The Dailey Edge Podcast
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The Dailey Edge Podcast
Episode 49: Data Centers And AI Reality Check
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Data centers are no longer a distant tech-industry detail. They’re showing up near small towns, tapping into local water systems, leaning on regional power grids, and sometimes bringing side effects people can literally hear. We start with the on-the-ground concerns communities raise, then pull the thread back to the real driver: our collective appetite for always-on cloud computing, streaming, social platforms, and now generative AI.
From there, we get honest about the incentives. When products feel free, it’s easy to ignore the energy use, hardware turnover, and infrastructure expansion happening behind the screen. We talk token pricing, why AI costs are likely to rise, and how the “brute force” approach to scaling large language models can collide with sustainability and common sense. We also dig into why different AI models are starting to specialize, and what that could mean for the future of the AI market.
The hardest part is the human side. Job displacement is already real, and the emerging gig economy of AI training work raises uncomfortable questions about pay, severance, intellectual property, and what smart regulation should actually target. We end by flipping to the upside: AI can be rocket fuel for entrepreneurs, but when everyone can build software instantly, the differentiator shifts toward creativity, taste, and human connection.
Subscribe for more grounded conversations on AI, data centers, and the business realities behind the hype, and if this made you think, share it with a friend and leave a review. #AI #ArtificalIntelligence #AIFuture #Data Centers
Welcome Back And The Big Question
SPEAKER_00Welcome back to the Daily Edge. Um, today it's gonna be a fun day. Glad to be back. Uh Todd just got back from a trip. Good to see him. We went over overseas. Uh today's gonna be interesting. There's
Why Data Centers Keep Popping Up
SPEAKER_00been a lot of dialogue around these data centers that are popping up. Um, so today will be a little bit of AI. We'll talk about some of the data center stuff. I think there's a lot of dialogue going on and kind of where we're going in the future. So I've done quite a bit of research here. Uh I live in Marion, Indiana, smaller community, and there's the possibility of a data center being built here. Um, I've heard there's lots of discussion on social media. Luckily, I I have um stayed off social media for the most part, but I have caught wind of some of the concerns. So I started to do a little bit of research there. But before I jump in, have you guys done any research or or have you gotten any conversations around the building of all these massive data centers and kind of what's the vibe that you guys are hearing?
SPEAKER_01Yeah, I mean, I've I've there's been a lot, there's been different tiers, right? I think when data centers were first popping up, especially in the California area, that was when we were hearing, and this is years and years and years ago, right? The first wave of brownouts and electric electricity shortages, and that was kind of the first, it seemed to be the first inflection point. You know, these these massive, these data centers are just absolutely crazy power hungry. Um, and then what I've seen over time as things have evolved, and I again we'll go back to you and get your insight on this, because uh are things like the noise pollution. Um, you see some smaller communities, typically in the southwest, that you know, all of a sudden one day they hear this humming noise. And I I've seen videos, I don't know if it was Vice or somebody who did a documentary on one of these towns, that you know, there were instances where in the home it was like over 90 decibels in a consistent, you know, uh buzzing or humming for days on end, or or maybe it was just at a particular time of the day and it was causing mental health issues. We, you know, uh obviously if you have a really loud noise. Um, and then the other things that have kind of popped up for me lately that I've seen are around pollution, um, whether that is, you know, I believe I I read or saw somewhere that one of the Tesla data centers is using some type of uh power um solution that's that emits methane or something like that, uh, as well as you know, the perception that there is there are other pollutions or pollutants in the air that are um, you know, particularly carcinogens or or things of that nature. So I've seen a number of different things like that. Um, and it seems that the solutions to these problems, at least the original power the problem of power and or water, is to build these data centers in more rural communities that aren't already where the grids aren't already taxed like they would be in you know central California or something like that.
SPEAKER_00That's a that's a great point.
Water Supply Worries In Marion
SPEAKER_00I mean, so let's talk about I know the big thing around here, there's a lot of worry about water. Um and so in our town, I don't believe it's as big of an issue. So the one thing is water supply, right? Water supply, there's power supply, and then there's the potential water contamination, I've heard. Um, so understanding that, and I've done some research um with AI uh to try to understand that better. But I know for our local community, Marion was built with I think it's a 12 million gallon capacity, give or take a little bit, because we had a lot of factories back in the day. We had Ball Memorial, where they had a glass factory use tons of water, we had RCA where they made television tons of water. So we have this capacity of like 12 million gallons, something around there. And we are operating less than five. Uh so we have this a data center of the magnitude they're talking about would run 3.3 million gallons a day, which is a lot, you know. We have the infrastructure set up, we have, you know, so um some communities, I believe, and again, I I don't think there's a this is all data centers are good or all data centers are bad, right? It depends on the situation. It's um so water constraint, I don't believe for us locally is a constraint. But then it goes, well, our price is gonna go up then, right? Um well if the infrastructure's there and now you're adding in a new revenue source because now you have this this user that's using three million gallons a day, that's gonna be an asset, um, or they're gonna be able to receive revenue on an existing system, which could arguably help keep prices level. Uh, but in some cases, to where they're building a data center where they're maybe creating a shortage for the community, or they're having to build infrastructure, I could see where that could actually be a real concern.
