What AI Can Actually Do and Some Things We Know

Happy Sunday (and happy Passover to our readers who celebrate)! This is an especially unleavened edition of our newsletter.

This week: Michael Taylor explains how to become an expert in any subject using AI’s pattern-recognition capabilities; Dan Shipper unpacks the implications on creativity of how LLMs condense complex concepts into consumable morsels; Evan Armstrong synthesizes his most important insights from two years of writing with the help of ChatGPT and Claude; and Casey Rosengren shares practical tools from acceptance and commitment therapy to help you get unstuck. On How Do You Use ChatGPT?, Dan chats with Hume CEO Alan Cowen, whose AI model can decode human emotions. Plus: our take on the latest business and tech news.

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Our stories

🔏 "How to Become an Expert at Anything With AI" by Michael Taylor: Want to become an expert in a new field overnight? AI can help you do just that. Michael Taylor teaches you how to use ChatGPT and Claude to identify patterns in successful writing, products, and more. Read this if you want to use AI's analysis capabilities to level up your skills in any domain.

"What Can Language Models Actually Do?” by Dan Shipper/Chain of Thought: One way to think about LLMs is that they just compress text into a smaller size, like a foot crushing a can of Coke. But the smaller version isn't a piece of junk; it's a perfectly packaged mini-Coke that's still drinkable. This has profound implications for ideas, making them far more legible, interesting, and monetizable. Read this if you want to understand how to harness the power of language models for your work.

"Some Things I Know (And Some Things I Don't)" by Evan Armstrong/Napkin Math: Evan fed all his writing into ChatGPT and Claude to synthesize what he's learned. The result? A mind palace of insights, each sentence a doorway to deeper understanding. Read this to explore his most important ideas, from which companies win (and why) to the power of AI. 🔏 Paid subscribers get a guide on how to do this exercise with their own writing.

"How to Do Hard Things" by Casey Rosengren/No Small Plans: Want to build a company but find yourself stuck? Casey Rosengren found that acceptance and commitment therapy (ACT) can help you go for it. Read this if you want to learn practical tools for getting out of your own way and taking action toward your goals. 🔏 Every subscribers can take Casey's new ACT-based mindfulness course, The Hidden Discipline, for just $699 (normally $1,000).

🎧 "He Built an AI Model That Can Decode Your Emotions" by Dan Shipper/Chain of Thought: What if AI could understand not just what you say, but how you say it? Alan Cowen, CEO of Hume, has built the first AI model that can interpret human emotions from vocal inflections and facial expressions—and respond in an emotionally intelligent way. Listen to this episode to learn how AI is evolving to understand and optimize for human well-being. 🔏 Paid subscribers have access to the episode transcript.

Chain of links

A new model, A new model, A new model. This week Apple, Adobe, and Microsoft released new open-source models. While big models like GPT-4 dominate mind-share, these smaller, use case-specific models are the future: Companies want to run AI locally and cheaply.

6 months, 0 in revenue, $2 billion in valuation. Cognition Labs, the maker of AI coding agent Devin, raised $175 million on a $2 billion valuation, a month after being valued at $350 million. The company achieved this with no revenue. If you take a deep breath in through your nose and catch that scent, yes, that smells like a bubble. That isn’t necessarily a bad thing! Bubbles are a necessary part of markets, but it does mean you should be cautious.

It’s time to build AI hardware! The Rabbit R1—an AI gadget that fits in the palm of your hand—came out this week. It is orange, it is cute, and it may or may not work, but we love to see people making new things. A world dominated by smartphone form factors is one of less innovation. We know the problems of our current devices, and it’s time for something new.

Google better watch their backs. Perplexity, an AI-powered search startup, raised $63 million at a billion-dollar valuation. The way its search works would severely undercut Google’s revenue model. It is a classic case of the innovator's dilemma, and we’ll see if the Perplexity product can improve enough to really take a bite at the search apple.

Robo-Ray-Ban. Meta released a multi-modal AI update for its Ray-Ban sunglasses. It can look at something, take a picture, and tell you what it is. It’s a fun, hands-free way to take pictures and get questions answered. Great product! —Evan Armstrong

The napkin math

Tech giants are paying big for NBA rights. Amazon and YouTube are rumored to be frontrunners to snap up streaming rights to the NBA. Sports rights are valuable because they are easy to model in Excel. As compared to new scripted programming, sports come with a built-in fan base and consistent viewing numbers. Predictability is one of the most valuable things in the world.

Tinker. TikTok. Soldier. Spy-app. President Biden signed a bill forcing TikTok owner Bytedance to divest the service or it'll be banned in the U.S. If app store providers like Google or Apple keep TikTok in U.S. stores, they’ll face a fine of $5,000 per user, for a rough total of $850 billion. Proponents say the move is necessary for national security, detractors say it is an affront to free speech. My view is a third thing entirely (Instagram Reels would win in the end, and the real issue is that short-form video is a plague upon human consciousness).

Crypto is back (e.g., the U.S. dollar reigns supreme). Stripe announced that it’ll soon allow stores to let users to pay with crypto stablecoins while it’ll pay merchants in fiat. The American dollar is the global reserve currency—it’s accepted everywhere and is a general store of value. Many of the most exciting crypto companies put that dollar on the blockchain and allow people to easily exchange it, obviating the inherent weakness of their local currency. Stripe just made it possible for everyone to transact with USD. It's a big deal.

IPOs are back bb! Rubrik, a software company that does cybersecurity or something, went public. Stocks went up about 16 percent on the first day of trading after raising $752 million. If, like the rest of humanity, you don’t care about software stocks, you should care about this because it injects liquidity back into the technology ecosystem. More IPOs means more cash to invest in more innovation. *In Elton John’s voice* It’s the circllllllle of capital.

$23 million to disrupt college. My wife, who is getting her Ph.D. at Boston University, is participating in a strike. It has been shocking to see how poorly the BU administration has treated its graduate workers. The more I’ve learned about administrative bloat and the student debt cycle, the more convinced I am that something has to change. Graduate workers should be able to afford rent, students shouldn’t be crippled with debt, and people should get jobs at the end. This is why a recent round into community college startup Campus caught my eye. With its model, adjunct professors make a lot more while students only pay $7,200 and get a coach to encourage them. Cheering for this startup to succeed. —EA

The examined life

Craft is all you need. Seinfeld is my favorite TV show, and I’ve always admired how much craft went into the seemingly simple program. Jerry Seinfeld is 70 and still obsessed with standup, but, weirdly, has chosen to do a movie about Pop-Tarts. I doubt the movie will be good, but the interview he did with GQ promoting it is. The ending line hits: “Get good at something. That’s it. Everything else is bullshit.” Highly recommended. —EA