The AI Crackdown Could Change the Internet Forever

Transcript

Ilia, uh, last week, Entropic removed access to Fable 5 after the US government issued an export ban. Uh, they cited safety concerns about possible jailbreaks. Is this the last models that are going to be available to the general public? Are there no more models that are coming to me in my claude because the government is saying no? >> So, I mean, there's a lot there's a lot here to unpack, right? First, Entropic released this model and kind of neutered it on on a number of dimensions and everybody was outraged about that because effectively if you asked it about cryptography, if you asked it about some bioscience, uh it would you know fall back to the kind of opus and initially even not very

transparently right so >> so I think like we getting to a stage where there is different parties who affect effectively deciding how you can use models, right? And so realistically this goes back against you know some of the fundamental like policing the the thoughts not policing the actions. M >> and so I think like you know I I actually predicted that government will start stepping in because like they they they kind of feel they need to even though it's violating some of the fundamental like freedom of speech uh uh kind of basis. So, so yeah, I think the the

we we'll start seeing a very strange things and and and already this is unrolling now where every like so there's a few things that are that are interesting here. One is entropic effectively now dictates how you can use these models, right? They also changed their privacy policy for the fable, right? Which says, hey, even though even even though you're paying us to not keep your data, we'll keep your data for safety purposes, right? So that was kind of one one side of this. Then the you know if you read the reasoning you know from David Sax and kind of some of the other folks from the government side they're like hey they said it's super dangerous.

We have like a reasonable ex like a way to use it for effectively finding exploits like they did they didn't patch it. Now the fact that they also then enacted uh this expert control is a very kind of obviously strange reaction. It's also now puts every single other government in the world on alert that at any time not just AI effectively every single internet service can be shut down. Like if you think of it right now like if you take your phone out of their pocket it runs on a lot of services that are provided by us and if government enacts export control

on any of them it's not it's not just it can be shut down like for for your country it's also like you can shut down everything like you can shut down everything because it's also an internet hard like if you as US citizen go abroad like you Did you give your phone to somebody else? Like how are they going to detect that right? So so it's a very strange precedent honestly for effectively internet because it kind of again violates the whole premise that internet is borous. So, so I think that that was a very strange action to like use that methodology.

Um, even even if they were kind of trying to like hey you guys should fix this this uh problem right that you said yourself is is you know hey security and safety is a big deal. So now going back to the models I think the Pandora box is open. I think people who are I think like obviously you know misses came out but it was only like available to a few parties but we in crypto saw hack after hack after hack it wasn't because people were using misses it was because the models are there a lot of them are open source now or open weights you can put them in the right harness where you effectly inspect you know every line for invariance for all the properties and you can find

vulnerabilities like this this is happening right know the obviously like I mean from kind of experiments and from what I've heard of people fable is like a good step forward on capabilities but I I like I really believe you know it's like a whatever uh 4-minute mile right as soon as one party can do it right everybody else kind of like pulls behind it and a lot of it is just like how much compute you can put behind it to really keep uh like reinforce learning and and updates. So, so I think like to your point is this the last model you'll be able to access? I think we will have this level of model from open source one way or another

within next 3 to 6 months. Right? We just saw JLM52 came out at least like from you know benchmarks and corsery usage it looks kind of like 4.7. So like one generation down from Opus. still still kind of couple months behind but like this is already something that you know two months two months ago was actually like hey this is a great product so I think like Pandora's box is open the this intelligence at scale is coming I think we we as crypto actually always thought in this way where we assume there is somebody in very intelligent on the other side who's trying to break in

the rest of the world hasn't built like that. Mhm. >> And so I think this mindset of effectively like hey we have like a government adversary who's equipped with you know potentially quantum computers trying to break us we need to kind of apply that across a society right I've I've talked about this like I call it dodoing the government right like right now government is not designed to actually withstand somebody who has you know intelligence and an immense amount of patience right and it's a fixable by effectively having AI on the other side, right, to also respond to this and like some some of the services are doing like FDA for example getting so much filings and the filings are so detailed that they now using AI to analyze the findings before

any like expert come in because like it's just like the amount of cont content and context is exploding on both sides. So we just need to keep like ramping up and equipping government and services and kind of with better better tools and start using some of the more fundamental solutions like for code we need for modification right there's no way around it like you know otherwise you can and mouse right the better model will always find issues that the previous model didn't find if you spend more compute you'll find more things if you if you spend it more you know intelligently in a proper harness you'll find more things right so you need a more fundamental like hey this is

