Dean Ball joins OpenAI as AI nationalization debate intensifies and export controls signal government fear

that powers it. And let me also tell you about Figma agents. Meet the canvas. Your AI agents can now create and modify your Figma files with design system context. Our next guest is Dean Ball. You know him, you love him. He's been on the show many times. and now he's part of OpenAI. We're very excited to have Dean Ball joining us. How are you doing? How are you settling in? How are you introducing yourself these days?

Uh well, doing great. Thanks for having me on. So, I started OpenAI on Monday. So, technically speaking, I'm still uh uh you know, senior fellow at the Foundation for American Innovation. Cool.

But yeah, no, it's uh it's very exciting.

Yeah. Yeah, it's it's uh what what are you uh uh Monday? What what are you hitting the ground running on? What is top of mind? Is it entirely uh

well be before that I want to I want to uh I want to just jump in and ask has this year been crazier or less crazy than you expected when it comes to the interaction between West Coast Labs and DC?

That's a good question. Um it has been about as crazy as I would have predicted. Mhm.

But I didn't expect I I would say like it's like I would have intellectually predicted it, but actually seeing it happen in the real world

is crazier than I could have imagined. And in some ways it is all falling together in ways that I could have never predicted. I'd say like the general intensity of it all is about what I would have guessed, but um a lot of the specifics are are both surprising and funny in ways I would have never guessed.

What's the funniest Um well I mean there's just a certain comedic aspect like the fact that so much of it is so personal right um the fact that there's like you know not to say it's all personal but the fact that some big chunk of what's going on here is that individual actors in this you know between the government and the industry like Daario you know they don't like each other right

um there's that element of it I think um uh you know one thing I wouldn't have expected is for so many people for an industry, for a government, for an administration that positioned itself as being so friendly to AI, the fact that the people who actually are are like closest to advising on the tech policy, at least some of them, um, are actually quite hostile to the frontier AI industry.

That's another thing that would have surprised me. You had David Sachs today tweeting basically about how the frontier AI industry in the United States is not a legitimate business. You know, it should just all be open source models and you can't trust, you know, like these kinds of things. That surprises me. That surprises me. Uh and I I find that to be an interesting dynamic I wouldn't have guessed.

Interesting. Yeah. I I I've I've been tracking it where uh we've noticed that uh AI stories have jumped from the business section of the Wall Street Journal to the front page to the world news section. And that's a very like visceral I I don't know if it's quantitative or qualitative but yes uh when you intellectually uh think about the the various showdowns and negotiations uh you imagine them as way more quantitative and more just like of course if it hits this threshold of capability then the reaction will be this and that will trigger this and uh you can step through all those but you forget that every single one of those decisions is going to be a personal interaction between several people. So it has been an odd time

Jordy. Yeah. Yeah. And then dynamic of doesn't matter how fast technology changes like people stay the same, right? They take things they take things personally and yeah and you know interpersonal dynamics end up driving a lot of behavior.

How have you been processing the the Sorry, please go.

Oh no. I was just going to say the funny thing though about the last month or so is that you know the truism in AI policy is that the technology moves so much faster than the policy. And I think we might actually be going through the maybe the one period where the policy is actually moving faster than the technology. Uh like you know uh my friend my friend Tim Hang from from FAI um and great Twitter account to follow um said he took Daario's essay which was uh you know policy on the AI exponential and changed it to AI on the policy exponential.

Kind of feels that way.

Yeah.

Yeah. It's interesting because, you know, we've we've gone over at different points on the show uh what the fears around the internet uh were around the year 2000, right? It was a lot of a lot of the same types of fear. All information would be completely available to anyone, even bad actors. It was a huge fear around job loss, you know, uh retail apocalypse instead of the SAS apocalypse, right? Why would anyone go to why would anyone go to a store when you could just get a product delivered,

you know, straight to your home?

