately from that, I just think like where are these systems going to be most useful? I just feel like everybody in this field has this vision, right? That like AI is going to take all jobs. The pricing by work thing is just a corollary of AI is going to take all jobs, right? Because then it's like, all right, maybe you price by work on invoices. And then next month you price by work on like consulting decks. And then before you know it, you price by work on like being AI CEO of like David Coe or something like that, right? Like that's not, I don't think that's how this is going to play out. I think the way this is going to play out is that where we're going to have is we're going to have humans fundamentally be the drivers of these egetic systems that basically give everybody tremendous amount of leverage on their own creativity. And how can that be built without a co-pilot style approach is like my question?”

    2024-06-24 · The Twenty Minute VC · 20VC: Why Foundation Model Performance is Not Diminishing But Models Are Commoditising, Why Nvidia Will Enter the Model Space and Models Will Enter the Chip Space & The Right Business Model for AI Software with David Luan, Co-Founder @ Adept · IDENTIFIED FROM THE TRANSCRIPT · source

  22. “I think in places we're definitely going to see that become true, but I actually think in knowledge work, the most valuable things to do will not be priced that way. And here's why. I think that the definition of price per work assumes repetitiveness, commoditization, cookie cutter, no creativity. I think what these AI systems are going to do, especially AI agents are going to do, we are basically going to give people the ability to go do new things and have way more leverage on their time and give them more opportunities to be creative. And so then ultimately what we're building is like a co-pilot or a teammate. And co-pilots and teammates don't charge you a price per work. You really pay them based on their ability to augment your ability to go do new things, right?”

    2024-06-24 · The Twenty Minute VC · 20VC: Why Foundation Model Performance is Not Diminishing But Models Are Commoditising, Why Nvidia Will Enter the Model Space and Models Will Enter the Chip Space & The Right Business Model for AI Software with David Luan, Co-Founder @ Adept · IDENTIFIED FROM THE TRANSCRIPT · source

  23. “While so basically the way that we're doing things is we are addressing use cases initially that are really painful that get our foot in the door, but we're really focused on how do we make the end user be able to teach at any new capability. Like I should be able to dump in my standard operating procedure for this new thing my team does, or I should be able to show a depth like 10 times and give it corrections on how I enroll a new nurse into a healthcare portal in the US. And then the model should be able to do that for me. And basically we're working on something that's ultimately very self-serve over time”

    2024-06-24 · The Twenty Minute VC · 20VC: Why Foundation Model Performance is Not Diminishing But Models Are Commoditising, Why Nvidia Will Enter the Model Space and Models Will Enter the Chip Space & The Right Business Model for AI Software with David Luan, Co-Founder @ Adept · IDENTIFIED FROM THE TRANSCRIPT · source

  24. “Think it's just really fundamentally disruptive to their business model. Like the way that a big corporation uses UiPath, right, is like there's a big plans around a process transformation that needs to be done, sometimes like an Accenture or something comes in and then maps out what the processes are like, sometimes what the process discovery thing. And then RPA engineers go and build those workflows. And then six to nine months later, you hit play on this thing that then automates some invoice processing every night or something like that. model of like you just put an agent in there and the agent observes what the end user does to go do that job and then that becomes like a like a thing that you can then just invoke with natural language is like really disruptive to the business model i think that the best way to uh to run circles around incumbents is to do something that has a different business model than what they have”

    2024-06-24 · The Twenty Minute VC · 20VC: Why Foundation Model Performance is Not Diminishing But Models Are Commoditising, Why Nvidia Will Enter the Model Space and Models Will Enter the Chip Space & The Right Business Model for AI Software with David Luan, Co-Founder @ Adept · IDENTIFIED FROM THE TRANSCRIPT · source

