Europe's AI Dilemma

So what to J.D. Vance's highly controversial speech at the Paris AI Summit this week? According to That Was The Week’s Keith Teare, it was “a breath of fresh air”. Others will argue it was just more MAGA putridity designed to alienate our European friends. Some tech notables, like Union Square Ventures partner Albert Wenger, take both views simultaneously, acknowledging on the one hand that Vance was correct to push back against “regulatory capture”, but on the other that Vance was “mistaking jingoism and wishful thinking for true global leadership”.

Here are the 5 KEEN ON takeaways from this weekly tech round-up with Teare:

* J.D. Vance's Paris AI Summit speech marked a potential turning point in US-Europe AI relations. His message prioritizing AI opportunity over safety prompted European regulators to pull back on some restrictions, with the EU dropping its AI liability directive and the UK rebranding its AI Safety Institute.

* Anthropic's growth is accelerating, with projections of $34.5 billion in revenue by 2027. They're currently outperforming OpenAI in some areas, particularly coding, and are expected to release a major new AI model soon.

* The Musk-OpenAI conflict has intensified, with Musk's $100 billion bid for OpenAI's non-profit arm being rejected. Meanwhile, OpenAI is planning to incorporate its Q* (Q-star) model into a new GPT-5 release that will combine reasoning, operational capabilities, and multimedia functions.

* The AI industry is seeing rapid advancement in humanoid robotics, with companies like Apptronics and Figure receiving significant valuations. Figure's valuation jumped from $2 billion to $39 billion after securing a major automotive partnership.

* Traditional political alignments are becoming less relevant in tech policy, with Teare arguing that economic growth and technological progress are transcending traditional left-right divisions. This is exemplified by some progressives like Reid Hoffman embracing AI optimism while traditional conservatives champion technological progress.

FULL TRANSCRIPT

Andrew Keen: Hello everybody. It is Saturday, February 15th, 2025, a day after Valentine's Day. It's been a day or a week dominated by a certain J.D. Vance. Yesterday, he made a very controversial speech in Munich, which apparently laid bare the collapse of the transatlantic alliance. He attacked Europe over free speech and migration. So he's not the most popular fellow in Europe. And a couple of days before that, he spoke in Paris at the AI Summit, a classic Parisian event talking about summits. Macron, of course, also spoke there. According to The Wall Street Journal, Vance's counts were good. The German, of course, being a conservative newspaper. According to The Washington Post, which is a progressive newspaper, he pushed the "America First" AI agenda. Others, like Fast Company, ask what to make of Vance's speech at the Paris AI conference. According to my friend Keith Teare, the author of That Was The Week newsletter, the speech was a breath of fresh air. I was going to call you Marx, Keith. That would have been a true Freudian error. What do you admire about Vance's speech? Why is it a breath of fresh air?

Keith Teare: Well, it's in the European context that it's a breath of fresh air. I think from an American perspective, he didn't really say anything new. We already think of AI in the way he expressed it. But in Europe, the dominant discussion around AI is still focused on safety. That is to say, AI is dangerous. We have to control it. We need to regulate it. And as a result of that, most of the American developments in AI are not even launched in Europe, because in order to be made available to citizens, it has to go through various regulatory layers. And that slows everything down. So in the context, Vance stood up on the platform in front of all of the people doing that regulation and told them basically, rubbed their noses in it, saying how self-destructive their approach was for European success. His opening lines were, "I'm not here to talk about AI safety. I'm here to talk about AI opportunity." And in the days since, there's been quite a big reaction in Europe to the speech, mostly positive from normal people and adjusting policy at the regulatory level. So it's quite a profound moment. And he carried himself very well. I mean, he was articulate, thoughtful.

Andrew Keen: Yeah. You say his speech marks a crucial inflection point. I wonder, though, if Vance was so self-interested as a MAGA person, why would he want even to encourage Europe to develop? I mean, why not just let it be like social media or the Internet where American companies dominate? Is there anything in America's interest that the Trump-Musk alliance would benefit from strong European AI companies?