Uh, and yet with that cycle, it wasn't like in 2000 in January, you know, DC was like, "Hey, like you can't you turn off your website uh for like a few weeks while we figure out whether or not this is going to, you know, uh do do something." Um, and so same thing with social media. Like you look at the reaction to social media now where people are like, you know, how many years in being like, whoa, this stuff seems like it could be like destroying the human race, you know, like causing birth rates to collapse. And it's like, okay, it took us 20 and and we're not even really, no one's really suggesting anything on a policy side with social media, right? It's like, hey, here's this thing that could be a meaningful part of birth rate collapse. And yet we're still like just fighting it out in local courts like is it addictive or not? You know, it's like no there's no focus on it. And so policy being being ahead of the technology for the first time at least in my lifetime is is meaningful.

At least moving fast. Yeah. At least moving very fast right now. H how are you processing the various levels of like AGI pledness for from the different parties? Because I I notice that uh you know you see the frontier capabilities like incredible uh just capabilities and feels like qualitatively new steps in terms of uh their capabilities in cyber bio and also just uh software development. Um, and then you go on like Instagram and you see someone doing like the chat GPT40 voice and it's not this, it's that, talking about stochastic parrots and hallucination and drinking a jug of water and it's all very funny, but it feels wildly disconnected. But then DC seems to be more in the middle. But where is DC in terms of like their general uh level of like understanding the technology, fear of the technology, capability?

Yeah. Or an example that I think is funny, there'll be like, you know, somebody outside of tech doing a podcast and like a a businessman that's not in tech at all that I won't name, but is sort of somebody that people would maybe get a take from is like 90% of all jobs will be gone by 2029. like a way way way way way more aggressive stance than even anybody that's like actually agi pill on

in San Francisco, right? So it's like it transfers so far that you have you have these people that

don't even know they they don't know a single person at the labs. They've not invested in a single

AI, you know, any any of these companies that are actually at the frontier. And yet they have this point of view that they're sharing really broadly that's just like so over the top and and uh unrealistic that uh it's it's honestly kind of funny.

Yeah. No, I mean I I think um I think DC is actually somewhat underrated in terms of how AGI pill it is. Definitely it's you know there are there are some people um you know there's all sorts of people and all sorts of government. It's not AGI build enough to be sure,

but it's underrated like how out of touch people are because really like you know Capitol Hill is dominated by a bunch of and the White House too for that matter. It's dominated by a bunch of highly online staffers in their 20s and early 30s, you know, kind of the the people that run the show in in a lot of ways in DC. Um and so they they are exposed to um like the online discourse about AGI and they see all that and so there's there's some just like natural exposure to the ideas there uh that you you might not I I would say for example I find DC to be a considerably more agilled place than uh New York. Um, for instance, I find New York to be, you know, New York is very fixated on a bunch of I I find that Wall Street is like persistently like 6 months behind

um the conversation that's happening.

Yeah, they're more focused on like yogurt line timelines, you know, is it going to take, you know, 30 minutes or 2 hours to get

yogurt thing? I've never heard of this.

No, I mean I People are always waiting in lines in New York. That's what you do. around. They're focused on a different You're focused on the wrong timeline maybe, but it's it's working for them.

Mhm.

Yeah. And and like, you know, so I think I think DZ and SF are like very uh are both are both compared to almost everywhere else in the country quite a GI pill. SF obviously more so. But look, governments all over the world are waking up now because I think both um so so you know the mythos fable thing in and of itself did probably quite a bit to accelerate that. But then the other important thing that happened that you have to keep in mind is there's a lot of people there's a lot of governments um across the world that fundamentally even though they might not admit it they do fundamentally look to to to America for sort of intellectual leadership and it's like there's been an argument of like well look this whole AI catastrophic risk thing like do we really need to take it seriously? Well, it doesn't seem like the Americans actually take it seriously, right?

And that was a colorable argument until about two weeks ago.

Mhm.

And um the US government placing export controls on a frontier model um was such a costly move and such a crazy and radical move to make. It was clearly made out of a position of fear. Mhm.

