Transcription
You might be worried about whether or not AI is going to take over all the jobs and make everyone reliant upon government assistance or universal basic income, UBI, to basically just survive in the future. And personally at this point, I think the real question to ask is what would a world with UBI actually look like?
Some people think that cryptocurrency and blockchain will actually play a key role in that future. And now what I would say is that ignoring crypto while the AI revolution takes place would be almost like ignoring social media as the smartphone became part of everyday life. AI and crypto are not two separate trends. They are part of the same story. And just recently, Sam Altman, the founder of OpenAI, the company behind ChatGpt, just laid out exactly how this could look in the future while on a podcast with Theo Vaughn. And mind you, he did not use the word cryptocurrency once. I had to freeze the frame on this upcoming video for copyright reasons, but it's only one minute and I promise it's going to blow your mind. So stick with me.
>> If the world, there's like eight roughly 8 billion people in the world. If the world can generate like eight quintillion tokens per year, if that's the world, actually, let's say the world can generate 20 trillion quintil 20 quintillion tokens per year. >> Tokens of >> like each word generated by an AI. >> Okay, >> just making up a huge number here. We'll say, okay, 12 of those go to, you know, the normal capitalistic system, but eight of those eight quintillion tokens are going to get divided up equally among 8 billion people. So, everybody gets one trillion tokens. And that's your kind of universal basic wealth globally. And people can sell those tokens. Like if I don't need mine, I can sell them to you. We could pull ours together for some like new art project we want to do. But but instead of just like getting a check, you're get everybody on Earth is getting like a slice of the world's AI capacity and then we're letting the like massively distributed human ingenuity and creativity and economic engine do its thing. >> I mean, that's like a crazy idea. Maybe it's a bad one, but that's the kind of thing that I think sounds like someone should think about it more. >>
Now, just to clarify, when Sam Alman said tokens, he was not talking about crypto. In AI, tokens are units of text or you could think of it as words or even parts of words that are used to generate and understand language in a large language model. But the thing is is that he did essentially describe a world where these AI tokens could also be used as digital currency. So whether he meant to or not, he essentially just outlined a world where AI and crypto merge. We all know that AI is going to create incredible productivity gains and profits. But the question is who is actually going to be able to participate in the upside of these profits because right now it's looking like it's going to be private companies and as Sam outlined it could be the people who own these AI clusters or these data centers. Essentially a lot of the value that's going to come from AI could accrue to the data centers themselves. It could also accrue to the the people that are actually creating the models, right? Like a chat GPT or a Gemini and or it could also be the people that are creating applications on top of those models. If that value were to accrue to the providers of the models like Open AI or like Perplexity or Claude, the thing is is those companies are pretty much all private. So, it's really hard for everyday people to even participate in that upside, even just assuming that they have extra income that they would have to invest if they could. But the truth is that a lot of these companies are not going public at all anymore because they're able to raise the money that they need from the private markets. And so these are venture capitalists or just larger institutions that are essentially allowed to invest in private offerings. Today, to be able to qualify to invest in these private offerings, you need to be what's called an accredited investor, which is a rule created by the Securities and Exchange Commission. Now, this accredited investor definition means that you either have a net worth of $1 million, earn an income of $200,000 or more on a yearly basis, or get this, you are participating in the company that is actually creating this offering. So, you'd have to work for an Open AI or be a director of the company. So the problem is that the major qualifications that you need to meet to be able to participate in the opportunities that are arising is that you need to already be wealthy or just be in on the gig.
Now technically some of the companies that are at least providing the clusters are actually public companies. You could think of like Amazon or Google as companies that will potentially participate in owning these data centers as well. Either way, the thing is is that the ownership structure of these companies is a little bit concentrated, right? You have the big CEOs and the directors that are outpacing the income of anyone that's working at the company anyway. And then on top of that, right, people who aren't working at these companies also have to invest in these companies in order to participate in what's happening. And obviously, you know, people should be investing, but it doesn't give everyone a chance to participate in this upside. And the only reason that's a real problem is because the gains that we might see might also lead to people not needing to work for these companies at all. And so the gains that are being produced and provided through these companies might not flow back down to people. I'm not saying that there's just no way for anyone to participate in the upside of what's happening. But what I am saying is that the concentration of where these profits are going to flow is very intense. And the directors of these companies and the people that work at these companies are going to have a much better chance to get ahead than the rest of people that are watching and even providing what's necessary for these companies to grow. So just for instance, these online companies, right, they exist everywhere. It's a global phenomenon that's occurring, but not everyone has access to the US stock market. So even if these companies are public, not everyone gets a chance to participate in the upside of what this is going to bring.
But Sam's idea flips all of this on its head. Imagine being able to participate in the value that's being created without having to buy a particular stock. Instead, people could earn or even be granted tokens. And I'm not talking about crypto. I'm talking about units of AI utility that you can use to generate text or a response from AI. In AI, these tokens are like, imagine a ticket to a show or like a key card that you could use to get access to a building. They are just these units of text that you put into the AI in order to get a response back out. But Sam takes this a little bit further. He says, imagine that you could either use these tokens or you could trade them. So imagine you have that ticket to that show and you can save that ticket and then sell it on the open market at a later date. Now, meanwhile, that facility where the show is taking place could upgrade and then the next thing you know that show is three times better than it could have been in the past when you initially bought that show ticket or were granted that ticket. In the same way, these AI tokens that Sam Altman describes could become more valuable over time as these AI systems essentially become more integrated into our lives and produce and create more value in the world.
And this is where crypto comes in. And if you know me closely, you know that I like to use the word distributed ledger technology because this is not about speculation on the assets that are being traded in the market. No, this is about having an infrastructure where you can distribute value. Distributed ledger technology or DLT or if you want to say blockchain is a system where you can make tokens on a network ownable by individuals, tradable and also open for anyone to use the system. DLT or these blockchain systems don't just track credits or data in a private database. No, this enables a network where anyone can access it and also anyone can trade the units or the native currency of these systems and also these tokens or cryptocurrencies can actually be used to reward the people that are powering the system. Without a blockchain, you would just have a database or a system where all of these credits are being tracked internally. But with a blockchain or DLT, you actually can open this up to the public and allow people to buy in or even be rewarded with tokens that would allow them to participate in the upside of the entire system. And when I say tokens in this manner, I do mean this time a cryptocurrency-like token. Imagine that that is the future of wealth. The reality is that this is already happening. We already have a lot of the infrastructure that would be necessary to make this happen. And if you're still questioning whether or not crypto is legitimate, then I want us to think about crypto from the lens of distributed ledger technology because it is much more powerful than some speculative little digital token or cryptocurrency that trades on an open market.
I'm Keith D here to talk everything money in markets. And if you enjoyed this, let me know in the comments and subscribe for more. As I've mentioned in the past, I have a private community where we are going over all of these changes that we're seeing and how we expect that to impact the economics and the markets. See you next time. Click here for the next.