Power Demand And Grid Unknowns
SPEAKER_00On the data or on the power side is even more interesting because I don't know how power works and when blackouts start to happen. And do you guys have a good sense of like I mean you you mentioned the blackouts um or the brownouts in California or people had to monitor like how do we I I feel like the power grid is somewhat all connected. Um do you guys have any sense on how the power grid works or how the um you know, because these obviously are gonna use a ton of power and how that maybe impacts the local community or the pricing?
SPEAKER_01I don't um I do, you know, I do know that alternative power solutions are always looked towards or a lot of times looked towards in these particular situations, like I mentioned earlier with Tesla using I feel like the numbers 37 units that that that are stationed outside of this massive data center that are powering it, um, using again a different a different type of power technology. Um but I don't I don't understand necessarily, and and again, maybe you guys can research this uh while one of the other of us is talking, kind of what that looks like. I think, interestingly enough, um maybe we come back to the electrical situation.
Social Media Hypocrisy And Visibility
SPEAKER_01I think uh the other picture here, and we talked a little bit about this, is you know, the majority of the data centers that exist today, and still a lot of the ones being built aren't necessarily AI. Uh, you know, being, you know, they're not these massive data centers filled with, you know, uh systems that are running on these GPUs for uh training AI models or any of those types of computations. It is crazy, you know, if you think about the fact that this technology has really only come into purview for us over the last couple of years as a society that it's already up to 25% of the new data centers. Um, that's a pretty substantial number, but it's still not the majority. Um, you know, I think maybe the bigger picture is are we being responsible from a societal perspective uh as it relates to how optimally we're using what we have out there, right? You know, it seems like um I think we've all listened to some some information lately around like it seems like as a society or as a as a as leaders in technology, these AI companies are kind of trying to brute force things, you know, just throw more and more and more and more and more compute when maybe that necessarily isn't the right approach, you know. Um maybe that's a good way to pivot this, is there's all there's going to be need as we move forward from a technological advancement perspective to have things like this. Um and there are there are absolute benefits there. Uh, you know, all of this data center spin-up obviously started with the internet, and then as cloud storage became more of a thing, and then streaming became more of a thing, you know, and then social media and now AI. So I think that's another piece of the puzzle is are we being responsible with it? And do we recognize collectively that while isn't it funny, isn't it ironic that people are complaining on social media, but the data centers that are being built are for meta, right? Like you're sitting there utilizing something that needs, you know, a massive amount of compute to run globally, uh, you're kind of creating your own problem.
SPEAKER_00I think that's what's interesting about this whole topic for me, and this is this could be AI specific, but more broadly is people understanding the implications of what they're doing on a day-to-day basis. So I think for me, I, you know, one of the boys said something to me the other day about using Chat GPT and the fact that it consumes so much power and is not great for the environment, right? I I would you could probably say I recklessly use Claude and Chat GPT and AI, um, probably because I don't have direct visibility into how it's impacting uh how it impacts, you know, and obviously my individual consumption, but at scale, I think there's uh that's uh I think a a challenge in general is how do we connect each of our behaviors on a day-to-day basis with the background implications as a society. And I I think that's the challenge here is you don't really know it until you live in a community where a data center is gonna potentially go up and you understand the implications of the increased stress, whether it be on the power grid or on the utilities grid and or the noise or whatever that happens to be. I mean, it was the same thing with the windmills, right out on the farms. Your your in-laws have uh, you know, do have a large farm in the Tipton area, and when they wanted to come out and put windmills out there, there's implications of that, right? And so um I I think for me that's the interesting thing. And how do we do better at helping people have visibility and transparency into how what they're doing? Um, you know, you have a lot of people, this is even in the food system, like, you know, you have kind of, I don't think anybody feels good about animals being slaughtered, right? In slaughterhouses and things, but we're all eating meat like all the time. And so it's uh, I don't know, to me, systematically, that's what piques my interest on it.
SPEAKER_01Well, I think it's weird, you know. I think there's just crazy juxtaposition in a sense that as things uh evolve from a technological perspective and we're bombarded with more and more and more information, we have to become better as humans at filtering. So we're constantly filtering out more and more and more and more because we're getting overwhelmed with data. So it's like we're we're we need to expose people more, but we're also actively pushing away. Like, I don't need any more, like I get it. Um, I think that's a that's kind of a weird situation that we're in from a human humanistic perspective. Uh you know, where whereas just you you look historically, we were naturally um obfuscated from other things, right? Like you we talk a lot about exposure to just global news and how fast things hit us. And and and in the past, you know, when you were exposed to something to to help you recognize where you fit into this bigger picture, um, it made much more of an impact because you didn't get a chance to see a lot of these things in real time. Now we see so much of it in real time, you're just naturally ignoring the majority of it. So it's like this this weird push and pull. But it it's an it's a problem as old as time. I mean, how many, how many times, you know, you look back, what called a decade ago, eight years or so, when the absolute top of everybody's mind from a priority perspective was green, right? We've got we're gonna we're gonna kill the world, it's all over. And and then you would see the celebrity who's taking the private jet from city to city talking about how bad the environment is uh and how we need to fix things. And it's the same, you know, it's it's like he it's it's so nuts, and and a lot of it's just ideal, ideological signaling. You know, we're big F1 fans in my family uh over the last couple of years. And F1 has and Apple does this too in my day job, right? Oh, yeah, we're not putting chargers in the boxes because we want to save the my ass. You don't want to spend money on the chargers and you want to make more margin. You're not trying to save the planet. Same thing with F1. Oh, so let me get this straight. You have jets flying F1 cars all over the world, but changing 22 cars to have more electrical power than gas power saving the planet. Like, get out of my face. So, you know, I think that that's that's one of these these problems. Like it goes, yeah.