Um, and everyone in the world saw that and like people wake up when they realize that the US government is genuinely scared about something that they wasn't previously on their radar, people do wake up to that. Um, and so I think that both throughout, you know, our country and then also, um, throughout the world, you will see more people kind of taking the AGI pill. Now, of course, the other thing about the AGI pill is that like a lot of um like a lot of psychoactive uh substances, it comes in waves. Uh you know, it hits you in in various waves, and it's like, whoa, I'm really AGI filled now, but you don't even know how AGI filled you're going to be in a year, you know, it's like that.

But but there's also there's also the export control cope and I would love to know where you stand on that, which is that uh it's not fear-based. It's economic and it's it's akin to well we don't want to we we also don't want to export Coca-Cola because you might figure out the secret recipe and it's just a good business and it might be purely about distillation and not necessarily that a foreign government would use this powerful model against you or for nefarious purposes but instead they might just steal the golden goose that you have cooking. I mean, yeah, look, and and actually I'm kind of curious to see how it how it resolves. Um, there is some future world where like for some combination of regulatory risks and safety concerns, but also competitive concerns like distillation,

the frontier models are just like kind of like less visible to the public, you know, where it's like there's somewhat more friction involved in getting to the true frontier.

Sure.

Um, friction and cost. Um and and and that might happen downstream of market incentives just as much as it is of economic incentives. But no, I don't think the government is playing any kind of five-dimensional chess here.

I really think this was about

all the way up to the sixth dimension string theory stuff. Um no, I don't think so. I I really do think that they um that what it what it looks like on the tin is in fact what happened that they got, you know, there was legitimate fear. Maybe that fear is to some extent um uh it might have been fear that was grounded in some degree of ignorance about the actual technical risks of AI and like what is a severe vulnerability versus what is not. That seems quite likely to me and it also might have been a fear that was maybe um agitated somewhat by the political veilance through which anthropic is viewed. I myself have argued this that like what anthropic does will inherently be seen as riskier and more dangerous and bad and what other their competitors do will be seen as like good and innovative because the government has a particular posture toward anthropic. Um and

yeah, but but at the the other side of that

is like they have been the most vocal about the risks.

Yes.

Well, of the labs outside of like the leas or yikowskis of the the world, but yes.

Yes.

Yeah. I would say of of the labs they have been.

Yeah. Um, and like that's part of what started this whole animosity. But now it's it's like this weird thing where I think political um political differences of opinion and political animosity from personal animosity color the fear as much as some degree of ignorance as much as the fear is also legitimate. Right. So the fear is coming from like a bunch of different places and fundamentally the government's not wrong to be concerned.

Yeah. But uh but yeah, I think that's where the export controls basically came from.

What is your current view on nationalization? There's there's there's rumors and news, but like is there

you got a very colorful example about letting rats live in your in your home

in your walls?

Yeah. What do you have against rats? You know, some people are dog people, some people are cat people, some people like rats infesting their walls, I guess. Well, look, I've I've lived in a DC rowhouse with a basement, so I know all about rats.

So, thumbs down on the rats, but thumbs down on rats in the wall is is the is the base is the base reason that nationalization gets talked about is sharing in the economic upside. Is it about uh you know popularity and like rankings and polling? Is it about control and having like a board seat almost like what are the problems that are solved when people even talk about nationalization as an option to any degree?

I think it depends. I I think I think different forms of of public equity solve different problems. Mhm.

The problem that I think is most interesting to think about is this sort of reality of our world today where um it's people don't feel a lot of agency and a lot of participation in the upside

of technology. So so like you know sometimes it is said that there's a lack of positive vision for the future technological vision. I don't think that's quite true. I think there's a lot of I mean I go on my Twitter feed and I see all kinds of crazy people building all kinds of amazing stuff and I love it. That's the whole point of Silicon Valley. You know, there's a lot of great visions for the future. What we lack though is an institutional infrastructure that gives people average people a sense that they're going to play a role in it, right? So, it's like, well, yeah, Elon Musk and Sam Alman and Dario Amade are going to cure a bunch of diseases and they'll be injecting exotic peptides into themselves on their Martian mansions while I'm stuck here, you know, with the the the the bottom dwelling class. That's how a lot of people feel. There's an inherent mistrust. Um and so I think that a public equity stake where we take all these large firms and we take us you know some chunk of their equity and we um broadly distribute them you know for free right we give people the equity as a donation essentially or a gift I think that is a token um that it's a it's it's a symbol

