GameStop CEO Ryan Cohen live on TBPN

And you look at these like Call of Duty,

they're killing each other. I want

positive influences. I want things that

are healthy. I want things where people

are going to learn.

>> We have Ryan Cohen, the CEO of GameStop.

Can you hear me, Ryan? How are you

doing?

>> I can hear you.

>> Okay. Sorry. We have we have serious

serious technical difficulties today.

Um, but I believe we have you here on

the phone. Thank you so much for

joining. Thank you so much for taking

the time. How are you today?

>> I'm doing well. How about yourself?

>> We're doing great. Uh, we'd love to just

get uh the story of GameStop from your

perspective, kind of how you tell it

now. Uh, you're a couple years into this

project. Uh, we'd love to kind of get

the the high level just to set the

stage.

>> Where do you want to start?

Um, maybe the original idea, like when

did you think you'd become involved with

this company?

>> I originally invested as

a passive investor.

>> Mhm. Um, I had a few conversations with

the management team and the board of

directors and I realized that saw a lot

of stuff that you read about but you

don't really believe until you actually

engage with them. And as we went through

conversations, I went from passive to

active

and uh filed the 13D I believe in uh

August of 2020 and then I joined the

board in January of 2021

and um

the rest is history. The long story

short is there's been a lot of changes

at the company. Um,

a lot of cost cutting.

>> Uh, a lot of rationalization, focusing

on the basics of running a profitable

business and a lot of it was getting

people out of the way. um a board of

directors that had perverse incentives,

a management team that had perverse

incentives. Ultimately, what you see is

that when people don't have their own

money on the line, they don't give a

[ __ ]

>> And they're focused on all kinds of

other stuff that ultimately doesn't

matter to shareholders. And a lot of it

was getting that out of the way so that

we could actually focus on the business.

And um you know you see it in the

results of the business today versus

where it was not just when I joined the

board but you know you look at the

results even prior to that. It's uh it's

a tough business.

>> Yeah totally. What do you think uh the

mainstream media gets wrong about the

GameStop story uh today or has gotten

wrong throughout uh the whole saga?

[Music]

That's not an easy question to answer.

Um because we're talking in generalities

and

>> sure

>> I don't want to stereo, you know, I

can't stereotype in general.

>> Um everyone thinks they know. The

mainstream C media thinks they know. I'm

running the business and they seem to

have greater visibility into the

business than I do. So everyone has an

opinion as opposed to actually just

focusing on the results. And in general,

the news should just focus on the

results instead of uh comments from the

peanut gallery, right?

>> Yeah. Let's let's let's talk about Q2

specifically. What what made that one of

the biggest quarters in years?

It's a it's a focus on running a a

business like an owner and cutting costs

and making money and leaning into the

areas of the business where there's

margin potential just trading cards and

then getting rid of the bloat. Um,

as an example,

uh, I was just looking at this earlier

today before we spoke. 2021

there were 14 over 1,400 people in

corporate.

Um

>> Wow.

>> Today there's like 400 people.

>> Wow. Yeah.

>> And we're more productive today than we

were in 2021.

SGNA has come down by like 50%. So

people build teams, they hire people.

Ultimately what that means is they

delegate their work to someone else. you

end up taking on this crazy cost

structure and

>> it works when the business is growing

but doesn't work well once you uh the

business stops growing and that's where

GameStop was and uh physical retail is

tough

>> yep

how much of that corporate restructuring

going from I think you said 1,400 people

down to 400 how much of that is just

reor reorienting around a players

aligned incentives picking being the

best person to actually run a specific

initiative versus using technology,

using software, using AI. Is there any

sort of narrative around that that

you've found success with?

>> It's both.

>> Mhm.

>> Even finding the right people though.

Yeah.

>> You know, you don't you don't know. I

mean, I've been interviewing people for

a long time and you meet people I meet

them and I get really excited cuz

they're really good at the interview

process and they know how to say the

right thing. So, what does that mean?

Means they've got really good public

speaking skills. So, they overindex

there and then you actually when you

look at their execution skills, they're

not great. Mhm.

>> So, uh, I've been as equally excited as

people that I've hired that have worked

out as I have been of people that I've

hired that I wasn't excited about and

then they prove to me that they can

actually execute. So, you know, the

results speak for themselves. You you

really only know once you put people

someone in the position and you see what

they're capable of. They can tell a

great story. they can put together a

great PowerPoint presentation, but you

don't you don't actually know until you

see what they're what they can actually

do. So, there's no question that

artificial intelligence and just

broadly speaking, technology has

increased productivity.

