Alex Karp on token maxing, enterprise taste, and why AI frontier labs face nationalization risk

a thousand minutes a week. It's no problem.

We did consider that at one point early on. We thought, should we do basically a morning show?

Oh, yeah.

Take a two-hour break and come back and do another show.

Late night show. Yeah, late night show, maybe. Anyway, we have Alex Garp here with us.

Welcome to the show. Welcome back. Thank you so much for taking the time. Uh we're going to have you grab these headset. These headphones, right? Not these.

You can sit close. Get in here. We got

We liked it last time. The three of us were sitting here.

No, we can. We can put the giant.

Let's put this up here. Right here. I'll sit. You can stand. This always works. Makes me feel Yeah. Get in here close. This is good. Feel good. Okay. Feel good. Uh, how is it going? How is AIPCON this time around? What's changed?

Um, well, we we're in a phase. All each one of these things like marks a time. First of all, you guys are even more baller, more successful.

Thank you.

Some tendies in your pocket.

I think it might have been been part two. We got to say thank you. You know, it's like blew us up. You're looking you're looking bigger and stronger. So, hey, are you more attractive in your personal life now? Randomly.

Well, here's what we're actually focused on. Dead hangs.

So, you came on last time. You said your dead hangs around like five

Oh, no. It's It's Well, it's plateaued in the last couple months at 5:30.

5:30. Okay. So, we The thing is like people are going to hear that. They're going to think hanging on a bar. How hard could it be? You got to go and do it. The audience has to go try to do it. We've started doing it. We're still in the

We're still between Yeah. between and somewhere around a minute 30. You feel like your tendons are going to rip.

300 dead hang is respectable.

Okay.

2 minutes is super elite.

It does feel respectable when you have the five minute number. You're looking at the

think strength matters. No. Um the the the thing is I don't want to go into rabbit hole in training. The single biggest mistake people make is they try to hang every day. You need recovery. It's like anything else. So if you want to mimic and get progress, you just do what I do, which is once a week you hang as long as you can. Doesn't have to be super macho. And then that's your day. So like just say you can do 130,

but multiple sets or

No, no, no. One day a week you do your maximum

max.

Wow.

So like let's say you could do two minutes. Okay.

You try to do at least 1:30. You fight to get to 1:30, but you don't fight to get to two minutes. Got it.

That's your dead hang day. And then you can basically [ __ ] around the next day. Do whatever you want. Don't overdo it, but you could do two times one minute with a long break.

Mhm. And then can't you just go around do less and less and less two days before if you two-minute dead hang you do like four times 15 seconds the day before you take off

and you do that just keep doing that and you're dead. What the mistake people make is they hear my ball or time.

[ __ ] that guy. I mean the mistake you're making is not doing a course. This could be a whole new revenue line. This could be a whole new revenue line of

pound. You guys have it more for you guys. be like, "Hey, call in." So, um, yeah, I mean, the dead hang is a it's like and also some of it's just genetic. Like my other metrics are elite, but that this is somehow alien territory.

God-given gift.

What about uh what about breathold underwater?

I don't do that. And I'm not sure I have like I grew up swimming. I think I'm weaker at that. Like I bet you I'd be in your guys range.

I I'm a dive master. I can hold my breath for three minutes.

And I'm just Yeah. I'm just Yeah. So, I think you would be I think you'd be crushing me on that, honestly. But you have like the lung capacity of a whale. That's true. I mean, like you got like I'm not moving. I'm not using. It's like you're like like you're like a like a like a whale floating out there under the ocean waiting to surface. True.

So, no, I say I'll tell you the difference. Uh, God, they're always minding me out there. But like, okay, when we first met, it was like AI may be real. Okay. Then I would say somehow until about two weeks ago there was like a holy [ __ ] this is real but

somehow it's not working but we're not allowed to say it publicly because we'll look stupid. Yeah.

And then there's a lot of investor hype. Yep.

Um there still is like investors printing attendees. So you have the investors on one side. I think people realize it's real but

you know it's like you know you have the whole token maxing. Yep.