that the the technology industry wants to build a future in which Americans have broad participation. And I think that I have problems with that. You know, there are concerns I have with that. There are concerns about the precedent that sets in particular. Like if you're a successful company, do you suddenly just like have to give the American people your stuff? Like that seems weird.

Um but nonetheless, AI is a special industry. We're living through a special time. And there are versions of that arrangement that I can sort of get on board with. Um where I get much more worried is when the government is taking an equity stake and putting that stake on its balance sheet.

Sure.

Um there are a bunch of reasons for that. Um one is just like the sort of picking winners effect

of okay well now all of a sudden the government which sets policy has a direct financial interest in making sure that these particular companies win. And I I think that's bad. Um, I think there should be an opport, you know,

I think there should be an opportunity for some lab or some other type of startup to come in and compete. You know, I think that's great. Um, competition to the frontier AI industry suddenly becomes like a threat to the government's balance sheet if you know in in in a world where the government has a big equity stake.

There's also corporate governance issues that I think are are pretty complicated. And one other thing that like no one has explored at all.

Well, the other but

Oh, go ahead. One one thing that stands out to me the most is like I don't think some American is going to feel like oh great I'm I really feel a part of this AI boom now that the government

no

has like a you know effectively an account with like Morgan Stanley with a bunch of equity in it and even if you ran the numbers to divide it all up into for every household or citizen it's not it's an it's an amount that would effectively be equivalent to less than a stimulus check. And we've sort of like run that

we've run the experiment of we've run the sort of like stimulus check experiment. I think it did help a lot of people at the time, but it didn't it certainly didn't like fix anyone's life. It wasn't like, okay, now I don't have to worry about rent next month or now I can buy a home, right? It just didn't solve any of people's like fundamental

problems. And so I think

and neither would this

and and so the the direct like distribute the shares directly uh doesn't solve it. Holding it on, you know, the the you know country's balance sheet doesn't solve it. And so anyways, I'm I'm with you.

No, I mean I think it's like it's like what the what the stake gives people that if it's directly going onto the the household's balance sheet is again it's like a symbolic thing. And look, it's also not like no money, right? like I think 5% in meta, Microsoft, Anthropic, Open AI, SpaceX, Google, uh maybe Nvidia to you throw in um uh you know I think that divided by the number of American households if the AI industry also does well if you sort of model out growth over the next 5 10 years like I think that's like

I think that's five figures you know

uh right like I think it's like you know it's again it's not life-changing sums of money for anyone I don't think but I think it's it's real money. Um, I think it's worth comparing to some of the ideas that people have around if somebody's trying to put a data center in your backyard and you go, "Well, I don't really want a data center in my backyard." And then they say, "Well, what if you were going to get $800 a month

for the next 10 years?" And they're like, "Oh, okay." That starts to be material because that is yes,

an amount that is, you know, more significant, consistent. there's like some element of like effectively cash flow which is what allows a household to thrive, right? And so I've just consistently been a lot more excited about these more targeted proposals because I think every person in America has every right to ask, well, why would I want this data center in my backyard if I can still use Chat GBT or whatever AI tools I want if it's somewhere, you know, hundreds of miles from me? Yeah, I'm I'm kind of with you about like that. It's better to pay the directly affected like the data center communities, stuff like that, it's better to structure these kinds of things that way, but if you wanted to do a nationwide equity thing, I think it's not the craziest thing. The one other thing about the government directly having a stake in addition to like I don't think it ends there.

I think the government will use that stake to control the companies in all sorts of ways. And where that gets interesting is um if you combine an equity stake with effective government control over um all sorts of aspects of of Frontier Lab, you know, content moderation policy and various things like this, right? Usage monitoring and stuff. Um

suddenly the Frontier Labs could begin to appear to be an instrumentality of the government.