SPEAKER_00So, how I mean that these are this is exactly kind of where I wanted this to go is the habits that we have and the lifestyle we live, we're not willing to sacrifice in a lot of instances some of those things, but yet we're so passionate about some of these, you know. Well, I don't want a data center in my community, but I'm not giving up Facebook. I don't, you know, why is there seven coffee shops on the bypass, but I'm buying my seven dollar coffee every single morning, right? So it's like the the behaviors that we have. So like if we don't want data centers being built, pretty simple. If everyone got off their phones, stopped using social media, reduced the amount of technology usage, they wouldn't be building these data centers at the at the pace. They'd still probably build some, but it was like I was trying to figure out like what's the per hour cost uh that like what does Facebook get for every hour you spend? And I thought it was going to be something astronomical. It turns out it's like 13 cents. But for like every hour that you're scrolling, they're making 13 cents on average. Now, for higher profile people that they can advertise higher things to, it's more and some it's less. But every hour you're paying you're saying build a data center. Every hour that you're scrolling, you're saying build a data center and build a coffee shop, and you know, and and and and it's like are we ever gonna feel passionate enough about something to give it up?
Free Products Paid By Attention
SPEAKER_00You know what I think is interesting about this, uh, and this goes back to the visibility, is uh the business models have shifted, right? You used to pay for things, right? And now people aren't paying for things, well companies are because they're advertising to those people. So what's really interesting about that is it uh it creates an an interesting incentive, right? Because now people can consume for free and someone else is paying for the party, right? But uh they're with your attention, yeah. Correct, yeah. You which is in my opinion more expensive, but it's uh not something that people feel as directly, and so I think there's this whole transparency uh piece of people just understanding the ROI of their habits and how it's impacting themselves or the broader society as a whole, and then there's this other element of actually incurring the cost uh physically, and I think that that there are, I think historically that was more of the model. As you consume, you pay. If you consume hot water, right, you pay, and that is a natural incentive for people not to consume so much hot water or energy or whatever else you're doing, turning out the lights. You know, you get the people that like to freeze themselves out uh in the winter to lower the heat bills. But in technology, the model's shifted, and I think it's created a little bit of a challenge in people not understanding or having to pay for the implications of their habits or actions on society, but it's unlimited entertainment, and then you may, to your point, you may not recognize it because it's just like, well, I'm not paying for this, I've signed up for the account. Now, on the LLM side, which is the the different models, there's a pay-to-play, you know, and sometimes it's 20 bucks a month for chat and Claude for the entry level, but I blew through the $20 plan. Like Claude, I've noticed stops me more and says you're out of tokens. Um, hit continue to you know go on, and I had to upgrade to the $100 a month plan.
SPEAKER_01Hey, they're gonna get us eventually.
SPEAKER_00Well, they're they're gonna have to.
SPEAKER_01Yeah, I mean, I think I told you I have a buddy who's like spending, he's got a lot of agentix stuff going on. He's spending like 30 bucks a day.
SPEAKER_00I was listening to a podcast with the the the developer of Claude Code. He was he's like the guy that built it, and they're talking about he's like, Yeah, Claude Code writes 100% of our code now. Um, but you know, I review it and it's pretty fascinating. And goes, you know, one of the ways we're recruiting people is we're telling them we're gonna give them unlimited spend. And he goes, We have people that run a hundred thousand dollars a month, like in tokens, and you know, like what do we pay for our tokens at IMG? Like next to nothing. I mean, we have the whole company using it was like $134 or something. No, it was like $34. So you can imagine, to your point, hundred thousand dollars in and mean you could if you're like, hey, write this, you know, and let it run for three days. I mean, I'm sure it's possible, but the the cost of AI, and I also heard the data centers that these GPUs and stuff burn out every three to five years. So they build the massive data center, but the replacement of the parts and the ongoing, um, it's gonna get expensive. And in instances where you might be saving from gaining some efficiency, you may in turn that may end up getting at some point. Maybe I should phrase it as a question. Do you feel at some point the cost of this is going to equal the cost of maybe the efficiency that you gain, whether it's replaced in an employee or absolutely.
SPEAKER_01I mean, it's it's capitalism. Did you get the emails this week that uh YouTube Premium and Netflix are raising prices? Although strangely, Google One is dropping prices on their storage, which I thought was nuts. But like, yeah, I absolutely think so. Eventually it'll be 20 bucks an hour or 10 bucks an hour in token cost to create an agentic platform that handles a particular 100%, just a little bit less than it would cost to have a human. I think so over time.
