The Great Transition

Hey, what's up? So, I'm going to try to encapsulate a whole bunch of stuff that's going on right now and try to wrap it into a single container. It's

actually very difficult to do because there's so much change as everyone knows and uh things are just getting crazier like every single week, every single day almost. And I've noticed like a whole

almost. And I've noticed like a whole bunch of different transitions happening at the same time. So, I call it the great transition. It's really a whole

great transition. It's really a whole bunch of smaller transitions, but I think they kind of have a theme and they have a direction and I think I know roughly where they're going. So, what I

want to try to give you is something where if you watch this whole thing and you think about all of these ideas and you just let them stew, I think the news that comes out over the next weeks,

months, even years, it's just going to make a lot more sense because you can kind of put it into this container, this mental model of thinking about things.

So, I'm just going to jump through these and uh they're going to jump around quite a bit because they're different topics. We got like personal, we got

topics. We got like personal, we got like corporate and stuff like that. So

let's just jump into it. All right. So

the first one is this concept of knowledge going from private to public.

Okay, this is really really important.

So there are a few different things that are making this happen. One is just LLMs in general. AI in general right now the

in general. AI in general right now the the concept is that it consumes all the stuff from the internet or whatever, right? all the books, all the blogs,

right? all the books, all the blogs, whatever forum conversations, like all all this training that's been done on these models going back to 2022,

actually before that, but anyway, all that sort of condenses into a model, right? So, you have this model that's

right? So, you have this model that's kind of representative of like all this knowledge, right? Everybody knows that

knowledge, right? Everybody knows that that's kind of understood.

What's not so much understood is that what this is actually doing to knowledge work. So in the past right uh you know

work. So in the past right uh you know going back 10 20 30 50 years if you are an expert in something

you have knowledge that no one else has right you have knowledge that no one else has. If you are a specialist

else has. If you are a specialist consultant at McKenzie or you are a heart doctor or whatever you are, you have special knowledge and you haven't

captured even a tenth of it. Let's say

you've written two books, you still haven't captured a tenth of your knowledge, right? You just know things

knowledge, right? You just know things that other people don't, right? If

you're a security professional who's been doing this for 20 years, you you just understand things. If you're a CISO that's done this multiple times, you you just understand things and and get

things that nobody else has. And

importantly, it's not in a book somewhere. Okay? Even if you've written

somewhere. Okay? Even if you've written books, your knowledge is still not fully in the books, right?

So that is a powerful thing. It it has always protected smart people. It has

always protected the intellectual people who have all this experience. So it it's a combination of smarts plus experience.

That magical combination has made those people very special. What is happening now is completely changing that. And and

this is one of the major transitions from private knowledge to public knowledge. What is happening now

knowledge. What is happening now especially with skills this whole concept uh that Anthropic came up with with skills it is scary we're talking

about a folder full of markdown files that can encapsulate a decent amount of your knowledge right you still have the capture problem where they don't know

exactly what to say how to capture it but but here's the situation many many smart people are producing skills and many many other Smart people are going

to collect knowledge and specialized knowledge from all over the internet anywhere it's been written down and bring that into a skill. Plus all these specialist people, they're writing

books, right? They have been writing

books, right? They have been writing books, they've been doing presentations, they've been writing blogs, they've been doing interviews, they've been doing podcasts. Well, in the past, we'd never

podcasts. Well, in the past, we'd never had a system that could basically say, "Well, go get all of that, right? Go get

everything so and so Dr. Huberman has ever said about health or morning routines or whatever. Bring it all together and turn that into a skill. I

mean, this is one prompt. This is one prompt. You know, find everything

prompt. You know, find everything Huberman has said about morning routines from every podcast he's ever done, every blog he's ever done, what whatever he's

ever put out, every article, every interview, and put that into a skill.

That new thing combined with the models just getting better and they're absorbing it and everything. I mean,

that that's the crazy thing. This just

feeds on itself, right? The model then can consume all those skills, right?

which of course is going to happen. So

ultimately you have this transition that is really accelerated but it's just going to continue to accelerate. And

what it means is the gap between special privatized knowledge that's inside of someone's mind, some specialist doctor, some specialist psychiatrist who's been

doing this work for 40 years or 50 years. the delta between what they know

years. the delta between what they know and no one else knows is getting smaller and that that is massively massively

impactful for like humanity in general.

Okay, then there's another sort of layer on this which is which is crazy. So

let's just assume all that is happening and all of that is being consumed by these labs who are spending billions of dollars bringing that knowledge into the models.

Fine. Okay, that's happening. But what

we just saw from Anthropic, and this is happening all over the place. Anthropic

just called it out because a bunch of these Chinese labs are doing it in mass, like very organized. I'm so surprised like everyone's like surprised by this and they're like, "Hey, what's the big

deal?" You know, maybe they're lying or

deal?" You know, maybe they're lying or whatever. Why would they be lying?

whatever. Why would they be lying?

China's known for doing this. China is

like famous for stealing things. Like

they're famous for a lot of good things, too, right? But they are famous for

too, right? But they are famous for stealing ideas, stealing content and um they're also massively going allin on

open source models. So I I believe that they have a very clear strategy. It is

you don't have to compete to be a a Pinnacle Lab, right? They don't have an anthropic. They don't have a Google uh

anthropic. They don't have a Google uh Deep Mind. They don't have an open AI

Deep Mind. They don't have an open AI but they do have deepseek and deepseek has been you know called out for doing

this for a very long time. They are

capturing the knowledge of all the billions of dollars of work and bringing it into open source. And then what they are doing as a Chinese strategy for AI I

believe is they're just saying distill it. not distill it. Well, they

distill it. not distill it. Well, they

are distilling, but release it, diffuse it, absorb it into the pool. It's like

uh you've heard the the metaphor uh peeing in the pool. That that's that's what happens. Our specialized knowledge

what happens. Our specialized knowledge of what specialized humans could do that no one else could do. That is the pee that's going into the pool. You can't

pull it out. Can't pull it out. It's

just going to be in there. And China is basically making this happen at a mass scale because yes, the large billion-dollar labs will have it first.

It'll go into those models first.

Actually, first it'll go into skills, right? First, it's going into this whole

right? First, it's going into this whole knowledge sharing concept of skills. So,

it's in the markdown file. So, it's on GitHub and stuff like that. So, that

takes a little more effort, but then it goes up into these labs. it gets

consumed, however long that takes, a period of months or whatever. But then

the open- source models are pulling from it.

And the other thing it's pulling is not just the data, the techniques that make those premier labs better and better or

have an advantage over another lab or have an advantage over open source.

Those techniques are also being diffused somehow. when the major labs have a

somehow. when the major labs have a major advantage and they jump ahead somehow. The Chinese models seem to get

somehow. The Chinese models seem to get it a few months later. So all of these things are actually contributing to the same thing. The specialized knowledge is

same thing. The specialized knowledge is being diffused into public domain. That

that's just a transition that's happening. Okay, so that's the first

happening. Okay, so that's the first one. Knowledge is going from private to

one. Knowledge is going from private to public. Okay, the second one is products

public. Okay, the second one is products are going from standalone software to APIs. So, I talked about this in uh my

APIs. So, I talked about this in uh my stupid little book from 2016 basically said that businesses become APIs and we're finally now starting to see this.

So, if you've seen like all these people releasing tools, right? um they're

releasing, you know, so and so model for this, so- and so model for that, or not just models, but like so and so functionality. Um like, uh there's a

functionality. Um like, uh there's a company that does remove background. Oh,

I I'll give you a great example. Um

Excaladraw. Excaladraw just came out with a new piece of functionality where you could just describe what you want to

make and it will build all the different uh objects for you in your favorite fonts and your favorite aesthetic. Like

it'll just build you diagrams. It like the perfect like really cool looking Excal diagrams. And my first question when I saw this was hold on because I

went and looked at the documentation and it basically said, "Yeah, you just go into the interface and you uh type into Excel what you want

to say." And I'm like, "What? What are

to say." And I'm like, "What? What are

you talking about? Do do you honestly think in like early 2026 I'm going to open up Excaladraw and type in a prompt?

Are you kidding me? So I posted I was like, "Hey guys, this looks amazing.

