back to indexStephen Schwarzman: Going Big in Business, Investing, and AI | Lex Fridman Podcast #96
link |
The following is a conversation with Stephen Schwarzman,
link |
CEO and cofounder of Blackstone,
link |
one of the world's leading investment firms
link |
with over $530 billion of assets under management.
link |
He's one of the most successful business leaders in history.
link |
I recommend his recent book called What It Takes
link |
that tells stories and lessons from his personal journey.
link |
Stephen is a philanthropist
link |
and one of the wealthiest people in the world,
link |
recently signing the Giving Pledge,
link |
thereby committing to give the majority of his wealth
link |
to philanthropic causes.
link |
As an example, in 2018, he donated $350 million to MIT
link |
to help establish his new College of Computing,
link |
the mission of which promotes interdisciplinary, big,
link |
bold research in artificial intelligence.
link |
For those of you who know me,
link |
know that MIT is near and dear to my heart
link |
and always will be.
link |
It was and is a place where I believe big, bold,
link |
revolutionary ideas have a home,
link |
and that is what is needed
link |
in artificial intelligence research in the coming decades.
link |
Yes, there's institutional challenges,
link |
but also there's power
link |
in the passion of individual researchers,
link |
from undergrad to PhD,
link |
from young scientists to senior faculty.
link |
I believe the dream to build intelligence systems
link |
burns brighter than ever in the halls of MIT.
link |
This conversation was recorded recently,
link |
but before the outbreak of the pandemic.
link |
For everyone feeling the burden of this crisis,
link |
I'm sending love your way.
link |
Stay strong, we're in this together.
link |
This is the Artificial Intelligence Podcast.
link |
If you enjoy it, subscribe on YouTube,
link |
review it with five stars on Apple Podcast,
link |
support it on Patreon,
link |
or simply connect with me on Twitter at Lex Friedman,
link |
spelled F R I D M A N.
link |
As usual, I'll do a few minutes of ads now,
link |
and never any ads in the middle
link |
that can break the flow of the conversation.
link |
I hope that works for you,
link |
and doesn't hurt the listening experience.
link |
Quick summary of the ads.
link |
Two sponsors, Masterclass and ExpressVPN.
link |
Please consider supporting the podcast
link |
by signing up to Masterclass at masterclass.com slash lex,
link |
and getting ExpressVPN at expressvpn.com slash lexpod.
link |
This show is sponsored by Masterclass.
link |
Sign up at masterclass.com slash lex
link |
to get a discount and support this podcast.
link |
When I first heard about Masterclass,
link |
I thought it was too good to be true.
link |
For $180 a year, you get an all access pass
link |
to watch courses from, to list some of my favorites,
link |
Chris Hadfield on Space Exploration,
link |
Neil deGrasse Tyson on Scientific Thinking and Communication,
link |
Will Wright, creator of SimCity and Sims on game design,
link |
Carlos Santana on guitar, Gary Kasparov on chess,
link |
Daniel Negrano on poker, and many, many more.
link |
Chris Hadfield explaining how rockets work,
link |
and the experience of being launched into space alone
link |
is worth the money.
link |
By the way, you can watch it on basically any device.
link |
Once again, sign up at masterclass.com slash lex
link |
to get a discount and to support this podcast.
link |
This show is sponsored by ExpressVPN.
link |
Get it at expressvpn.com slash lex pod
link |
to get a discount and to support this podcast.
link |
I've been using ExpressVPN for many years.
link |
It's easy to use, press the big power on button,
link |
and your privacy is protected.
link |
And, if you like, you can make it look
link |
like your location is anywhere else in the world.
link |
I might be in Boston now, but it can make you look like
link |
I'm in New York, London, Paris,
link |
or anywhere else in the world.
link |
This has a large number of obvious benefits.
link |
Certainly, it allows you to access international versions
link |
of streaming websites like the Japanese Netflix
link |
ExpressVPN works on any device you can imagine.
link |
I use it on Linux, shout out to Ubuntu 2004,
link |
Windows, Android, but it's available everywhere else too.
link |
Once again, get it at expressvpn.com slash lex pod
link |
to get a discount and to support this podcast.
link |
And now, here's my conversation with Stephen Schwarzman.
link |
Let's start with a tough question.
link |
What idea do you believe,
link |
whether grounded in data or in intuition,
link |
that many people you respect disagree with you on?
link |
Well, there isn't all that much anymore
link |
since the world's so transparent.
link |
But one of the things I believe in and put it in the book,
link |
the book, what it takes is if you're gonna do something,
link |
do something very consequential.
link |
Do something that's quite large, if you can, that's unique.
link |
Because if you operate in that kind of space,
link |
when you're successful, it's a huge impact.
link |
The prospect of success enables you to recruit people
link |
who wanna be part of that.
link |
And those type of large opportunities
link |
are pretty easily described.
link |
And so, not everybody likes to operate at scale.
link |
Some people like to do small things
link |
because it is meaningful for them emotionally.
link |
And so, occasionally, you get a disagreement on that.
link |
But those are life choices rather than commercial choices.
link |
That's interesting.
link |
What good and bad comes with going big?
link |
We often, in America, think big is good.
link |
What's the benefit, what's the cost
link |
in terms of just bigger than business,
link |
but life, happiness, the pursuit of happiness?
link |
Well, you do things that make you happy.
link |
It's not mandated.
link |
And everybody's different.
link |
And some people, if they have talent,
link |
like playing pro football,
link |
other people just like throwing the ball around,
link |
not even being on a team.
link |
Depends what your objectives are.
link |
Depends what your talent is.
link |
Depends what gives you joy.
link |
So, in terms of going big,
link |
is it both for impact on the world
link |
and because you personally gives you joy?
link |
Well, it makes it easier to succeed, actually.
link |
Because if you catch something, for example,
link |
that's cyclical, that's a huge opportunity,
link |
then you usually can find some place
link |
within that huge opportunity where you can make it work.