Um, you know, that's that's been a big

benefit. And then doing more with less.

>> Yep.

You take a Z salary, you have billions

of dollars of cash on hand. Uh, how do

you plan to allocate it over the next

two to three years? I don't want to I

don't want to go too long term.

>> There's um

we don't have a gun to our head. So it

needs to be a situation where the

downside is limited and the upside is

really high. And

um that's a different calculus than the

world of private equity or or venture

capital or any money managers where

they're incentivized to deploy capital

because they get management fees. In

this case,

a fancy way of saying is it's risk

adjusted and I don't want to lose money

and I I want a situation where there's a

good chance of making money and a really

low chance of losing money. So, it needs

to be a pitch that is pretty much down

the middle. Um,

>> does that mean you're waiting you're

waiting for a for a crash?

You never know what's going to happen in

the financial markets. They can go from

>> uh from green to red and and they don't

flash yellow. So when that happens,

we'll be in a position. But

>> yeah, I just feel like it's I just feel

like it's notable that you have all

these, you know, digital asset treasury

companies that are just market buying,

you know, obscene amounts of

>> of uh, you know, Bitcoin and and other

tokens and and you guys are, you know,

uh, taking a longer view.

>> Yeah.

>> What are you excited about uh in the

core business over the next few years

between retail online? You you mentioned

trading cards. Can you unpack a little

bit more about some of the the key

initiatives like the customer behaviors

that you see as uh really big

opportunities?

>> I tried a lot of different things.

>> So I originally went in

um with the the Chewy playbook

>> was we focused first on consumables. So,

we had a lot of success on pet food,

treats, litter, things that you could

put on auto ship. And then it went from

focus on consumables, getting customers

on auto ship to we're going to be the

everything pet store and we're going to

expand our catalog and we're going to

add all these hard goods. So, I had all

these preconceived biases

where I was going to copy the Chewy

Playbook at GameStop and basically be

like the everything store

>> for gaming. and we um I hired a bunch of

fancy people from both Amazon and Chewy

and we expanded the catalog and we added

a bunch of product and um most of that

product didn't sell and we ended up

marking it down and taking a big hit and

it cost shareholders a lot of money cuz

once you have the product trapped in

stores you got to mark it down in order

to move and get it out of the stores. Um

whereas within the consumable space if

we ever bought if we ever overbought

inventory we just waited and ultimately

you know bought too much cat food or

whatever it ended up selling. So

physical retail is very very very

different than in e-commerce. And uh I

spent a lot of money to figure that out.

And so what I learned is that we went

into all these categories and

a lot of uh we took some significant

hits on losing money. We lost money.

It's that simple. by trying to expand

into all of these categories that were

not core to the GameStop customer. And

then along comes collectibles. And

obviously after expanding into

categories where there's very little

success, your risk appetite at that

point is pretty low. All of a sudden, we

see that they're like the GameStop

customer. Y

>> really when it comes to trading cards,

there's a strong appetite for for

trading cards. And that category has

done very well. And we've gone from like

10% of our sales to over close to a

third probably for the full year is

going to come from collectibles. And um

>> that's remarkable. Congratulations.

>> Yeah.

>> Um I I want to I I want to know more

about the collectibles thing. Let's

let's table that for a second. I'd love

to know more about uh where you see the

traditional video gaming market going.

Uh I'm I'm experiencing kind of whiplash

because I see uh mobile games and and

freeto play growing and micro payments

happening. EA is getting taken private.

Uh you have a lot of stuff going on that

end, but then you also have Palmer Lucky

kind of bringing back the Game Boy and

the N64 with Chromatic and I know you're

you're partnering on that. Um what are

you excited about? What does the shape

of the traditional sort of like video

game market look like over the next

couple years?

>> The video game market is definitely

going from physical to digital. So, our

ability to play in the digital world is

limited. There's a lot of money that's

being spent and um we've taken a capex

light approach like a a a pretty risk

light approach to the digital world. if

there's not a a clear path to us being

able to to make money and a a payback

period that's that's pretty attractive,

then

>> uh this isn't a story of like moonshots.

So there's no moonshots that are being

done like we're

>> we're focused on real returns.

>> Yep. Uh what about wearables, virtual

reality? Uh we heard a story about the

Meta Quest or the the Meta Rayban

displays and uh a friend of ours went

and had to test them at Best Buy and

didn't have a great experience and it

feels like uh if we do enter sort of

like a wearable era, there's a renewed

demand for instore experiences. Is that

on your radar at all or is that more of

like a you know futuristic thing that

you'll deal with it when it comes down

the pipe?