And people are on to that and then so there's a whole value lecture there. Y

um uh you have a political situation um where you know people who do not understand basic economics are winning the political argument. So you can you could we could talk about where

there's a lot here. Let's break it let's break it up. Let's start with the token maxing thing. Let's start with what's what's real. Uh how are you actually thinking about deploying AI?

First of all, what what is your what is what is Palanteer's philosophy around token consumption?

Well, like we Okay. We have a product that will allow you to ba I mean internally it's called something but externally but really we call it the demastatory like get off masturbation thing internally. Sure. It's like people are just like print like sitting there all day kind of like a porn addiction and enterprises are like okay we knew this we believe this will create value but we cannot have people just like some people

checking the weather with it just like and just re rearranging deck chairs on their personal Titanic

literally like porn like people are like full on

it feels it feels so

yeah toolshaped objects tool-shaped objects you're looking at more than you want you hope no one notices you're kind of It feels productive to have every email classified with

here's what it comes down to like business problems can never be I mean sometimes they can be solved purely with money and just spending more but very often

actually I think it's the opposite so just to give you a weird an

no and I was going to say very very often it's more the opposite where it's about figuring out the right way to do something and then you can use capital to fuel that process but

let me give you a thing that's too generous for you guys

okay it it it's taste plus money.

Okay. Yeah.

And there is no like AI like if you look at like pick any issue you want to talk about token mechanism maxim maxing uh what's going on with deploy codes are other people going to build ontologies why are why why does our political class not understand AI especially in Europe it's like yes because all these things can be scaled in a very valuable but largely going to commodified way but you can't scale the taste of like what is the business problem you want to have to solve and need to solve at the end of the day whether it's in the for whether it's the Ukrainians fighting the Israelis commercial entities it's there's somebody sitting there who's like okay but this problem is valuable this problem isn't and once that value that problem is always has that problem

always almost always but not always has attributes so there are some problems you could solve with this like I want to write a report on GDP growth in China right okay but if it's a problem that requires a knowledge store like I want to understand the specialized way I underwrite. We're going to have a guest here. I want to understand the specialized way I drill for oil and gas that's both legal, ethical, and reduces the cost of production. I want to change the the the supply chain of my industry, whether that's military or whether that's building boxes or whether that's cars. These things require actual precise ongoing processes. They are enhanced by large language models. They are not replaced by large language models. And then you get to security issues like but for us like the whole myth of things is just a boon because like yeah we could take any model their model open AI model sure

open model we can identify we can now identify uh vulnerabilities at like 10 100x yeah but then who patches them

how do you patch them on prem how do you patch them on prem so that your specialized knowledge stays on prem like if you're any business or Intel service a lot of these things are very similar like you're not putting your classified data in a public cloud. Same thing if you're like you have a special way of farming soybeans.

Yeah.

Well, you're not. So, it's like how do you have how do you so all these problems are exposed identified and then

you always have a thing of where's the charisma which people really underestimate and it's it's not global. There's no global charisma now. Like so right now the large language models are very frontier companies are super charismatic with investors. Mhm.

I'll give you some news. They're

super not charismatic with enterprises and the people like in a way.

Even with enterprise.

No, no. I mean, it's

because I understand what the people No, no. The enterprise people. I have a secret. I have a secret like every company has a secret way of selling. You know what my secret way of selling is? Don't even call. Don't Don't come talk to us. There's a frontier company. Go spend two days with them. And if you're lucky, after you're done, I'll let you in my door. They're like clamoring. They're like They're like, "Hey, I'll take your bad brand." We have a great brand in enterprise, but like it it's like it's like secret knowledge because the investors love this. They're like, "Hey, my stocks are all up. Everything's up. I mean, Palunteer's done very well. We're like, but it's like and you know, you guys are doing very well, I imagine." Right? And it's okay. We're we're you know, we can But I'll tell you what, you go down the street, you talk to a marine, you talk to a bus driver, you talk to the person who owns the bus driving company,

they are not happy. They do not like these people. They're tired of people token maxing. Yeah. That it looks like masturbation at their that's cost them money. They they're like And honestly, then you have something we're not allowed to talk about in this country. Likability.