And that is bad from a public perception perspective. it's bad from a foreign, you know, sort of dealing with foreign governments, right? Because people won't trust American AI as much. But the other thing that like I guarantee you no one has thought about um uh is there's case law in America about like if a private corporation is doing something at like strong government compulsion. Um there are times when that can

uh intersect with like like basically the law will consider the company to be an instrumentality of the government and the kinds of laws that apply to government agencies suddenly apply to that private firm. So, for example, like due process, the fifth and 14th amendment, the first amendment, like these kinds of things where like you don't have due process rights if you're like if you're mad that United Airlines canceled your flight, you don't have due process rights with respect to that. But like you do have due process rights when you complain to the government about things, right?

Um and like uh uh those things are really really valuable. They're also not the kind of things that we associate with like fastmoving firms. Yeah.

Um, and so you're inviting like a whole host.

It's hilarious that like United Airlines is the fastmoving firm relative to like the DMV and and the AI labs are like a thousand times faster than the airline companies. So we're going to leapfrog to DMV speed which is crazy to think about.

It could be like public utility is what I would say. like and you would be I think people would be surprised how quickly the government continuing on the current policy trajectory but with a equity stake how quickly you have a colorable argument that the labs have essentially been turned into public utilities

and that they are basically government agencies and therefore they should be regulated you know government agencies are highly regulated entities in America right

um and yeah I think that's uh um

I think that's plausible and not something a lot people are thinking about.

Yeah. Uh, walk me through the the how you process the somewhat jokey Joe Weisenthal take of, okay, well, we've been through booms before, comp it to the railroad industry. Uh, the railroad industry created a lot of value. Uh, there's a consumer surplus. You can buy a train ticket. You can get something delivered. And then uh yeah, if they make profit, that goes into the government's uh balance sheet via taxes and then that can be redistributed in a in a stimulus check, but it can also just be used for other things that the government does that hopefully the voters approve of. And so the question of of like why is this time different? Why does the normal mechanism of consumer surplus plus tax revenue not externalize all of the internal value that's created at the labs?

Oh, I think I think the normal process basically does create like an enormous amount of value. Like I don't really think this any of this is like necessary in some sort of like

like economically optimal sense at all. Like

no, I think the labs will create far more value than they capture. Yeah,

vastly more orders of magnitude more trillions of dollars, right? Tens of trillions. Um, probably already have like created

a minute. I might say that there is a world where the economic flywheel of reinvesting profits effectively never ends and so you never see profits, you never see tax revenues or something. This is a very bizarre scenario to play out, but you know, Amazon didn't pay taxes for a very long time, not because it was tax evating, just because it was reinvesting in things for a really long time. And so, uh, you could say, well, in a scenario where you're in some crazy exponential takeoff and you're seeing trillions and trillions of dollars be recycled into these firms that are able to spend the capital immediately, then maybe the tax revenue falls off. I don't know. We're now in sort of like

Yeah. But then you're but then you're hiring thousands of employees. You have investors that are selling along the way. You have people

Yeah. And and the equity, right? There's capital gains, right? We have capital gains taxation, you know. So all the individual employees who are making all this money, if things go well, they'll be paying lots of capital gains tax and ordinary income too when their shares get delivered to them. Um so like there's a lot of tax piece for the government here. Um, I think the real reason to do it, and this is again like giving the equity to the government does nothing. It does nothing. It doesn't even solve a political problem for you. The problem that we have is not so much that like the normal rules of economics aren't working. I think that's very overrated, but it is true that the the institutional legitimacy is really fading. And for a lot of people, the like institutional architecture of America is not legitimate anymore and they're perfectly comfortable discarding it. Mhm.

And I think that the way I would approach an equity stake is a way of communicating kind of directly with the American people and saying, you know,

Mhm.

Um, we want you to feel a direct upside in what we're building here and and that we also want you to understand that we're building it together and you have a direct ownership stake in that.