I mean, the when I think about

wearables, the Apple Watch is a good

product. When I think about the

MetaQuest,

I mean, it's a joke. Uh the all of the

virtual reality stuff doesn't feel like

who's going to walk around with these

[ __ ] glasses on their head? Like,

it's just

it doesn't it does not seem like that's

the future. But if we could sell a

product and we can make really high

margins, then obviously we're going to

sell the product. But we're not

investing in um in in virtual reality or

in in the metaverse unless there's a

clear path to being able to deliver

results for shareholders.

>> Yeah. Yeah. I meant more just as like

Apple does have the Apple Store network.

Uh other companies that are trying to

get into wearables and might need intore

demos don't have one of those. But uh

yeah, I mean your your rationale makes a

ton of sense.

>> It's so interesting to think about the

dis, you know, when when I hear you

talk, Ryan, it's you're you're

everything you say aligns with

thoughtful capital allocation and yet

the the broader like world seems to

believe that this is this is just about

being, you know, kind of

>> this is, you know, it doesn't

>> moonshots. the other there there's

there's uh CEOs out there that have

effectively meme stocks and they just

act and talk a lot differently. Yeah.

Than you do.

>> No, this is refreshing.

>> Um what what do you think about some of

the the uh conversations? There's been

uh I guess rumors that uh the admin is

interested in companies moving to by

annual uh reporting instead of quarterly

reporting. Do you think that's smart?

what what kind of moves from the admin

uh this year have you been uh

particularly

uh interested in?

>> I like reducing cost. So if it costs us

less money than to report by annually

then by all means uh I think it's

important for shareholders to have

visibility into how the company's doing

and then making a determination whether

they want to stay invested or not.

But we have an opportunity to reduce our

costs. I mean,

>> it's it costs a lot of money to be a

public company.

>> Yeah,

>> we spend a lot of money on audit fees.

So, that hurt me at Chewy. That hurts me

at GameStop. Uh they they charge us a

lot of money. So, if it mean if it

ultimately means we spend less money on

being a public company than and it makes

us more efficient, then that's that's

fantastic. Uh, I I've I did did I didn't

mention it, but thank you for Chewy.

I've been uh a subscriber for probably a

decade. Uh, you know, it's uh it's been

the backbone of my household and my uh

my dogs. Thank you as well. Uh I'm

interested to hear your your take on

kind of uh evolution of e-commerce.

There's a lot of chatter about agentic

commerce and people buying through

products through their chat apps. Have

you looked into that? Do you have a a a

current uh framework for thinking about

the the adoption rates of people buying

stuff through an LLM?

>> Um Amazon started selling pet products

in the late

>> 90s

>> and

they were they were doing okay.

>> Chewy comes along. We originally wanted

to start off selling jewelry. We

actually bought hundreds of thousands of

dollars worth of jewelry. We went I went

to a trade show and I bought hundreds of

thousands of dollars worth of jewelry.

We set up the website and everything and

then I was shopping in a neighborhood

pet store and I had a um at the time

like a five or six pound teacup poodle.

Uh, and I kept on going to this neighbor

at bed store every few weeks and I run

into the office. By the way, I don't

wear jewelry. I was not passionate about

the cat. I didn't know anything.

>> That's important. I went to felt like

you were just kind of it was picking

like this seems like a good mark in

business and it's light. You can ship.

>> Yeah. It was a little too mercenary like

you got to get into the, you know, build

something that you want so you can give

yourself feedback.

>> Yeah. And but you think like your

intuition is like there's margins in

jewelry and so like you can make money.

There was there was a blue Nile at the

time that had really gross high gross

margins and I was like we can do we can

do well in online jewelry.

Um anyway, I went to this jewelry trade

show. I bought hundreds of thousands of

dollars worth of jewelry. Um, and

then I was shopping kind of at the same

time every few weeks at this

neighborhood pet store for my poodle.

And I was way more interested in the pet

category than I was in jewelry. I

understood the customer and so I ended

up selling the jewelry. I ended up

getting like 80 or 90 cents on the

dollar. Mhm.

>> Uh, and I went into the pet category and

I liked that. I Well, I understood it.

Uh I

I liked the predictability of the

industry. I like the fact that like once

you're a pet owner, you're buying pet

food pretty much for the rest of your

life. And um and and we shifted. And so

Chewy comes along. It's 2011.

And

I took the playbook from Amazon. So the

focus on fast shipping, having a great

selection, being able to get onto the

website, add an item to the cart, and

check out. Our average checkout time was

like less than two minutes.

>> Wow.

>> So, you know, you think about like

GoDaddy, and I don't know if you've ever

bought a domain name, but you go through

the check out process, they're trying to

upsell you on like a gazillion stuff.