link |
If you're prosecuting a really small thing
link |
and you're wrong, you don't have many places to go.
link |
So, I've always found that the easy place to be
link |
and the ability where you can concentrate human resources,
link |
get people excited about doing really impactful big things,
link |
and you can afford to pay them, actually.
link |
Because the bigger thing can generate much more
link |
in the way of financial resources.
link |
So, that brings people out of talent to help you.
link |
And so, all together, it's a virtuous circle, I think.
link |
How do you know an opportunity when you see one
link |
in terms of the one you wanna go big on?
link |
Is it intuition, is it facts?
link |
Is it back and forth deliberation with people you trust?
link |
What's the process?
link |
Is it art, is it science?
link |
Well, it's pattern recognition.
link |
And how do you get to pattern recognition?
link |
First, you need to understand the patterns
link |
and the changes that are happening.
link |
And that's either, it's observational on some level.
link |
You can call it data or you can just call it listening
link |
to unusual things that people are saying
link |
that they haven't said before.
link |
And I've always tried to describe this.
link |
It's like seeing a piece of white lint on a black dress.
link |
But most people disregard that piece of lint.
link |
They just see the dress.
link |
I always see the lint.
link |
And I'm fascinated by how did something get someplace
link |
it's not supposed to be?
link |
So, it doesn't even need to be a big discrepancy.
link |
But if something shouldn't be someplace
link |
in a constellation of facts that sort of made sense
link |
in a traditional way, I've learned that if you focus
link |
on why one discordant note is there,
link |
that's usually a key to something important.
link |
And if you can find two of those discordant notes,
link |
that's usually a straight line to someplace.
link |
And that someplace is not where you've been.
link |
And usually when you figure out that things are changing
link |
or have changed and you describe them,
link |
which you have to be able to do
link |
because it's not some odd intuition.
link |
It's just focusing on facts.
link |
It's almost like a scientific discovery, if you will.
link |
When you describe it to other people in the real world,
link |
they tend to do absolutely nothing about it.
link |
And that's because humans are comfortable
link |
in their own reality.
link |
And if there's no particular reason at that moment
link |
to shake them out of their reality,
link |
they'll stay in it even if they're ultimately
link |
And I've always been stunned that when I explain
link |
where we're going, what we're doing and why,
link |
almost everyone just says, that's interesting.
link |
And they continue doing what they're doing.
link |
And so I think it's pretty easy to do that.
link |
But what you need is a huge data set.
link |
So before AI and people's focus on data,
link |
I've sort of been doing this mostly my whole life.
link |
I'm not a scientist, I'm not let alone a computer scientist.
link |
And you can just hear what people are saying
link |
when somebody says something or you observe something
link |
that simply doesn't make sense.
link |
That's when you really go to work.
link |
The rest of it's just processing.
link |
You know, on a quick tangent,
link |
pattern recognition is a term often used
link |
throughout the history of AI.
link |
That's the goal of artificial intelligence
link |
is pattern recognition, right?
link |
But there's, I would say, various flavors of that.
link |
So usually pattern recognition refers to the process
link |
of the, we said dress and the lint on the dress.
link |
Pattern recognition is very good at identifying the dress
link |
as looking at the pattern that's always there,
link |
that's very common and so on.
link |
You almost refer to a pattern that's like
link |
in what's called outlier detection in computer science,
link |
right, the rare thing, the small thing.
link |
Now, AI is not often good at that.
link |
Do you, just almost philosophically,
link |
the kind of decisions you made in your life
link |
based scientifically almost on data,
link |
do you think AI in the future will be able to do?
link |
Is it something that could be put down into code
link |
or is it still deeply human?
link |
It's tough for me to say since I don't have domain knowledge
link |
in AI to know everything that could or might occur.
link |
I know, sort of in my own case,
link |
that most people don't see any of that.
link |
I just assumed it was motivational, you know,
link |
but it's also sort of, it's hardwiring.
link |
What are you wired or programmed to be finding or looking for?
link |
It's not what happens every day.
link |
That's not interesting, frankly.
link |
I mean, that's what people mostly do.
link |
I do a bunch of that too because, you know,
link |
that's what you do in normal life.
link |
But I've always been completely fascinated
link |
by the stuff that doesn't fit.
link |
Or the other way of thinking about it,
link |
it's determining what people want
link |
without them saying it.
link |
That's a different kind of pattern.
link |
You can see everything they're doing.
link |
There's a missing piece.
link |
They don't know it's missing.
link |
You think it's missing given the other facts.
link |
You know about them and you deliver that
link |
and then that becomes, you know,
link |
sort of very easy to sell to them.
link |
To linger on this point a little bit,
link |
you've mentioned that in your family,
link |
when you were growing up,
link |
nobody raised their voice in anger or otherwise.
link |
And you said that this allows you to learn to listen
link |
and hear some interesting things.
link |
Can you elaborate as you have been on that idea,
link |
what do you hear about the world if you listen?
link |
Well, you have to listen really intensely
link |
to understand what people are saying
link |
as well as what people are intending
link |
because it's not necessarily the same thing.
link |
And people mostly give themselves away
link |
no matter how clever they think they are.
link |
Particularly if you have the full array of inputs.
link |
In other words, if you look at their face,
link |
you look at their eyes, which are the window on the soul,
link |
it's very difficult to conceal what you're thinking.
link |
You look at facial expressions and posture.
link |
You listen to their voice, which changes.
link |
You know, when you're talking about something
link |
you're comfortable with or not,
link |
are you speaking faster?
link |
Is the amplitude of what you're saying higher?
link |
Most people just give away what's really on their mind.
link |
You know, they're not that clever.
link |
They're busy spending their time thinking about
link |
what they're in the process of saying.
link |
And so if you just observe that, not in a hostile way,
link |
but just in an evocative way
link |
and just let them talk for a while,
link |
they'll more or less tell you almost completely
link |
what they're thinking,
link |
even the stuff they don't want you to know.