  25. “Yeah, totally. I mean, this is a good question. It's actually a question that used to cause me a lot of heartburn because I found it so hard to explain to people why agents were going to be different than RPA. Best analogy I've got is RPA is very useful for high volume tasks that always look the same. The analogy that I would give would be RPA is a little bit like, you know, when you go to a factory floor and there's robots roaming around everywhere, what those robots do is there's like literally a yellow line painted on the floor and the robots like follow that line they go from cell to cell on station to station and they pick up stuff. But what agents are agents are meant to be constantly thinking and reevaluating and planning at every step to solve your goal and it's much more like full self-driving. The difference in utility between those two things is fairly large. Of course there's many areas where you don't want something that can have variability and therefore you should use RPA. I just think in five to ten years people are going to use their computers by giving them a high level goals.”

    2024-06-24 · The Twenty Minute VC · 20VC: Why Foundation Model Performance is Not Diminishing But Models Are Commoditising, Why Nvidia Will Enter the Model Space and Models Will Enter the Chip Space & The Right Business Model for AI Software with David Luan, Co-Founder @ Adept · IDENTIFIED FROM THE TRANSCRIPT · source

  26. “I mean, just even looking at something as simple as I want to add a new lead to Salesforce, right? Let's go outside and find 10 different companies who all use Salesforce and look at how they've got it configured and it all looks completely different from each other.”

    2024-06-24 · The Twenty Minute VC · 20VC: Why Foundation Model Performance is Not Diminishing But Models Are Commoditising, Why Nvidia Will Enter the Model Space and Models Will Enter the Chip Space & The Right Business Model for AI Software with David Luan, Co-Founder @ Adept · IDENTIFIED FROM THE TRANSCRIPT · source

  27. “Yes, that's what our advantage is. Is like, you know, we get this question all the time, right? With the depth trying to, like, we want to be the system of record for workflows and enterprises. Like any employee at any large company should be able to teach adept, hey, like, here's how I do this particular thing, right? Like, here's how I handle fetching all the data for an insurance claim, right? And this should be able to show a depth at and then adept should be able to do it for them. That generalization, all of those edge cases and variability is why the only way to solve that is to have vertical integration of model with use case. And it's also why I think we'll do better than companies that are just focused on a vertical, like a particular narrow problem. Because I was talking to Prairag, who used to be the CEO of Twitter. We were just hanging out the other day. And he's like, dude, every enterprise workflow is an edge case. And he's absolutely right. And that's why you need to.”

    2024-06-24 · The Twenty Minute VC · 20VC: Why Foundation Model Performance is Not Diminishing But Models Are Commoditising, Why Nvidia Will Enter the Model Space and Models Will Enter the Chip Space & The Right Business Model for AI Software with David Luan, Co-Founder @ Adept · IDENTIFIED FROM THE TRANSCRIPT · source

  28. “Yes, we're really, really focused on this particular problem that we're trying to solve. We're trying to build an AI agent that you can delegate arbitrary work tasks to. And so then everything we do stems from that. So what we are not doing is we are not trying to just train foundation models to sell them to other people. What we're doing is we're building like a very vertically integrated stack. Going back to our previous discussion of where will vertical integration happen versus not. I do think that in the agent space, it's extremely important that you own the entire stack from what is the end user interface. I think as we're talking about the Apple example earlier, owning the interface gives you tremendous leverage in this era of AI to how do you make agents that are reliable enough to be used at work all the way down to what needs to happen to the foundation modeling layer to enable this whole end-to-end system to be maximally performant. That's what we do. This is vertical slice.”

    2024-06-24 · The Twenty Minute VC · 20VC: Why Foundation Model Performance is Not Diminishing But Models Are Commoditising, Why Nvidia Will Enter the Model Space and Models Will Enter the Chip Space & The Right Business Model for AI Software with David Luan, Co-Founder @ Adept · IDENTIFIED FROM THE TRANSCRIPT · source

  29. “Think it would have to look like something like that. I think that right now that's why I think of the companies, of the independent foundation model companies besides Adept, I'm more excited about places like OpenAI because they have chat GPT to help do that. Whereas I think if you're a pure play model seller, I think it's very difficult.”