>> Yeah. And then all of a sudden, Chewy is

like average time less than two minutes.

We're not trying to upsell you. It's

like we're going to get you your pet

food as fast as possible at the best

price. So Julie comes along in 2011

and completely completely disrupts the

industry.

>> Yeah.

>> And we disrupted the independence. We

disrupted Petco and PetSmart. And we

were delivering your consumables at a

better price, faster, with an easier

experience backed up by great customer

experience. And so, um, you don't

necessarily have to be first to the game

in order to be successful. Amazon was

first to the game, but we focused on the

category and we were successful. And

it's kind of what's interesting in

technology in general is like you have

these technology companies that are

trying to do everything, right? Amazon's

trying to do streaming, they're trying

to do e-commerce, they're trying to do

everything. And then all of a sudden,

you have Netflix that is really

successful in streaming. You have Chewy

that's really successful in pet food.

>> Yeah.

>> So if you focus on a category,

you could be very successful. How did

you process the DTOC e-commerce era? It

was like really hot in Silicon Valley.

Every MBA was raising venture capital,

slap a $250,000

brand on a white labeled product and

raise some money and then it kind of

fizzled out. But like how were you

processing that at the time? What's your

postmortem? Like how should people think

about bu building brands going forward?

Is there still opportunity

>> for us? building brand was acquiring one

customer at a time and making sure that

they got their

pet food or whatever the hell they

ordered from us the best price really

quickly. That's how you build a brand.

It's not

>> spending a bunch of money on, you know,

Pets.com, a Super Bowl commercial. It is

focusing on the the best marketing is

word of mouth. So, you allow a customer

through word of mouth. You have a great

customer experience. You deliver the

product really quickly at a great price

and you have a happy customer. And that

was the way to build Chewy was getting

big market leadership and making sure

that customers were really happy.

>> What are the three like key lessons from

Chewy that you feel like you and the

GameStop team are applying today?

um running efficiently. There's no

question that like we ran very a a focus

on

uh on you know Chewy was they're so

different. Thing is is you think like

e-commerce and and and physical retail

are the same. And that's where I I made

a lot of mistakes cuz I showed up like a

wise guy at GameStop. I thought I had a

lot all the answers. But e-commerce and

physical retail are very very different.

>> Yeah.

>> So in general within physical retail,

what I've learned is like you want to

you have to run lean and you're better

off having less inventory than more

inventory. So um

I caught shareholders a lot of money by

taking the Chewy playbook at GameStop.

And then I learned physical retail which

was

uh a muscle that I had zero memory and

it was on making sure that when you get

the product you sell it very very

quickly because if you don't the product

depreciates very quickly whereas with

chewy if I overbought I sold the product

very quickly it didn't matter. So

>> they're not the same.

>> They're uh they're not the same. It it

the reason why in general

both concepts have worked out is cuz

you know you you you keep on I have my

own money on the line. So I'm not going

to stop until I figure it out. And

>> you're him.

>> But but it costs a lot of money to

figure it out.

>> Skin in the game. The man's in the

arena.

>> Uh people have said you're you're too

>> Yeah. People have said you're uh too

bold as a CEO. Uh do you think the

traditional concept of a of a buttoned

up uh CEO CEO that maybe shies away from

controversy uh should uh is is obsolete

or or should be forgotten.

>> I don't even know what a co means. I

want at the end of the day I want

whoever's in charge if it ends up

successful they end up doing really well

and if it ends up not being successful

they lose a lot of money and call them

call me the janitor for all I care at

the end of the day their incentives

should be aligned with common

shareholders so

um

that's the most important thing is that

the incentives are are generally

aligned.

>> Yeah. You're the loudest shareholder.

>> Yeah.

>> Um how do you decide how do you decide

what battles to fight because you got a

lot of stuff coming your way at any

given point? A lot of opportunity.

What's your framework?

>> My framework is what's going to move the

needle. like if if we can if if we can

make 80% margins

uh but the upside is limited and it's

not going to move the needle, then I

don't care. If if it's able to translate

into billions of dollars of shareholder

value and it's scalable, then we're

talking. So there's a lot of things that

are like small time and yeah we can make

a lot of margin but there's there's not

a lot of upside in terms of shareholders

then who cares but if it translates into

into something meaning meaningful and

scalable then then I'm interested.

>> Do you think do you think power packs

could be that?

>> Uh what do you think?

>> Well the chat is going crazy. They want

to know they they want the the update

from your side.

>> Power packs is interesting.

Power packs physical and digital

um is very interesting.