SPEAKER_00Um it's going to be just getting you in and yeah, I try to buy anthropic stock, it's not publicly traded. Just so it'll be interesting to see if companies start to pay. Like I got an uh email the other day that Shopify, my product that's on Shopify, is now able to be found and purchased through Chat GPT. Like, and so it'll be interesting to see if the companies do start to foot some of the bill and it allows to keep it very, very low for the consumer. Um, and that's essentially what happens on Meta and Facebook and Instagram and those platforms. Well, do you I mean that's a great point. Do you guys go on there and say, hey, I I'm looking for XYZ, and then it it runs and um I'm looking for a platform, it does give suggestions like Perplexity in particular is really, really good at that. Perplexity
AI Upside Versus Rising Costs
SPEAKER_00is kind of built for reviews. I'm a reviews junkie, and I to TJ's point earlier about data, we are drowning in data and information. And that's actually one of the things that I think AI, why AI for me in particular is so compelling, because it helps us sift through that data. It takes the mountains and mountains of, you know, I don't care if it's a 30-page document or a 400-page book or you know, 500 reviews of which half are fake and you have no idea how to discern, it can do a lot of that discernment and boil it down to what actually matters. And so I do appreciate that. I I mean, it it's really hard to, you know, when you get into the cost-benefit analysis, like many of these things, it just gets infinitely complex. I heard uh the CEO of JP Morgan uh Diamond, Jamie Jamie Diamond, Jamie Diamond say he thinks it's going to be a three and a half day work week here pretty soon, um, thanks to AI. And uh I I think there's a lot of different potential benefits, whether it's a shorter work week, whether it's a a universal basic income, whether it's just uh improved ability to digest the information, make more efficient decisions um, you know, in our day-to-day lives. The the benefits are certainly great, but the costs are adding up.
SPEAKER_01You know,
Brute Force AI And Responsibility
SPEAKER_01one of the things that I think it would be interesting to pivot into a little bit is uh how responsible these leaders in the space are being with, again, I said it earlier, right? And I'd love for you to talk about it because I think it's probably fresher in your head, um, the way we're approaching AI. Um, you know, it's been somewhat of the Wild West, right? There's been tension over the last half decade with, you know, between like there was the Sam Altman-Elon kind of thing, where Sam was kind of more like, let's just go pedal to the metal, and and Elon's, you know, used to be more like that, where like let's just go forward, but it maybe is a little bit more um reserved, right, as you see it now. But it's really intriguing, like the LLM thing and the attempt to have um, you know, these these large language models that know everything versus solving particular problems, which is A more agentic approach. It seems extraordinarily irresponsible. Um, why don't you talk a little bit about what you've learned as it relates to that versus a different approach, potentially?
SPEAKER_00Yeah, I was gonna ask you guys, that was one of the questions that I had, is like AI, most people are saying there's this euphoric future impossibility of everything human, it raises the bar for humanity in general. This is the likely outcome, and then there's this 25% that's like doomsday, and everyone that's building their own LLM is like it'll be this blissful thing if you just support mine, right? Why does every billionaire tech entrepreneur have their own system, right? So there's this like this could be really bad, but if you just I mean, if you go with the one that I built, so you think of this as in like personalities. If all three of us had billions of dollars and wanted to build our own LLM, we're gonna come at it slightly different, right? We're gonna have Elon's approaching this different than OpenAI, the way Altman was doing it, the way the anthropic seems to be more mission-driven. Like there's uh, and so you have all these personalities building these large language models that take, like, you know, Elon's kind of a funny, edgy dude. So like Grok is funny and edgy and can do some things that others can't. So they each have this personality, and to me, that's gonna be fascinating. I don't know how many we're gonna end up with. Um, right now, what is there? Probably four or five let's call it, let's call it Gemini, Facebook, you got Meta.
SPEAKER_01You got, I mean, meta's is kind of, I feel like on the outside looking in a little bit, but Gemini for sure, Claude for sure, open AI, so uh Chat GPT, um, grok, perplexity, and then like blue sky. If you look, I mean Asia's got, I mean, you were just there, but like, you know, there not blue sky or blue, whatever it is. There's the there's the one that came online really quickly, uh what like 18 months ago and learn really whatever. But there's five or six, but let's call it those five major ones in the US right now. But you make a great point. Everybody, every LLM or or every big AI company is trying to sell you on their approach, their approach, and which one's right, and which one's gonna be the right play.
SPEAKER_00And I mean, it's if we had billions of dollars, we would convince ourselves that we needed to have an LLM that was approaching it this way. We would take this, you know, more moralistic approach, I'm sure. But the other thing that ties into this, I don't know if you had anything to add on that. No, I just uh I think with the five, I think what you're gonna find out is we're gonna end up with specializations, just like we have in many other industries. You're gonna have uh like I I will I toggle between them for image generation. I go to Nano Banana Pro, which is Gemini's, it's fantastic. Uh for any sort of brainstorming, conceptual, just like uh things, I go to Chat GPT and I still think it's absolutely the best when it comes to business type things and coding and or efficiency um type. Building documents, yeah, documents stuff, it's clawed. And I think, you know, there's it's not I don't think any of these guys are right or wrong, and I don't I don't know that any of them is building the evil or the the you know great morally you know moral North Star, but uh yeah, I think we're gonna end up with different specializations across the models. Can we talk
The Dark Side Of Displacement
SPEAKER_00a little bit about the dark side of AI for a second? So what dark side?
SPEAKER_01Yeah.