    2024-06-24 · The Twenty Minute VC · 20VC: Why Foundation Model Performance is Not Diminishing But Models Are Commoditising, Why Nvidia Will Enter the Model Space and Models Will Enter the Chip Space & The Right Business Model for AI Software with David Luan, Co-Founder @ Adept · IDENTIFIED FROM THE TRANSCRIPT · source

  30. “I think what happens is all of the tier one clouds will have their own effort that will do well because it has to do well. And they will do whatever it takes to go ensure that they have the capital and data flywheel and talent to go do that. Then I think for the independent companies, and I would say that adept is very different because what we do is we sell an actual end user facing agent to enterprises, which is a very different business model than selling models to developers. But companies that sell models to developers will either need to effectively be the first party effort of one of these big clouds, or they have a short window between now and commoditization to build such a big economic flywheel that they can afford to stay independent.”

    2024-06-24 · The Twenty Minute VC · 20VC: Why Foundation Model Performance is Not Diminishing But Models Are Commoditising, Why Nvidia Will Enter the Model Space and Models Will Enter the Chip Space & The Right Business Model for AI Software with David Luan, Co-Founder @ Adept · IDENTIFIED FROM THE TRANSCRIPT · source

  31. “At home is powered by AMD or Intel CPU trying to create a way in which Apple owns the interface and Apple owns the end customer and then the like big brain LLM smarts is just like one hot swappable thing.”

    2024-06-24 · The Twenty Minute VC · 20VC: Why Foundation Model Performance is Not Diminishing But Models Are Commoditising, Why Nvidia Will Enter the Model Space and Models Will Enter the Chip Space & The Right Business Model for AI Software with David Luan, Co-Founder @ Adept · IDENTIFIED FROM THE TRANSCRIPT · source

  32. “I am extremely impressed with OpenAI, I think, in terms of their technical delivery. I think the degree to which GPT-40 was, I think, relatively underhyped relative to what I think the true scientific improvements have been in that model, there's a pretty big gap. Like I think we're moving towards a world where we're going to be training these universal models that take any input in, right? Audio, text, video, you name it, and then generate any output out. And all of humanity's knowledge will be encoded in one of these models. And he gypsy 4.0 is a much bigger step towards that than people realize. So I think that Apple cutting that deal with OpenAI, I think at least part of it is a recognition that I think OpenAI is on a different trajectory compared to others on actual model progress. But at the same time, it also really strongly hints at a commoditized future. To the same extent today, as a consumer, I no longer care whether my computer, my desktop,”

    2024-06-24 · The Twenty Minute VC · 20VC: Why Foundation Model Performance is Not Diminishing But Models Are Commoditising, Why Nvidia Will Enter the Model Space and Models Will Enter the Chip Space & The Right Business Model for AI Software with David Luan, Co-Founder @ Adept · IDENTIFIED FROM THE TRANSCRIPT · source

  33. “To go tell you whether this tweet is positive or negative. Like a pretty small model can do a perfect job at that. And so things like that will always run on the edge. And so then if you're a giant frontier model provider, you're just not going to be able to monetize these tiny skills that are just going to limit the edge. But then conversely, a billion parameter model is probably for some time not going to solve, like, be able to create a 3D part for me for my car, right? That's probably going to be the GPT-10 problem. And so I think as a result, I think Apple is just going to completely crush at everything that looks like something that's really private, something that's fine-tuned on your own particular data, but doesn't require massive reasoning capability. And that will all run at the edge.”