We we we can't get enough inventory. So

>> that's always a good

>> I don't want to I don't I don't want to

say anything because I mean users can uh

>> do you see

>> customers can figure out for themselves?

>> Yeah. Do you see it as the same sort of

like it's more consumption focused so it

fits within the Chewy model or is is

that the right way to think about this

as opposed to you know you you you're

you're there's less risk of getting

stuck with a bunch of inventory.

>> Are we talking physical or digital? uh

physical I would imagine would be like

the place where there's inventory risk

in some regard. But uh if if you view it

as more of a consumption product uh than

like the Chewy story, there's presumably

less risk in uh holding a bunch of

inventory.

>> I like the trading card space. Okay. So

we have uh we GameStop has a lot of

assets. We have the community and the

brand that allows us to if you look at

digital power packs, we've kept uh we've

kept it pretty limited in terms of being

able to get into the digital category

and and frankly it's not a marketing

thing. We just we can't get enough

inventory. And it's the same thing on

the physical thing, but digital is more

scalable. Um, so if we had a choice

between physical and digital, because

digital is more scalable, we're going to

go towards digital. Um,

can't get

>> Yeah.

>> enough inventory

at at least at a price where we can

>> I mean, you you can buy inventory at a

110 or 120% market value, but we're not

going to we're not going to start doing

stupid stuff like that. How do how do

you see the collectibles landscape

evolving over the next five years? It

feels like different players have picked

a focus whether that's live uh

traditional auctions uh something uh you

know like like you just discussed um as

well but like what what is what is the

shape of the market going forward uh in

your view

>> they're all connected like if you look

at the overall collectible space it's

looked at as a st store of value. And

it's been that way for decades. If you

look at trading cards, you it's like

nostalgic to, you know, I I I grew up.

Uh I didn't I collected trading cards a

little bit, but there's definitely a

comeback right now on trading cards, so

it's looked at as a store of value.

Whether that continues or not,

who the who knows? I mean, everyone is

like, well, it's going to continue.

Everyone thinks crypto is going to

continue. Nobody knows.

>> Y

>> uh but but we're having a lot of success

when you look at our assets right now.

Like the the way it stands right now is

we're selling the product very quickly.

We can't get

the more inventory we have, we could

sell the product. So we're going to run

efficiently and if we can sell the

product, great. And if it happens where

we can't sell the product, then we're

going to adjust and uh you know, we're

going to lower our costs and going to

focus on on on the things that make

sense.

>> Do you have a do you have a take on

Labu? I feel like uh if I find out about

it, I'm ultra late and I might have top

ticked it when I finally uh learned

about that, but it seems like it's uh

somewhat important to the collectible

boom, the story there. Uh, do you have

any idea what's going on?

>> We I don't Do we sell Lubu right now? I

don't think we sell Lubu.

>> Yeah. Yeah. I'm just wondering like uh

Yeah, it's like kind of an odd strategy.

It has some of the unboxing

characteristics. Uh, very popular.

Seemed like it just kind of emerged out

of China out of nowhere. Uh, I was

wondering if you had tracked the market

at all.

>> No. Should we sell it?

>> I don't know. It might be too late. I

have no idea. They're very demonic in

our view.

>> Yeah, we we we we think they kind of

just don't have the right vibe and uh I

feel like there's plenty of other

collectibles that would be more on

brand. Personally,

>> how how do you

>> What was that?

>> Is it females or males?

>> I don't know.

>> I think it's all sorts of people buying

them.

>> I saw Tim Cook had one,

>> so I don't think that How are you

thinking about uh how do you think about

M&A on the in the collectible space? I'm

sure people come to you all the time

with sort of platforms that maybe have

some scale but not quite uh the scale

that you have that that would love to

sell to you but obviously companies are

bought not sold. So I'm curious uh if

you've if if it's something that you

would explore in the future.

They don't come to us as often as you

think because they know well

um they probably go to private equity or

venture capital or these fancy hedge

funds before they come to us cuz

uh I want to make sure that I'm I'm uh

I care about cash flow and the price

that I pay. So

>> yeah,

>> we don't uh we see some deals, but it's

hard to compete against guys that are or

girls, whatever, that are getting

management fees.

>> Do you think uh do you think AI uh plays

into the collectibles world at all? Just

this idea that like if you have a piece

of IP, you can instantiate it maybe much

quicker across a whole host of images

and videos and kind of build out an

intellectual property world faster. Is

that actually an accelerant to the

collectible trade?

>> I

in general I have been I'm the person

that's very cynical when it comes to

emerging technologies.

>> Sure.