link |
And once you know that, of course,
link |
it's sort of easy to play that kind of game
link |
because they've already told you
link |
everything you need to know.
link |
And so it's easy to get to a conclusion
link |
if there's meant to be one, an area of common interest,
link |
since you know almost exactly what's on their mind.
link |
And so that's an enormous advantage
link |
as opposed to just walking in someplace
link |
and somebody telling you something
link |
and you believing what they're saying.
link |
There are so many different levels of communication.
link |
So a powerful approach to life you discuss in the book
link |
on the topic of listening and really hearing people
link |
is figuring out what the biggest problem,
link |
bothering a particular individual or group is
link |
and coming up with a solution to that problem
link |
and presenting them with a solution, right?
link |
In fact, you brilliantly describe a lot of simple things
link |
that most people just don't do.
link |
It's kind of obvious,
link |
find the problem that's bothering somebody deeply.
link |
And as you said, I think you've implied
link |
that they will usually tell you what the problem is,
link |
but can you talk about this process
link |
of seeing what the biggest problem for a person is,
link |
trying to solve it,
link |
and maybe a particularly memorable example?
link |
Sure, if you know you're gonna meet somebody,
link |
there are two types of situations, chance meetings,
link |
and the second is you know you're gonna meet somebody.
link |
So let's take the easiest one,
link |
which is you know you're gonna meet somebody.
link |
And you start trying to make pretend you're them.
link |
What's on their mind?
link |
What are they thinking about in their daily life?
link |
What are the big problems they're facing?
link |
So if they're, you know, to make it a really easy example,
link |
you know, make pretend, you know,
link |
they're like president of the United States.
link |
Doesn't have to be this president, could be any president.
link |
So you sort of know what's more or less on their mind
link |
because the press keeps reporting it.
link |
And you see it on television, you hear it.
link |
People discuss it.
link |
So you know if you're gonna be running into somebody
link |
in that kind of position.
link |
You sort of know what they look like already.
link |
You know what they sound like.
link |
You know what their voice is like.
link |
And you know what they're focused on.
link |
And so if you're gonna meet somebody like that,
link |
what you should do is take the biggest unresolved issue
link |
that they're facing and come up with
link |
a few interesting solutions
link |
that basically haven't been out there.
link |
Or that you haven't heard anybody else
link |
always thinking about.
link |
So just to give you an example,
link |
I was sort of in the early 1990s
link |
and I was invited to something at the White House
link |
which was a big deal for me because I was like,
link |
you know, a person from no place.
link |
And you know, I had met the president once before
link |
because it was President Bush
link |
because his son was in my dormitory.
link |
So I had met him at Parents Day.
link |
I mean it's just like the oddity of things.
link |
So I knew I was gonna see him
link |
because that's where the invitation came from.
link |
And so there was something going on
link |
and I just thought about two or three ways
link |
to approach that issue.
link |
And you know, at that point I was separated
link |
and so I had brought a date to the White House
link |
and so I saw the president
link |
and we sort of went over in a corner for about 10 minutes
link |
and discussed whatever this issue was.
link |
And I later went back to my date.
link |
It was a little rude
link |
but it was meant to be confidential conversation
link |
and I barely knew her.
link |
And you know, she said,
link |
what were you talking about all that time?
link |
I said, well, you know,
link |
there's something going on in the world
link |
and I've thought about different ways
link |
of perhaps approaching that and he was interested.
link |
And the answer is of course he was interested.
link |
Why wouldn't he be interested?
link |
There didn't seem to be an easy outcome.
link |
And so, you know, conversations of that type,
link |
once somebody knows you're really thinking
link |
about what's good for them and good for the situation,
link |
it has nothing to do with me.
link |
I mean, it's really about being in service,
link |
you know, to the situation.
link |
Then people trust you and they'll tell you other things
link |
because they know your motives are basically very pure.
link |
You're just trying to resolve a difficult situation
link |
or help somebody do it.
link |
So these types of things, you know,
link |
that's a planned situation, that's easy.
link |
Sometimes you just come upon somebody
link |
and they start talking and you know,
link |
that requires, you know, like different skills.
link |
You know, you can ask them,
link |
what have you been working on lately?
link |
What are you thinking about?
link |
You can ask them, you know,
link |
has anything been particularly difficult?
link |
And you know, you can ask most people
link |
if they trust you for some reason, they'll tell you.
link |
And then you have to instantly go to work on it.
link |
And you know, that's not as good
link |
as having some advanced planning,
link |
but you know, almost everything going on is like out there.
link |
And people who are involved with interesting situations,
link |
they're playing in the same ecosystem.
link |
They just have different roles in the ecosystem.
link |
And you know, you could do that
link |
with somebody who owns a pro football team
link |
that loses all the time.
link |
We specialize in those in New York.
link |
And you know, you already have analyzed
link |
why they're losing, right?
link |
Inevitably, it's because they don't have a great quarterback,
link |
they don't have a great coach,
link |
and they don't have a great general manager
link |
who knows how to hire the best talent.
link |
Those are the three reasons why a team fails, right?
link |
Because there are salary caps,
link |
so every team pays a certain amount of money
link |
for all their players.
link |
So it's gotta be those three positions.
link |
So if you're talking with somebody like that,
link |
inevitably, even though it's not structured,
link |
you'll know how their team's doing
link |
and you'll know pretty much why.
link |
And if you start asking questions about that,
link |
they're typically very happy to talk about it
link |
because they haven't solved that problem.
link |
In some cases, they don't even know that's the problem.
link |
It's pretty easy to see it.
link |
So, you know, I do stuff like that,
link |
which I find is intuitive as a process,
link |
but, you know, leads to really good results.
link |
Well, the funny thing is when you're smart,
link |
for smart people, it's hard to escape their own ego
link |
and the space of their own problems,
link |
which is what's required
link |
to think about other people's problems.
