Claude Fable 5 is BANNED. What to do?

**Greg Isenberg** (0:00)
I had my entire weekend planned out. I was going to lock in and use the most powerful AI model on the planet, Fable 5, to build this crazy idea I've been sitting on. Then Friday at 521 p.m., the US government sent Anthropic a letter. And by Friday night, the model was gone, disabled, for everyone. No warning, no appeal. And I sat there thinking about how fragile this whole thing actually is. We've all been building our businesses, our workflows, our entire creative process on top of models that live on someone else's servers, controlled by someone else's terms. One government letter away from disappearing. So this weekend, I'm not building with any frontier models, not none. And this is the episode I needed to make. By the end of this episode, you're gonna understand what local models are, why they suddenly matter more than they did a week ago, exactly which ones to use, what hardware you need, and a few startup ideas that only exist because intelligence now runs on your desk for free. I think it's opened up a bunch of money-making opportunities that I'm gonna share by the end of this episode. Let's get into it.
So, let me paint the picture of what actually happened, because the lesson is bigger than just this one model ban. So frontier models are incredible. I'll be the first to say that. Nobody's arguing that. But they all share the same weakness. You don't own them. You rent access. And rented access could be revoked at any time. By a government, by a policy change, by a pricing change. They could just make it so expensive that you can't access it. By the company deciding your use case, violating a term you didn't read. We just watched this happen in real time. The single most powerful model on earth is gone overnight. And I want to just be clear that I'm not anti-cloud. I use these cloud models every day. And the cloud models are going to be the strongest. They're going to be better than local models, just in terms of like you're getting the best possible stuff. They're the smartest tool available. But what it's taught me is that you do need to own a part of your stack. You need a layer that nobody can take away from you. And the way I think about it is like electricity. Most of the time, you're happy being on the grid, right? It's cheaper, it's easier, someone else maintains it. But the people who are truly resilient have a generator in the garage. They know a hurricane comes and lights go out. Well, they got this generator that continues going and they can actually use their stuff.
Local models are basically that generator for you. And I know what a lot of people are going to say in the comments, they're going to be like, well, local models aren't good at all and it's just not that true anymore. I think the switch probably happened about six months ago. Two years ago, running a model on your laptop was literally garbage, maybe a year ago too.
But today, a model that runs on a gaming GPU or a decent Mac is good enough for about, I would say 80% of what most people use things like ChatGPT or Claude for. The gap between free and local and expensive cloud closed faster than I think a lot of people expected, including myself. So let's actually talk about what a local model is. And I want to make it dead simple. You know how I am on this channel and this podcast. I'd like to just dumb it down for myself and for you, because I don't want to scare people off. A local model is an AI model that runs entirely on your own computer. You don't need internet, you don't need an API key, and you don't need per-token cost. No company is watching what you do. You just download the model file once, and from that point on, it's yours. It runs on your machine, the same way a video game or a photo editor might run on your machine. And that's really it, that's the whole concept. We don't need to over-complicate it. Basically, the intelligence lives on your hardware instead of someone else's. And you get three main things that you don't get with cloud models. The first thing you get is privacy. Your data never leaves your machine. And this isn't nice for you just personally. It's an entire unlock for selling to a bunch of different industries that you might want to sell to, like healthcare or legal or finance. Industries that legally cannot send their data to a third-party API. And there's actually a ton of those industries. We're going to talk about more of that when we get into the startup ideas. So let's put a hold on that. The second main point is you get zero marginal cost. So after you've got the hardware, and of course you do need to spend money on hardware, and hardware is getting more and more expensive.