>> So,

uh like autonomous driving as an

example, like everyone with like GM,

Ford, all of the big OEMs, they're

finished cuz there's going to be

autonomous driving. No, it's it's uh

when it comes to AI,

it's a big problem. At some point, the

computers are going after the humans.

And I don't think it's that far away. I

think that the sci-fi movies, when it

comes to AI,

I feel it. I feel like there's going to

be a big problem when it comes to

artificial intelligence. And at some

point it's going to be the computers

against the humans.

China versus the US. Who's going to be

the winner? Who the [ __ ] knows? But we

got big problems with AI. And it's

interesting because you can't stop human

innovation.

And we've got this insatiable appetite

to go into these technologies like

artificial intelligence that are very

disruptable. There's lots of money

that's that is being poured into it. But

what the future looks like, we have to

be very very very careful. So

artificial intelligence,

it scares me. I mean, I I like the

productivity benefits, but

um AI

once the robots come after us

scares me.

>> What's your timeline there?

>> It's faster. It's faster than I would

have thought. When I look at what's

happening, I don't buy into emerging

technologies,

but when I look at the advance

advancements in AI,

this is no joke. And we have to be very

very very careful about what's going to

happen to artificial intelligence.

>> Where do you think we are in the market

cycle? Do you think it's uh you think

it's 1999

uh February of 2000? Does that is that

even worth comping to or do you comp to

something else

>> in AI? It feels early.

Doesn't feel like we're at the end. It

feels like we're like the second or

third inning, but who the hell knows?

But at a high level,

um

I think that it

I think we have to be very careful when

you think about the future of humanity

and whether

AI is going to benefit the future of

humanity.

I don't know.

I would uh if I was running a

dictatorship and someone made me king

and you told me should we move forward

with this technology,

it's not clear to me whether moving

forward with AI

is going to benefit everyone. It's

definitely going to benefit

the few that are invested in the

industry, but there's going to be a lot

of people that are not going to benefit

from artificial intelligence. So,

>> but chat GBT chat GBT is depending on

paid users right now. They can't, you

know, if they killed off humanity,

that'd be kind of bad for business.

Isn't there a way to solve that

alignment issue?

You know, we've if you look at the

tractor trailer the US in the 1800s

and the tractor trail I think it was

like 80% of the population was working

on the farm and then all of a sudden

tractor trailer comes along and few

centuries later it's like 2 to 3% of the

population is working in farming and you

would have said how the he the hell can

the US economy adapt to something that's

so disruptive and we did. But when it

comes to artificial intelligence,

I feel like it's different.

Uh maybe I'm biased from some of these

sci-fi movies, but there is going to be

a lot of wealth inequality that's

created.

I don't I don't like it. I mean, there's

there's there's opportunities to be had.

There's no question about it. But is it

better for humanity in aggregate AI?

What do you think?

>> Well, I Yeah, I I think for me, uh I

think it's very straightforward to

imagine the dark sci-fi timeline, but it

feels farther away. I mean, at least in

our corner of the internet, people have

been reacting to uh uh Carpathy's

interview with Daresh that was uh I

think went live Thursday night. And it

feels like uh the debate right now is is

is AI frontier lab progress slowing down

is it just autocomplete

uh or uh and if it's autocomplete and we

don't have uh and if basically if the

rate of progress is slowing down are is

there massive overinvestment right now

and what I'm hearing from you is

simultaneously

uh generally kind of the the doomer

point of view which I think is fair, but

at the same time it doesn't sounds it

doesn't sound like if you were running a

a hyperscaler you'd be ramping up capex

right now.

Are we smart enough as a society to

understand

what the benefits are and what are the

downsides? And everyone has perverse

incentives. So someone who's in the AI

industry is going to tell us how AI is

the best thing since sliced bread. But

in general as a society if you think

across like human evolution

over centuries do I want to take this

emerging technology and is this going to

benefit

the human population in aggra over the

long term?

Do you

>> what happened? What happens when AI

becomes smarter than us?

>> Yeah, it's pretty crazy. Do you think

the solutions government intervention

just good stewardship by the leaders of

the foundation model labs like who

actually

who actually has the responsibility of

stewarding the new technology most

effectively?

It's governments

and it's ones who are f who have a long

tenure. You look at America,

you know, the presidential cycle is four

years.

>> So,

I don't know if that's necessarily

long-term incentives.

>> Yeah.

>> Um,

but

who cares about where humanity is going

to be not in four years from now? not

when they check out but in a hundred

years from now. Who's got a long-term

focus on this emerging technology and

who cares about humanity

over

centuries

but we have to be very very careful

about this technology.