link |
It requires for you to let go of the fact
link |
that your own problems are all important
link |
and then to talk about your,
link |
I think while it seems obvious
link |
and I think quite brilliant,
link |
it's just a difficult leap for many people,
link |
especially smart people,
link |
to empathize with, truly empathize with the problems
link |
Well, I have a competitive advantage,
link |
which is, I don't think I'm so smart.
link |
So, you know, it's not a problem for me.
link |
Well, the truly smartest people I know
link |
say that exact same thing.
link |
Yeah, being humble is really useful,
link |
competitive advantage, as you said.
link |
How do you stay humble?
link |
Well, I haven't changed much.
link |
Since I was in my mid teens.
link |
You know, I was raised partly in the city
link |
and partly in the suburbs.
link |
And, you know, whatever the values I had at that time,
link |
those are still my values.
link |
I call them like middle class values,
link |
that's how I was raised.
link |
And I've never changed, why would I?
link |
And so the accoutrement of, you know,
link |
the rest of your life has gotta be put on the same,
link |
you know, like solid foundation of who you are.
link |
Because if you start losing who you really are,
link |
So I've never had the desire to be somebody else.
link |
I just do other things now that I wouldn't do
link |
as a, you know, sort of as a middle class kid
link |
from Philadelphia.
link |
I mean, my life has morphed on a certain level.
link |
But part of the strength of having integrity
link |
of personality is that you can remain in touch
link |
with everybody who comes from that kind of background.
link |
And, you know, even though I do some things
link |
that aren't like that, you know,
link |
in terms of people I meet or situations I'm in,
link |
I always look at it through the same lens.
link |
And that's very psychologically comfortable
link |
and doesn't require me to make any real adjustments
link |
in my life and I just keep plowing ahead.
link |
There's a lot of activity in progress in recent years
link |
around effective altruism.
link |
I wanted to bring this topic with you
link |
because it's an interesting one from your perspective.
link |
You can put it in any kind of terms,
link |
but it's philanthropy that focuses on maximizing impact.
link |
How do you see the goal of philanthropy,
link |
both from a personal motivation perspective
link |
and the societal big picture impact perspective?
link |
Yeah, I don't think about philanthropy
link |
the way you would expect me to, okay?
link |
I look at, you know, sort of solving big issues,
link |
addressing big issues, starting new organizations to do it,
link |
much like we do in our business.
link |
You know, we keep growing our business
link |
not by taking the original thing and making it larger,
link |
but continually seeing new things and building those.
link |
And, you know, sort of marshaling financial resources,
link |
human resources, and in our case,
link |
because we're in the investment business,
link |
we find something new that looks like
link |
it's gonna be terrific and we do that
link |
and it works out really well.
link |
All I do in what you would call philanthropy
link |
is look at other opportunities to help society.
link |
And I end up starting something new,
link |
marshaling people, marshaling a lot of money,
link |
and then at the end of that kind of creative process,
link |
somebody typically asks me to write a check.
link |
I don't wake up and say,
link |
how can I give large amounts of money away?
link |
I look at issues that are important for people.
link |
In some cases, I do smaller things.
link |
Because it's important to a person, and, you know,
link |
I can relate to that person.
link |
There's some unfairness that's happened to them.
link |
And so in situations like that,
link |
I'd give money anonymously and help them out.
link |
And, you know, it's like a miniature version
link |
of addressing something really big.
link |
So, you know, at MIT, I'm a little bit
link |
you know, at MIT, I've done a big thing,
link |
you know, helping to start this new school of computing.
link |
And I did that because, you know,
link |
I saw that, you know, there's sort of like a global race on
link |
in AI, quantum, and other major technologies.
link |
And I thought that the US could use more enhancement
link |
from a competitive perspective.
link |
And I also, because I get to China a lot
link |
and I travel around a lot compared to a regular person,
link |
you know, I can see the need to have control
link |
of these types of technologies.
link |
So when they're introduced, we don't create a mess
link |
like we did with the internet and with social media.
link |
Unintended consequence, you know,
link |
that's creating all kinds of issues and freedom of speech
link |
and the functioning of liberal democracies.
link |
So with AI, it was pretty clear
link |
that there was enormous difference of views
link |
around the world by the relatively few practitioners
link |
in the world who really knew what was going on.
link |
And by accident, I knew a bunch of these people,
link |
you know, who were like big famous people.
link |
And I could talk to them and say,
link |
why do you think this is a force for bad?
link |
And someone else, why do you feel this is a force for good?
link |
And how do we move forward with the technology
link |
by the same time, make sure that whatever is potentially,
link |
you know, sort of on the bad side of this technology
link |
with, you know, for example, disruption of workforces
link |
and things like that, that could happen much faster
link |
than the industrial revolution.
link |
What do we do about that?
link |
And how do we keep that under control
link |
so that the really good things about these technologies,
link |
which will be great things,
link |
not good things are allowed to happen?
link |
So to me, you know, this was one of the great issues
link |
The number of people who were aware of it were very small.
link |
I just accidentally got sucked into it.
link |
And as soon as I saw it, I went, oh my God, this is mega,
link |
both on a competitive basis globally,
link |
but also in terms of protecting society
link |
and benefiting society.
link |
So that's how I got involved.
link |
And at the end, you know, sort of the right thing
link |
that we figured out was, you know,
link |
sort of double MIT's computer science faculty
link |
and basically create the first AI enabled university
link |
And, you know, in effect, be an example,
link |
a beacon to the rest of the research community
link |
around the world academically,
link |
and create, you know, a much more robust U.S. situation,
link |
competitive situation among the universities.
link |
Because if MIT was going to raise a lot of money
link |
and double its faculty, well, you could bet that,
link |
you know, a number of other universities
link |
were going to do the same thing.
link |
At the end of it, it would be great for knowledge creation,
link |
you know, great for the United States, great for the world.
link |
And so I like to do things that I think are really positive,
link |
things that other people aren't acting on,
link |
that I see for whatever the reason.
link |
First, it's just people I meet and what they say,
link |
and I can recognize when something really profound
link |
is about to happen or needs to.