SPEAKER_00So I was listening to a podcast, and and this hasn't hit home for us. Let's just be clear. I'm in a town of 25,000. We have probably three software developers that maybe even live in this county, right? But software developers has there's been tons that have been displaced. Like that's a legit people are losing their jobs. So I was listening to this podcast, I was talking about this, and what what there it was um the diary of a C diary of a CEO, Stephen Barlett, and they were talking about the people that are being displaced. One of the one of the jobs that's becoming available is this data AI trainer kind of role, and they're all project-based. And these people who are now unemployed are basically having to fight for these projects to be able to train the AI model, and they're extracting the data at like pennies on the dollar, right? Like, hey, get on here for $15 an hour, you know, tell me everything and how I would respond to this. Like, chat didn't know how to respond to something before someone got in there and taught it how to respond to something. So there's this ongoing need into the future that it's gonna continually need as society progresses and people are gonna have to take what they've learned and craft it over years and years and years as it replaces them. They're gonna be stuck in this role of kind of feeding the engine at pennies on the dollar. What are your guys' thoughts on that?
SPEAKER_01Yeah, I listened to some of some of the same thing, and it's pretty nut. It's like gig economy stuff for you know these people. And, you know, I remember there was like a visceral response to one of the stories. The lady uh had had a kid and she was a she was a developer, and now she's you know, like sitting there, and it is, it's exactly like gig economy, right? If you're if you're delivering DoorDash, you're sitting there waiting for the next one, right? If you're driving Uber, you're waiting for the ride to come through. And in a lot of instances, um, that supports a a lifestyle where you don't have a lot of responsibility, like you where you can sit and wait for something to come in. Um and so she was like, Yeah, I've got my baby or or my kids, they're young kids, and I'm sitting there at the dinner table with my laptop open, waiting for this gig to come through, waiting for this gig to come through so I can train this model. And then once the gig comes through, I'm ripping through this as fast as I can to get as much data processed as I can, and I'm screaming at my kids because they're bothering me while I'm trying to do this, but I don't want to lose out on this potential opportunity to make money. Um, and so there's, yeah, I mean, to me, there's definitely um a lot of potential dark side to this, but but that was one that was a real eye-opener that you don't even think about.
SPEAKER_00Yeah, I mean, I think the disruption's real from a uh job loss perspective. We've seen several companies cut five-digits jobs, tens of thousands, not like a few hundred. And I think it's gonna continue. And they're, you know, I I think I think society is extremely resilient, and I don't want to mute the disruption and the devastation that a lot of families are gonna go through because a lot of those software developers were breadwinners in their families, because these are one, you know, six easily six-figure jobs, a lot of times multiple six-figure jobs, and all of a sudden the rug kind of gets pulled out from under you. I mean, that's the challenge there. Um, so I think on a macro level, there is massive, massive disrupt that's gonna happen. I do think society's resilient, and we'll find, you know, right now there's some of that, right? That's happening. But I think those that can retool themselves and reskill themselves, and those that can lean into some of the skills and capabilities that AI is really bad at, we'll find new ways to leverage that technology and be more inventive. It's probably gonna take some time, you know, more time than maybe it took when some of the automation and the manufacturing system displaced some jobs. I I don't know that that was as is that cut as deep as this is going to cut. I think this is going to cut deeper and it's gonna take longer. But we were talking the other day in insurance, right? So one of the things that AI is really, really good at is looking at images and inventorying things that are in these images, right? So, and one of the the issues with insurance is if you have a house fire, God forbid, like it's a lot of question around what was in there, what wasn't, you know, what needs replaced. You know, we could potentially be using staff capacity that we create with efficiency to go into people's homes, take these 360-degree view uh pictures of all the rooms in their house, and immediately within 15 minutes or 20 minutes, have a complete inventory of everything that they have in their house that really simplify the claim process if there were to be a claim. And so I think our ability to, as a society, to invent those new things, and and we're, I think we're still two decades off from robots going out and doing, you know, uh household chores at scale. I realize there are robots now that are prototyping doing dishes and cleaning houses and things like that. But I think, you know, those sorts of things where where the human ingenuity, the human physical activity, the emotional side, the connective side, I think there's still a lot of things that we do much, much, much better than AI. And I think we're gonna see those economies grow.
IP Theft And Regulation Tradeoffs
SPEAKER_00What I mean, do you feel like regulation around um the people that are feeding these systems? Like there should be some balance of like they're getting paid for the contributions they're making. For there should be some, I don't know if it's unionized that I'm thinking of, but not to be taken advantage of in a situation where you know they're somewhat desperate, right? And so they're feeding the model. And how much and I I know this is another contention point, is there's like things are being uh for lack of a better term, pirated. Like people's intellectual protocol are being just kind of dumped in there. There's not, it's kind of like Napster back in the day, right? Like you can there, there's you can put anything in there, and it could be anybody's and it could be used. So, like you've got the modern day Napster that's basically stealing IPs from people, and that's not really regulated. How do you guys feel like they this should be regulated more or less, or not not at all? I mean, I think with the regulations, it depends on how far upstream you want to solve the problem. So I think with regulations, you're you're taking a situation where a lot of people have lost their jobs, everybody's trying to clamor for a dollar, and the natural free system without regulation can capitalize on that. And honestly, it's the same thing that companies are capitalizing on with employees overseas, right? Employees overseas are capitalizing on people's willingness to work for less because the alternatives are not there for high-paying jobs. So I think it gets to be a slippery slope. What I'd like to see is us go further upstream to prevent the issue. I think is these companies do are doing very, very well and they're finding efficiencies that are creating millions, if not billions of dollars of efficiencies, depending on your size as a company. I think severance needs to be a much more generous, uh, thoughtful thing. I think, you know, a lot of these companies depend on how you you may people are getting maybe a few weeks, maybe a few months if they're lucky, to find their footing and replace hundreds of thousands of dollars of income. I would love to see the things be phased out more. If it's like if you're going to let people go, and I don't know exactly how this gets implemented because certainly there's for cause and not for cause and that sort of thing, but as you're creating efficiencies, can you run someone down 75% of their salary, 50% of their salary, 25% of salary over a year's time, or give them six to nine months? I think that's gonna be really, really important is more generously uh walking people off the off ramp or you know, taking people down the off ramp so they have an opportunity to find their footing. To me, that's going to minimize. I shouldn't say minimize, it's going to help aid the chaos of people willing to do whatever for whatever.