Keith Teare: Well, from strong European AI openness, yes. I don't think Vance thinks for a minute there are any European companies that will be able to compete in that open environment. And so most of his purpose is economic. He's basically saying open up so that our guys can sell stuff to you and the money will flow back to the U.S. as it has done with Amazon and Google and every other major tech innovation in recent years. So it's basically an economic speech masquerading as a policy speech.

Andrew Keen: I wonder if there's an opportunity for Europe given the clear divisions now that exist between the U.S. and Europe. I wonder whether there's an opportunity for Europe to start looking more sympathetically at Chinese AI companies. Did Vance warn in his speech, did he warn Europe about turning to the Chinese, the other potential partner?

Keith Teare: Yeah. There are two parts of his speech I didn't really incorporate in the editorial. The first was a subplot all around China, which he didn't name, but he called "dictatorships." We don't want dictatorships leading in AI. And then there was another subplot, which was all about free speech and openness and not censoring, which was aimed at the Europeans, of course, and the Chinese.

Andrew Keen: Discussion of their free speech, or at least it's their version of free speech, isn't it?

Keith Teare: I think the funny thing is in order to be consistent, they're going to have to allow all free speech. And they will, because they know that. And so, weirdly, the Republicans become the free speech party, which makes no sense historically. But it is happening. And I thought there were a lot of interesting things in that speech that symbolized a very confident America. However, the reason America is doing this is because it's weak, which is a paradox.

Andrew Keen: Politically weak or militarily weak or economically weak?

Keith Teare: Not militarily - it's super strong, but economically it's relatively declining against China. It's the next Europe. America is the next Europe. China is the next America. And in that context, America's brashness sounds positive to our ears and to mine as well, because it's pro-optimism, pro-progress. But actually, it's coming from a place of weakness, which you see in the tariffs and the anti-Chinese stuff.

Andrew Keen: And I want to come to the Munich speech where Vance was pretty clear. Trump's always been clear that if there is an opportunity for Ukraine, Ukrainians have to work for American access to its raw materials, minerals, etc. Whether America's foreign policy now is becoming identical to that of China, helping other countries as long as they provide them with essential resources.

Keith Teare: Yeah, exactly. By the way, one of our commentators, David John William Bailey on LinkedIn, is saying we need to explain this. He says he's also attempting "$1 trillion mob-style shakedown." Anyone defending this is either deluded or only reads hard-right propaganda.

Andrew Keen: Well, but Keith, you've always claimed to be a progressive. You always claim to be a man of the left. You have a background in left-wing communist activism. Now you're on board with Vance. You were on board the week before with Musk. You're ambivalent about Trump. What does this say to you? What does this suggest about you personally, or is the reality of politics these days that the supposed conservatives like Vance are actually progressive in their own way and the supposed progressives in the Democratic Party are actually conservative?

Keith Teare: Well, as you know, I don't like those labels anymore because I think they're trying to fit a modern narrative into an old set of boxes. I think, broadly speaking, Vance is an economic progressive. He wants the economy to grow. He wants GDP to grow.

Andrew Keen: Some people say everyone's a progressive in that sense if they want GDP to grow.

Keith Teare: Yeah, but not very many people can do it. So I think they really are serious that they believe innovation in tech and GDP are correlated. And I believe GDP and social good are correlated. And so if you really want to be a progressive that wants people to have a good life, you have to support economic growth. And I think Vance does. And I think that's what his narrative is about. He's basically telling Europe that they're going to get the opposite, which has been true, by the way, now for a decade. European GDP per capita is as low as $35,000 a year. American is $85,000 a year.

Andrew Keen: That's an astonishing shift. And this is going to be remembered, I think, as an important week in the American-European relationship. You said that the aftermath of the Vance speech has been remarkable and telling. The EU dropped its AI liability directive. The UK rebranded its AI Safety Institute. OpenAI removed diversity commitments. So a speech is now having an impact, particularly this Paris speech when it comes to AI policy, both in Europe but also in the US as well.

Keith Teare: Yeah, I wouldn't give too much credit just to the speech. I think the speech is symptomatic of a lot of zeitgeist change and everyone is getting in line with the new zeitgeist, which is tech is good, AI is good, censorship is bad.