link |
And I do it, and at the end of the situation,
link |
somebody says, can you write a check to help us?
link |
And then the answer is sure.
link |
I mean, because if I don't, the vision won't happen.
link |
But it's the vision of whatever I do
link |
that is compelling.
link |
And essentially, I love that idea of whether it's small
link |
at the individual level or really big,
link |
like the gift to MIT to launch the College of Computing.
link |
It starts with a vision, and you see philanthropy as,
link |
the biggest impact you can have is by launching something new,
link |
especially on an issue that others aren't really addressing.
link |
And I also love the notion, and you're absolutely right,
link |
that there's other universities, Stanford, CMU,
link |
I'm looking at you, that would essentially,
link |
the seed will create other, it'll have a ripple effect
link |
that potentially might help US be a leader
link |
or continue to be a leader in AI.
link |
It's potentially a very transformative research
link |
Just to linger on that point a little bit,
link |
what is your hope long term for the impact
link |
the college here at MIT might have in the next five, 10,
link |
even 20, or let's get crazy, 30, 50 years?
link |
Well, it's very difficult to predict the future
link |
when you're dealing with knowledge production
link |
MIT has, obviously, some unique aspects.
link |
Globally, there's four big academic surveys.
link |
I forget whether it was QS, there's
link |
the Times in London, the US News, and whatever.
link |
And one of these recently, MIT, was ranked number one
link |
So leave aside whether you're number three somewhere else,
link |
in the great sweep of humanity, this is pretty amazing.
link |
So you have a really remarkable aggregation of human talent
link |
And where it goes, it's hard to tell.
link |
You have to be a scientist to have the right feel.
link |
But what's important is you have a critical mass of people.
link |
And I think it breaks into two buckets.
link |
One is scientific advancement.
link |
And if the new college can help either
link |
serve as a convening force within the university
link |
or help coordination and communication among people,
link |
that's a good thing, absolute good thing.
link |
The second thing is in the AI ethics area,
link |
which is, in a way, equally important.
link |
Because if the science side creates blowback
link |
so that science is a bit crippled in terms
link |
of going forward because society's reaction to knowledge
link |
advancement in this field becomes really hostile,
link |
then you've sort of lost the game
link |
in terms of scientific progress and innovation.
link |
And so the AI ethics piece is super important
link |
because in a perfect world, MIT would
link |
serve as a global convener.
link |
Because what you need is you need the research universities.
link |
You need the companies that are driving AI and quantum work.
link |
You need governments who will ultimately
link |
be regulating certain elements of this.
link |
And you also need the media to be knowledgeable and trained
link |
so we don't get overreactions to one situation, which then goes
link |
viral and it ends up shutting down
link |
avenues that are perfectly fine to be walking down or running
link |
But if enough discordant information,
link |
not even correct necessarily, sort of gets
link |
pushed around society, then you can end up
link |
with a really hostile regulatory environment and other things.
link |
So you have four drivers that have
link |
to be sort of integrated.
link |
And so if the new school of computing
link |
can be really helpful in that regard,
link |
then that's a real service to science.
link |
And it's a service to MIT.
link |
So that's why I wanted to get involved for both areas.
link |
And the hope is for me, for others,
link |
for everyone, for the world, is for this particular college
link |
of computing to be a beacon and a connector for these ideas.
link |
Yeah, that's right.
link |
I mean, I think MIT is perfectly positioned to do that.
link |
So you've mentioned the media, social media, the internet
link |
as this complex network of communication with flaws,
link |
perhaps, perhaps you can speak to them.
link |
But I personally think that science and technology
link |
has its flaws, but ultimately is, one, sexy, exciting.
link |
It's the way for us to explore and understand
link |
the mysteries of our world.
link |
And two, perhaps more importantly for some people,
link |
it's a huge way to, a really powerful way
link |
to grow the economy, to improve the quality of life
link |
So how do we get, how do you see the media, social media,
link |
the internet as a society having a healthy discourse
link |
about science, first of all, one that's factual
link |
and two, one that finds science exciting,
link |
that invests in science, that pushes it forward,
link |
especially in this science fiction, fear filled field
link |
of artificial intelligence?
link |
Well, I think that's a little above my pay grade
link |
because trying to control social media
link |
to make it do what you want to do
link |
appears to be beyond almost anybody's control.
link |
And the technology is being used to create
link |
what I call the tyranny of the minorities.
link |
A minority is defined as two or three people
link |
on a street corner.
link |
Doesn't matter what they look like.
link |
Doesn't matter where they came from.
link |
They're united by that one issue that they care about.
link |
And their job is to enforce their views on the world.
link |
And in the political world, people just
link |
are manufacturing truth.
link |
And they throw it all over.
link |
And it affects all of us.
link |
And sometimes people are just hired to do that.
link |
And you think it's one person.
link |
It's really just sort of a front for a particular point of view.
link |
And this has become exceptionally disruptive
link |
And it's dangerous.
link |
And it's undercutting the ability of liberal democracies
link |
And I don't know how to get a grip on this.
link |
And I was really surprised when we was up here
link |
for the announcement last spring of the College of Computing.
link |
And they had all these famous scientists, some of whom
link |
were involved with the invention of the internet.
link |
And almost every one of them got up and said,
link |
I think I made a mistake.
link |
And as a non scientist, I never thought
link |
I'd hear anyone say that.
link |
And what they said is, more or less, to make it simple,
link |
we thought this would be really cool inventing the internet.
link |
We could connect everyone in the world.
link |
We can move knowledge around.
link |
It was instantaneous.
link |
It's a really amazing thing.
link |
He said, I don't know that there was anyone
link |
who ever thought about social media coming out of that
link |
and the actual consequences for people's lives.
link |
There's always some younger person.
link |
I just saw one of these yesterday.
link |
It's reported on the national news
link |
who killed himself when people use social media
link |
to basically sort of ridicule him or something of that type.
link |
This is dangerous.