SPEAKER_01Yeah,
Monopolies And The Rocket Problem
SPEAKER_01I I I think one of the other issues is I think an analogy that we was used in that podcast you referred to is the rocket versus the bicycle. And it kind of goes back to um, you know, like mid-early mid-century where we were seeing the government break up a lot of monopolies, right? Whereas there's a standard oil or Mobel, right, with the whole ATT thing. And it's it's crazy because what we've gotten ourselves to right now is we've got five companies that can, there's only five companies in the world that can afford to build what they're building. These giant and and the analogy was they're building these rockets, right, that are these I can do-it-all platforms. And they each have, like you said, they each have their own kind of little ideology alongside it. Um, and they each have their story, like, oh yeah, if you don't get in bed with us, you know, like uh uh when when certain certain models have come online, you know, and they claim that they are the ones that are more concerned with uh AI safety. They're like, get in bed with us, because if you don't, AI is gonna kill everybody. And so like they're jumping on board. Oh, I want to do this with whoever because they're the ones that are worried about this potential existential threat. Um it would be really interesting to see if you know something could be done to make um this technology more accessible, meaning like you could build it with um very specific goals in mind. Because like, you know, if if you were a group of, let's just say uh insurance agencies and you wanted to work on a platform um that handled, and I know you guys are looking at different agents and building out things that handle specific tasks, but if there was an opportunity for um other companies to build things out as opposed to, and and then as you're as you're getting more specific, um you're not requiring the resources that that building these all-knowing God beings are are creating. Um so you know, I I'd love to see it pivot that way and and see companies, uh, you know, many more smaller AI companies focusing on very specific things. And again, you see a little bit of it, but everybody that's getting the shine are these monsters that are trying to build, you know, uh consciousness, if you will. And I just don't know, like for me, what's the purpose of that, of getting to that, right? Of getting to something that can solve the Turing test. Like, why? Why are we obsessed with this versus solving these specific problems that that could optimize you know, scenarios for humanity? Like, I feel like anything over and above that just a complete waste.
SPEAKER_00I think people are finding those use cases in their own lives, and that's why the popularity has grown to your point. Solving the Turing test or whatever that that is that you reference. I don't think there's really any purpose there, but people are finding ways to create efficiencies within their business, they're finding ways to create efficiencies in their personal lives, and that's why I think the demand continues to skyrocket because people are finding these own. I mean, yeah, in a perfect world, I think a lot of this energy gets concentrated into more holistic, uh into more holistic efforts that benefit humanity and society as opposed to their their growing and developing at the expense of humanity and society in a sense, but it's just really hard to measure out that ROI. I think the other thing I was going to add that I think is a little bit different here. I don't know
US China Race And Gaslighting
SPEAKER_00that I see a lot of the demonizing between, I've seen a little bit of it, but less as of late, demonizing across AI companies in the US. I don't see Google kind of taking shots at open AI or open AI taking shots at anthropic. No, you know, but what I do see is I think there's a collective race between like the US and China, for example, that I think is a little more real. And that's where I think you get hesitations on regulations, because regulations do one thing very, very well, and that's slow things down. And so I think there's a lot of hesitation from a US perspective. They're letting these companies run fast and hard and on the backs of, right? I mean, if you look at any revolutionary period, uh transformative period, a lot of times it's on the backs of people and societies that are working probably harder than what they're being compensated for. I mean, you look at America and like the railroads and when the infrastructure was built, and then you look at a lot of these other third world countries or developing countries, they're working for very, very limited compensation, and they're and that is how these companies or these countries, excuse me, are able to kind of catch up is because of that. So I think that's why we're seeing a lack of regulation right now, is because the US wants to win this race, and uh it'll be interesting to see what happens.
SPEAKER_01But do you think they're gaslighting us? What race? Like what what I mean? Yes, we can all theorize. Like if China gets to whatever um arbitrary point first, then they're gonna have superior military technology and they're gonna kill all of us. Um, or if if we don't get to this certain point before so-and-so, AI is you know the paperclip problem, right? AI is gonna kill everybody. We need more of your money, we need more of your resources. Um, even if, like you said, if it's a collective, because it makes sense for all five of those companies because the barrier to entry is astronomical to come out and say, hey, we gotta win this. If we don't, we're all gonna die. Um, you know, what are they gaslighting us? You know, I'd be interested to is it real?