Andrew Keen: Well, I don't know if that's - I'm not sure I would call that the zeitgeist, Keith. I mean, you're talking in Palo Alto, where that's always been the zeitgeist. I think if anything, in universities and book publishing, the reverse is true.

Keith Teare: Yeah. So I'm an avid MSNBC watcher. I watch Morning Joe every morning with Mika Brzezinski and Joe Scarborough. And so I'm kind of imbued with the liberal narrative compared to what's going on. And what's happened is a very rapid change from the days after the election when the liberal narrative was "we need to look at ourselves" has now become a narrative that "the judges have to save us from the administration." The administration is not democratic, even though it was elected, and we've got to rely on judges because there's no one else to rely on.

Andrew Keen: That doesn't mean the zeitgeist has shifted. It just means that the people on one side have shifted their focus, but they still are not sympathetic to Trump, Vance, Musk.

Keith Teare: I think there is increasing sympathy. I think you're going to be surprised. I think if an election was held today, Trump would win by more.

Andrew Keen: Well, he would certainly win by more if he was running against Harris. That's another question. So it's been another remarkable week for AI content. One piece that you pick out, which I thought was interesting, is from somebody called Elizabeth Yin. Nice to have a female author - too many of our authors are male. Maybe I'm being too woke. But the AI takeover, according to Yin - no one's jobs are safe. This isn't exactly news, is it?

Keith Teare: No, she's really summarizing what we've been talking about in That Was The Week for quite a while. But I thought it was a good summary. And she gives some kind of prioritization. There's a section that talks about regulated professions, human-centric jobs, creative and entrepreneurial jobs, energy and infrastructure and distribution. And she then breaks down what she thinks the main impact of AI is going to be. She kind of leaves it where you kind of want more from her because she doesn't thoroughly go through all of these. But she's a VC, she does early-stage investing. She's very good. And the one thing she says, which I don't think anyone's going to disagree with, is "fewer workers more." I was at an event this week in San Francisco where there was a panel with some VCs and entrepreneurs on exactly the same questions she's asking - where the cuts are going to come first or what sectors are going to be most dramatically affected in the short term. And people weren't entirely clear. But the one area that comes up is healthcare - that's the lowest hanging fruit at the moment.

Keith Teare: Yeah, there's a funding event this week from a company that applies AI to biology, specifically cancer programming - anti-cancer cells. So you're going to see AI in everything. And it's that will lead to an acceleration of invention for sure, because the individual is still really important. By the way, there's another article about that this week. The individual now has an army of talent in AI, able to help them make progress. It just speeds everything up.

Andrew Keen: Yeah. So what other AI news in the summary? There's a couple, 2 or 3 pieces on Anthropic. I use Anthropic. I like it. Their growth soars to 34.5 billion in 2027 revenue. That's of course, speculative. And they announce their next major AI model could arrive within weeks, Anthropic competitive with OpenAI.

Keith Teare: Yes, and they're better than OpenAI at some things. They're already better than OpenAI at coding. If you put it in context, those three Anthropic pieces sit alongside the Google piece and the OpenAI pieces. And what it tells you is we've seen a major acceleration of product roadmaps and plans in the last couple of weeks, mainly in response to the DeepSea news, I think.

Andrew Keen: Yeah, it's interesting that DeepSea was a one-week wonder, but there are no headlines at least from you on DeepSea. It seems to have stimulated change as you suggest, rather than change things in its own way. And then your Google pieces - interesting that they're rolling out a new memory feature for Gemini AI, allowing recall of past conversations, which is increasingly getting to the point where these AIs, if not human or sentient, certainly are able to remember things and have conversations.

Keith Teare: Yeah, and that becomes much easier once you go from LLMs to other LLMs with agents. An agent is a piece of software that speaks to another LLM to complete a task. And so you could have in software a memory agent or a recall agent whose only job is to say, "Is this question been asked recently and what did I look at the last time?" and bring it into the context for whatever the current question is. And I think we're going to see more and more of this. I've spent most of my week building a multi-agent system for my company, Single Rank. I have a question taker agent that you ask a question of. It then farms out to a database agent or a chart drawing agent or an expert reasoning agent. They all have different jobs and they come back and give their answers to the original agent, and then it gives the answer to the user. So this collaborative agents concept is becoming very real now. And memory is one of those - I think Perplexity is the most advanced.

