Can the AI Industry Regulate Itself? Stripe Wants PayPal, China Catches Up, NY Bans Datacenters

**Jason Calacanis** (0:00)
All right, everybody, welcome back to World's Greatest Podcast, the number one podcast, your favorite podcast, the All-In Podcast. I'm Jason Calacanis, the World's Greatest Moderator with me, of course, Chamath Palihapitiya.

**Chamath Palihapitiya** (0:12)
The great, great, great, great, great, great, great, great grandchild, Jason was, of a hooker and a-

**Jason Calacanis** (0:20)
You saw that?

**David Friedberg** (0:21)
A prisoner.

**Chamath Palihapitiya** (0:22)
And a purse snatcher.

**Jason Calacanis** (0:25)
This comes from like a history of France, from a history of-
Said they let you- This was the deal in 1719, Sacks. If you're a prisoner in a, in Paris, you were offered your freedom on the condition that you marry a prostitute and move to the great state of Louisiana. What are you saying, Sacks? You're taking the deal?

**Chamath Palihapitiya** (0:47)
It explains a certain of your proclivities, Jay Cal.

**Jason Calacanis** (0:52)
I thought you were asking me to see if they would extend the rule for you.

**Chamath Palihapitiya** (0:55)
No, I'm saying that you're great, great, great, great, great, great grandmother.

**David Friedberg** (0:58)
I'm not French, I'm Greek.

**Chamath Palihapitiya** (1:00)
That's what I'm saying very explicitly. She was a hooker.

**Jason Calacanis** (1:03)
We never spent time in a prison. Also, of course, David Friedberg is here. How are you doing, brother?

**David Friedberg** (1:09)
Living the dream.

**Jason Calacanis** (1:10)
Yeah.

**David Friedberg** (1:10)
Good to be back. Missed you guys last week. How was Brad? How did he fill in?

**Jason Calacanis** (1:14)
That was great. Yeah.

**Chamath Palihapitiya** (1:15)
Yeah, he was great.

**David Friedberg** (1:16)
Trump account victory lap?

**Jason Calacanis** (1:18)
He had a little victory lap. We played Chariots of Fire and how was your special time at blank and your time next week at blank?

**David Friedberg** (1:29)
Thanks for having me on your show, Jay Cal. All right.

**Jason Calacanis** (1:32)
We got a full docket today.
Lots of stories. Let's start with DeepMind's Demis Hassabis. Just dropped an AI regulation proposal and it's pretty popular with the boys. In an ex-article, Demis called for a US-led international AI standards body. Proposal is modeled after Finra, the Financial Industry Regulatory Authority.
That's a self-regulatory body and this would be federally overseen, but industry-funded and run by independent technological experts. Frontier Labs would submit their models 30 days before release, and it would be voluntary initially, then mandatory at some point. The models would be assessed on risk to cybersecurity, national security, biological threats, and other high-risk domains. Benchmarks would be updated quarterly, and the body can coordinate a slowdown in development if the situation demands it. I guess that would be if there was a cyber risk, et cetera. Looks like on the positive side, we have Elon who said it was thoughtful, Sam at OpenAI, Jack Clark at Anthropic, Sundar, Satya, Jack Dorsey from Block, the Carlson brothers. So Friedberg, your thoughts on?

**Chamath Palihapitiya** (2:58)
Oh, well, way to really put in the effort today. Go ahead, Jason.

**David Friedberg** (3:03)
Just pass it to me, Jay. I'll take care of it.

**Jason Calacanis** (3:06)
What do you want me to do? Oh my God, what an incredible topic. All right, here, let me do it. You want me to do it right?

**David Friedberg** (3:11)
Some of us actually care about this topic. Let's go.

**Jason Calacanis** (3:13)
Okay, yeah, you care about it. Okay, here we go. Three, two, here's a clip of me calling it on the All-In Podcast first. The whole industry is going to need to be regulated. And I think the industry needs to regulate themselves. That's the key to this.
We need to have a set of tests that Google, Microsoft, Amazon all agree to, Elon. Hey, these are the things we should test and they should self-certify each model before asking the government, which doesn't understand the models to certify them. The industry should have an industry certification like they do for countless other things. I've talked about the MPAA and the video game industry. We should just self-certify. It's the simplest thing in the world to do, and then we could release the models ourselves without the government getting involved. Friedberg, would you like to congratulate me on nailing it again?

**Chamath Palihapitiya** (4:00)
Well, first of all, first of all, I thought that Demis' proposal was really smart and thoughtful. Now that I know that you may have shared the same thought, I think we should just do something totally different.

**Jason Calacanis** (4:11)
I can't win, Sacks. Even when I nail it, I hit a half-court shot. Chamath is like, move the net, move the net.

**David Friedberg** (4:18)
I think it's worth putting a little definition around this proposal, which is to form an SRO, self-regulatory organization because they're not purely independent. SROs like Finra and the National Futures Association, they exist in the financial markets and they were created to allow the financial institutions to set their regulatory rules, how they check each other, how they make sure that everyone is being safe because they're obviously all creating risk with one another. So the industry doesn't want to have exposure and they certainly don't want to have things get slowed down because that would make the markets inefficient. So the analogy with AI is pretty appropriate here, which is that there are many players in the industry. They are all trying to progress AI technology and no one wants to have a single regulatory body that comes in from the government or outside that says, here are the tests you guys have to pass with your models in order for them to be appropriate. As we saw in California, when California tried to pass AI legislation, I think it was about a year, year and a half ago, none of what they wrote even made sense at the time. But fast forward a year, none of those kind of rules and requirements actually map to the technology of the day. So the purpose of an SRO like Finra and NFA is they can adjust how tests are being run, who is actually running the test to make sure the right experts are involved in doing this, independent experts that is, to do the testing with federal government oversight but not control. So in the case of Finra and NFA, they report up ultimately to Senate committee and House committee that gives those committees oversight of those governing bodies that are supposed to be doing the work to make sure that they're doing their friggin jobs. So the SRO concept would be that experts could be brought in from industry that know how to assess models for things like cyber risk, for things like bio risk, for things like weapons risk, social manipulation, et cetera, et cetera. That independent body can get voted on, can get changed over time. And because they actually have expertise in running software evals and running tests like this, they can operate at a faster pace than setting up a new government agency. So it's kind of a very elegant solution. And I think it's why everyone, to your point, Jay Cal, and I'll say this is right, the industry recognizes that there needs to be some degree of oversight and checkpoints here. And I think that this could actually solve that problem. So that's why I think everyone's kind of climbing on board with it because it doesn't actually hand stuff over to the government. It says, hey, we're going to get the right people to take a look at these things. And the government is going to have oversight ultimately.