It's funny you say that.

That's how I would view it. It's funny you say that because I can't for the life of me identify who you're talking about when they say they don't they don't see legitimacy in the in the United States government because I see like the tear it all down opposed to the Trump administration leftwing say this is not a this is not a government that I want to participate in. But then I also see a lot of the AI the a the AGI pled folks say like no like this is going to be way more powerful than any government. uh this is not a legitimate institution in the face of the the god in a box that we're creating. And so there's like oddly multiple categories of people that sort of fit in that bucket. But I don't know if you uh have more thoughts on like where that pressure is coming from. Well, what I think it is is like the idea it's it's really more like even stepping back just like the idea of the whole American economic order of you know

we have private enterprise and the people who do well

pay taxes and then we use that to redistribute and it's good that some people do really well and that whole thing like that's really gone, you know.

Yeah. Uh in wild wild times. Um what else Jordan? Do you have do you have something else to run through? Uh I'm curious your like July 2nd 20 26 take on the state of open source.

I think that

the my read is I think open open weights open source is great closed models are great. We should have a lot of them. I think

all smart companies of the future will use both in massive amounts. Uh but there's like you know this interesting depending on um depending on people's bags they have very different sort of like stances on on the issue even though I think that in general it's much more like use used a lot of both but um uh I think there's some debate around uh an open source an open source ban that is interesting. It doesn't really it's hard to see how that would actually be possible, but um I'm curious

your views.

I don't think the US is going to do an open source ban. Um I I I I would be surprised by that. Um now they will I would suspect that once an American open source model gets to the point that it poses you know mythos level capabilities however that ends up being defined um the government will review uh uh that model and when they review that model um you know I I don't know it'll be interesting to see what happens right like are they do they just

log on to it

yeah well when it goes through there's going to be a deacto licensing regime for they're not going to care about whether it's closed or open source. The open source to be very clear like an open source model that hits a the mythos level capability is subject to a licensing regime like the government's licensing regime unless the government like explicitly says otherwise. That is what I would assume if I were developing models. Obviously not the Chinese models. Um um I think it's possible that the Chinese government gets freaked out at some point and and decides to sort of you know um restrict open source. They probably won't get rid of it. They probably won't ditch the strategy altogether, but I could see them um you know downplaying it at the frontier.

And I guess uh if I were like if I were an organization planning things, I would want to use both, right? If I would want to use both closed and open source, right? If I were some enterprise,

um I would probably not base my strategy on there being continued open source that is like particularly close to the American frontier.

Mhm.

I really wouldn't base my strategy on that because I just see a lot of headwinds. I see economic headwinds. I see um and I see these sort of safety issues. There are strategic issues. There's all sorts of things that I would just like I'm not saying it will not like open source will go away. I don't think it will. I think there are going to be some there are some ways in which open source is going to be very important as a kind of institutional technology like if we need to have a common adjudication system for example like a judge that sits in the middle of like court cases or like civil disputes or something like that. You can imagine how uh if you wanted that to be like an AI system, you can imagine how it would be really good if it were open weight so that like everyone can audit the weights and we can all know that we're dealing with the same thing and blah blah blah blah blah. That that's like really valuable. Um but I would not necessarily bet on open source keeping pace. Uh you know I don't think it actually has kept pace as many as as closely as a lot of people seem to think. I think it's about a year behind. Um and I wouldn't necessarily be surprised to see that gap widen over the next year.

Yeah. The other interesting wrinkle is that there's uh there's a certain scale of of model size and intensity where uh you could effectively do arms control even on an open-source uh yes you know like AI system because you could just detect like okay like yes it's open source you can download a hugging face but you need an entire data center to inference it meaningfully and so we control it at the rack level as opposed to as the weights level uh which is a whole different set of worms. We'll get there somewhere. Thank you so much for coming on the show. Always great catching up and uh excited to be working with you soon.

Have a good one.

Yeah, guys.

Glad to be joining the team.

See you. Cheers.

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