    2024-06-24 · The Twenty Minute VC · 20VC: Why Foundation Model Performance is Not Diminishing But Models Are Commoditising, Why Nvidia Will Enter the Model Space and Models Will Enter the Chip Space & The Right Business Model for AI Software with David Luan, Co-Founder @ Adept · IDENTIFIED FROM THE TRANSCRIPT · source

  34. “Okay, I like to think about AI capabilities in terms of, actually to start from the top on this one, thinking about the Apple, think about like the Apple advantages in this particular space, I think there's like two areas of extreme power and leverage that you get in machine learning right now. One is the ability to run smart models for free at the edge. And the other one is to have the absolute smartest models possible. And so I think Apple has a massive advantage on the former. And when we go think about like whether that'll be enough, I think that's a really hard question to think through because I kind of think about it as like concentric rings of model capability, right? To give some concrete examples like a one billion parameter model that is otherwise trained to be state of the art kind of has like this set of capabilities that it's like perfect at. And then it's like kind of okay at the next rung up. So like maybe the very minimal set of capabilities is like, is this tweet positive or negative? Right. Like you don't need you don't need GP.”

    2024-06-24 · The Twenty Minute VC · 20VC: Why Foundation Model Performance is Not Diminishing But Models Are Commoditising, Why Nvidia Will Enter the Model Space and Models Will Enter the Chip Space & The Right Business Model for AI Software with David Luan, Co-Founder @ Adept · IDENTIFIED FROM THE TRANSCRIPT · source

  35. “Okay, I think you think we're saying the same thing. It is incredibly hard. Like Nvidia is killing it. It is incredibly hard, but it is possible. And if the economic returns are high enough, people will do it, right? So I just think Google TPU is a great example. Like I'm a massive NVIDIA fanboy. Jensen is incredible. And I think Nvidia has executed so well here. I think we also have to give props, though, to like, I think the TPU team when I was at Google was sub 500 people and their budget was a shoestrain budget. And yet somehow every generation they taped out quite good chips that were then used to train Gemini and Palm and are used by third parties now and all of that stuff. And there is such a strong will to ensure that Google has its own first party chip. That's the counter example to like the perpetual chip dominance.”

    2024-06-24 · The Twenty Minute VC · 20VC: Why Foundation Model Performance is Not Diminishing But Models Are Commoditising, Why Nvidia Will Enter the Model Space and Models Will Enter the Chip Space & The Right Business Model for AI Software with David Luan, Co-Founder @ Adept · IDENTIFIED FROM THE TRANSCRIPT · source

  36. “I love the topic of chips. We can stay here for a while. It's just so much fun. It's like the most interesting thing that's happened in some time for that industry. So we were just talking a minute ago about how important it is, right, for model makers to control their chips because that way, if it really is a scale and resources game, if company A, let's say choose Google with TPU, TPUs are great, right? With TPU has a 20% cost advantage compared to company B using chip Y, then Google will just be able to just the better cost of model training will let them go bigger, let them invest more in post training tricks like the ones we were talking about earlier and have an advantage. And so then company B is like going to be really pressured to go find some way to go do that themselves. Similarly, if you're a chipmaker, it's just too easy to be commoditized by these in-house efforts if you don't also own something at the model layer. So I think that's like vertical integration.”

    2024-06-24 · The Twenty Minute VC · 20VC: Why Foundation Model Performance is Not Diminishing But Models Are Commoditising, Why Nvidia Will Enter the Model Space and Models Will Enter the Chip Space & The Right Business Model for AI Software with David Luan, Co-Founder @ Adept · IDENTIFIED FROM THE TRANSCRIPT · source

  37. “That's my expectation. To me, what's interesting about AI from a business side, right? Is it forces the question of what companies or offerings are going to be bundled or integrated and which ones are going to get unbundled? And I actually think that there's going to be a really strong vertical integration pressure between model builders and chip makers.”