SPEAKER_00Like it's I mean, I think it's dramaticized. I think for sure it's dramaticized. I think that's just natural. The human brain forms a hypothesis that, you know, and we like to think of the worst. So I I think it absolutely is dramaticized that if China gets there first, here are the implications. And the reality is, uh, I mean, we don't know, right? We don't know how far ahead does someone need to be to where it starts to be exponentially beneficial. If it gets this far ahead and then it can take that advantage and compound it, you know, you don't know one of those things where it's like maybe there's a 10% chance that someone's gonna get out ahead of it with the wrong motives or values, and is but the reality is 90%. It's like, okay, their AI may be a little bit better. I just got back from there, and I what I will tell you is their AMAP system is way better than Google Maps, it's fantastic, but there's obviously China's their A map, their their navigation system is so so much better than Google Maps. It's um it's honestly a travesty, but there's no implications to that, right? There's no implications to a more sophisticated mapping system. And so if they happen to have their own AI models that are a little more sophisticated, uh you know, what does that actually mean? I don't know. It's likely dramatized to answer quite a bit. Go
AI As Rocket Fuel For Founders
SPEAKER_00back to your, yeah, you're like the most powerful AI to do what, right? I mean, I think one of the positives, let's I kind of want to shift a little bit into the positives now, because I think there are some obviously concerns, but if you're an entrepreneur, AI is probably the most powerful thing that's ever been introduced from a lot of different standpoints. You can build a company quicker, more thorough, faster than you've ever been able to build before, and you can solve complex problems with less resources. Like, you know, when you when YouTube first came out, if you want to be a YouTuber and you want to do clips and reels, you had an entire team, right? You probably had video editors, you had you're spending hundreds of thousands of dollars to pull it off. You don't need any of that now. You need one setup, you get your roadcast video, switcher. I mean, it's very simplistic to do. An entrepreneur, I was like, you know, you think about who uses the tool. Well, it's someone who's really trying to solve a lot of different problems, and to gather the information that you can gather as an entrepreneur trying to solve problems, it's unbelievable. And I think that's why I'm specifically so excited about it because it literally makes what I want to do. I have these visions of things that I'm not capable of carrying out. Like, I just I man, it wouldn't be cool if we could do this. And then it was like, yeah, this would be cool. Would you like me to build it for you? I'm like, yeah, yeah, yeah, build it for me. And then I can like test them, be like, well, let's switch this. And they're like, okay, would you like me to like build the website? Yeah, build the website. You know, like it just you could, as a race director, you could show up and it'll build out a whole website for your race and it could set up a data. I mean, it could do all this stuff. And it's like, for people that are trying to solve problems efficiently, I think it's going to allow a lot more small businesses to jump up and play in larger fields against some of the bigger players because the red tape isn't as thick to get there anymore.
SPEAKER_01I think it
Why AI Can Make Work Soulless
SPEAKER_01ultimately does the exact opposite.
SPEAKER_00Please tell me more.
SPEAKER_01And I think that it's like the Instagram ad problem. Social media ad problem. You're experiencing this firsthand. Where when people started leveraging social media for business use cases, especially early on, it was so cool, right? You could we'll we'll start with like Facebook and Instagram, but like you could get content out there to the masses and the more the Instagram is a better example, right? You could post on your your company account whatever small business you had stuff that was relevant to your products or your brand or your services, and you could get it out there to your followers. Most companies that I've dealt with are starting to trend back towards in-person activations. Um great example. I I won't name names because I don't want to like divulge someone's business, but I there's a company I work with, and they uh sell branded products, and 70% of what they do is done online. It's done through Amazon. Um and so the there's the majority of the branded products that they sell, so they have six or seven brand partners, are sold via Amazon. Their brand partners care about one thing only, and that is the in-store retail experience and the engagement that they have with the community. It's all they care about. And I think what potentially ends up happening, um, you know, because we're we're seeing because those companies are seeing like I I can, there are so many people paying on social media for ads. It is so cluttered, it is so overwhelming. I can't get any, I can't build fans of my brand anymore. It's impossible. So I have to do in-person activations and build this foundation at the community level. And I think that's ultimately what happens is we're gonna have a bunch of entrepreneurs out here that are building soulless, you know, companies with no human interaction. And then what it ends up becoming, um, if it does stay affordable for the time being, is everybody's doing exactly what you're doing. Hey, I think this would be really cool for me. Claude, build me this perfect example. Three weeks ago, I, as you guys know, I do a lot of virtual running on the treadmill and I like to do workouts. And so for me to do workouts using the program, the virtual running program, I have to use this website that builds the workouts for me. I upload them to the program and I can do them. Well, this workout building website is kind of archaic, it's been around for six, five to six years. So I'm like, you know what, Claude? I want to build my own. Done. Three hours. And I think you'll see now I love the the vision of man, I could like optimize this and optimize this, and then I could like do this and do this and get all these people to use my my platform, zwiftrunner.io, if anybody's whatever. I get all these people to use my platform to build their workouts to do their virtual runs. Um, but I think the missing piece there is if I were ever to want to do that, I'd have to spend so much time engaging with people on the platform, letting them know about the thing, uh, selling people on why virtual running is cool. And so I'd have to build that foundationally through uh connection. Um now where I do to for it to be successful, now where I do think it it does provide value is when you're in a situation where you have a foundation built already, and then you're optimizing on top of that and maybe spreading out and attacking a couple of different verticals that way. But I think starting things from scratch, it becomes this uh situation where, but at the end of the day, where it it heaps more value on human connection. And then we start to find those areas you were talking about where, okay, you got to retool and you have to realize that it's about this now. Um because building a website, anybody can do it in 10 minutes and it it'll be it'll be coded perfectly and it'll execute exactly like you want.