actually mathematically proven so so I think like models are coming I think the the expert control is honestly was more of a like a really bad precedent that now I'm going to activate actually even more AI development outside of US now like I mean I've heard at least multiple countries where people like hey we should have our own sovereign lab right um that you know is able to do this and they will allocate capital to do this compute etc which is by the way good for crypto for you know we have projects doing decentralized training we have projects trying to kind of facilitate that I think those as well will be >> uh like before they were kind of like hey we have open source models why do we need this now it's like well what if we

don't have now we need actually something that is decentralized that is >> able to extend it and then at the same time we need to assume everybody's equipped with like all the knowledge of the world and advanced intelligence. We should we should be able to build the society that kind of has that in in not police the thoughts like not police what you're thinking and what you're asking but what actions you you know you're doing. >> So why did the government actually decide to put an export control on it?

Like what does what how does that benefit them? Because do do they just want access to it before the rest of the world? kind of like how Mythos was given to a select group of insiders, call them elites. So the government needs to have the tools before everyone else because certainly the government knows that the all the other models in the world are also going to eventually become very very powerful just like Fable, just like Mythos. Why is what's the government's strategy here? >> I mean obviously I'm I'm not >> Yeah, maybe you're not the right person to ask about the government.

Um, I mean I I'm not sure there's like a very clear strategy. I think it was like that's what I'm saying. It it felt a little bit like >> poor game theory. >> Poor game theory, but also like like again effectively Entropic been saying we're pro-safety and then when they have like when there's like look there is a safety problem you should fix it. they haven't right so like I think that that is a narrative violation for entropic and so maybe that was kind of reaction to that again this is like us guessing >> and and you know based on what uh what some of the folks wrote on Twitter the

I think like again the from perspective of like maintaining us as like the main technology exporter this is a really bad precedent >> because effectively Like now if I again if I'm a government or a uh kind of nation that is not US like I I literally cannot rely on the technologies >> right this put up this puts up walls between the United States and every other country ally or enemy alike it doesn't matter it's just like okay we're we have this super powerful technology that we could share but we choose not to.

>> Exactly. Yeah. So, so this is where like and then again this is this is not even for super powerful technology like they can shut down maps for example Google maps and Apple maps tomorrow and now like everybody >> I don't want to like catastrophize this but in in Russia we're seeing increasing censorship of the internet you know in Iran the internet has literally just been off for almost 3 months now um China has its own version of the internet is what you're saying with the government turning ing off fable like turning off a specific service of the internet. It's on that spectrum. It's not as crazy as Iran turning off a whole internet, but it's just like oh the United States government is turning off a little piece of the internet and

that's the precedent that you're worried about. >> Correct. Yeah. Yeah. It is turning off a piece of internet which means like what stops them from doing this again and again and again >> from even doing this even further to further pieces of the internet. >> Yeah. And and again I think I mean the I mean obviously technologies we've been building in in web 3 are resilient to a lot of this right and kind of been built to to withstand this. Uh and so this is this is obviously an interesting time. I mean the the the one way I kind of draw a parallel here is now like a centralized AI is becoming like fiat like every government will want to have their own

>> and then you you still need like a decentralized you know everybody's >> do you think the internet just kind of becomes bulcanized as like you have the USA internet for USA citizens you have Germany internet for German citizens is that where you think this goes >> I mean I not not if we can help it right again I think like we've we've >> or at least that's where the governments are pushing it that's what the government >> may have like I mean if you are in UK for example you have a very different internet like I I remember opening up YouTube with VPN and without and like I forgot to turn it on and like I saw completely different stuff right like half of the stuff I usually watch which is some of the US like daily shows and stuff is banned in UK

>> right and it's like uh or like the specific episode was banned or something, right? like you know like there's things that they're banning on Google search like people don't actually speak but there's actually a lot of like censorship in few of the countries that um kind of goes unnoticed and obviously UK is doubling down on some of the like uh you know hey we don't want children like the problem is like you're effectively prescribing how like parents now should be parenting and it's like I maybe agree with the premise that like children shouldn't use social media until 1314. But I don't like government prescribing that is not a way to do this, right? There is parents who

should be enforcing that on their children and kind of >> right >> explaining to the children why this is not the right thing to do >> and and in enforcing that because I I've been having a lot of these conversations about the same thing myself like yeah I I think we should not have kids under 16 on social media. Social media is just like it's it's not ready. Their brains aren't ready for it. But if we implemented that as a country that would mean that we would require internet enabled devices to have KYC and that's not what I want. I don't want that. And so having like banning teenagers and younger from the internet requires KYCing everyone.