    2024-06-24 · The Twenty Minute VC · 20VC: Why Foundation Model Performance is Not Diminishing But Models Are Commoditising, Why Nvidia Will Enter the Model Space and Models Will Enter the Chip Space & The Right Business Model for AI Software with David Luan, Co-Founder @ Adept · IDENTIFIED FROM THE TRANSCRIPT · source

  38. “Killing it right now on chips. But what's happening is every one of the major clouds and every major LLM provider is working on a strategy to have their in-house chips because that way they have better margins. And so then at the end of the day, if you're like a developer or you're like an end user talking to ChatGPTN from one of n different providers, do you care whether the back end is an NVIDIA chip or an AMD chip or an in-house chip from Google, right? You don't really care. And so therefore, like there's a really key point of the interface of the LLM gives you tremendous leverage on everything downstream.”

    2024-06-24 · The Twenty Minute VC · 20VC: Why Foundation Model Performance is Not Diminishing But Models Are Commoditising, Why Nvidia Will Enter the Model Space and Models Will Enter the Chip Space & The Right Business Model for AI Software with David Luan, Co-Founder @ Adept · IDENTIFIED FROM THE TRANSCRIPT · source

  39. “I think it's a game of how much you existentially need to win. I think every tier one cloud provider existentially needs to win here. Let's look at the dynamics involved. It's one where as these models get smarter and smarter, they kind of become the base computing primitive. Today, the base computing primitive is like nodes on EC2 or like storage, right? But in the future, when more and more software is just like the logic of software is actually just handled by an LLM, nobody cares anymore about what the base computing primitive is. All you need to do is access these models and compose these models to go solve things for customers. So then whoever controls the model layer controls all of the underlying comput. And so right now what's happening, right, is like if you don't have an offering here that is state of the art, then you're just going to be cut out of this particular game. I think this is also actually an area where I think it's really important for companies like Nvidia to go up the stack, right? Like Nvidia clearly.”

    2024-06-24 · The Twenty Minute VC · 20VC: Why Foundation Model Performance is Not Diminishing But Models Are Commoditising, Why Nvidia Will Enter the Model Space and Models Will Enter the Chip Space & The Right Business Model for AI Software with David Luan, Co-Founder @ Adept · IDENTIFIED FROM THE TRANSCRIPT · source

  40. “That uses LLMs in it. So, for example, what we should be doing is we should be finding ways in which end application builders can be themselves responsible for how to build in long-term memory about user preferences, right? Like, I don't know, let's say I'm building a company that's working on a consumer travel assistant, right? Like I should just be able to tell that thing, hey, like, I freaking hate, this is a true story, by the way. I hate aisle seats because once someone dropped a suitcase on my head on a flight and I got a concussion, never book me an aisle seat again. That kind of like long-term memory, I think application providers should be able to handle.”

    2024-06-24 · The Twenty Minute VC · 20VC: Why Foundation Model Performance is Not Diminishing But Models Are Commoditising, Why Nvidia Will Enter the Model Space and Models Will Enter the Chip Space & The Right Business Model for AI Software with David Luan, Co-Founder @ Adept · IDENTIFIED FROM THE TRANSCRIPT · source

  41. “That's a good question. Well, I think you can kind of think about memory as being two different things, right? You kind of have short-term working memory, and then you have long-term memory. I think people who've made really good progress on short-term working memory, right? Like if you go look at Gemini, Gemini's context length is like a million, it might even be more now. I actually don't quite remember. Like a million tokens long, which is so cool is you can feed it like giant snippets of video and be like, hey, like write me a step by step of like everything the person cooking on this in this particular video did and it'll do it like that stuff is insane. That's making good progress. And the reason that's been hardest for computational reasons. But this sort of longer term memory problem, this goes back to like another thing that I believe and that's why I'm slightly less excited about model building, slightly more excited about application developers because the underlying thing that everyone's realizing now is that LLMs themselves are not a product. Like an actual product is this entire software system.”