>> What what was your view on social media

a decade ago? It was quite popular for a

period to say that social media was

destroying humanity.

Uh and maybe it is, maybe it isn't. Uh

we seem to have found a way through. But

do is your view that that AI is as bad

as people once maybe thought social

media would be?

like what what specifically when you

think about you know one one of the

things we laugh about internally is uh

just how easy it is to clock when

somebody uses AI to generate like a

cover letter cover letter or a job

application right it's like a really

good way to just get your cover letter

application ignored is just to generate

it with chat GBT it's just beyond

obvious and I'm sure your your team has

seen a lot of this too but I'm curious

like what do you think the before we get

to the you know sci-fi doomer scenario

where the computers rise up and destroy

us all. Uh what what's kind of like the

immediate impact uh that that uh you're

worried about?

Social media

is one of the worst things to happen to

humanity.

If you look at Instagram,

people are so easily manipulated. They

filter videos. They filter pictures.

You know, you look at these young

people, their expectations, their lack

of work ethic.

China

has censored all of this stuff for good

reason because it's so easy to

manipulate the layman. And so in general

when I look at social media I say well

has it benefited humanity

or is it been toxic? It's there there's

no question that social media is is

toxic.

Um

AI clearly will increase productivity

but at what cost?

At what cost?

I think we have to be very very careful

>> when when public company CEOs talk about

how much efficiency they're getting out

of AI. Do you think that they're

actually getting efficiency out of AI or

do you think they're just uh pushing

their teams harder to be more efficient

and uh they want to blame blame the

impact on on AI?

>> It's both.

It's both. But AI without question

increases productivity.

But you know again it's shortterm versus

long-term. So if you're running Johnson

and Johnson or pro or Proctor and Gamble

and you can use artificial intelligence

and you could reduce your cost structure

because you've got all these humans that

are doing these mundane tasks and all of

a sudden you realize the computers are

going to do it better. Well, duh. You're

going to reduce your cost structure. But

all of a sudden, when you when you have

all of these people that are unemployed

and the demand for your product goes

away,

what's better?

You want to keep people employed and

have some kind of self-worth and working

hard and making money or do you want to

replace them and give them universal

basic income? And then what does that

mean? Does your consumption and demand

for your product in aggregate go up or

go down as a result of artificial

intelligence? I don't know. But I one

thing I know for certain is that the

CEOs if they can reduce their cost

structure in the short term, they're

going to replace they're going to take

computers over humans.

But is that better for humanity over the

long term?

You tell me. everyone on UBI over the

long term. How does that make them feel?

People need a purpose.

>> You don't you don't think we'll create

new jobs? I mean, we created email jobs.

A lot of them could go away and the

world wouldn't be too much different.

>> Artificial intelligence feels different.

>> Yeah. I just wonder if we on other

things.

>> It feels different. like we could still

have we could still have hierarchies and

competitions on things that only humans

can do. I mean, we already do this with

sports and all sorts of things. Um there

there's probably still some sort of like

reproductive battle to try and get to

the top of the stack. Even if you don't

need to go and work to make money, there

are still other things that you do with

your time to raise your status in

society. Um but I don't know, it is it

is a bizarre future to think about. I

just wonder if it's five years, 10

years, 50 years away.

>> We're in an era of

instant gratification. That's the

American system. Is that now now now?

>> Mhm.

>> Innovation, making money today. But when

you think about 10, 20, 30 years from

now and artificial intelligence,

what what does the world look like?

It's it's not about job displacement.

It's not about control,

but is artificial intelligence going to

control us or will we control artificial

intelligence?

And you would argue that social media

already controls how we feel daytoday.

We open our phone and decide

>> Yeah.

>> our mood based on what's happening in

far away places that we have nothing to

do with.

>> Social media is a big problem.

What's

>> it's so easy if you look at the

divisiveness

>> in this country,

social media, whether you're a

conservative, you you go on Instagram

and you're you're a conservative

and then all of a sudden you get, you

know, these algorithms serve you all

kinds of things that are going to make

you mad. And if you're a liberal, you

all of a sudden go on social media and

you see all kinds of media that's going

to make you mad.

>> Why is it that ultimately

humanity like it it comes down to human?

What why do we have to lose something in

order to appreciate? Well, it feels like

the only neutralizer is death and war.

doesn't have to be that way, but it

feels like the only way we can

ultimately appreciate something is if we

we actually lose it.

It's it's very very very sad, but that's

what it comes down to. There is so much

in divisiveness

in America if we can just all come

together and figure out command things

that

we both agree on but instead we figure

out the reasons why we're going to be

divided and the politicians divide us

and

>> well I think a lot of people have agreed

a lot of people on social media have

agreed that they like you a lot so

there's there's there's there's one

white pill in there.