>> Exactly. >> And that doesn't seem correct either. One one fear that I have is that the AI labs are forced to collect KYC information. And that's not the blanket internet, but it's just like the most powerful corner of the internet. What do you think is the odds that like OpenAI, Anthropic, XAI are forced to KYC their users? >> I mean, I think like if if this expert control stands, right? That that kind of will be requirement because h how else they going to be able to actually because right now it's brand for everyone, right? By saying hey it's only available to US citizens you effectively like well on internet you know there may be a cat on the other side like how do you know >> right

>> right >> so unless you really yeah KYC and and it's it's going to be like KYC which you need to re reverify all the time right because obviously I can like you know you can KYC for me and now I have access right so >> um so it it's this this may happen I mean it's going to be great for for decentralized AI honestly. Um but I think yeah this is this is a very strange again kind of expected like I I fully much expected like full nationalization of AI labs because they are creating a very like AI creates a massive disruption to how governments work to how uh kind of societies work

and instead of figuring out how to adopt society the easy way is to say no no no let us let us stop everything and and you know uh and again I think there was this there was this petition like two years ago right hey we should slow down the AI right and there was a bunch of people signed it >> like including Elon Musk right I think >> very famous people like Matt Max Techmark you've all know Harrari I think signed it like a bunch of people signed it yeah >> yeah I mean Elon Musk I think was the most fun because he then went and started XAI right >> um but but this is this is was like I looked at this I'm like guys this is this makes no sense right you're trying to stop effectively like something

that's already out there right this is this doesn't work like that like we should be thinking what what is that substrate on which we can actually uh build to with assumption that everybody has like again nobody wants you know bioweapons to be designed and built to be clear like right now it is possible to do with you know whatever with 7B model on my local laptop, right? It's not it's not like it wasn't possible. The hard part is actually, you know, materializing it, creating the the substances are exported by specific companies that actually require like physical production, right?

And so now are those properly controlled? Does does the law enforcement has the tooling to actually understand when when you know who is buying which like substances like this like that? Th that's a level where you should be enforcing, right? Not on like, hey, I'm trying to figure out how like molecular biology works and you know what happens when two molecules collide inside, you know, a DNA cell, >> right? Because like maybe I'm going to come up with a cure for something, right? Like that that's like this just like the levels are so make no sense.

And >> so to your point, yeah, it's it's very much similar to already censorship kind of where you effectively assume that people are not able to like the the way to think about it is are you giving people the sovereignty and autonomy to make decisions and or you are enforcing these decisions on them, right? which you know we've historically I mean we know historically doesn't work right like it like it works up to a level and then kind of cracks >> and so yeah I think this is this is it's it's an interesting time it it validates everything that like web 3 has been

building and at the same time it it I mean now it's way easier to like explain this to people right it's like oh you know why are we building what we're building because like well you did you like the model yesterday. >> What about today? Right. >> Right. Right. Right. Right. There. So, playing it forward and just kind of like running on the assumption that the AI labs do get nationalized. And you can listen to what Daario has said and and Sam Alman has said. It's like, oh yeah, like AI is going to be more powerful, as powerful as nuclear weapons. If th the AI leaders say those things, well, the government's like, oh, you guys are building something more powerful than nuclear weapons. That's a national security concern. we're going to

nationalize you. There's probably some steps, some gymnastics to do to get from A to B, but like assuming we just get to the point where they are nationalized. The way that I see me as an individual, as a consumer, maybe maybe I just want access to the world's most powerful models now, they're nationalized by the government and I have to KYC to get them. Maybe I don't want to do that. And then there is a growing in order to access the more powerful models, there's a growing number of like borderless technologies. You named one a VPN. You were in London. You wanted access to a more powerful version of YouTube by turning on your VPN so you could get get so you could get access to YouTube. I'm calling that like a borderless

technology, one that like doesn't really pay attention to nation state boundaries. How does web 3, what you're building at near uh ironclaw, how how does that all that borderless technology give me access to the world's most powerful models so that I don't have to KYC with the government? >> Yeah. So very much like when you KYC as well, if if this is government, they will also store everything you do, right? Because you know what what if you are a bad actor, we should be able to like analyze everything you've done ever in your life, right? And and again the the flip to be clear like I actually believe AI will be not just everywhere it will be everything like the like the

operating system will run on AI and so >> I I open up you know Brave browser my browser and it's not a web page it's like my AI waiting for me to like ask something >> yeah it's your Leo there powered by uh well in case of Brave but powered by neari but u but yeah I mean effectively you will be using AI as the interface to information and the way to communicate with others, right? Uh and so in that world, right? Yes. Like if it's nationalized all government, it's it's way worse than like prism and kind of because effectively this is not just metadata. They will have literally every conversation, every interaction, every therapy session, every you know kind of uh meeting that you've had like all of