Andrew Keen: Yeah. We were talking about Perplexity before we went live. You convinced me - I use Anthropic but you said for me it's probably wiser to use Perplexity where I still have all the access to Anthropic, but it adds a layer and some more intelligence. As I said, I was at an event this week where one of the venture people from OpenAI was there who talked about Sam Altman's projection that in the not too distant future there'll be billion-dollar individual startups. Are you suggesting, Keith, that's not that far on the horizon, given the power of AI that individuals can do all and do the entire startup without needing the help of anybody else?

Keith Teare: Depends on the startup. If the startup is mainly software, that's probably true. But if it needs account management and billing and all the others...

Andrew Keen: But eventually all that stuff will get - that's the easy part, isn't it? You can always get that done.

Keith Teare: It's the hard bit right now, like reconciling invoices to receipts. I'm not very good at that. So I think it's coming with two things: rising agents and then agents that can use tools to follow, do actions, if you will. So it's coming and it's probably coming this year and it'll accelerate. So, yes, it will get there. I think the headline of a single founder of $1 billion company is just a headline. But it's directionally correct.

Andrew Keen: It does. And it does reiterate Elizabeth Yin's point that no jobs are safe - in finance, in HR, in coding, in content. I mean, I'm using it more and more to summarize these conversations. I don't need a large editorial staff. So clearly dramatic change. And in fact, your startup of the week, Keith, the robotics startup Apptronics, is in talks for new funding at an almost $40 billion valuation - a hardware company. Does this speak of the reality of this new AI revolution? That it's not just theory, it's practice now?

Keith Teare: Yeah. Well, Figure has gone from 2 billion to 39 billion in less than a year. And why? Because one of the major car companies signed an agreement with it to have these robots on production lines in its factories. And the start of the week, by the way, is Apptronics, which is a different humanoid robotics company, also raising a lot of money but slightly earlier in its journey than Figure.

Andrew Keen: It's my mistake - I have to admit I thought it was Figure so that's my error. I'm going to add an Apptronics image to this content. I'm rather embarrassed.

Keith Teare: You've probably already got one. That said, they both speak to the same truth, which is AI is going to manifest itself in the physical world in the form of humanoid robots sooner rather than later.

Andrew Keen: And that was another of Tim Draper's - he was one of the speakers at this event I went to in San Francisco. I know he's an investor in your firm. That was his big prediction. So Apptronics is building robots for humans. Are they just a kind of earlier version of Figure in some ways?

Keith Teare: An earlier version, possibly more advanced in concept because they started later when the software gets better by the week. So the later you start, the more advanced the software is that you can leverage. And so we're not going to see an end to this. There's going to be a lot more of it. I think humanoid robots are really interesting because the physical world is built for humans. You know, steps, ladders, everything.

Andrew Keen: But I'm not sure that would be the case, especially when it comes to, say, self-driving cars and roads. That's going to change as well, isn't it?

Keith Teare: Well, you still have roads because they still are...

Andrew Keen: You still have roads. But I'm saying the roads themselves will become more and more suited to self-driving cars as opposed to human-driving ones.Yeah. You would hope the roads would become more intelligent and communicate to the cars, but that seems to be much further off.

Andrew Keen: But I'm sure the Chinese will do that. Not the Americans, not even in San Francisco. Meanwhile, there is still lots of tech news. There's this open feud between Sam Altman at OpenAI and Elon Musk. Musk this week had a bid to buy OpenAI for around $100 billion. Is this just sensational, meaningless stuff? Is this froth or is it meaningful in the long run? The Musk-Altman fight?

Keith Teare: Well, the specifics of this are super interesting because it's very clever of Musk. What Musk is offering to buy is not OpenAI. He's offering to buy the not-for-profit part of OpenAI. Now Altman is trying to put a value on that not-for-profit because he wants it to go away, or at least be subsumed. And he's trying to do it at a very low valuation so that the stakeholders in the not-for-profit don't get much. So Musk put a super high price on the not-for-profit to force the board of OpenAI to put a proper value on it as it transitions or to stop transitioning - one or the other. And I think if I was on the board of OpenAI now, I'd be very worried. They rejected his offer yesterday, by the way, but that will not be the end.