This looks amazing. Looks fantastic.

There's no way I'm going to use it. Can

you make this available as an MCP? Can

you make this available as an API?"

I'm not going to do any of this ever.

Like if I have to open an app, I have already lost, right? I've already lost.

Like this this is not a good thing. It

It means my tooling is horribly broken.

My AI should be doing all of this for me. So I'm not sure if they made that

me. So I'm not sure if they made that adjustment, but when I uh posted that on Twitter, like a whole bunch of people showed up and they're like, "Yeah, 100%.

I need, you know, I need an MCP for this, otherwise it's not useful." That

is the way everything is going. If you

notice, most of the releases coming out for products now, they're like, "Here's the MCP for it. Here's how your agents can do this automatically, right? This

is just becoming the new way to release software." And this is heading in the

software." And this is heading in the exact direction that I put in that stupid book in 2016. Businesses become

APIs. Now, why is this important?

It's important because the consumer is not so much making the choice anymore.

The consumer is not going to be like, "Yeah, there's 47,938 different options for removing

backgrounds from images. Let me pull up GitHub and Google and let me spend two and a half hours sampling and trying

different ones." No, no, no, no. that

different ones." No, no, no, no. that

there's too many apps and because of AI there's too many apps being made right on top of that. So so there'll be hundreds more of these things coming out

all the time. The only way this resolves which is what I was talking about in in that uh text was there are directories. Okay, if you have

a background remover tool by the way my favorite is removebg I think is the one I use. um and they do have an MCP or

I use. um and they do have an MCP or they have an API at least and that's what my uh system Kai actually calls. So

if you do have one of these agents um there there will basically be orchestration layers directories of services labeled and categorized you

know taxonomy folky whatever basically saying if you want to um remove backgrounds from images

here's your list of 27,000 but they will be rated right you'll have different services with different ratings and my system Kai I will know

which services it prefers, right? He

prefers to go to this rating service or whatever, which is like IMDb or Rotten Tomatoes, right? But it's for software.

Tomatoes, right? But it's for software.

And it says, "Okay, find me the highest rated one with the most ratings, the least negative ratings, what, whatever algorithm Kai wants to use." And he's going to select, okay, it's remove

background. Boom. pulls that in, drops

background. Boom. pulls that in, drops it into our workflow inside of our skill. Boom. That's it. From now on,

skill. Boom. That's it. From now on, when I want to remove or when Kai wants to remove a background for me for an image, that's what he uses. Okay.

Where's the website?

Where's the website for remove background?

Who needs a website?

This is a service, a directory service like the old days like Yahoo directories or whatever, right? This is a directory service of

right? This is a directory service of the best thing, right? It's already been rated. My agents are going to go check

rated. My agents are going to go check those ratings and it's going to find the API and it's going to integrate it.

this old way of making the software, packaging it, oh, it's got to have a nice UI, it's got to have a nice website, you know, when the person comes to the website, they got to really like

it. Then they go click the buy button,

it. Then they go click the buy button, then they do all this. It's all going away, right? And this is tightly coupled

away, right? And this is tightly coupled with another related one I have here in the list, which is interface. Interface

is going away. SEO is going away. Okay,

so interface used to be for humans. We

make software. We have services.

Whatever software, service, whatever it is, we have to have an interface for that, right? It's the interface you use

that, right? It's the interface you use actually day-to-day to interact with it.

But you also have to have an interface for the marketing and describing how to use it and the documentation interfaces in general, front end in general is

going away.

It's it's not that the content won't be there. is that it will be designed to be

there. is that it will be designed to be consumed by agents. Right? Your agents

are the ones who will be the main consumers. AI will be the main

consumers. AI will be the main consumers.

And this also relates to another one which is everyone has their own digital assistant. Right? This this was the

assistant. Right? This this was the number one sort of prediction and call out uh in uh the real internet of things

in 2016. Everyone gets an a digital

in 2016. Everyone gets an a digital assistant. Everything gets an API. Most

assistant. Everything gets an API. Most

importantly businesses people eventually as well, but objects, businesses, services, they all have an API. And then our AI, because it knows

API. And then our AI, because it knows us so well, when we make a request, it goes and gets the thing from the API, brings it back to us. And then the third

piece is interface. When we want an interface, when we want to look at I'm buying shoes, I want to see what they look like. Um, I'm buying a house. I

look like. Um, I'm buying a house. I

want to see what it looks like. Our AI

will be presenting the interface to us.

Okay, this is already starting to happen. People are building bespoke

happen. People are building bespoke software. Custom software is the

software. Custom software is the direction that it's going, right? So

software goes from being everyone has the same packages to everyone gets bespoke software, everyone has custom

software. Interfaces go from being tied

software. Interfaces go from being tied to the application itself, it's inherently part of the application to all of that being separated. the the

core part of your business, the core part of your product is the API which will be used by the agents of of the user of the consumer and the interface

will be between their agent that user's agent and them. That's the

interface, right? And this will take a little more time, but it's already starting to happen a little bit with everyone having custom software and custom interfaces. So that that's a

custom interfaces. So that that's a number of sort of things all wrapped into one. Software

into one. Software goes from standardized and consolidated and integrated

to being separated between its interface and its functionality and the user of most software becomes AI

as opposed to the user itself. Right? So

those are kind of the major transitions there. Uh so SEO again SEO used to be

there. Uh so SEO again SEO used to be about being attractive to the user. SEO

goes from trying to attract the user to trying to attract the user's AI again.

So when I say, "Hey, I need a new bed mattress." I'm not saying that to the

mattress." I'm not saying that to the internet. I'm not saying that to Google.

internet. I'm not saying that to Google.

I'm not saying that to the worldwide web a browser. No, I am saying that to my

a browser. No, I am saying that to my agent. I am saying that to my DA. I need

agent. I am saying that to my DA. I need

a new mattress. Well, guess what? My DA

knows my sleeping habits, knows my routine, knows if I like a firm mattress or a soft one, knows, you know, my girls, she likes a softer bed, I like a

harder one on my side. So, it's like this is where the customization comes in, right? Your agent knows you,

in, right? Your agent knows you, therefore, it can do smarter queries for you. But the point is, it's the one

you. But the point is, it's the one doing the queries. It's the one who, if it's going to be tricked into picking one mattress versus another, the

tricking needs to happen at the AI layer cuz I'm just going to do whatever my agent tells me, right? The agent's going to be like, "Yeah, I found the best one.

It's not even a question. You know, it's this much. Do you want me to get it for

this much. Do you want me to get it for you? You know, I'll have it here

you? You know, I'll have it here tomorrow." And that that's the end of

tomorrow." And that that's the end of that. Okay. So that was a few things

that. Okay. So that was a few things that were based around the consumer. Now

I want to bring it a little bit over to the enterprise side. All right. So all

of that is sort of on the consumer side.

Let's switch over to talk a little bit about the enterprise side.

So much the same sort of stuff that we're talking about on the consumer side is also going to be happening on the enterprise side. the

enterprise side. the changes that are happening on the enterprise side, they're they're so massive, like absolutely massive. One of

the big things that's going to be happening on the enterprise side is the transition from humans

creating processes and sort of following them to AI kind of running the business based on SOPs and basically building out

a lattice structure like a graph structure of all the work that needs to be done. I did a post I think in 2024

be done. I did a post I think in 2024 maybe talking about companies are just a graph of APIs a graph of operations

and I was talking about like somebody who just does a task right let's say it's a uh threat intelligence task or no let's take um the insurance one right

you have to look at the photos you have to look at their account you know they're making a claim for example you know I need to be paid for this accident I just got into. And you need to filter

for fraud, right? So, I'm Sarah. I'm

looking at these things. I'm trying to figure out if uh this is fraud. I'm

looking at the picture. Does it look real? Do they have a real account? Are

real? Do they have a real account? Are

they making lots of claims just recently? Like, does their account look

recently? Like, does their account look compromised? All these different things.

compromised? All these different things.