that information will be available in one place. And so that's kind of the the bad the bad scenario from my perspective, right? because it is 1984 literally right because they can also if you change the system prompt you can also change what people see and how make decisions right away and like it's it's a very subtle right it's not visible to the user so what we've been building is kind of like how do we actually decentralize like AI and we started very much in the inference place where it's like assuming the model let's say open weight model exists how do We bring this to everyone in such a way that indeed you don't need to KYC

nobody can see what you're using it for right so all the data belongs to you and it should be decentralized and accessible right so you know if one country shuts down etc like we should have redundancy we should be able to bring uh partners with compute across the world and there there's interesting efficiencies coming from this because you know if you're sitting in US probably uh you know in Europe they already went to sleep they're using actually less compute right now so you can tap in into that compute so you can actually start like I call filling the bubbles right like you utilizing compute better >> load balancing when when one of the world one part of the world is asleep and they're not using compute you guys

redirect compute to the place that has slack in the system >> correct yeah so that so that's kind of where neari started and then as part of this we're like okay Well, now that I have confidential inference and confidential AI, I want to give it more context. I want to give it my meeting notes, my notion, my, you know, all kind of uh my email, my financials transactions. And I'm like, do I trust the current agents to actually not screw it up, right? Not leak it, not send information, >> my cloud co-work agent, right? which has access to my desktop, has access to my files. But that's the thing that that's the anarch if if Claude if anthropic is nationalized by the government, Claude

coowork on my desktop is a government application file agent. It's a literally a government agent in my computer that I installed. >> Yeah. I can read everything. >> Yeah. But even be like the thing is like even before any kind of like government or anything like right now this agents they accidentally read all your private keys and secrets and passwords and sends them to their entropic right so somewhere in the logs of entropic >> if you're using like uh yeah your all your keys all your information all your o tokens like all of that gets like accidentally documents my healthcare records like even all the other stuff the stuff that like normies might be more sensitive positive to you.

>> Yeah. And and so so that was kind of the idea behind article is like okay well given consent like we we want consential and like verifiable solution. We need a harness that also like brings this properties and you can trust with your data and with your actions, right? And so so kind of ironclaw really layers on on top of near AI. You can use it with other providers to be clear, but you know, we optimizing for that like hey, you have a private agent that's on your side that is not going to go and like, you know, >> uh do something stupid. Uh they're not going to send any data, right? No telemetry. uh that um you don't want and it uses confidential inference so you

kind of have the full stack verifiable and for people who actually been using this like there's this feeling of kind of freedom that comes with it that because like right now if you're actually technical person and you're on internet you actually have a feeling that you're being surveyed all the time right there's actually no like the the the the way this compared is like when you sit in a Tesla There's like a bunch of cameras pointing at you and they're actually streaming all of this, right? Because they're collecting all the data. >> Yeah.

>> And so like you're not doing anything wrong there, but like you know like now somebody has a footage of you whatever picking a nose, right? Like like >> right >> like that's that's kind of versus like you're driving in a you know kind of more traditional car which doesn't have any of this and you know you don't have that kind of overarching feeling of you. So that that's the same thing is like right now when you use this mo when you use centralized providers all the data goes there they may keep it they may not keep it they if you are on a subscription plan they are keeping it for sure and all of that goes somewhere right again it doesn't matter like what will happen with it but like it it exists now we also you know we can talk

about quantum like all of the information going going on the wire right and and like encrypted you know with quantum make it decrypt it. So like again there's like additional problems that come from that >> and so like with with this approach you know everything's private everything is kind of stays on your behalf and so now you don't have that kind of like hey should I should I not ask this question right like hey you know I was trying to think through like hey whatever uh like a friend of mine is doing mRNA startup and I want to research a little bit and I'm like should I ask Chad GPT about it because like I actually have some friends who got banned from chatb for asking questions right and so like should I ask this question I get a get

banned and I cannot access it anymore right versus here I can just ask question you know okay like I learned something good you know so that that's the kind of freedom that like we offering really and then from there you know starting to partner like how do we build better models maybe first how do we optimize them how do we uh you know you can like fine-tune models to uh make them smarter in the specific use cases and so this brings to another idea we've been working on which is agent marketplace because like yes your agent can do a lot already and it can be smart but it doesn't always have all the context. maybe actually going to be very expensive for it to do something. And so the idea of agent marketplace is

actually finding the agent that specializes in that. And again, you probably like when you're hiring someone like in your company, you're giving them a lot of context. You're giving them a lot of access. And you know, if it's a contractor, like it's harder and like if it's you know, Upwork, it's even harder to like you need to structure, etc. with agents right now like if you're hiring some agentic company on another side again you have the same problem is like is their ops good are they going to like leak my data if if I give them access to my like sales CRM are like are they able to like are they going to look at my leads etc right >> so what we offering because we have now this confidentiality and verifiability