Andrew Keen: What is Musk doing? Is it just because he hates Altman and he's annoyed that he was one of the co-founders and he's no longer involved? Because if he does indeed do what he seems to want to do, which is weaken, even undermine OpenAI - I mean, the real winners are probably Anthropic and Google then rather than Musk.

Keith Teare: Well, and Grok - he has his own Grok xAI.

Andrew Keen: But is xAI a real player? I mean, he can get massive valuations, but how does it compare with Anthropic or Gemini?

Keith Teare: It's good. I mean, it's very good. And the next version, rumors are that it's going to be a top performer.

Andrew Keen: Certainly not a top - you said it's good, but it's not...

Keith Teare: It depends on what for. But it's certainly as good or better than DeepSea already.

Andrew Keen: So there is a method to Musk's madness. It's not just about hating Altman and OpenAI.

Keith Teare: Well, because it's Musk, there's more than one thing going on. He has economic interests in xAI, for sure. He's also really pissed off with Altman because he considers that Altman basically stole the OpenAI idea from him, which is not really true when you get into the facts. But he believes that. And not only that, but lied by making it not-for-profit and then turning it into a for-profit when he promised he wouldn't. So Musk basically feels like he's got the moral high ground and that gives him the energy to fight. Altman is clearly tired of the whole thing. He's just trying to do what he's trying to do, you know, and having a light shone on it.

Andrew Keen: So it's the first time you have articulated some concern about OpenAI. You've always been quite bullish. Are you suggesting that your bullishness in the past is changing a little bit?

Keith Teare: I don't think so, because I think this is a bit of a sideshow. The biggest news this week about OpenAI is the decision to abandon the Q* model - not abandon it, but incorporate it into a new GPT-5 later this year.

Andrew Keen: So how would a unified next generation release work? Which would be what? Everything together?

Keith Teare: It would do reasoning, operational stuff, actions, and it would do what other LLMs do, including being capable of video and image production all in one, and probably will retain its position as the best across all of those different things. So I don't see that anything bad is going to happen to OpenAI. I do think Musk can be an irritant and it could force them into corporate decisions about valuation and merging their different components that aren't to their liking. That could happen.

Keen: My interview of the week, which you were kind enough to include in this week's newsletter, is with Greg Betta. Most people won't be familiar with Greg Betta. He's a tech writer, journalist based in the North Bay San Francisco, but he's also the coauthor with Reid Hoffman, who everybody knows, of a new book called "Super Agency: What Could Possibly Go Right With Our AI Future?" And from a progressive point of view, it's optimistic about AI. So I guess Hoffman is one of the few progressives, Keith, who actually is optimistic about AI. Is that fair?

Keith Teare: Yeah. He really represents that part of the liberal spectrum that was in the New York Times article last week suggesting the Democrats should embrace technology and innovation. And the book is symptomatic of that. I didn't have a chance to listen to the interview - give us a flavor of what he said.

Andrew Keen: It's standard - it's like listening to you. He believes that this progress will ultimately benefit. He distinguishes himself a bit too, I thought, created some light between him and Hoffman. I think he sees Hoffman as being slightly more optimistic than him. But it's about super agency - you and I have talked endlessly about agency, about humans being able to shape their lives. And of course, that's the big debate. For the critics, it's the AI that will shape us. For the optimists, AI will enable us to shape the world. It's an age-old argument, and it's not going away.

Another figure on the left, if that's still a term that means anything, is Albert Wenger. He's your post of the week and he comes back to the Vance speech. He says praising this speech by Vance is mistaking jingoism and wishful thinking for true global leadership with a real vision of AI and humanity. I'm assuming you don't agree with Albert on this issue.

Keith Teare: I do agree with him. I think I wanted to take a positive view of Vance's speech for his optimism in the context of Europe. It was a great speech. Albert's right that the American framing is entirely jingoistic. And AI isn't - AI is entirely global and humanistic. So there is a contradiction between a declining superpower being a champion of progress for its own nation versus what Albert would prefer, which is leadership that is truly global in nature.