link |
And so I don't have a solution for that other
link |
than going forward, you can end up
link |
with this type of outcome using AI.
link |
To make this kind of mistake twice is unforgivable.
link |
So interestingly, at least in the West and parts of China,
link |
people are quite sympathetic to the whole concept of AI ethics
link |
and what gets introduced when and cooperation
link |
within your own country, within your own industry,
link |
as well as globally to make sure
link |
that the technology is a force for good.
link |
And that really interesting topic.
link |
Since 2007, you've had a relationship
link |
with senior leadership with a lot of people in China
link |
and an interest in understanding modern China,
link |
their culture, their world, much like with Russia.
link |
I'm from Russia originally.
link |
Americans are told a very narrow, one sided story
link |
about China that I'm sure misses a lot
link |
of fascinating complexity, both positive and negative.
link |
What lessons about Chinese culture, its ideas as a nation,
link |
its future do you think Americans should know about,
link |
deliberate on, think about?
link |
Well, it's sort of a wide question
link |
that you're asking about.
link |
China is a pretty unusual place.
link |
It's physically huge.
link |
It's got a billion three people.
link |
And the character of the people isn't as well understood
link |
in the United States.
link |
Chinese people are amazingly energetic.
link |
If you're one of a billion three people,
link |
one of the things you've got to be focused on
link |
is how do you make your way through a crowd
link |
of a billion 2.99999 other people.
link |
No, the word for that is competitive.
link |
Yes, they are individually highly energetic,
link |
highly focused, always looking for some opportunity
link |
for themselves because they need to,
link |
because there's an enormous amount of just literally people
link |
And so what I've found is they'll
link |
try and find a way to win for themselves.
link |
And their country is complicated because it basically
link |
doesn't have the same kind of functional laws
link |
that we do in the United States and the West.
link |
And the country is controlled really
link |
through a web of relationships you have with other people
link |
and the relationships that those other people have
link |
with other people.
link |
So it's an incredibly dynamic culture
link |
where if somebody knocks somebody up
link |
on the top who's three levels above you
link |
and is, in effect, protecting you,
link |
then you're like a floating molecule there
link |
without tethering except the one or two layers above you.
link |
But that's going to get affected.
link |
So it's a very dynamic system.
link |
And getting people to change is not that easy
link |
because if there aren't really functioning laws,
link |
it's only the relationships that everybody has.
link |
And so when you decide to make a major change
link |
and you sign up for it, something
link |
is changing in your life.
link |
There won't necessarily be all the same people on your team.
link |
And that's a very high risk enterprise.
link |
So when you're dealing with China,
link |
it's important to know almost what everybody's relationship
link |
So when you suggest doing something differently,
link |
you line up these forces.
link |
In the West, it's usually you talk to a person
link |
and they figure out what's good for them.
link |
It's a lot easier.
link |
And in that sense, in a funny way,
link |
it's easier to make change in the West,
link |
just the opposite of what people think.
link |
But once the Chinese system adjusts
link |
to something that's new, everybody's on the team.
link |
It's hard to change them.
link |
But once they're changed, they are incredibly focused in a way
link |
that it's hard for the West to do
link |
in a more individualistic culture.
link |
So there are all kinds of fascinating things.
link |
One thing that might interest the people who are listening
link |
who are more technologically based than some other group.
link |
I was with one of the top people in the government
link |
a few weeks ago, and he was telling me that every school
link |
child in China is going to be taught computer science.
link |
Now, imagine 100% of these children.
link |
This is such a large number of human beings.
link |
Now, that doesn't mean that every one of them
link |
will be good at computer science.
link |
But if it's sort of like in the West,
link |
if it's like math or English, everybody's going to take it.
link |
Not everybody's great at English.
link |
They don't write books.
link |
They don't write poetry.
link |
And not everybody's good at math.
link |
Somebody like myself, I sort of evolved to the third grade,
link |
and I'm still doing flashcards.
link |
I didn't make it further in math.
link |
But imagine everybody in their society
link |
is going to be involved with computer science.
link |
I'd just even pause on that.
link |
I think computer science involves,
link |
at the basic beginner level, programming.
link |
And the idea that everybody in the society
link |
would have some ability to program a computer is incredible.
link |
For me, it's incredibly exciting,
link |
and I think that should give the United States pause
link |
and consider what...
link |
Talking about sort of philanthropy and launching things,
link |
there's nothing like launching,
link |
sort of investing in young youth, the education system,
link |
because that's where everything launches.
link |
Well, we've got a complicated system
link |
because we have over 3,000 school districts
link |
around the country.
link |
China doesn't worry about that as a concept.
link |
They make a decision at the very top of the government
link |
that that's what they want to have happen,
link |
and that is what will happen.
link |
And we're really handicapped by this distributed power
link |
in the education area,
link |
although some people involved with that area
link |
will think it's great.
link |
But you would know better than I do
link |
what percent of American children
link |
have computer science exposure.
link |
My guess, no knowledge, would be 5% or less.
link |
And if we're going to be going into a world
link |
where the other major economic power,
link |
sort of like ourselves, has got like 100% and we got 5%,
link |
and the whole computer science area is the future,
link |
then we're purposely or accidentally actually
link |
handicapping ourselves,
link |
and our system doesn't allow us to adjust quickly to that.
link |
So, you know, issues like this I find fascinating.
link |
And, you know, if you're lucky enough
link |
to go to other countries, which I do,
link |
and you learn what they're thinking,
link |
then it informs what we ought to be doing in the United States.
link |
So the current administration, Donald Trump,
link |
has released an executive order on artificial intelligence.
link |
Not sure if you're familiar with it.
link |
In 2019, looking several years ahead,
link |
how does America sort of,
link |
we've mentioned in terms of the big impact,
link |
we hope your investment in MIT will have a ripple effect,
link |
but from a federal perspective, from a government perspective,
link |
how does America establish, with respect to China,
link |
leadership in the world at the top
link |
for research and development in AI?