    2024-06-24 · The Twenty Minute VC · 20VC: Why Foundation Model Performance is Not Diminishing But Models Are Commoditising, Why Nvidia Will Enter the Model Space and Models Will Enter the Chip Space & The Right Business Model for AI Software with David Luan, Co-Founder @ Adept · IDENTIFIED FROM THE TRANSCRIPT · source

  42. “Train a base model, give it access to a wide range of different environments to go solve hard problems in and have the model try how to solve those problems and use that and combine that with sort of human input on whether it's doing good or bad job. And I think that will solve reason.”

    2024-06-24 · The Twenty Minute VC · 20VC: Why Foundation Model Performance is Not Diminishing But Models Are Commoditising, Why Nvidia Will Enter the Model Space and Models Will Enter the Chip Space & The Right Business Model for AI Software with David Luan, Co-Founder @ Adept · IDENTIFIED FROM THE TRANSCRIPT · source

  43. “No, I actually think that solving these reasoning skills are on the roadmap of every LLM player. I do think there will not be that many LLM players. I think there will probably be my guess is somewhere between five to seven long-term steady state LLM providers at maximum scale just because of the costs involved. Reasoning is just another expensive thing that these companies have to get right, but I think they will all solve it because I think the way to solve reasoning is something that many of us in the field kind of have a pretty strong suspicion on.”

    2024-06-24 · The Twenty Minute VC · 20VC: Why Foundation Model Performance is Not Diminishing But Models Are Commoditising, Why Nvidia Will Enter the Model Space and Models Will Enter the Chip Space & The Right Business Model for AI Software with David Luan, Co-Founder @ Adept · IDENTIFIED FROM THE TRANSCRIPT · source

  44. “I think the general capability of reasoning will need to be solved at the model provider level. And that's because what you're actually doing is you're not just using the model to reason. You are trying to improve the model's ability to reason, which means the model itself needs to change.”

    2024-06-24 · The Twenty Minute VC · 20VC: Why Foundation Model Performance is Not Diminishing But Models Are Commoditising, Why Nvidia Will Enter the Model Space and Models Will Enter the Chip Space & The Right Business Model for AI Software with David Luan, Co-Founder @ Adept · IDENTIFIED FROM THE TRANSCRIPT · source

  45. “As a human mathematician, would sit down and be like, Well, you know, here's the things I know to be true about the world. How do I compose them such that I can prove the thing that I want to prove?”

    2024-06-24 · The Twenty Minute VC · 20VC: Why Foundation Model Performance is Not Diminishing But Models Are Commoditising, Why Nvidia Will Enter the Model Space and Models Will Enter the Chip Space & The Right Business Model for AI Software with David Luan, Co-Founder @ Adept · IDENTIFIED FROM THE TRANSCRIPT · source

  46. “Reasoning is one of the problems in the field right now that I think a bunch of us sort of have a similar ideas for how to solve, but it actually requires some new research to be done. So in a weird way working in AI is pretty funny these days because the giant model scaling problem is so known and it's really a function of resources. And so you kind of don't feel like you need to be a genius to go make new progress on just pure model scaling. But I think pure model scaling does not deliver solutions to reasoning. To me, the definition of reasoning is being able to like compose existing thoughts to discover some new thought. And I think to go do that, that's not something that's trained into the capabilities of LLMs by simply asking it to regurgitate the internet's worth of data. The way we're going to solve reasoning is back to what we were talking about earlier, taking theorem proving as an example. You want to give the model access to a theorem proving environment and have it try things in the same way that like, you know,”

    2024-06-24 · The Twenty Minute VC · 20VC: Why Foundation Model Performance is Not Diminishing But Models Are Commoditising, Why Nvidia Will Enter the Model Space and Models Will Enter the Chip Space & The Right Business Model for AI Software with David Luan, Co-Founder @ Adept · IDENTIFIED FROM THE TRANSCRIPT · source

  47. “As the models got bigger and bigger and bigger, we didn't change anything else, we just had to look at more data, and then we made the model bigger. And then at a particular size, there's just this aha moment where from where it went from not being able to do three-digit arithmetic to being like very good and predictably improving at getting three digit arithmetic better. And that like aha moment we couldn't know about in advance. So that's what I mean by like a minimum viable capabilities and how it's a function of model scale. There are things that we really want these models to be able to do, like be really useful agents or to help us discover new things in science or whatever, but it's hard today to say, hey, you know, if I just spend like $2 billion in compute on this model and have the right data, that'll happen for sure. I think that's what's so cool to work in the field.”