Andrew Keen: It's interesting that the first comment on Albert's tweet was from someone called "e/acc" who says this may be the most e/acc speech of all time. I didn't know what that meant - it meant effective accelerationism. Are you familiar with this term, Keith?

Keith Teare: Yeah, this is the Marc Andreessen Peter Thiel framing against the philanthropists.

Andrew Keen: So are you an effective accelerationist? Do you believe in...

Keith Teare: Effective altruism versus effective acceleration? This is interesting. You say they're the same thing - I don't think anyone thinks that. But I think you might be right. But as long as you put them in the right order, I think if you get acceleration and growth and value, you're going to get a better life.

Andrew Keen: Yeah, it's a play on effective altruism, but it's thinking in the same way that the world can become a better place.

Keith Teare: Yeah. And the altruists wanted it to be done by good deeds as opposed to by economic progress.

Andrew Keen: And even Albert acknowledges, like you, that there are aspects of the speech which in your language are a breath of fresh air. He said the only good point was the clear pushback against regulatory capture. Is it going to be effective? I mean, is it clear that the days of Lina Khan are over? Are we at the end of the period of regulatory capture, whether it's in Europe or the U.S.? As you say, one of the consequences of the speech was that the Europeans have taken a step back from regulation.

Keith Teare: I would say the new Lina Khan is Elizabeth Warren. Lina Khan's gone. She's a sideshow. But Elizabeth Warren is still mainstream.

Andrew Keen: Yeah, but a much, much older and perhaps less powerful figure, especially in Trump's America. I mean, Warren, she can talk a lot and get people annoyed, but she can't actually do anything. Whereas Lina Khan actually controlled regulatory capture - I mean, she was the head of the FTC.

Keith Teare: Exactly. But I find Warren intensely irritating. It's amusing to me that Musk is asking how her net worth went from $200,000 to double-digit millions. And it's because she got subsidized by pharma, because she's pro-vax. And she's plugged into that.

Andrew Keen: That's a controversial observation. You're saying anyone who gets supported by big Pharma is pro-vaccine? Does that mean that anyone who's anti-vax is not going to get the money? Most of us are pro-vax.

Keith Teare: I'm totally pro-vax. But I'm just saying politicians like her typically get high net worth through serving stakeholders. And she is very against the credit card industry, for example. But she's not against pharma. So she's found her niche.

Andrew Keen: Well, that's not a very generous interpretation, although it does suggest that when you give Elon Musk the keys to the Treasury and the IRS, then all these things are going to get revealed. And we should end with another interesting X from Albert, which I think gets to a lot of this. He said, "If you're young and capable and care about democracy, you should work for Doge." What do you make of that? I tend to think he's right.

Keith Teare: I can't fully understand his meaning. In my brain, I'll interpret it the way I would, which is what I said last week.

Andrew Keen: And to add to the quote, he said, "Offense is the best defense."

Keith Teare: Yeah. The main threat to democracy is unelected bureaucrats blocking progress. I mean, if you think about it...

Andrew Keen: Like Elizabeth Warren, in your view, at least.

Keith Teare: No, I'd use the Obama example. Obama wanted to get a really good healthcare plan. And as soon as he was in office, he made speeches saying, "I won't be able to achieve what I want to achieve unless you, the people, are on the streets." Because Washington is averse to change. And it turned out that he had to make all kinds of compromises. And he ended up with what we today call Obamacare. But his experience was an experience of being blocked. And Trump basically has been through that himself. We're probably mostly thankful for that based on his first administration. He now is older, and he's not prepared...

Andrew Keen: Suddenly older. I don't know about wiser.

Keith Teare: He's not prepared to let the bureaucracy stand in his way. And Musk is his weapon. And there is something positive about a better, cheaper state and more democratic if the elected people can do what they said they were going to do.

Andrew Keen: Yeah. And bring the expenses down. "If you're young and capable and care about democracy, you should work for Doge" - wise words from Albert Wenger. We will return to all these themes, Keith, in the future. Have a good week and we will see everybody again next week. Thanks so much.

Keith Teare: Everyone.

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