tag you can actually hire an agent that you know runs verifiably and confidentially that doesn't not gonna you know do anything with your data and you can give it access to your emails to your CRM to your notion whatever and so there can be a specialized agent you know better prompts maybe fine-tuned model access to some third party data to then do actions with your data as well fully verifiably as well so this is kind of like how this starts to scale as well beyond just a single person like what what I call a multiplayer world which again this is where blockchain comes in and becomes kind of the uh the coordinator of that >> markets don't move one asset at a time.

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you're illustrating. The what about I mean this is maybe just is the same thing but just like everything that you are doing with the the checks and like you know running uh confidential inference is building like user aligned AI as in you're taking the alignment that any part of a AI tech stack might have with any other entity and you're cutting that off and so you're only allowing any sort of like AI agent to respond to the will and demand of the user. And so in addition to it being like decentralized and you know on the blockchain, it's also seemingly just like you're trying to optimize for alignment here. I'm seeing a lot of alignment talk out of you.

>> Yeah. So I actually define user ownership as privacy alignment and kind of this like verifiability neutrality, right? So >> yeah to me the alignment like I have a I mean in AI AI land controversial take that you cannot actually do ali like a general alignment because we're not aligned like people are not aligned with each other right you know country is not aligned with each other you can only do alignment with a single person >> right like you can align a a model or system to be on behalf of a single person or it's aligned to be on behalf of a company right generate more money for the company right so those are two options. Everything else is kind of lip service. And I think actually what I

mean again speculating I don't know but it feels why people keep leaving some of the labs who were responsible for alignment and safety is to big part because of this like they kind I mean if I again this is complete speculation but it's like it's just like impossible job because there's no there's no codified properties of alignment for a broader society because we're we are not aligned right things that are you know some things that are like even >> alignment is a meme is what you're saying. >> Yeah, lime is a meme. Yeah. Well, that's that's a whole that's a whole different conversation. Um, but yeah, so I think like I mean, you know, the way the way you want this models to

work, I mean, this is not my my analogy, but uh is like your mom, right? You you want it to be on your side always, right? It doesn't matter what you do, it's always on your side, but at the same time, it's critically pushing you back when you when you are trying to do something stupid. Right. >> Right. And so like you want that level of alignment where it's on your side. It's aligned with your interests. It's trying to make you a better person, you know, more economically successful. >> And at the same time, it's able to like no, no, no, this is not a good idea and this is why, right? Like it's able to shape and and really uh but coming from a side that is on your side, right?

Right now you either have like a psychophony, right? is like everything you say is a amazing idea or again we don't even know how much of the tuning happening is is to generate more revenue for the company right so I mean I can I can tell you kind of from my experience at Google like the the economic incentives kick in and so what does this mean when you're launching a new system at Google you are so-called AB testing if it makes more money right and so you naturally as engineers start optimizing for what will produce more money for the company. Just because that's how you launch new products, that's how you get promoted. And like what makes more money for the company doesn't always mean it's

better product for the user. Doesn't mean it's always better for the user success, right? It may mean like you give them half the answer and they need to search more so they need to see more ads, right? like that's you know there's kind of like there's an inflection point where it it was actually a better product and then at some point it started becoming less of a better product and more how do we make more money from the same people and so I don't think actually is still is there yet to be clear but you know as they're exploring how to put ads in it as they exploring how to kind of um you know crossell etc th those are types of properties that also will come through and this is what we like explicitly against like hey this should be your

product your uh your system and and I actually think uniquely web 3 is the substrate to build that right because if you think of like open AAI they started as a foundation and they ended up being kind of for-profit company that like starts to optimize for those things because they needed to do capital formation and they couldn't do it through foundation and we actually in three have foundations which have a capital form system through token to create that where you have alignment with the user, right? The token holders are the users and so you you have that alignment like we actually solve the problem that you know OpenAI should have launched a token effectively and then they would have been on the on the right

path, >> right? So Ilia, um I want to ask you how you win this game, how near and the userowned AI world wins this game because I see a lot of like nobility in, you know, private AI, userowned AI. It makes sense like it's it's private. It's aligned with me. It's probably good for the world. We don't we we're taking uh you know, power out of the hands of the elites. But you're going up against, you know, just simply giving your driver's license over to anthropic. So you can access the world's most powerful model in this sexy like interface that is, you know, optimized by billions of dollars Silicon Valley capital in order to make the best product possible. And so like