    2024-06-24 · The Twenty Minute VC · 20VC: Why Foundation Model Performance is Not Diminishing But Models Are Commoditising, Why Nvidia Will Enter the Model Space and Models Will Enter the Chip Space & The Right Business Model for AI Software with David Luan, Co-Founder @ Adept · IDENTIFIED FROM THE TRANSCRIPT · source

  48. “The coolest thing, the reason why I love working in AI is that for the first time as an engineer or researcher, it feels like you're uncovering unknown secrets about how intelligence works every day. It's like very different from programming. As a programmer, I show up to work. I'm like, here's the thing I want to build. I know I can build it. I know if I am clever enough, I can solve a problem. And I know exactly the behavior of the system that I've built will be. But the cool thing about AI is that every day you come to work and you make some tweaks to the model. And what you get on the other end is actually somewhat unpredictable. You kind of feel more like a gardener than an engineer. And I think what's really cool about it is that like as these AI systems have gotten bigger and as the architectures and data sets have improved, what the model is good or bad at, you can't totally predict ahead of time. You have some estimates for things. But just going back to the early days, right, when we were training GPT-2, we trained GPT-2 in various different sizes. At the smallest size, the model was just like unable to do three digit arithmetic.”

    2024-06-24 · The Twenty Minute VC · 20VC: Why Foundation Model Performance is Not Diminishing But Models Are Commoditising, Why Nvidia Will Enter the Model Space and Models Will Enter the Chip Space & The Right Business Model for AI Software with David Luan, Co-Founder @ Adept · IDENTIFIED FROM THE TRANSCRIPT · source

  49. “But not in data. Yeah, I mean, I think that's a key insight. I kind of think that chatbots, chatGPT and stuff and agents are kind of becoming different species of technology. Like I think they'll be useful in very different ways. And what they need to be useful is super different. Like just one concrete example is the hallucination problem. Having hallucinations in chatbots and in like image generators is like a really good thing, right? Because it gives you like a starter tool for getting to like solve a blank page problem, right? Like gives you like little bits of novelty and creativity. But agents, on the other hand, like if you want something to go consistently, I don't know, like do your taxes for you or handle all of your shipping containers or something like that, you do not want that thing to go randomly hallucinate and like make up stuff along the way, right? And so like these things are speciating in an interesting way right now.”

    2024-06-24 · The Twenty Minute VC · 20VC: Why Foundation Model Performance is Not Diminishing But Models Are Commoditising, Why Nvidia Will Enter the Model Space and Models Will Enter the Chip Space & The Right Business Model for AI Software with David Luan, Co-Founder @ Adept · IDENTIFIED FROM THE TRANSCRIPT · source

  50. “That is a good understanding of it. I think a good way to think about it is historically for the last couple years as we scaled up LLMs, we've just been doing more unsupervised learning. Get more data, more smart journalists writing articles, feed it in there, and that makes it smarter. But the problem is a model trained that way is only as good as the smartest data in the training set. Like it cannot discover new knowledge because its job, the way the models are trained, is to do what a human would do in that situation.”

    2024-06-24 · The Twenty Minute VC · 20VC: Why Foundation Model Performance is Not Diminishing But Models Are Commoditising, Why Nvidia Will Enter the Model Space and Models Will Enter the Chip Space & The Right Business Model for AI Software with David Luan, Co-Founder @ Adept · IDENTIFIED FROM THE TRANSCRIPT · source