And if it looks legit, okay, here's how much we're going to pay you out. you

know, some of that's automated, but you still have people that are their job, their actual physical job is to do this task, right? So,

task, right? So, that's the type of thing that currently in the enterprise, if you look at any major company, there is not a map,

there's not a graph that basically the CEO could look down and say, "This is my entire business. This is every task

entire business. This is every task happening in my company and the process of how it's done. The

SOP, right? Also a process, kind of the same word. Uh I'm military, so that

same word. Uh I'm military, so that that's the way I say it. There's an SOP, standard operating procedure for how this thing is done, right? And here are

the people that do it. Here are the workflows. Here are the multiple steps

workflows. Here are the multiple steps involved.

AI is going to have this for every company. This is the major transition

company. This is the major transition that's going to be happening. This is

just now starting. This is very slow.

This is much slower than all this consumer adoption that we've seen over the last couple years. This is going to take time. Uh and this is what companies

take time. Uh and this is what companies are still figuring out. They're like,

"What exactly am I going to do with AI?"

Well, this is what they're going to do with AI. And I'm sure a million

with AI. And I'm sure a million different companies, this is a thing I do for companies, but people like McKenzie, lots of different companies like this, they're already bringing in,

you know, an army of 22year-old smiling kids to interview everyone and produce this map. Here is the work that takes

this map. Here is the work that takes place. Here's where decisions happen.

place. Here's where decisions happen.

Here's where tools happen. Here's where

all these things take place. Right? So

bringing you back to the consumer side, when you have a map like that, the whole conversation around software changes.

Once again, before you would have people, the people are basically the company. The people are doing the work.

company. The people are doing the work.

Yes, they have documents. Yes, they have processes, but it's the people doing the work. They're supposed to follow this

work. They're supposed to follow this policy, but it's just a dock. It's just

a word doc. Used to be, right? Um, now

it's like a Google doc or whatever. But

do they follow it? Not really.

Sometimes, often. It depends on the company, but it's it's not required, right? A company can have people who

right? A company can have people who mostly do the work. They're be barely referring to the policy. By the way, there might be three or four of those docs and the main person who maintained

them, you know, she went on maternity leave. She never came back, right? What

leave. She never came back, right? What

whatever it is like, oh, that was Scott.

Scott left the company, you know, he retired. He's not he's not coming back.

retired. He's not he's not coming back.

So those docs get old. Nobody's

following the policy.

That is completely different than an AI saying, "Okay, I now own all these SOPs.

Here is the map of all work that's being done.

And the humans, humans are still there.

There's going to be some humans left in the company. Humans are the ones

the company. Humans are the ones responsible for improving this AI, for telling the AI, "Hey, look, we need to change this SOP like that. That's not

how this should be done anymore." And

you have a conversation with the AI or whatever. And the AI is like, "Okay, are

whatever. And the AI is like, "Okay, are you sure about this?" Boom. It makes the change. All the documentation is

change. All the documentation is updated. All the SOPs are updated. the

updated. All the SOPs are updated. the

cross references are updated. That is

the new model for for business, right?

It's not started yet. It's barely

started. Massively different for different companies, right? Some people

have been doing this for a year or two already. People like Google probably.

already. People like Google probably.

But most companies, they're barely even realizing that this is a thing that right now they're just like, "Oh, AI is a tool. Everyone's telling me I have to

a tool. Everyone's telling me I have to use it. Tell all your employees you must

use it. Tell all your employees you must use AI. What does that actually mean?

use AI. What does that actually mean?

This is the thing that's actually going to happen. SOPs are established, goals

to happen. SOPs are established, goals are established. What are we actually

are established. What are we actually trying to do as a company? We're going

to talk about that one later. This is a massively important one. But all of that gets canonicalized, captured, turned into SOPs, turned into goals, turned

into text, turned into actual things you could look at. But the important part for this particular point is the the map this graph of all the different work

there. Okay. Now a software vendor comes

there. Okay. Now a software vendor comes in and they're like hey look we got you know the best we we'll just say this company needs background uh image

removal or whatever.

We have the best one out there. It's the

best. Now, in the past, what would happen is they would bring their salesperson, take someone out to a steak dinner, and be like, "Yeah, yeah, it's just it does background removal way

better than anything else. Like, you

just have to have this." And if they convince this person and the manager and, you know, the purchasing authority or whatever, procurement, whatever, they

buy it. Once again, it's a human doing

buy it. Once again, it's a human doing the work. They have this image tool.

the work. They have this image tool.

Okay, maybe there's an API call if there's some automation if it's relatively new. But ultimately, it's

relatively new. But ultimately, it's humans buying software. Software is a package. It's sitting on a shelf and

package. It's sitting on a shelf and they've purchased a bunch of software.

Maybe they use it, maybe they don't. In

this new model, this lattice, this graph system, it includes all the tools. The

work is laid out as a grid, as as a graph. Here's here's the stuff. So,

graph. Here's here's the stuff. So,

watch this. This is a completely different conversation you have with the software vendor. Um, okay, cool. Here is

software vendor. Um, okay, cool. Here is

my map. Here's all the processes, all the work that I do, every single workflow being done. What are you replacing?

What are you doing better? Click on this node. Boom. You click on the node.

node. Boom. You click on the node.

Background image removal. Let's look at the metrics for it. Here's how fast it is. Here's how cheap it is. Here's how

is. Here's how cheap it is. Here's how

many times it failed. Here here's how many times it succeeded. Here's the

ratings for how that's been done.

Now, what are yours?

Now, what are yours? And they have they're going to have to produce metrics that say, I can do that function better.

So, now it's not about a software package that some human is buying and maybe they use it, maybe they don't. Now

it's about an AI saying here are my metrics for this function which fits into this graph.

Can you prove that your metrics for doing this function are better? That's a

completely different way of thinking about software. Once again going back to

about software. Once again going back to for the consumer for the the same service. Okay, let's just say it's the

service. Okay, let's just say it's the same company. Remove background.

same company. Remove background.

before they were marketing to the consumer with a pretty website and with SEO from Google, which is I'm sure how I found this company in the first place.

Remove background. Boom. It's a number one hit on Google. That was targeted at me and it worked. Now that marketing

goes to my agent, Kai. Kai finds that for me in a directory.

The same thing is going to happen inside the enterprise. the enterprise is going

the enterprise. the enterprise is going to be like, "Look, find all of our software, find out where it is on this function map, and if it's not, first of

all, if it's not on the map, they're all fired. Cancel all contracts, right? If

fired. Cancel all contracts, right? If

it's not in this map or it's not in something, we're about to add a node because we have a new function, a new business line or new product or service or whatever. If it's not part of our

or whatever. If it's not part of our structure, why do we have it?" So, it's just gone, right? But the conversation becomes

improving upon this matrix. That's all

that matters. So all these incoming like pitches and the steak dinners and like sales and marketing and blah blah blah,

it becomes a whole lot less important once we're actually doing an objective measurement of what is the function that you're performing and how well do you do

it. Right? So that's that's absolutely

it. Right? So that's that's absolutely huge. Okay. Okay. So the transition here

huge. Okay. Okay. So the transition here is going from corporate product marketing being a human to human

targeted operation that results in a software package being purchased by a human which is then used by a human or

not. That's the old world. Two,

not. That's the old world. Two,

the enterprise has a grid, a graph of all operations and all functions inside of its company. And software is

evaluated based on the function and the metrics that it provides. And those

functions and metrics need to be superior or they don't get swapped out.

So it's a that that's the transition.

It's a fundamental shift there. Okay.

Next topic is work itself. Okay. So,

automation inside of companies. So, the

transition here is automation going from a thing that helps humans do their jobs better and basically improves productivity and efficiency and stuff

like that to being a way for companies to get to their ideal state of being able to do all the work themselves. This

is colossal. This is economy changing.

Okay? Because th this really is the end of labor, right? So there's labor and there's capital and these have always been imbalanced. This is how this is

been imbalanced. This is how this is going to get disrupted. It gets

disrupted because companies have always wished that they could do all the work themselves without employees. If you are only one founder and you don't have much work to do, you do all the work

yourself. you get all the profits

yourself. you get all the profits yourself. Now, if you hire a washing

yourself. Now, if you hire a washing machine and your your business is washing clothes and you you don't want to expand, you're not trying to scale, you're just trying to make the money

that you make. People bring you dirty clothes, you give them back clean clothes, that's a cool business. And you make lots of money and you are able to feed

your family and you just you have a good life right?