it's it's kind of just like, you know, the Ethereum versus Robin Hood thing. Like what am I going to go do? buy tokenize SpaceX viao on unis swap on Ethereum with my Ethereum wallet or am I just going to open up Robin Hood and I'm just going to buy SpaceX IPO on on Robin Hood and it be custodial and so you're going up against the you know the gargantuans and you're doing it inside of a context that's like cumbersome and difficult and decentralized and slow. One way that this manifests is like, well, we literally have Fable banned and Fable's not even out. And so, you know, it's maybe it's great that like Near can aggregate a bunch of open source models and you optimize for all these different

models and you can have the power of all of them, but they're still not fable. So, how do you just compete with the constraints of the environment that you're in and the principles that you have trying to go up against like the most useful product in the world? Why will your products be better? Yeah. So, I mean it's a great question and this this indeed always been a question for crypto, right? Why why is this a better product? And I think the the answer I always came back to was twofold. One was we do need to first build a better product, right? As you said, you know, buying ono and unis swap with your metam mask is is not right. We I mean on a crypto side like we launched near.com and you can you know buy all

the assets from a single place with a face ID now that's actually you know and it's confidential you don't need to think about like who sees your balances etc like that now is onetoone comparable to kind of Robin Hood experience >> I will say I was using near.com for the first time and I was just cleaning up a bunch of dust from from some very old wallets that I had like 20 wallets that had somewhere between like actually more money than I like somewhere between $20 in one wallet to 2,000 in another wallet and I was sending everything everything to my near wallet because near can literally receive everything. So I will give you points and kudos for that. It was nice that like once I had assets in my near wallet that I could do the uh pass key on my browser or Face ID on my

phone so I never had to like press done through my ledger button 17 times to approve a transaction that it was warning me that it couldn't read to me anyways. And so I I will give you kudos and points for that. That that UX did seem very solid. >> Yeah. So so that that's always been the thing is like how do we create a UX that and by the way for Ledger we'll we'll have sessions as well. So you'll approve once a session with like guard rails and then you'll be able to within those guard rails use a bunch of transactions. >> Cool. >> Uh so because like I I I yeah everyone knows this like that you click the right button on the ledger four times and then you click them both so you can approve the transaction.

>> Yeah. Well, near at least like you can actually read what you're signing. that yeah that's the uh but anyway I I like to the broader point like we need to build better products like that's the I think like the bar in crypto have been very low and uh indeed I think we have we have a need to do this to to create a products that are truly like accessible and like really simplifying at the same time right I mean again the benefit of near.com now compared to Robin Hood is you don't into KYC it is accessible through all chains you know like it's actually a better product than a centralized pro like service provider product because it's

accessible everywhere it's you know you you can access all those things it's always with you anywhere right so like and if this front end stops working you can access it through any other front end by the way because >> like at the end it's a pass key into your into your new account right that holds assets so like it's all protocol >> like I actually have like my own like Claude built me a custom front end uh from the same APIs, right? Just just to uh kind of check that. So I think like we can build better products in result, right? And then yeah, the more restrictions they add actually the better pro the better our product becomes without having it. I think on the model >> is near bullish the more restrictive

governments become. I mean in a way yes like it's always been true for blockchain right is is like the more restrictive the government I mean the the the harder it is to get a bank account the harder it is to transfer money the more bullish uh blockchain becomes um I think I I think it's it's it's going to be kind of very similar arc that happened in in fintech right you know crypto like first nobody cared then there was like we'll ban ban things and make things complicated and so it kind of strived on a on a ridge and then okay we should adopt this because actually it's just a better rails and I think I actually think if if they don't want to get nationalized they

will become decentralized almost right because like if you have a decentralized backbone like you can still be shipping like research and models and and and even safety rules right like like I do think there's there's an this need for some safety rules it just needs to be very explicit like they're bundled in and everybody can see what they are. Um and so we we can actually have like on conventional inference you can have a private model like model weights that are not open weight but they need to you need a hash you need like to know what they are and you can apply additional restrictions if you want like again if a developer wants to launch a model they should be able to do it with restrictions they want like

again this is their freedom as well you you we should we cannot encourage on that uh but they should be knowing what this restrictions right like I'm as a consumer should be like hey this model doesn't allow me to you know explore biotech cool I'll use something else so >> so I think like the as as the technologies mature in decentralized world I think there will be adoption as well it will you know just naturally because like this is a way for them to also offset their uh their risks and potentially tap in into more uh more markets that you know they're going to be cut out if if they continue in this route. Do you think um one one thing that we're noticing is

