20VC: Scale's Alex Wang on Why Data Not Compute is the Bottleneck to Foundation Model Performance, Why AI is the Greatest Military Asset Ever, Is China Really Two Years Behind the US in AI and Why the CCPs Industrial Approach is Better than Anyone Else's

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The Twenty Minute VC

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4.4 • 637 Ratings

🗓️ 12 June 2024

⏱️ 60 minutes

🔗️ Recording | iTunes | RSS

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Summary

Alex Wang is the Founder and CEO @ Scale.ai, the company that allows you to make the best models with the best data. To date, Alex has raised $1.6BN for the company with a last reported valuation of $14BN earlier this year. Scale tripled their ARR in 2023 and is expected to hit $1.4BN in ARR by the end of 2024. Their investors include Accel, Index, Thrive, Founders Fund, Meta and Nvidia to name a few.

In Today's Show with Alex Wang We Discuss:

1. Foundation Models: Diminishing Returns:

What are the three core pillars that can meaningfully improve foundation models performance?
Why is data the single largest bottleneck to the performance of models today?
What data do we need to capture that we do not currently, that will have the biggest impact on model performance moving forward?
Will we see the largest companies in the world revert back to on-prem with the increasing security challenges of migrating all customer data to foundation models?

2. AI: A Military Asset in Global Conflict: China + Russia

Why does Alex believe that AI has the potential to be an even more powerful military asset than nuclear weapons?
If this is the case, should we have open systems? Do we not have to have closed systems?
Why does Alex believe that the CCP's approach to industrial policy is better than anyone else's?
How does Alex evaluate the rise of Chinese EV car manufacturers in the last few years?
Does Alex really believe that China is two years behind the US in the AI race?

3. "I Get Fairer Treatment in Congress than in the Press":

Why does Alex believe that the best PR is no PR?
Why does Alex believe that he got fairer treatment in congress than he does in the media?
Why does Alex believe that all founders should look to own their own distribution channels today?

4. Alex Wang: AMA:

What are some of Alex's biggest lessons from Patrick Collison on the impact that a hot company brand has on the ability for that company to hire the best?
Does Alex think Trump is going to win? What would be the impact if he were to?
Why does Alex believe that enterprise software will be changed forever in the next few years?
What question is Alex never asked that he thinks he should be asked?

Transcript

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0:00.0	At its core, this AI technology has the potential to be one of the greatest military assets
0:06.8	that humanity has ever seen.
0:08.4	But it's even more of a military asset than nukes.
0:10.7	Let's say China or Russia had AGI today and the United States didn't.
0:16.0	I would imagine they would use that to conquer.
0:18.6	The CCP's system is incredibly good at taking very
0:23.7	aggressive centralized action and centralized industrial policy to drive forward critical industries.
0:29.1	They have a clear shot at racing forward. This is 20VC with me, Harry Stebbings, and my word. What a show
0:34.8	we have in store for you today. This was such a special one to do
0:37.8	live in the studio as we welcome Alex Wang, found and CEO at Scale AI, the company that trebled
0:43.5	revenue in 2023 and is expected to finish 2024 with 1.4 billion in ARR. Earlier this year, they raised
0:51.2	$1 billion at a reported $14 billion valuation, and this show
0:55.6	was immense, really, one of my favorite shows to record in recent times, and so let me know
1:00.5	what you think, and you can watch the full show from the studio on YouTube by searching
1:04.5	for 20 VC, that's 20 VC.
1:07.1	But before we dive in, let's face it, your employees probably hate your procurement process.
1:11.9	It's hard to follow.
1:12.9	It's cobbled together across systems, and it's a waste of valuable time and resources.
1:17.2	And as a result, you probably are facing difficulties, getting full visibility, managing
1:21.6	compliance and controlling spend.
1:23.8	It's time for a better way.
1:25.3	Meet Zip, the first modern intake to pay solution that can
	...

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