Like a palunteer. We have I think we have like 50 100 million global fans. We have like 5 million people that wake up in the morning literally calling me Satan.

I didn't know I had that kind of

warm hand. But uh you know, it's like that's what they believe.

Yeah.

And like and they really believe it. Okay. What people are not allowed to really address is like we have fans and enemies.

Yeah.

Yeah. These people polarizing.

Yeah. We're polarizing which means both sides. Yep. These people have one side.

Yep.

They're just It is. So it's like you and it's like it's a really big

social media companies too have the same problem.

Yeah.

Everyone uses them but no one likes them.

Yeah. But but then they also live in a circle and that circle's printing money. Yep.

So it's like you know when you look in the mirror and you just printed a lot of money,

you look pretty fresh. Is part of it is is part of it that that some element of the technology let's just say LLMs is so magical that the companies involved that the companies that are making and selling frontier intelligence can be bad at a bunch of other things and still grow

well no no they are magical at a certain kind of thing allowing you to write for example code now that code doesn't can't be used as a knowledge store so if you look at code in like three different ways like just using palent as a model we have code That's basically infrastructure. So what what are the Ukrainians using? What is the department of war using? What do a lot of our enterprises? We call that primitives. It's basically hard-coded things that that understand the world low way do you do? It would take millions of technical hours and an understanding of all these enterprises to do it. So it's it's much more like how do you build a steel beam? Then you have like code that is written by FDAs.

Okay. So that's kind of managed. It's the reason why FDAs work. The secret is it's actually managed on something that we as a product. So you're writing to a codebase. We're managing that. We're increasing our product. It's not just random people write. Then you have let's call it free code.

That free code is that's magical. Like you can do it very quickly. It's almost right. It doesn't have to be exact.

Dashboards,

dashboards, financial stuff,

probabilistic stuff where you just have to get one off analysis.

It was magical.

By the way, it's magical. It not only creates and it's magical in a way. I know people don't like the porn thing, but it's also addicting. It's like, you know, it's not good for you, but you know, it may lead to damage.

One more dashboard,

one more time. It can't hurt that much. I know my doctor says it I shouldn't do it, but it's like it's like that, right? And you just keep go and like and if you're involved in the that thing, you're also making money.

Yeah.

And then last not least in certain circles like if you have you want to be a Russ researcher or you believe essentially it's a religion. So like you know and like one of the things is very charismatic especially to people who've never had a religion because all of a sudden that hole in your heart that was yearning for I don't know I would say you know a a established religion Judaism, Christianity, Islam is like being filled.

Yeah.

And and all the answers are there but it it's very very successful at doing things that a company has to do.

But it is not actually solving the problem that enterprises are. It is now it can solve them. That's the trick. It's not It's not binary. It's not like you can't say they're not valuing. They're totally putting our business on steroids. Like without LM, nobody would be talking about our ontology, about Apollo managing SEC exploits, about our ability to manage an enterprise essentially as turning all these companies into FDES. These deploy codes, we love them because now every company wants a deploy code. You know how you do that?

You replplatform on Palunteer and like and it actually works. It's not somebody with no taste, who's never done enterprise, who has no earthly clue how these things work, who's done something else, and is like just imagining they know how to do it, right?

Yeah. Is part is part of this moment quite entertaining for you because you guys have been working on understanding businesses at a deep fundamental level creating you guys have effectively been doing the work that it that people are promising AI can do for 20 years now but actually doing it finding all the really rough finding all the really rough edges and uh and not and and being at a point where you don't have to oversell the technology. You can sell both things. But now there's maybe

Here we go. We got it together. Um, now there's maybe

Oh, it's the wrong side. That's why. Flip it around.

The dyslexic.

There you go. There you go. Living the brand. Living the brand.

We got that. I don't know. All that stuff wasn't recording.