SPEAKER_00You
The Coming Era Of Creatives
SPEAKER_00know, this reminds me of progressive. I've told this story several times um after I learned about it, which is progressive. The reason that they became who they were is because they figured out how to ask the right question. They asked the right question about one-time drunk driving offenders. They were at looking at data and analytics and figuring out how they could find a niche. And what they found is with one-time drunk driving offenders, they could charge basically whatever they wanted because no one other insurance company would write them. And in eight out of ten cases, they would never have another one because it was kind of a scare. They on a way home from a wedding or some other kind of event, they had one situation and they asked the right question and it it exploded. And I think this is going to be interesting. I think we're gonna find as AI continues to be more sophisticated, it is going to favor the creatives, it is gonna favor the innovators, it's gonna favor the people that know how to ask the right questions of it and use it to create an experience for people that probably has to do in part with an in-person scenario. And so, how can you take your races that are naturally in person and use AI in a way to curate that experience to be as enjoyable and fruitful as possible based on whatever mission you're trying to accomplish? And I think that is where people are it's it's gonna be rocket fuel for the the right companies because I do think there's a lot of people out there aimlessly doing random things that are not going to have the staying power because there's no emotional.
SPEAKER_01Well, I think you're I mean, a great example utilizing the kind of guardrails you gave there is you know, we have lie tracking at prairie. And so utilizing AI to enhance that dashboard and to make it available publicly so more people can consume that information, people can have a better idea at the race of what's unfolding, how many people are left, versus somebody who goes out and they're like, hey, uh Nano Banana, I want you to make me a logo for my race. Thanks. Okay, Chat GPT, can you create a social post that I can put on Instagram and I can put on Facebook so people are aware of my races? Okay, uh, run sign up. You've got a really robust platform. I'll use you for timing and you for so least effort possible, I set up a race. Uh then I think you know, we start to see this situation where there's pullback and it's like there's no soul, you know. Um, somebody set up a race and they did all these things, but unless, unless you're doing the the the footwork on the ground, um, or you've already built a community that you can market that kind of stuff to. But I think we're also, we've talked about this in so many episodes before. We're also starting to recognize when something is hollow. You know, when when it it's a logo that AI designed, or when it's a video that like it's just we have to naturally.
SPEAKER_00Um so I think what you're saying is like it just makes it so crowded when everyone's doing it, it's not special anymore. And one of the things on that podcast that I listened to that they talked about was like before the printing press, the amount of people that could read was like I don't know, 3% or 4%. Printing press gets invented, and now all of a sudden, you know, the newspapers and everyone has access to actually read stuff, and now everyone learns to read, and that's a good thing. And you just wonder if that's gonna be the way with software development. When own like building an app or building software is like it's a very expensive, tedious thing. And if you still want to build it good, it's like one thing to build it, another thing to maintain it, and another thing to support it, and so forth and so on. But when software development becomes normal, and they think in two to three years, all you really need is a business case. You won't like now you still need the guy, like you still need maybe an engineer to like like I don't know. I tried to set up Claude Code and you gotta like put a terminal, like I still can't even figure out how to get to you know, so there's still some complexity, but at some point it'll just be like you got a business case, and you're like, build me an app, like run sign up that does this for just my races, and and it'll do it. That it's gonna take away once everyone can build software. Now all of a sudden software doesn't become a differentiator per per se. And what happens clutters the market?
SPEAKER_01Yeah, like what happens? That's such an interesting point. What happens when every race, you know, I mean has its own app. Yeah, and how frustrating is it when you want to track somebody on a race, and then you go back and you look at your phone at the end of the year and you have seven race apps because you track somebody in the mini and you track somebody in Monumental in Chicago, and it's like and then you create an app to aggregate the seven apps, you know.
SPEAKER_00Hey, I want to get this data from these seven feeds and pull them in. And that's where I think some of this is gonna shift. I think people will discern what the gap is, right, and what the frustration points are, and then they'll pull things together to solve it. And that that will be and that's where I think we're going to go into an era where the creatives are gonna dominate for the better part of the next few decades. I mean, if we look at the last few decades, the the the technical has dominated. Creatives, it's like, you know, whether it is acting or an artist or those sorts of things, it's feast or famine. You've got a very small percentage of people that hit it absolutely huge, and you have a large percentage of people who are uh really struggling, yeah, starving artists. I mean, that's even in photo and video production, video production's been a little more consistent, but I think the the creatives have been out there struggling for decades, while the coders and the technical people and the project managers and and those who had the STEM skills have been reaping all of the benefits. And I think we're gonna see a shift there. And I know we've talked about this in prior podcasts, but it needs to start infiltrating its way into the school systems really, really quickly. It is that system is designed to very much crush creativity and crush uh, you know, most of the artists that get through that get through school uh in spite of it, as opposed to, and so I think we're gonna see an interesting shift and and a different type of personality is is uh you know gonna be maybe more set up for success.
Closing Thoughts And A Practical Nudge
SPEAKER_01I think it's probably a good tighto.
SPEAKER_00Well, I it's interesting. We went from like our data centers good or bad and what they're supplying, but we spent a lot of the time on AI in general and a lot of the use cases, which it's just so relevant right now. If you're not using it, you should try it, whether personally or professionally. There's so many things that could um help you become more efficient. And what I'm finding is like the more efficient I can become, the more time I can spend with my family. Um and so there are things that uh I would definitely look look look into. So hope you guys uh gain some value and uh we look forward to seeing you next time.