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

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Jun 12, 2024

Alex Wang, Founder and CEO of Scale AI, delves into the critical role data plays in AI's future performance. He argues that data, not compute, is the main bottleneck for foundation models. The discussion pivots to AI as a formidable military asset, potentially surpassing nuclear weapons, and examines China's approach to industrial policy in AI development. Wang challenges the notion that China lags behind the U.S. in AI, exploring innovations in the Chinese EV market and the implications of these geopolitical dynamics.

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INSIGHT

Strategic Data

Enterprises must have strong data strategies to compete effectively in an AI-driven world.
Proprietary access to data sources will be a primary source of competition.

INSIGHT

On-Premise Models

Enterprises are cautious about sharing sensitive data with external model developers.
On-premise models customized with internal data are gaining popularity for this reason.

INSIGHT

China's AI Rise

China is rapidly catching up to the US in AI capabilities.
The CCP's centralized industrial policy allows for aggressive advancement in key industries.

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

In Today's Show with Alex Wang We Discuss:

1. Foundation Models: Diminishing Returns:

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

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

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

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

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

4. Alex Wang: AMA:

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