that um stable coins got adopted in developing uh countries more sooner than uh developed countries like inside of developed countries we use stable coins as like margin on a and that's how we use stable coins but but developing countries use stable coins for payments and like stable coin adoption in Africa no one pushed that Africa just started using them and I I could imagine maybe something similar happens with decentralized AI and also just like AI model aggregators where all of the different models are are like pretty cost effective and not much not that much worse than the top models, the

frontier models and so you get like 90 plus% of the strength of the model for a 90 plus% discount. And if you can and if you know governments in the first world are being restrictive and like putting up walls would do you do you think it's possible that developing countries or just like the the global south for example or just people just away from Silicon Valley are actually adopters of these decentralized AI platforms or or uh products simply because a because the the cost is better. What do you think about that? So I think I think the the cost is actually true even for Silicon Valley, right? I mean you we saw Uber saying that like hey they like in fact

they were limiting how much the like Entropic and Claude can people use. Microsoft cancelled their claw subscription, right? Because they spent like a billion dollars. And so I think this is a more uh like in the months, right? Um I think this is a more fundamental that because this this is actually cheaper fundamentally cheaper and indeed the the gap is there right I I don't want to uh say it's not right now the but between a hardness and indeed maybe routing to multiple models you can actually achieve yeah pretty good

results and we had open router obviously showed some some interesting results as well on this. you can actually get pretty far. You know, your agent hardness can be like, hey, you know, try a cheaper model like if if the answer is not that like because it's iterating, right? It can be like more things that running on background maybe running at like batch API like there's like a lot of tricks you can do to make things cheaper. I do feel there is a yeah just huge opportunity across the board.

Again, this comes back down to really good product and honestly compute. I think that the bottleneck right now is actually compute. What's happening right now is hyperscalers, right? Like three four companies effectively buying out all the new compute that's been built next year or the year even year after in some some cases. So there is like very limited room for tapping into more compute. there's interesting again experiments around how to tap in into Apple devices and and some other things which are pretty powerful and really aggregate their compute uh and so like you know we we're experimenting on some of that as well I

think like yeah the compute is be like even though we aggregating like you know you need something to aggregate right if everything is owned by Microsoft Google >> open AAI right >> uh then there's nothing to aggregate m uh much But but I do think the the cost Yeah. the cost differential is so dramatic that for a lot of cases people will start switching now because like just the spend is going through the roof. Right. The the the flip side of Entropics's revenue being parabolic is that everybody companies spend on Entropic is parabolic. Right.

>> Right. Right. Yeah. And so and again the as as people are starting to like give it more access and more production like more of your IP and more of how you're making decisions are really like if you're a company right and and now the way the decisions are being made is effectively flowing through AI you don't want that like you know if they training on that data they effectively will replicate your business >> in AI right so so confidentiality it becomes also more valuable, more important and the and the safety of the hardness, right? The fact that like if it's non-technical people, you know, doing operations and financial

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targets, fair market value of Bitcoin and Ether, and where we are in the cycle. There's new episodes that are released every Wednesday. They're 30 minutes. They're short. They're punchy. I think this crypto cycle is harder to navigate than most. So, let's do it together. Go subscribe to this podcast. Search the DeFi Report wherever you get your podcast, YouTube, Apple, Spotify, or find a link in the show notes. There's a new episode waiting for you now. >> So, there's um both uh retail individual adoption of, you know, userowned AI. And then there's also institutional like entity corporation adoption of the of the same thing. uh like you could imagine it would be uh corporate rules for a specific corporation just like hey

we are doing all of the uh we're doing ironclaw we're doing the decentralized AI platforms because of all the same reasons that we've been talking about in the podcast just being aligned with the corporation uh where are you focused on for growth like over the next like six months how does Near grow all of it it products it grows ironclaw it grows confidential inference all of the the private and and self user owned AI stack where where do you see like the next marginal user coming from? >> Yeah. So we're targeting kind of this like overlap between like small and medium enterprise and like proumer

because I mean big companies just move slowly right and and it's also hard for them to like re redo their organization to use the technologies the general consumer indeed just doesn't care right like you know your mom probably like is not using it too much at least my mom is not using it too much right beyond asking like beyond like a you know fancy Google and so there's like not as much of the of of that need but the people who are running businesses building things scaling initiatives you know like we call them kind of sovereign individuals like people who actually like have agency and doing things right they're either like a proumer within organization or you know

somebody in organization who wants to implement it kind of broader uh that in organizations that can move quicker. So those are really the kind of target audience and again because like finance, legal, medical like those are use cases where especially privacy is important th those are kind of the main target as well. Uh obviously you know you can you can sign up and and use it for anything but th like crypto, fintech, medical, legal those areas where you especially need privacy because like you know >> ch came out and said like no like if you put any information in chat GPT it's not privilege even if you you were a lawyer