If you hire a washing machine before, you were doing it on on the board right in the river and you were making money, but you weren't making that much money.

You weren't making as much as you could.

So, you decided to save up for a year and buy a washing machine. Now, your

washing machine is doing way more. You

You're able to do way more clothes and make way more money. If a whole bunch of people come to you and say, "Hey, I can

also wash clothes in the river." Think

about this. You need to hire me as a clothes washer in the river because that's what's fair. And um there needs to be a balance between labor and capital.

It you're going to be like, "Are you kidding me? I can do all this work

kidding me? I can do all this work myself.

I am literally doing all the work myself." They're going to be like, "No,

myself." They're going to be like, "No, you're not doing all the work yourself.

You have a washing machine."

That is me.

Okay? If I have a closed washing business and I have 10 washing machines behind me, that is me doing all the work myself.

That is the transition that is happening. That is what AI is. And just

happening. That is what AI is. And just

to be clear, the total amount of compensation that knowledge workers receive is somewhere around

$50 trillion per year. 50 trillion per year globally.

I think it's somewhere around 10 trillion uh for the US.

That is how much money companies are spending to pay humans.

And the major transition here is they don't want to be paying those humans.

They actually never did want to be paying those humans.

My favorite way of capturing this is the ideal number of human employees inside of any company is zero. That is the number that they're trying to get to.

Now, there are exceptions to this, right? If I'm a small spunky founder and

right? If I'm a small spunky founder and you know I want to work with my friends um you know I want to do a project with my friends I get five of my friends involved we build a small startup or

whatever it's kind of like we're all owners at that point right so you still will have like elite employees cadre co-founders stuff like that inside of

these companies like that's that's not going to go away like hardly any companies are going to have like zero employees especially larger are medium-sized companies, but we're

talking about going from tens of thousands of employees to a few hundred, maybe eventually a few dozen, but let's just say a few hundred. We're talking

about massive, massive reduction because of this different way of thinking about automation. It's not a thing that helps

automation. It's not a thing that helps a human do a task, which is what it's always been. It is a way to get to the

always been. It is a way to get to the state of the company does the work itself which is a natural clean happy state for

any company. They prefer to be doing the

any company. They prefer to be doing the work themselves. Again go back to the

work themselves. Again go back to the single person with a washing machine business. The washing machine business

business. The washing machine business is part of them. It is part of their business. So they don't have a reason to

business. So they don't have a reason to hire employees. So that is the major

hire employees. So that is the major transition there. Automation going from

transition there. Automation going from a thing that helps employees to being a way for the company to do all the work

themselves. Okay, so that brings us to

themselves. Okay, so that brings us to the next transition which is okay fine that makes sense. What are we supposed to do? What are we supposed to do? We

to do? What are we supposed to do? We

have jobs, right? How do Okay, if everyone gets fired, who's going to buy all the stuff, right? who's going to buy all the stuff? So, that's a UBI conversation. Not really going to go

conversation. Not really going to go into that. Like, there there's going to

into that. Like, there there's going to be money. People are going to receive

be money. People are going to receive money to pay their bills and stuff like that. Otherwise, you just don't have a

that. Otherwise, you just don't have a society. It's all bad. So, that will get

society. It's all bad. So, that will get solved one way or another hopefully uh more gently and faster and easier uh rather than the alternative. Okay. So,

what does this look like for actual people? So instead of people on mass

people? So instead of people on mass working for companies you know medium largesiz companies or whatever that goes away that goes away right because those

companies like we talked about they are trying to get rid of everyone instead of that being the way that we make our money we're going to make money by producing value ourselves by

articulating the skills that we have the capabilities that we have the products that we provide the services that we provide broadcasting that out and that is going to go up into one of these

directories like I talked about before with products that AI can look at, right? AI can find products in one of

right? AI can find products in one of these directories, but this will also be the substrate for all work to be done.

So, humans will broadcast their capabilities and say, look, you know, I'm a systems engineer. I've got 8 years experience, 2 years experience, 25 years experience, whatever. Here's all the

experience, whatever. Here's all the different stuff I can do. Here's my

portfolio, blah blah blah. By the way, I like to mountain bike, blah blah blah.

So, this is your Damon. This is your broadcast system describing, you know, the people you've worked with, like your reputation score. People give you up

reputation score. People give you up votes. Kind of similar to what LinkedIn

votes. Kind of similar to what LinkedIn was doing. Uh they kind of went away

was doing. Uh they kind of went away from this. It's now kind of like a

from this. It's now kind of like a social network. So, this is the play

social network. So, this is the play though. There's a substrate that

though. There's a substrate that connects all these different people, right? When I need a catsitter because

right? When I need a catsitter because I'm going on vacation, I'm going to broadcast out, hey, I need someone to watch my cat. They need to be fed. You

know, if they're crazy, they might scratch you, whatever. Broadcast that

out. Keep in mind, uh, my AI is broadcasting that out for me. Okay.

Everyone around's AI is watching all the substrate, whatever this thing is called, and they're they're like, "Hey, I'm I'm a cat person, you know? I'm a

cat lady. I love cats. I can take care of cats. Um, you know, I don't get

of cats. Um, you know, I don't get scratched or whatever or I don't get sick when I get scratched, whatever it is. And I also live, you know, two

is. And I also live, you know, two blocks away. Being in her ear, her AI

blocks away. Being in her ear, her AI tells her, "Hey, there's a catsitting job over here. You know, it's going to pay $84.

Um, do you accept?" Boom. Yes. Same

thing like someone there's a crash on the on the corner. you know, someone injured themselves. Hey, does anyone

injured themselves. Hey, does anyone have any medical uh, you know, professional training or whatever. Does

anyone have EMT skills? Boom. It's going

to beacon for people all around nearby who have a reputation score above so and so. They get beaconed. Someone takes the

so. They get beaconed. Someone takes the job. They go help the person. Okay. Same

job. They go help the person. Okay. Same

for gardening. Same for engineering services. Same for, hey, I need a

services. Same for, hey, I need a shoulder to cry on. Hey, I need nurturing. Hey, I need tutor for my

nurturing. Hey, I need tutor for my kids. Hey, I need meal prep. Um, I need

kids. Hey, I need meal prep. Um, I need to gain a lot of muscle mass in my legs.

Uh, I need a personal trainer.

Everyone who has services, capabilities, value to offer, they are beaconing out onto this system, it is out there on the substrate and then everyone's AI is

looking at that system and that's how you find work. Okay. Another version of this is like Fiverr. Okay, it never it's not automated, but it's the same kind of vibe

also as LinkedIn. It's like here are my services, here are the jobs, right? So

you you you've got consumer and producer, right? You've got like here's

producer, right? You've got like here's the work I need done. And then you've got the other group saying, here's all the stuff I can do. And then it's a matter of, okay, we're going to join together. It's going to be five people

together. It's going to be five people on this project. It's going to be a six-monthlong project. Here's the money

six-monthlong project. Here's the money that I'm offering. Boom, boom, boom.

Everyone agrees, boom, the work starts.

That is what I'm calling human 3.0. It's

what I'm calling the state that we're going to get to.

Do I know this is going to happen for sure? I believe the answer is yes. Um,

sure? I believe the answer is yes. Um,

only because I'm an optimist and I believe we are not just going to die off and, you know, devolve into chaos after the corporate system breaks down. Uh, I

can tell you that the corporate system is going to break down because the corporate system is going to pull all the work internally and do it with

automation and AI and robotics. That

seems obviously inevitable. Again, not

everyone, but most people will be laid off as a result of this over time. It'll

happen different speeds in different industries, but that is pretty much inevitable. I think that this better

inevitable. I think that this better solution, this new solution is also inevitable. The reason I love this, and

inevitable. The reason I love this, and this is a little bit of an aside, but I love this because it's more human focused. It's humans connecting with

focused. It's humans connecting with humans.

And there'll still be companies, right?

It's humans connecting with companies, but it's not in this hierarchical, you know, you know what corp corporate that's that's military. this idea of I

work for Sarah. Sarah works for Joe. Joe

works for Raj. And oh, I'm having a meeting with Raj. Oh my god, I you know, he's three skip levels above me. Like

this whole military structure, this whole like dreading Monday and just like this whole thing is like toxic and poisonous and it has been for decades.