I I trailed off. But uh but is part of it entertaining to you that it feels like

you know Palunteer has always been in some ways um not had competitors because there's nobody with Alex Karp running a company that is does what Palanteer does besides Palanteer. But at the same time, there's been tens of billions of dollars deployed now to effectively do what Palanteer does, but just selling the intelligence part, not selling all the underlying kind of infrastructure that you

Well, they're doing two things. They're selling they're trying to sell the intelligence part and they're trying to pretend if you just hire a bunch of people and let them run around their FDS. Now, the the very cool thing is when you've been in your basement doing your thing and everyone kind of views it as the freak show, it it's really interesting and and and great to have adoption. The pretty ironic thing is half the people adopting now don't even know they're copying. But now the copying thing helps and hurts. Where it hurts is in the beginning it puts clutter in the market.

Yeah.

Um and there's there's no doubt about it. where it helps and then we saw this with defense tech honestly. So like in defense tech, we were the only people. We were the first people despite what it's I I love these honestly other podcasters. They're interviewing people who are paring things I said 20 years ago. They don't know it and it's like oh that's so insightful. It's like yeah of course it's insightful. Karp said it 25 years ago. Uh and like but it's but so that kind of that part is super weird but uh and like but um but it's but what really happens when we see is like it expands the market. So like in defense tech we would not be doing this well in just purely in government unless there weren't 50 companies that were doing similar things because then the people are like okay first of all

you view it as like offbalance sheet sales resources where other people are basically

well it's off well no that that's the large it's they do two things they increase the size of the market because de facto nobody wants to find it underwrite a market where there's only one person

sure

so like if you're the one person the percentage of the defense budget you can get is much smaller and two they set up a comparator. It's like you know you may not like the freak show. Okay, if like but have you noticed the people who are serious buy it and then then it changed and then three it changes the standard. Now what you're seeing now is like that times 100x.

Yeah. And it does change like recruiting retention and like how you build a company and we're we're always think you have to think about how to being dyslexic huge advantage there because like you don't have a playbook and now that need you need things to shift and we're doing that. Um the the the central thing though that is just cannot be developed even if you understood the playbook. A lot of these things are like appear like it's like you know LM code appears like pounder code but isn't for a deployed thing appears like pounder it isn't ontology. You could theoretically copy parts of it, but they're essentially structures that are built deep into organizations that we own. And by the way, take you three years. And in three years, we're in a completely different world. But there is this magical thing called taste. Like in the end of the day, the reason why you guys have done so well, it's of course there's aptitude and diligence and showing up and all those things. Yeah. But you have to be able to differentiate between two people who are in business, one of whom is saying something that sounds weird, that is insightful, one of whom is pariting something that sounds weird and that's all they're doing. And a lot of people, very few people can do that. And you have the same thing like the enterprises that succeed, there is a taste arbiter. And at Palunteer, we have taste art. We have taste in every product, taste in every deployment, taste in every casting. Who puts the people there? How do you put them there? How do you organize the thing? Our ontology then does that technically. How do you manage the whole org with taste? Who should be in charge? What data set should come in? What what are what are the ways in which you protect? What is what should you push into the public crowd? What should be on prem? What what should I mean leaving aside the law and like wars or ethics? What do you want to protect? What should you protect? What should you not protect? Because quite frankly, you want that to be out there so you can get more data. All those things are arbited by taste. And then you have to have the credibility of having taste. That's a real problem for a lot of these places because they don't have they they're popular with their friends. They don't they really don't understand how unpopular they are in enterprise. Like they think it's like oh yeah like the way I think I have a problem with like professors at Colombia. It's like no it's a real problem. Like they think I'm Satan and uh you know it's like I I I think you know we grew up in the same community. Let's talk about Haidiger. They're like they don't want to talk about Haidiger.

So it's like it's like Yeah. And so that's just a it's a weird thing. It's going to be a super The one thing I would say for anyone listening, if you're listening to this and you're chillaxing and not active, I'm not saying you have to agree with me politically or anything.

Yeah.

There the like partly because of this dynamic and very self-inflicted because I I I tell you I can't name names. I called many of the titans of this world and and like started this six months ago like every couple days

were going to be national every couple days.

Like some of them I'm like, "Yeah, we're going to be I mean, you know, it's like honestly they're like the bat." They they find me very entertaining. Like I'm not sure. Like so they call cuz Yeah. It's like it's like, "Oh yeah, this going to be entertaining. You're going to pick up."

