Public Markets, Image Gen, and Specialized Models, with Sarah and Elad

**Sarah** (0:05)
Hey, listeners, welcome back to No Priors. Today, you've just got me in a lot again.

**Elad** (0:09)
It's a favorite tip episode. Sarah, habibi, how you doing?

**Sarah** (0:12)
I'm great, I'm so excited. Everything is adorable cartoons that are also slightly nostalgic and sensitive. And tell me about how you react to Studio Ghibli and also just Better Image Generation.

**Elad** (0:25)
I mean, I'm a longstanding anime fan, so I think converting the world into everything anime or manga is a very positive step for humanity. So I view this as something I've been waiting for for a while. I feel like every year or two there's sort of this moment in the Image Gen world where people have a, wow, that's an amazing moment again. And the first version of that was like, oh my god, I think maybe even the GAN wave was the first wave. There was a GAN artwork in like 2019 or so, or 2018, they went to Sotheby's for auction, which was one of the first sort of AI generated arts back when people were doing these adversarial network based approaches to generating artwork. And it was kind of these kludgy tool chains, but even then people were like, whoa, look at what AI can do right now. It was super bad in comparison to what you can do today. And then there was kind of the mid-journey early staple diffusion wave, where those models came out and people are like, oh my gosh, this thing is amazing, but everybody has seven fingers in the images, but oh my god, it's amazing. And look at all the things we can do with it, and it's going to transform society, et cetera, et cetera. I feel like we've periodically had these, and I feel like this is the latest version of that. And part of it is we're just on this amazing curve of quality and fidelity in this art work and the ability to do. I mean, even back in the gang world, there was like style transfers and, you know, do this in the style of Van Gogh and et cetera. But the degree to which it does it so well now and so cohesively and in so many styles and with so much aesthetic beauty and oversight is really striking. And I think we're just hitting another one of those moments where people are like, wow, this can really do it for forms of animation and other things. And all this is obviously in the context of ChatGPT and Open AI and the 4 models incorporating a lot of this stuff directly in. So I think it's fantastic. We're going to see another thing like this in another year, I think, and then I think there'll be the very commercial versions of this, which are already happening. But look, we can use it for graphic design completely seamlessly versus it works and we can use it for all these different use cases. And so I feel like we're doing the horizontal version of it and soon we'll have the vertical versions all come out. And obviously, there's companies like Recraft and others working on the vertical versions directly. But I just view this as a super interesting evolution of the technology, so I think it's super exciting.

**Sarah** (2:32)
What do you think? I think it is funny how much at least like our little niche of the technology ecosystem, but like anime and manga is pretty popular. The world reacts to like they want more cute, they want more beauty. I think it's really exciting. One of the interesting things this exposes is users, people overall are very good at projecting where we are in terms of quality and controllability and how much more room we have, right? I think like going from it's eight bits of gray scale to you have images that might be perceived as photos of real people was a huge jump to your point of people being shocked at some point in two generations ago of image generation. And then I think one of the things that Mid Journey did was really have an aesthetic point of view and like take a bunch of user feedback into account in terms of what was preferred. I actually feel like a lot of people thought of image generation, like end users, not researchers, as a little bit more of a solved problem. And I think just this is another data point of how much more we're going to get and that people want, never mind in video and everything.

**Elad** (3:43)
Yeah, also text and logos and there's a lot that's coming that people haven't done or sort of these truly integrative things where you can start truly clicking into the images and modifying pieces. And there's apps that are doing that or there's things like VIA that sort of do these real time modifications as you're working on things. But I do think there's so much room still. We're very early, but it's still so striking. So it's a very exciting area.