People have been so unhappy with this and now that it's actually under threat, people are like, "Well, don't get rid of my job. Don't fire me." And which is

my job. Don't fire me." And which is justified, right? Because they're

justified, right? Because they're worried about losing their livelihood and they're worried about being able to pay rent and a mortgage and, you know, school and groceries. So, it's

understandable that they're clinging to that. But remember,

that. But remember, we shouldn't be clinging to a thing we hate and we have hated, right? All this

to say, I think the way that it's going, the way that I'm pushing for, I'm actively building to make this happen is to have this new human-based substrate

where producer, consumer, producer, consumer, things are a lot more equal.

You get hired based on your skills. And

that that's a relationship you can get out of any time. And here's what's cool about it. You can be in multiple of

about it. You can be in multiple of these, right? you can have ongoing like

these, right? you can have ongoing like retainer type things going on with like 20 different customers and you're on this big project uh for a full six months and you're getting paid from that

plus you're doing the catsitting plus you're a part-time EMT in the in the nights just in case someone falls off their bike or whatever. You know what I mean? So it's like it's just a more

mean? So it's like it's just a more aligned thing, right? Because now you're actually broadcasting everything that you you are, right? You're you're like,

"Yeah, I play violin. I will come to your son's birthday party and play violin if they like classical music."

So, it's like you're broadcasting not just, oh, you know, here's my resume.

I'm a tech engineer level three blah blah blah. I worked at into it. That is

blah blah. I worked at into it. That is

not you. you. What what this is going to allow us to do is broadcast our full selves and monetize ourselves in the best way possible, not in a gross way.

We're we're going to say we are going to be compensated and rewarded for being ourselves. If we are the best nurturers

ourselves. If we are the best nurturers in the world, forget tech skills, forget any tech, right? You're the best nurturer. You're the best listener.

nurturer. You're the best listener.

You're the best mother. You're the best parent. You're the best tutor. You're

parent. You're the best tutor. You're

the best trainer. You're the best boxing coach. Okay? They're they're not

coach. Okay? They're they're not producing products. They're not

producing products. They're not releasing startups. They're helping

releasing startups. They're helping other people become the best versions of themselves. In many ways, they're the

themselves. In many ways, they're the most important people. Well, guess what?

That's in their Damon. That is

broadcasted. They become world famous for that. So they got everyone trying to

for that. So they got everyone trying to come in and and use them, right?

And they make money from it, which they should. This is how humanity should

should. This is how humanity should work, right? So anyway, this is the tech

work, right? So anyway, this is the tech layer I think is going to replace the whole system. This is the transition

whole system. This is the transition that I think is happening. I just want to cover that because a lot of people have questions. What am I supposed to do

have questions. What am I supposed to do after we lose all these jobs? Okay. Next

topic I want to talk about is cyber security. So, similar to a lot of the

security. So, similar to a lot of the other things we've already talked about, cyber security has been human-based, right? Um, it's it's a you hire a human

right? Um, it's it's a you hire a human team, you have human staff, they are good security engineers or whatever.

They're doing pentests, they're doing security assessments, vulnerability assessments, they are manually looking at all the different vendors and trying to figure out, is this one dangerous?

Um, should we allow it through procurement?

and they're just being bombarded by all these requests. And you know, if you

these requests. And you know, if you have a really good, you know, third party service person, um, auditor person, they

could look at x number of of those vendors per day. Maybe some of them get escalated because the CEO really wants that, uh, piece of software. So, you

have to do a security assessment. You

have to find some way to make it secure because it's coming in the company anyway. That's the life of a security

anyway. That's the life of a security person. That's a life of a security

person. That's a life of a security program. It's humans grappling with all

program. It's humans grappling with all this stuff in a very gross sort of in the weeds like sewer type of thing. It

It's not pretty. It's it's it's not clean, but it's got the job done, right?

We're still alive. The internet still mostly works. You could still go to the

mostly works. You could still go to the ATM and get cash out. So, security has been largely successful. Keep in mind, we're still losing billions to fraud all

the time, but it's it's a messy process.

What security becomes now with all this AI stuff is it becomes your AI stack as a defender against the AI stack of the

attacker. And unfortunately, you're not

attacker. And unfortunately, you're not facing one attacker, you're facing all the attackers. So the attacker is trying

the attackers. So the attacker is trying to understand your company extremely well. It's making a list of all your

well. It's making a list of all your employees. It's creating personality

employees. It's creating personality profiles on all your employees. It's

coming up with the best spear fishing campaigns to find the ones who who probably have the most access based on their job title. And it's sending out these spear fishing attacks. It's

constantly pulling your DNS. It's trying

to see if you're doing a merger and acquisition with a company that doesn't have good security. So, that's going to be a weakness. And they're launching uh malware. They're sending you uh spear

malware. They're sending you uh spear fishing emails. They're trying to

fishing emails. They're trying to compromise all your websites. They're

trying to pivot internally. They're

trying to sell the access that they have. And they're doing this at like

have. And they're doing this at like machine speed, right? They've just got so many agents working on this constantly, constantly hitting you. You

can't tell Chris and Raj and Sarah, "Hey, uh great job last year. Um, I need you to do 895

times as much work because uh that's how m many more attacks were being hit with.

That doesn't work. Also, you can't be like, "Uh, hey, great news. We got three more headcount." That also won't make a

more headcount." That also won't make a dent. Your only chance is to have the

dent. Your only chance is to have the same AI or better as the attacker.

And this goes back to what happens to all companies. What happens to all

all companies. What happens to all companies also happens to security programs. It's no longer about here's our security team. Here's roughly the

things we need to do. And yeah, there's some documentation, but ultimately it's like who's on call, who's doing the work, blah blah blah. And it's like a

very human focused thing. That's all out the window. SOPs.

the window. SOPs.

SOPs, everything is a process and workflows which you could visually look at and see look this is the cue for

processing incoming things. Uh here's a queue for you know here are the constant workflows that are happening all the cron jobs or whatever it is for finding

insider threats. Here's all the

insider threats. Here's all the processes for managing the CI/CD. Here's

every single tool, every single decision point, every single approval point that needs to happen as part of CI/CD before something goes live. We're doing static analysis, we're doing dynamic, we're

doing uh you know, we're looking at some other aspect of the application, how it impacts the business. Each one of those turns into a little node that is where a

tool drops into. This is where a human drops into. This is where the human is

drops into. This is where the human is replaced because a very smart AI model just took over that role. Everything

becomes transparent, visible with discrete actions and activities and decision points at each area. And the

question is then how well are we doing this? How good are our information sources feeding our context? this concept of unified context

context? this concept of unified context that I put out a year or so ago maybe 2024 actually unified entity

context everyone like I was talking about with the corporate side also the security side we're all working off a unified context of the company what are its goals what are its challenges what's

the risk register look like they're all working off the same sort of thing right here are attackers here are sensitive things here's our crown jewels tools over here. All of this is unified. We

over here. All of this is unified. We

have this map of all the workflows that are happening, all the different tools.

And now the question is, are we getting that context updated? Okay, new AWS account which just stood up. We just

launched a new application, a new service in uh Asia and also Iceland and also in Seattle and it's got all these

new services on it. How quickly

are we as a security team learning that they did that because that was some crazy marketing group over there or whatever. Let's just assume we're going

whatever. Let's just assume we're going to have shadow it still for quite a while. This transition I'm talking about

while. This transition I'm talking about with like everything being mapped out and SOPs. That's not going to happen

and SOPs. That's not going to happen overnight. This is going to take a long

overnight. This is going to take a long time. Some companies, this is going to

time. Some companies, this is going to take 15 years and they'll probably be dead, but some will survive and it will take them 15 years because they're a soup sandwich. it will take them

soup sandwich. it will take them forever. Somehow they survived.

forever. Somehow they survived.

