Welcome to Stewart Squared podcast with the two Stewart Alsops. In this episode, they explore the trajectory of technology from the early days of personal computing to the current AI revolution. Topics include reflections on "The Last One" program from the 1980s, which promised to be the last program you'd ever need, and comparisons to today’s advancements with LLMs and platforms like Claude. The conversation also touches on venture capital’s role in these tech cycles, how AI is being funded, and where the next big breakthroughs might emerge.

Check out this GPT we trained on the conversation!

Timestamps

00:00 Introduction to Stewart Squared

01:43 The Last One: A Revolutionary Program

02:38 Evolution of Personal Computing and AI

08:38 The Role of Venture Capital in Tech

12:26 Impact of Social Media and Financial Cycles

17:59 Banking Crises and Venture Capital Resilience

20:49 Liquidity Challenges in Venture Capital

22:35 Impact of Low Interest Rates on VC

23:39 The Role of Risk in Innovation

26:30 Elon Musk: A Case Study in Risk and Innovation

34:31 The Future of AI and Investment

40:38 Conclusion and Closing Remarks

Key Insights

1. Historical Tech Cycles: The episode draws parallels between the early days of personal computing and today’s AI developments. In the 1980s, programs like "The Last One" promised to revolutionize computing with automated coding, just as today’s large language models (LLMs) offer the potential for natural language-driven software development. The tech industry has consistently cycled through bold innovations that promised transformation but often faced limitations due to technology not being fully matured.
2. The Rise of AI and LLMs: Large language models such as Claude and OpenAI’s GPT are seen as fulfilling the decades-old vision of creating programs by simply interacting with machines in natural language. The hosts discuss how today’s LLMs might finally be delivering on the promise of AI, with current tools being used to build applications efficiently, but with limitations still present in scaling those systems to broader uses.
3. Venture Capital's Role in Tech Booms: Venture capital has been pivotal in funding technological revolutions, from early computing to the current AI boom. In the episode, it’s noted that venture capital has shifted dramatically from small, high-risk investments to massive funding rounds, particularly during low-interest-rate periods, which accelerated the growth of tech companies. However, there’s concern that AI’s current valuation might be unsustainable, leading to a potential correction.
4. Challenges of Building with AI: While AI tools today offer exciting possibilities, the episode highlights the limits of these systems. They may allow for quick application building but often lack the depth and complexity to create fully integrated, large-scale platforms. The challenge remains in taking AI-driven development beyond small-scale applications into larger, more functional systems that can operate across different platforms.
5. The Repetition of Innovation Cycles: There’s a cyclical nature to tech revolutions. The episode points out how early AI efforts, such as expert systems in the 1980s, failed due to a lack of data and processing power, much like the rise and fall of Web 2.0 or the dot-com bubble. Today’s AI hype might be part of a similar cycle, where massive excitement and investment will likely be followed by a cooling-off period as the technology faces practical limits.
6. Meta's Focus Shift: Meta's investment strategies were discussed, particularly its shift from virtual reality (VR) projects to AI. While the company had been criticized for heavy spending on VR with uncertain returns, it’s now putting similar amounts into AI development. The episode suggests Meta is gradually pulling back from VR as it doubles down on AI, though neither yet has a clear business model to generate immediate profits.
7. Apple's Quiet AI Developments: While companies like OpenAI and Meta dominate the AI conversation, Apple remains relatively quiet, though it's suggested that Apple might soon change the landscape. The episode hints at Apple's upcoming advancements in AI and its ability to leverage its massive resources to reshape the industry, potentially offering a more integrated and seamless AI experience through its devices and ecosystem.