>> Yeah, there's some

>> Until they don't. Until they don't.

>> Well, hopefully it doesn't.

>> Do they like me over the long term? I

don't know. We'll find out.

>> Yeah,

>> we true leadership is not about dividing

people. It's figuring out how do we

bring people together over the long term

that benefit humanity.

>> Yeah. Uh how do you apply that that that

sort of thinking to video games? because

there was a lot of fear-mongering about

violent video games causing kids to

become violent. Uh the government did

step in and regulate video games with

the ESRB. Uh every game is given a

rating and young kids, you know, they

they can figure out a way to get access

to some violent video games, but it's,

you know, parents are more in control

now. And I feel like we more or less got

the good outcome and and people can

enjoy video games responsibly. And of

course there's some negative scenarios,

but in general I feel like uh video

games have been just like a cool cool

medium for artists to tell stories.

There's wide variety of experiences. Uh

it feels like we as humanity got through

that test and whereas maybe we're still

in the middle of the of the fight for

positive social media and maybe just at

the beginning of the fight for positive

AI outcomes. Uh h what lesson should we

take from like how humanity uh dealt

with video games?

I

>> think the Chinese have restricted their

children from playing video games. I let

my kids play video games. Doesn't b

unless they're playing like Mario Kart.

Yeah.

>> But you look at these like Call of Duty,

they're killing each other.

I want positive influences. I want

things that are healthy. I want things

where people are going to learn.

>> Mhm.

>> Blowing someone's head off, exposing it

to young people.

Governments,

you know, you look at America, it's the

land of the free. It's great. It works

well for immigrants cuz they come from

places where it's [ __ ] and they come to

America, they have all this freedom and

their gratitude. They're they're

grateful. But then you look at people

where they don't necessarily have that

level of gratitude and they come to

America, you give them all this freedom

and they destroy themselves. So, do I

want my kids going and playing Call of

Duty,

blowing each other's heads off? And then

you look at the Chinese and they're

restricting the ability to play video

games,

and you say, "Well, they're censoring

versus we're free."

Well, what's better for humanity? Having

boundaries and having rules or just

letting people do whatever the hell they

want, destroy their lives?

>> Have you ever thought about getting Have

you ever thought about getting into

politics?

>> I was born in Canada.

>> There are some positions you could still

run for.

Which ones? Senator.

>> Yeah, I think you could be I don't know

if you could be senator, but you could

be maybe, right? Isn't the mayor of New

York not born in America? Or going

>> what is it? There there was this saying

my uh

I heard

>> you could be city councilman. Maybe.

>> Yeah, cuz they'd kill me.

>> Well, you could go to Canada. You could

be prime minister of Canada.

>> Too honest. I'm too honest.

I'd have to be full of [ __ ] I'd have to

be sure. They couldn't handle me. They

couldn't handle me. Politicians, they're

like diapers. They start to stink. They

get They start to stink very quickly. I

couldn't play the [ __ ]

>> No.

>> So, you you want to tell people what

they want to hear.

>> Yeah.

>> And I'm not playing that game of what

they want to hear. But when it comes to

artificial intelligence and social media

in general, is it beneficial to society

and humanity as a whole?

>> I don't like him.

I don't like him.

>> That's extremely honest.

>> Humor confirmed.

>> Yeah,

>> that's fair.

>> Well, thank you so much. This has been

really a great interview. Uh, thanks so

much for calling.

>> Yeah. Anything else? Anything else that

we missed? You know, we'd love to

Anything else that you're working on

that you want that we didn't touch on?

We'd love to talk about

>> you guys got anything else?

>> I think we're good.

>> Uh, last question. What What's your

What's your relationship like with Roar

and Kitty? You guys talk much?

>> Um,

>> ask him.

>> Okay. Yeah, we'd love to have him on the

show. Maybe we'll

>> get him on the show.

>> That'd be a lot of fun. He's uh you know

we're we're pretty new to the live

streaming thing. I always enjoy talking

to people who uh operate in the same

medium and so conversation.

>> Yeah.

>> We don't want day traders. We want I'll

have a conversation with him that if

he's focused on decades and centuries,

not on making buck.

>> Yeah, that makes a ton of sense.

>> Uh I like it.

>> Well, yeah. Well, we're rooting for you

for the next decade, for the next

century, for the next millennia. Thank

you so much for coming on the show. This

was fantastic.

>> Yeah, great chatting, Ryan. Cheers.

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