Many companies they'll do this over the course of two or three or five years, right? Some companies have already

right? Some companies have already started this. Some companies won't start

started this. Some companies won't start this for another 3 years. It's massive

massive like variance in how fast it's going to happen across various industries. Okay? So I don't I don't

industries. Okay? So I don't I don't want you to think like oh I think this is happening right now to everyone and it's just like it's going great. No,

this is barely starting. Okay? So the

point is this structure is what attackers are going to use to attack you. They are going to have a world

you. They are going to have a world model of your company which has all these pieces, right? They're hopefully

they're not as filled in as your version, right? Um when when you launch

version, right? Um when when you launch that AWS stuff, when you launch those new services, you have access to AWS.

Hopefully hopefully your attacker doesn't. So you should be able to pull

doesn't. So you should be able to pull that like really quickly. Okay, you

should have access to all your endpoint visibility. You should have access to

visibility. You should have access to all your different tools, all your different APIs, all your different agent infrastructure constantly pulling asset management. Asset management is about to

management. Asset management is about to get elevated to top top tier finally, thank goodness. But you should have this

thank goodness. But you should have this data way faster than your attacker.

Unfortunately, all of this is very very ancient inside of most companies. I have been doing consulting for over 20 years.

Most companies I see, they do not have asset management.

They do not have unified documentation.

They do not have most of this stuff.

Okay, we're we're in a bad state. We're

in a bad state because as AI starts spinning this stuff up for the attackers, they're going to build a world model of these companies faster than the company has it because the company has to go slow. They have to

have 19 meetings to prepare for the meeting. Attackers are just going to

meeting. Attackers are just going to like yolo it, you know, submit the single prompt, make no mistakes and

start attacking. So all this to say

start attacking. So all this to say transition is humans doing security work to a unified

workflow model with SOPs of the work that is being executed largely by agents largely by AI with humans there to tweak

and improve and guide and instruct and steer and validate the AI. by automation and the game here

the AI. by automation and the game here is for your orchestration system to be better than the attackers. All right, so this next one is a way of thinking about

enterprise AI in like a completely different way and uh I put this out about a year ago or so and I I think it's really powerful as an inversion. So

the the idea is that um currently definitely a year ago, two years ago, but even still now everyone is thinking okay we have security we need to put AI

on it. Okay we have finance we need to

on it. Okay we have finance we need to put AI on it. Okay we have um HR we need to put AI on that which means we need AI

agents um for finance. We need finance AI, we need um security AI, security AI agents,

right? So the idea is you have the

right? So the idea is you have the discipline, you have the topic and then AI gets sprinkled on top and it's supposedly going to do something that

benefits you related to that topic.

This is I don't think the way to think about it. Okay, I think the way to think

about it. Okay, I think the way to think about this is actually you have a company and you have the company's work and all its workflows and the graph of

all the services and the tools and the operations, SOPs, goals, everything that is actually the system. The system is the

graph of operations. Okay, it is the graph of algorithms that take place to make this business function. Okay, maybe

it has humans there, maybe it doesn't.

Maybe it has lots of humans, maybe it's mostly AI and a few humans. Doesn't

really matter. This graph of functions, this graph of algorithms is the company.

Now, think of AI as a system for running this graph of algorithms. That is what AI is.

Then you have the question of okay, what are you doing for finance? What does

procurement look like? Show me

procurement.

You're looking at this graph and this one little um line lights up. It's

actually like 19 different lines. They

all light up. Oh, these are the procurement uh workflows.

Cool. So, we can drill into those. We

can inspect. Okay, here's the tools.

Here's the human involved. Here's the

decisions. Here's the signoffs. Here's

the exceptions. Here's the risk register. Whatever it is, the overall

register. Whatever it is, the overall system is the graph of algorithms largely run by AI. What ends up happening is all the different things

that used to be industries, they become use cases inside of AI. Okay? So the

before is you have industries using AI and now what you have is an graph of algorithms

run by AI that has use cases for different things right you you've got some of these things are security some of these things are HR some of these

things are engineering some of these things are marketing AI is the container AI is the thing and

it just has functions that happen to be affiliated with what we used to call industries that that is a fundamental transition.

Now it's not absolute. This is a mental model. But I think this mental model is

model. But I think this mental model is a lot more descriptive of what's actually happening than thinking about it in terms of like well let's do everything the way we used to do it

before. Okay, we've got an HR database.

before. Okay, we've got an HR database.

We're going to have an HR interface.

We're going to have HR tools and an HR dashboard.

No, that's going away. Okay. If you

abstract everything to questions and everything to algorithms, the question is something like, how happy are our employees?

How much money are we spending on compensating employees? Should we pay

compensating employees? Should we pay more for bonuses? Those are questions.

Those questions are not in industry.

Those are questions that just happen to be associated with what we used to call an industry. Those are all hitting

an industry. Those are all hitting unified entity context. The results are coming out and you have the answer. But

ultimately it is all feeding off this underlying unified context and graph of algorithms and understanding of

what the business actually is. And all

of that is powered and enhanced and managed and orchestrated by AI. Okay,

here's the next one.

Custom everything. So in the past and this one crosses consumer and enterprise. So in the past you basically

enterprise. So in the past you basically had very few people, very few organizations, very few companies producing software, right? You've got

Adobe, right? There aren't many competitors to Adobe. When Adobe was on top, it was on top. Uh when Microsoft was on top, it was on top. You have a

few competitors, but you go into any enterprise, they're mostly running Microsoft shop, they're mostly running Google shop, whatever.

I think that might start to go away. Um

I it's not that I think that these major platforms won't still have a stronghold or whatever. It's just that I don't

or whatever. It's just that I don't think the implementation of their software is going to look the same inside of all these different companies.

And it could be for much smaller companies that aren't legacy, their software stack could look completely different from another uh

startup, maybe even doing the same sort of stuff just because the founders, which there'll probably be very few, the founders will just be like, "Yeah, I I like this style. I like terminal style.

I don't like UIS." you know, um, I want everything to be API based. You know, I really like the color purple. Uh, I need purple and blue. I need the software to look a certain way. I need it to act a

certain way. I want all the auditing and

certain way. I want all the auditing and logging to go a certain way. You know, I want to be stood up only in these regions, whatever. Whatever their

regions, whatever. Whatever their preferences are and the preferences for the interface for all this stuff, custom. We're already seeing this with

custom. We're already seeing this with like custom replacements of tons of different SAS software. I mean, this is just all over the news everywhere. It's

really easy to create a version of something. Now, it's a big difference

something. Now, it's a big difference between being able to have that thing roll out, you know, enterprisewide and it's stable and it's secure and all of that, right? There there's some work to

that, right? There there's some work to be done there. that that'll take, you know, a couple years to sort of work its way through. But I think there's a very

way through. But I think there's a very high chance that companies and consumers will be making their own software, even

if they're not making their own software. Let's be clear about that.

software. Let's be clear about that.

There's 8 billion people on the planet.

Not everyone's making their own software. But just just consider in 2019

software. But just just consider in 2019 or 2022 the number of people who made software products was rounded down to zero. Okay, that that's the way to think

zero. Okay, that that's the way to think about this. Rounded down to zero.

about this. Rounded down to zero.

Everything in the app store, every software company rounded down to zero.

If you multiply that by 1,000 or 10,000 or a million, that is a lot more software. That is plus we're talking

software. That is plus we're talking about the ability for someone to speak to their AI agent, which we've already talked about. Everyone's going to have

talked about. Everyone's going to have one, and say, "Hey, I really wish I had a workout app. You know, I've been using this one. You know, it's $19 a month.

this one. You know, it's $19 a month.

It's pretty good, but I just wish it did this. I wish it did this. I wish it did

this. I wish it did this. I wish it did this." And boom, it's now installed on

this." And boom, it's now installed on your phone. It's on your thing. The

your phone. It's on your thing. The

other one's uninstalled. The

subscription is canled. That same exact thing is going to happen inside the enterprise. Now, in the enterprise, it's

enterprise. Now, in the enterprise, it's going to take a little bit longer because that thing needs to be integrated with everything else. It's

got to have the tie-ins. It's got to have procurement. It's got to have legal

have procurement. It's got to have legal sign off. Auditors have to sign off.

sign off. Auditors have to sign off.