right obviously medical data uh like all over the place. So, so like those are really use cases where you need this the systems. >> There's a since I got you here as we wrap up earlier, there's a tweet that I want you to uh interpret for me because I I'm seeing more and more of this stuff. This is from the the Near Protocol Twitter saying daily confidential TVL on Near Intense is picking up and we're just looking at a graph going up and to the right starting from February uh when you guys launched confidential uh uh TVL. Uh what what is this? What does it mean to have confidential TVL on near intense? What is actually being locked up here? Can you like help me understand this chart?

>> Yeah. Yeah. So, so, so what we launched is effectively maybe like stepping back. We launched a private chart, right? So, this is a chart of near where everything that's happening there uh like you cannot just go into explorer and see how much balance everybody had or what transaction people sent. You need to have your viewing key and then you can see your stuff. Mhm. >> Uh and you can still run smart contracts, you can still run services inside that private chart. >> Uh then we launched intense in that right and kind of uh plugged it in with the rest of it. And then near.com is kind of the first product using that and we actually have few now partners building on top of the same API. So you can again your balance on near.com will

show up on other other places, right? And so now what is like how do you get privacy confidentiality is to have funds at rest in a confidential place right because like if you just you know if you send money through confidential shard and right away somewhere else well that's very much trackable right >> you can map that right >> yeah you can map that now it's still useful in some cases so I don't want to completely discourage this but that doesn't give you true privacy uh so this is actually balance of people who put their assets into private shard and keeping it there.

>> Oh, this is your privacy set. >> Yeah, this is a privacy set. And >> this is like this is like the Zcash uh percentage shielded except it's on percentage. It's just like a total c like total volume total uh ass yeah total amount. And and the cool thing is this is different assets, right? There's near, there's Zcash, there's USDC, USDT, Bitcoin, there's some SUI, some some whatever Salana, right? So it's >> but can't USDC be held across many chains? So how how does this account for that? >> So so we uh like whenever you deposit USDC here it converts into like near native USC.

>> Okay. Okay. Okay. >> And same same thing with Zcash with Zack. >> So Zach is uh we have our omni brbridge tag that effectively holds it on near. This is also the same Ccash brought to Salana and like so everything we route like we have the kind of our omni bridge deck do that >> and so yeah so this is all of the assets of different uh different assets in one place >> and uh importantly yeah because you can also trade privately this whole set actually fits right because normally you would have per asset right like if you you know Zcash you only have Zack Tatada cashache every pool was a separate asset this is you come in and you can trade.

So you you know maybe you came in with GCC but you're actually holding Salana maybe you you know bought a bunch of NER so like that whole whole sad effect really is anonymity for everyone and this is just one in order to get privacy you can't have privacy in one specific pocket you kind of need privacy everywhere for the privacy to be real and what I see near doing is they're just like building private puzzle pieces and for agents and for humans who want to transact privately on the internet. Maybe you can use Zcash, but not everyone wants to use Zcash. Maybe they want to use USCC when maybe they want to use dollars. Maybe agents want privacy.

This is how we transact privately on the internet. >> Well, it's it's a vertical stack, right, for the like from blockchain to AI, right? And Venice was a good example, right? Like you you can pay with VV and DM for your Venice product, right? And so we have VVV on confidential intent. So you can buy it confidentially and then you can use Venice which actually uses like in the end to end encrypted mode uses nearai inference right so you can kind of have like the full stacks through Venice as like one of the products and so that's idea is like as these products coming together you get like full sovereign mode where everything's confidential everything's yours

>> your data your assets your choice >> full sovereign mode I like that I like that a lot uh IA it's been pretty cool to watch Near do some of these things. Uh I've been pretty excited to see what what you guys have done. Uh it just it seems to be you guys are building for the the current age that we are in. Uh and so as governments get more restrictive and as they clamp down and ask me to KYC so I can have more powerful bottles uh I know that there's near on the other side of that trade. So thank you for doing what you're doing. Thank you for coming on the show today and answering my questions. Uh if people are curious or just like to go down the top of the near rabbit hole, where would they go?

>> Uh I mean you can start with near.org. Um, and then if you're more interested in like near.ai as well has a bunch of stuff. And then if you want to use near go.com and uh became consential today become confidential. Hell yeah. Thanks for coming on the show. Bankless Nation, you guys know the deal. Crypto is risky. You can lose what you put in. But this is a frontier. It's not for everyone. And we're glad you're with us on the bankless journey. Thanks a lot.