Yeah. So any case, so I've been telling them for 6 months, six. We're going to be nationalized.

Yeah. You talked about

we're going to be nationalized. And they're like, "Why would anyone nationalize? Never happened in America. It's never Why would anyone nationalize us? We're so likable. We're creating so much value." like okay I'm not going to debate that I know how likable I am I'm not going to tell you how likable you are but I am telling you and you know the momentum on this is on the side of people in national we don't get our act together and figure out ways we can say hey look there are problems here we're going to deal with these things are not going to yes they are going to create opportunities you have to talk openly about how these things are valuable because we have adversaries you can't just say these all that stuff so the primary risk honestly to Palenteer and a lot of these other countries is and And it's going to be nationalized before national it's going to be regulated by people who don't understand this. And now they'll tell you in private I'm working on this. I'm d this lobbyist. It's like not going to work. So like that's something like if you're listening to this and you're like look you know you don't have to agree with me on all my proclamations. I got a lot of by the way there's some people who think I'm saying we should have a draft. Too lazy to read. I'm just saying we should like in a world where everything is changing. Everything is changing. Don't we have to find some communal structure to remember we're American? You don't like my you don't like my idea of like we all do a week in the park? Great. Come up with some other idea. We can have no idea, you know, and like and then they're like, "Well, I'm saying I I do not want a draft, just to be explicit." They're like, "Oh, that's pro-war." No, honestly, you know what? Most of our wars are fought because no working-class person is making a decision. You start making sure everyone is involved in everything. I'll see you how few wars we fight. It's actually the anti-war position. But any case, disagree with everything. If you're we have on the right and on the left people uh people who have no earthly clue what they're talking about right and left.

All they're talking about is how much they hate us and those of us who are sensible in the middle.

You know too many of us are chill waxing like it oh like nationalization it can't happen. America would never do that.

Sleepwalking into and you guys have tendies to protect now. You guys should be on the front line of this. Like you got full Oh, I'm sorry. Hey, I have a I have a full on very impressive uh corporate leader coming on. So, I got I got to turn it down.

Last question. Last question if we have time. Uh

how are your conversations going with Fortune 500 CEOs around headcount planning? There's been so many layoffs this last year that people were saying, hey, we're getting so much out of AI. We're able to, you know, cut back here or there. uh people inside tech often know like these maybe there's just a reduction because there needs to be a reduction or got bloated maybe they do need to fund some AI

declining business model yeah the business just doesn't have momentum but how are those conversations going what does it look like

like the the like I by the way I talk to fortune 500 companies I talk to unions I talk to soldiers I talk to fire it

if you upscale somebody

they're more valuable And like all these whether it's people working on batteries, people driving trucks, people corporate leaders and again this is where I think we have to be very careful to be more disciplined on the corporate side. Like if you run around saying AI allowed you to fire twothirds of your workforce and you did it because maybe your competitor's kicking your ass. Yeah,

that could that is a really like you might as well just go sign up for Bernie Bernie Sanders manifest. And part of the thing is they really believe that can't happen. So they're free riding on the fact that it could

like we have and it just cannot work anymore. These things are very very explosive. The American people sense that there is something dangerous here. And when people are playing with that fire, it's like it's a they assume the fire won't burn their hands. That's not the world we're in. That fire is going to consume us. And what we see, again, the war fighting example is just the most neutral, not for everybody, but like the soldiers at the bottom have gotten much more valuable. And and I don't even just mean the special operators, which obviously they're in a different league, but like every the people doing a lot of the operations now are doing our product. They're high school vocationally trained. You see this everywhere. The the the modern enterprise is going to have like we have a a true like very very very smart uh person coming on and it's like you're going to have a very smart executive. He's much better at hiding it than I would be if I were him. But that's you can talk to him about that. But um uh um and uh and then very talented, creative people with taste all up and down the stack. Any case, I think this is time for me to

I think this is time.

We uh

Thank you so much.

Great to catch up.

Always fun first.