There's a lot more workflow involves in being able to do that. But I can tell you this, every CFO is looking at their software list and saying, "How can I cancel all of this?" It's just like the

employee thing. How can I get to zero

employee thing. How can I get to zero employees? That's what the CFO is

employees? That's what the CFO is thinking as well. How can I not pay any other company for software? How can it all be ours? Everyone wants this. The

question is, you know, we couldn't do it before. We

couldn't do it before because it's hard to make software. You got to maintain it. You got to do all this stuff. Well,

it. You got to do all this stuff. Well,

the better AI gets, the easier that gets. Okay. So the tendency here is from

gets. Okay. So the tendency here is from common shared large few companies

producing software to everyone has their own and right and it's not going to go to the full extreme right it's going I'm I'm going to say it's going to go to

like a 90% extreme or an 80% extreme highly specialized software everyone running their own personal AI stack as

as a person as a human, your AI system is going to look, feel, act, behave differently than someone else. They

might even be using similar products, but your interfaces are going to be different. The way it speaks to you is

different. The way it speaks to you is going to be different. The news sources that you're filtering is going to be different. And that takes me to my next

different. And that takes me to my next one, which uh Robert Putman talked about in his book uh bowling alone in I think 2000.

When you have fragmentation like this across companies but mostly across people when you have fragmentation like this that's going to be profound. So one

of the things Putman talks about in his uh book is the reason the country was so unified before is that we were all watching the same TV

shows. We're all watching the same news.

shows. We're all watching the same news.

We all drove the same cars. We all had the same watches. We all went to the same churches. We all lived on the same

same churches. We all lived on the same block. Maybe someone had a slightly

block. Maybe someone had a slightly bigger house, but we're all living in the same sort of community. And

everyone's consuming the same sources.

Everyone's thinking similar things because we're reading the same newspapers. We're learning the same

newspapers. We're learning the same things in schools. Well, when you take what I just talked about, everyone gets custom software. Everyone has custom AI.

custom software. Everyone has custom AI.

And in fact, you're not even viewing the sources. All these APIs, all these

sources. All these APIs, all these services that make up the world, you're not viewing them. There's millions of them. There's billions of them. Your

them. There's billions of them. Your

AI's job is to consume all of that. Its

job is to understand you and understand your needs. It consumes all those

your needs. It consumes all those services and then it gives you what you want. Well, what does that open up? That

want. Well, what does that open up? That

opens up the possibility that all of us will be having a different world experience.

We believe the reality that we see.

Okay. So when you watch a particular news source, if you watch particular YouTube channels, you watch particular podcasts or YouTube channels or TV shows

or you know news channels or whatever, you think the world works that way. That

is your world. That is reality to you.

And if you watch this other set, which this person might live next door, they are in a completely different reality than you.

They don't even know that this new uh dancing team from uh Korea is the most popular thing. And they got uh 20

popular thing. And they got uh 20 billion views on the video that just came out yesterday. And to all of your friends, this is the most important thing that's ever happened. And you just can't believe it. You've watched it over

and over. You cry every time you watch

and over. You cry every time you watch it. It's the most amazing thing ever.

it. It's the most amazing thing ever.

The person next door doesn't know it exists. In fact, they're not sure if

exists. In fact, they're not sure if Korea is a real country based on the media they're watching. They're like,

"Yeah, that could just be made up."

This fragmentation because of custom everything is going to be massive, right? inside of companies.

right? inside of companies.

The dynamic here is very strange. How do

you audit software? How do you do security scans? How do you do auditing?

security scans? How do you do auditing?

Um how do you do legal compliance?

It's a lot easier when everyone has SAP and everyone has Microsoft uh 0365 and everyone has, you know, CrowdStrike and everyone has PaloAlto firewalls and

Checkpoint firewalls, right?

That's a whole lot easier because people have skill sets around those things.

What happens when everything is custom, right? So the transition here roughly is

right? So the transition here roughly is few things that are packaged that most everyone uses to millions of options with infinite

customization.

And everyone is kind of using different stuff customized just for them. and

they're experiencing different realities as a result. All right, final one. I've

saved this one for last. So, I think the kind of ultimate use case for AI is what I'm calling ideal state management or

state management or state orchestration.

Not really sure on the term, doesn't really matter. The real term will be

really matter. The real term will be created uh probably in the next year or so. The idea is

so. The idea is what we've been doing inside of companies, what we've been doing as people, what we've been doing as a

society is just kind of yoloing. This is

what we've always done. This is what humanity does. We're like, hey, you

humanity does. We're like, hey, you know, I need to do better next time. I

need to do, you know, less of this thing that's really hurting me. Companies are

like, hey, we should have goals. We

should have OKRs. Hey, we should have a meeting. we should plan the next year or

meeting. we should plan the next year or whatever. Those documents go somewhere.

whatever. Those documents go somewhere.

Maybe they get revised, maybe they don't. But what you do see, and again,

don't. But what you do see, and again, I've been doing this for so long. If you

track a company's goals, um, for an average company, like a medium-sized company, which there are just, you know, hundreds of thousands of these things all over the world. If you look at their

goals and plans and metrics over the course of a year or five years or 10 years, they're just making up. Like

it changes constantly. The management

changes like they uh they come out with a set of metrics. They don't hit them.

They come out right after that and they're like, "Uh yeah, guess what? We

got a new plan. Uh he you know, we hired this person. It's going to be amazing.

this person. It's going to be amazing.

Here's new metrics. Here's the new plan." And it's just kind of like

plan." And it's just kind of like constant reinvention, but not because of innovation, more so just because we're winging it.

And this is no fault of anybody's it.

Everyone's doing it. Very, very smart people are doing it. It's just the reality that we live in. Okay, this is one of the fundamental changes that AI

is going to bring. I think what we're about to move into is a situation that moves away from this ad hoc yolo sort of

situation to the ultimate use case for AI which is state management. And state

management starts with defining what ideal state is. This is a thing that most companies do not have. they they do not have an articulated

statement kind of like a PRD document uh which has multiple SOPs revolving around it that says here is our actual mission here are

our actual goals here are the problems we are trying to solve in the world which is why this is our mission here are our goals here are our challenges these are the things that are you know

we can't hire fast enough you know we can't ship product fast enough. We keep

getting beaten by our competitors. We

need to move into Asia. We're not there yet. Like, you put all your challenges.

yet. Like, you put all your challenges.

You got your risk register. You have

your projects. You have your budget. You

have your people. And this is your unified document. This is your your

unified document. This is your your grail. This is your system. This is your

grail. This is your system. This is your algorithm for what what you're chasing.

Okay? this being locked into the core DNA of the company and everything revolving around that. So I I

talked about all this infrastructure, this um graph of algorithms that graph of algorithms needs to be

feeding this system, this ideal state, this perfectly articulated and not perfectly, nothing's going to be perfect. This very well articulated

perfect. This very well articulated ideal state is about to become the most important thing for companies but also

for anything for organizations for entities for people. This is a big thing that I work on in my private work with the PI system with my TLO system like

all the stuff that we're doing in my community. We think about ideal state

community. We think about ideal state from the very beginning. ideal state.

This concept is extraordinary. It's

extraordinarily powerful. Okay, I've

been using it for a long time. Not not

this new version that I have now, but roughly I've been using a system like this for probably 10 years. And there

wasn't any AI. You don't need AI to sort of think about articulate this and start moving towards it. It's very powerful.

Forget any tech, just note cards, index cards, a space pen, you're off. And

you're going to have massive benefits from doing this. Here's where the AI comes in. And this this is like the

comes in. And this this is like the sickest, most powerful, most exciting thing in all of AI across all AI ideas

that I've ever heard about or come up with or whatever. Okay, so check this out. This is the universal game. When we

out. This is the universal game. When we

meet aliens flying around the galaxy or whatever and we tell them this thing I'm about to tell you, they're going to be like, "Yeah, that's what everyone does.

How do you think we got here? How do you think we have all these spaceships? How

do you think we have all these planets?

How do you think we have Dyson spheres around all these stars?" Like that's obvious. That is the algorithm, right?

obvious. That is the algorithm, right?