link |
I think that you have to get the federal government
link |
in the game in a big way,
link |
and that this leap forward technologically,
link |
which is going to happen with or without us,
link |
you know, really should be with us,
link |
and it's an opportunity, in effect,
link |
for another moonshot kind of mobilization
link |
by the United States.
link |
I think the appetite actually is there to do that.
link |
At the moment, what's getting in the way
link |
is the kind of poisonous politics we have,
link |
but if you go below the lack of cooperation,
link |
which is almost the defining element of American democracy
link |
right now in the Congress,
link |
if you talk to individual members, they get it,
link |
and they would like to do something.
link |
Another part of the issue is we're running huge deficits.
link |
We're running trillion dollar plus deficits.
link |
So how much money do you need for this initiative?
link |
Where does it come from?
link |
Who's prepared to stand up for it?
link |
Because if it involves taking away resources
link |
from another area, our political system is not real flexible.
link |
To do that, if you're creating this kind of initiative,
link |
which we need, where does the money come from?
link |
And trying to get money
link |
when you've got trillion dollar deficits,
link |
in a way, could be easy.
link |
What's the difference of a trillion
link |
and a trillion and a little more?
link |
But, you know, it's hard with the mechanisms of Congress.
link |
But what's really important is this is not an issue
link |
that is unknown, and it's viewed as a very important issue.
link |
And there's almost no one in the Congress
link |
when you sit down and explain what's going on
link |
who doesn't say, we've got to do something.
link |
Let me ask the impossible question.
link |
You didn't endorse Donald Trump, but after he was elected,
link |
you have given him advice, which seems to me a great thing
link |
to do, no matter who the president is,
link |
to positively contribute to this nation by giving advice.
link |
And yet, you've received a lot of criticism for this.
link |
So on the previous topic of science and technology
link |
and government, how do we have a healthy discourse,
link |
give advice, get excited conversation with the government
link |
about science and technology without it becoming politicized?
link |
Well, it's very interesting.
link |
So when I was young, before there was a moonshot,
link |
we had a president named John F. Kennedy from Massachusetts
link |
And in his inaugural address as president,
link |
he asked not what your country can do for you,
link |
but what you can do for your country.
link |
We had a generation of people my age, basically people,
link |
who grew up with that credo.
link |
And sometimes you don't need to innovate.
link |
You can go back to basic principles.
link |
And that's good basic principle.
link |
Americans have GDP per capita of around $60,000.
link |
It's not equally distributed, but it's big.
link |
And people have, I think, an obligation to help
link |
And apparently, I take some grief from some people who
link |
project on me things I don't even vaguely believe.
link |
But I'm quite simple.
link |
I tried to help the previous president, President Obama.
link |
He was a good guy.
link |
And he was a different party.
link |
And I tried to help President Bush.
link |
And he's a different party.
link |
And I sort of don't care that much about what the parties are.
link |
I care about, even though I'm a big donor for the Republicans,
link |
but what motivates me is, what are the problems we're facing?
link |
Can I help people get to a good outcome that
link |
will stand any test?
link |
But we live in a world now where the filters and the hostility
link |
is so unbelievable.
link |
In the 1960s, when I went to school and university,
link |
I went to Yale, we had so much stuff going on.
link |
We had a war called the Vietnam War.
link |
We had sort of black power starting.
link |
And we had a sexual revolution with the birth control pill.
link |
And there was one other major thing going on,
link |
the drug revolution.
link |
There hasn't been a generation that
link |
had more stuff going on in a four year period than my era.
link |
Yet, there wasn't this kind of instant hostility
link |
if you believed something different.
link |
Everybody lived together and respected the other person.
link |
And I think that this type of change needs to happen.
link |
And it's got to happen from the leadership
link |
of our major institutions.
link |
And I don't think that leaders can
link |
be bullied by people who are against sort
link |
of the classical version of free speech
link |
and letting open expression and inquiry.
link |
That's what universities are for, among other things,
link |
And so I have, in the midst of this onslaught of oddness,
link |
I believe in still the basic principles.
link |
And we're going to have to find a way to get back to that.
link |
And that doesn't start with the people sort of in the middle
link |
to the bottom who are using these kinds of screens
link |
to shout people down and create an uncooperative environment.
link |
It's got to be done at the top with core principles that
link |
And ironically, if people don't sign on
link |
to these kind of core principles where people are equal
link |
and speech can be heard and you don't have these enormous
link |
shout down biases subtly or out loud,
link |
then they don't belong at those institutions.
link |
They're violating the core principles.
link |
And that's how you end up making change.
link |
But you have to have courageous people who
link |
are willing to lay that out for the benefit of not just
link |
their institutions, but for society as a whole.
link |
So I believe that will happen.
link |
But it needs the commitment of senior people
link |
to make it happen.
link |
And I think for such great leaders, great universities,
link |
there's a huge hunger for it.
link |
So I am too very optimistic that it will come.
link |
I'm now personally taking a step into building a startup
link |
first time, hoping to change the world, of course.
link |
There are thousands, maybe more, maybe millions
link |
of other first time entrepreneurs like me.
link |
You've gone through this process.
link |
You've talked about the suffering, the emotional turmoil
link |
it all might entail.
link |
What advice do you have for those people taking that step?
link |
I'd say it's a rough ride.
link |
And you have to be psychologically prepared
link |
for things going wrong with frequency.
link |
You have to be prepared to be put in situations where you're
link |
being asked to solve problems you didn't even
link |
know those problems existed.
link |
For example, renting space, it's not really a problem
link |
unless you've never done it.
link |
You have no idea what a lease looks like.
link |
You don't even know the relevant rent in a market.
link |
So everything is new.
link |
Everything has to be learned.
link |
What you realize is that it's good to have other people
link |
with you who've had some experience in areas
link |
where you don't know what you're doing.
link |
Unfortunately, an entrepreneur starting
link |
doesn't know much of anything.
link |
So everything is something new.