So this is what I call it. I call it the algorithm. The algorithm is

algorithm. The algorithm is we have ideal state. What is our current state? Okay. Step two, what is our

state? Okay. Step two, what is our current state? So remember what I was

current state? So remember what I was talking about before about you have the graph of algorithms, you have asset management gets elevated to the top.

This current state, it's the job of your AI and all the different agents and all the different systems. It's not all AI.

This is deterministic code as well, right? What is the current snapshot of

right? What is the current snapshot of the orc? What is the current state of

the orc? What is the current state of our problems and our solutions and our products and our services? How happy are our people? How happy are our customers?

our people? How happy are our customers?

What is the current churn number? What

is the current products we're about to release? What are our competitors about

release? What are our competitors about to release? What are the market

to release? What are the market conditions? Snapshot. Okay. Snapshot.

conditions? Snapshot. Okay. Snapshot.

snapshot. Ideal state. Ideal state is here. We're in Asia. We have 30% more

here. We're in Asia. We have 30% more employees. Actually, more likely 30%

employees. Actually, more likely 30% less employees, but separate topic. Um,

you know, we want to be in these markets. We need to have more services.

markets. We need to have more services.

We need to have more private lunch and learns uh in our local community. what

whatever it is all that's going to be hundreds of thousands of things or hundreds of things or millions of things whatever it is our current state also has millions of things in it right

because it's going to go down to like eventually at some some level here's the current open ports for all of

our Kubernetes pods right all all of our AWS infrastructure current state current state over here they're all locked down nothing publicly available

strong authentication on them etc. Now here it is. Watch this.

The role of AI is continuous migration.

Continuous gap closing between current and ideal state.

This works as an individual trying to lose 20 kilos which I'm trying to do. an individual

trying to lose 20 kilos, trying to uh increase their V2 max, trying to find a wife, trying to get their art exhibited in the local

gallery and eventually at MoMA in San Francisco, trying to come up with uh new EDM tracks so they can go to EDC and

actually play live on stage.

trying to run a federation of planets.

Okay, if we're talking about, you know, 9,000 years in the future or whatever, anything you're trying to do at any scale can be managed by ideal state and

current state and the migration.

This is extremely extremely powerful. I

think we're about to apply this to almost everything. I think PRDS

almost everything. I think PRDS engineering.

So I have this thing inside of uh the PI platform. It's called the algorithm. I

platform. It's called the algorithm. I

literally start the algorithm by decomposing the prompt that comes in and turning it into reverse engineered ideal state components. I break out the

pieces. I look at the context from the

pieces. I look at the context from the user and I do deep analysis and we do research as well. This is if you have a lot of time, do research and you figure out, okay, what do they actually mean by

this? Okay, I might have sent in a

this? Okay, I might have sent in a single one-s sentence prompt, but I do all this research to break it into its pieces. What does he explicitly say he

pieces. What does he explicitly say he wants? What does he explicitly say he

wants? What does he explicitly say he doesn't want? Okay, what does he maybe

doesn't want? Okay, what does he maybe mean by that? What are some common gotchas for someone trying to build a system like this? All that gets decomposed, reverse engineered, and I

start creating ideal state criteria.

These actually go into cloud code tasks, right? The task system from cloud code,

right? The task system from cloud code, which is extraordinary. I put them all in there. Then they go into the PRD. And

in there. Then they go into the PRD. And

the PRD is what we work off of, but it's all working off of ideal state. So

engineering can be run this way.

Companies can be run this way. You

managing your life, you managing your entire family's happiness. Okay, my

husband, you know, he needs to be more healthy. My kids, they need to have

healthy. My kids, they need to have better education. Uh, they need more

better education. Uh, they need more tutoring in this. Hey, I'm looking at the dashboard. Looks like they haven't

the dashboard. Looks like they haven't had enough vegetables. Okay, I'm going to tell my AI we're going to order more vegetables. Hey, we haven't gone on a

vegetables. Hey, we haven't gone on a vacation together in a while. Hey, um I noticed uh we were looking at our phones a little bit too much at the dinner table last few days. My AI notified me

about that. So, yeah, let's make sure

about that. So, yeah, let's make sure we're all looking in each other's faces and talking about uh physical arts.

Let's make sure we do a number of vacations during the year where there's no tech involved whatsoever. We're

focusing on human things and all of this. Again, the AI is managing this

this. Again, the AI is managing this stuff for you because you put it in your ideal state. Okay? So, if you're running

ideal state. Okay? So, if you're running an ice cream truck business, you're running a Federation of Planets, or you're just trying to like find a girlfriend or a boyfriend, all of this

can be managed the same way. Same way as if you're trying to launch a new SAS replacement app or a new workout app or whatever you're trying to do with AI.

Everything can be managed by thinking about it in this way. Now, there's a lot of steps in between, but those steps can be scaffolded. Those steps can be

be scaffolded. Those steps can be engineered. Those steps can be filled

engineered. Those steps can be filled in. And the smarter the AI gets, the

in. And the smarter the AI gets, the more it's going to be able to just know how to help you transition and build plans to help you transition. So, I I think this is potentially the biggest

idea in AI. I don't think many people are talking about it yet, but I think this concept of ideal state is is is about to be huge. And in fact, I think

agentic platforms are about to start building it in to like everything they do. wouldn't be surprised to see this

do. wouldn't be surprised to see this cloud code, codeex, Gemini start to move towards AGI generality by

doing this reverse engineering of requests into an ideal state that you then pursue because here's the trick and

and I got this from Andre Carpathy. You

can't hill climb. You can't

progress towards something if you don't have failures, if you don't have a thing to hill climb against. And this is why I reverse engineer everything into ideal

state criteria because they are also my verification criteria. So what Carpathy

verification criteria. So what Carpathy said was previous software was you can make anything.

the next generation of software will be you can verify anything and I I think it's very powerful. So my ideal state criteria in the algorithm within uh

personal AI infrastructure the open source project it turns the ideal state into the verification criteria and they're all discreet and they're all

verifiable yes or no and that's what gets us to this verifiability thing that Andre was talking about and that's what ultimately allows us to go from current

state to ideal state. So really excited about this. I know this was tons of

about this. I know this was tons of content and I just want you to think about it. It's a set of transitions.

about it. It's a set of transitions.

It's not just one transition. So, I

consider all of this to be part of the great transition. Hopefully, it's a

great transition. Hopefully, it's a mental model. I know it includes lots of

mental model. I know it includes lots of subset things, but I think all of it combined does produce a single mental model. So, hopefully you can now see

model. So, hopefully you can now see when all this news comes out, right? new

models, new products, new services, you know, um co-work can now do this. Oh,

it's it's it's going after the lawyers, it's going after whatever. What my goal is here is for you to be able to say, well, hold on, you know, based on this great transition model, that thing

that's happening is not some something new. It's it's not going to produce

new. It's it's not going to produce anxiety, right? I'm trying to reduce

anxiety, right? I'm trying to reduce your anxiety of thinking about all this change because I believe this great transition sort of model with all the little subm models and transitions that

I was talking about. It's kind of like a container. It's a container. It's a

container. It's a container. It's a

mental model container that can reduce your anxiety. If you understand this, in

your anxiety. If you understand this, in my opinion, if you understand this, then you just won't be surprised by things, right? And and I could be surprised like

right? And and I could be surprised like I I could have missed something, right?

Obviously, I could be wrong about any one of these or more. But in general, I don't think I'm going to be surprised by this. I put the stuff into the book in

this. I put the stuff into the book in 2016. It is coming true. I think it's

2016. It is coming true. I think it's natural progression for the stuff to be happening. Like, who knows how it's

happening. Like, who knows how it's going to happen, when it's going to happen, which company's going to do it.

You can't predict that stuff. It's

impossible to predict. But the

direction, I think, is possible to to see where it's potentially going. And

that gives you a container, a mental model to be like, okay, this all sort of makes sense inside of this framework. So

you're not spooked out by like all these new models coming out. Um, new products coming out. It's like, oh, this person's

coming out. It's like, oh, this person's going to lose their job. That person the these industries are being disrupted.

No, if you have this mental model, I think you're more likely to just be like, uh, yeah, that seems to be the way it's going. and uh you can buckle down

it's going. and uh you can buckle down and just move forward. So hopefully this has been helpful and uh we'll see you in the next one.