link |
And I think it's important not to be alone,
link |
because it's sort of overwhelming.
link |
And you need somebody to talk to other than a spouse or a loved
link |
one, because even they get bored with your problems.
link |
And so getting a group, if you look at Alibaba,
link |
Jack Ma was telling me they basically
link |
were like at financial death's door at least twice.
link |
And the fact that it wasn't just Jack.
link |
I mean, people think it is, because he
link |
became the sort of public face and the driver.
link |
But a group of people who can give advice,
link |
share situations to talk about, that's really important.
link |
And that's not just referring to the small details
link |
like renting space.
link |
It's also the psychological burden.
link |
Yeah, and because most entrepreneurs at some point
link |
question what they're doing, because it's not going so well.
link |
Or they're screwing it up, and they
link |
don't know how to unscrew it up, because we're all learning.
link |
And it's hard to be learning when there are like 25 variables
link |
If you're missing four big ones, you can really make a mess.
link |
And so the ability to, in effect, have either an outsider
link |
who's really smart that you can rely on
link |
for certain type of things, or other people who are working
link |
with you on a daily basis, most people
link |
who haven't had experience believe
link |
in the myth of the one person, one great person,
link |
makes outcomes, creates outcomes that are positive.
link |
Most of us, it's not like that.
link |
If you look back over a lot of the big successful tech
link |
companies, it's not typically one person.
link |
And you will know these stories better than I do,
link |
because it's your world, not mine.
link |
But even I know that almost every one of them
link |
If you look at Google, that's what they had.
link |
And that was the same at Microsoft at the beginning.
link |
And it was the same at Apple.
link |
People have different skills.
link |
And they need to play off of other people.
link |
So the advice that I would give you
link |
is make sure you understand that so you don't head off
link |
in some direction as a lone wolf and find that either you
link |
can't invent all the solutions or you make bad decisions
link |
on certain types of things.
link |
This is a team sport.
link |
Entrepreneur means you're alone, in effect.
link |
And that's the myth.
link |
But it's mostly a myth.
link |
Yeah, I think, and you talk about this in your book,
link |
and I could talk to you about it forever,
link |
the harshly self critical aspect to your personality
link |
and to mine as well in the face of failure.
link |
It's a powerful tool, but it's also
link |
a burden that's very interesting to walk that line.
link |
But let me ask in terms of people around you,
link |
in terms of friends, in the bigger
link |
picture of your own life, where do you
link |
put the value of love, family, friendship
link |
in the big picture journey of your life?
link |
Well, ultimately, all journeys are alone.
link |
It's great to have support.
link |
And when you go forward and say your job is
link |
to make something work, and that's your number one
link |
priority, and you're going to work at it to make it work,
link |
it's like superhuman effort.
link |
People don't become successful as part time workers.
link |
It doesn't work that way.
link |
And if you're prepared to make that 100% to 120% effort,
link |
you're going to need support, and you're
link |
going to have to have people involved
link |
with your life who understand that that's really
link |
part of your life.
link |
Sometimes you're involved with somebody,
link |
and they don't really understand that.
link |
And that's a source of conflict and difficulty.
link |
But if you're involved with the right people,
link |
whether it's a dating relationship or a spousal
link |
relationship, you have to involve them in your life,
link |
but not burden them with every minor triumph or mistake.
link |
They actually get bored with it after a while.
link |
And so you have to set up different types of ecosystems.
link |
You have your home life.
link |
You have your love life.
link |
You have children.
link |
And that's the enduring part of what you do.
link |
And then on the other side, you've got the unpredictable
link |
nature of this type of work.
link |
What I say to people at my firm who are younger, usually,
link |
well, everybody's younger, but people
link |
who are of an age where they're just
link |
having their first child, or maybe they have two children,
link |
that it's important to make sure they go away
link |
with their spouse at least once every two months to just
link |
some lovely place where there are no children, no issues,
link |
sometimes once a month if they're
link |
sort of energetic and clever.
link |
Escape the craziness of it all.
link |
Yeah, and reaffirm your values as a couple.
link |
And you have to have fun.
link |
If you don't have fun with the person you're with,
link |
and all you're doing is dealing with issues,
link |
then that gets pretty old.
link |
And so you have to protect the fun element of your life
link |
And the way to do that isn't by hanging around the house
link |
and dealing with sort of more problems.
link |
You have to get away and reinforce and reinvigorate
link |
your relationship.
link |
And whenever I tell one of our younger people about that,
link |
they sort of look at me, and it's
link |
like the scales are falling off of their eyes.
link |
And they're saying, jeez, I hadn't thought about that.
link |
I'm so enmeshed in all these things.
link |
But that's a great idea.
link |
And that's something, as an entrepreneur,
link |
you also have to do.
link |
You just can't let relationships slip
link |
because you're half overwhelmed.
link |
And I think there's no better place to end it.
link |
Steve, thank you so much.
link |
I really appreciate it.
link |
It was an honor to talk to you.
link |
Thanks for listening to this conversation
link |
with Stephen Schwarzman.
link |
And thank you to our sponsors, ExpressVPN and MasterClass.
link |
Please consider supporting the podcast
link |
by signing up to MasterClass at masterclass.com slash lex
link |
and getting ExpressVPN at expressvpn.com slash lexpod.
link |
If you enjoy this podcast, subscribe on YouTube,
link |
review it with five stars on Apple Podcast,
link |
support it on Patreon, or simply connect with me
link |
on Twitter at lexfriedman.
link |
And now, let me leave you with some words
link |
from Stephen Schwarzman's book, What It Takes.
link |
It's as hard to start and run a small business
link |
as it is to start a big one.
link |
You will suffer the same toll financially and psychologically
link |
as you bludgeon it into existence.
link |
It's hard to raise the money and to find the right people.
link |
So if you're going to dedicate your life to a business,
link |
which is the only way it will ever work,
link |
you should choose one with the potential to be huge.
link |
Thank you for listening and hope to see you next time.