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Is AI a new species? Microsoft’s Mustafa Suleyman thinks so

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Join us at masters of scale dot com slash apply twenty six. That's mastersofscom slash apply. Twenty six. Hi listeners. This week we're sharing my conversation with Mustafa Suleiman from the Masters of Scale Summit.

Mustafa is the CEO of Microsoft AI. And it was inspiring and thought provoking to talk with him about the transformational moment we're in. I hope you enjoy this chat we had live on stage at the Presidio Theater in San Francisco. You gotta have incredible talent at every position. There are fires burning when you're going out. And then you go back to this is totally gonna be amazing. There are so many easy ways. I have no idea what to do. Sorry, we made a mistake. But you have to time it right. Oops. Working out of a three-bedroom apartment. We haven't made just how you do it.

This is masters of scale. So you other people have sometimes you know, made parallels between AI and a species. And

Thinking about this as well. Yeah. Starting small, like I said, let's go. How is that as a lens for thinking about AI? What are the places in which it's a good lens? What are the places in which it's a misleading lens?

What's the way that it should guide kind of the The global thinking. You know, I think um When

We have something that is fundamentally new, that is like unlike anything we've sort of seen before which each new ch you know sort of wave of technology really does feel like that. I mean if Think about how utterly magical and crazy it must have been to have electricity for the first time. Or even to speak to somebody via a telephone line. across the Atlantic. I mean it it must have just been mind blowing. It adds a completely new

mental representation to your world view of what's possible. So Each time that happens, we sort of struggle for the right metaphor. to relate it to something that we do know. Um it isn't ultimately gonna be like that thing that we do know. But it's the best that we have before

It arrives. And I propose this new digital species metaphor. Just because when you step back and look at the capabilities of these things, it's really the closest corollary, even though that kind of is raises a lot of things that we don't want it to be and I think frames the question of containment in in the correct way.

We'll be able to see what you see. Hear what you hear. understand and interact with text and you know in real time. take actions on your behalf. Those capabilities are now coming into vogue, and I think You know, the the right metaphor, the most similar

alternative that we've got is the species. And that comes with I think a helpful frame for thinking about what we don't want it to be as well. And and what would you say would be on the species, the one thing But it's really important that we do, and the one thing that's really important that we try not to do in order to guide in the digital species As

As we're And by the way, I recommend Mustafa's book, The Coming Wave, which which also goes in this depth. This is like the You know, sixty second version. I think like One of the things that's incredible about these models is that they

don't give you exactly what you put in. I mean that's that's sort of the great ambition of of software, right? We want it to tell me something that I don't know. And so hallucinations I s I think are a kind of unfortunate phrase like That's not

A downside. To me, that's The upside. Yeah, creativity. We want like a wide variety of possible responses given some input. And that malleability and that ambiguity is what we want. And so having them learn their own representations of things rather than us handcraft those features, which was the core motivation of the last fifteen years of machine learning. It's great that it's now doing that. But

What we sort of need to figure out is where is the boundary on that learning, right? At the moment There's Very little, if any recursive self improvement. So there's not a closed loop of self improvement. that doesn't have a human directly overseeing it, but we can see that coming into view in twenty twenty five.

Teams will start experimenting with that. And so I think that's one to watch as something to be cautious about. The other thing is just straight up autonomy. Right. Like you know. It's clearly going to increase The risk. if these models can, you know, interact in arbitrary digital environments, spin up their own VMs.

you know, take actions on you know web pages, interact with APIs, and do all that kind of thing completely independently of human oversight and control. So those are two capabilities that we would be pretty concerned about. And then On the positive side. I think that like The positive side is that they will be immensely creative and I think that they're gonna

Help to Interact with the very best of ourselves. You know the the The fact that they don't need to be, if well designed snarky, judgmental, shame inducing

You know, most humans can be arsehole, right? There's no reason for these things to be mean. Some people will program some AI companions to be all of those things. And that isn't an inevitable outcome. That is a choice that some designers will make. And you know, I think structurally we should do everything in our power to limit those kinds of things. in the ecosystem, in the norms and values and stuff. But some people will do it, but I think that there's plenty of space for these things to really help us be our best selves. Like I read this paper

A couple three weeks ago. That basically reported that. You know, a bunch of people who had real conspiracy theories. I mean I'm talking about like flat earth level conspiracy theory. I think that we should really all agree that the flat earth one is like that's pretty nuts. Like

People who had chatted to a chat bot over the an extended period of time, I think it was like six weeks or something, reduced their propensity to believe the conspiracy theory. That's'cause the chatbot is Patient, nonjudgmental, doesn't put you down, it's relentless, always comes back and um you know generally draws on you know the kind of scientific literature with an evidence based on and so forth. I think there are very promising signs that the upside really will be incredible. So uh

Actually, I'm going to jump ahead to a question that I was planning on asking you in a bit, but I think this is a good frame for it. Which is, you know, when you, Karen and I started inflection, one of the founding principles was that EQ Um as

as important as IQ. Right. Say a little bit about Why What that meant for pie.

You know what I mean? What is the thinking of that and why is that important across the board, not just for what Pi is doing. Um I mean you know IQ I think we can generally consider to be The sort of accuracy, um, the speed, the comprehensiveness, the relevancy of an answer.

The extent to which it has real time access to information. You know, all of those things we're sort of making there's a steady march of progress. And I think what I sort of noticed was that what people tended to you know, people in the in the community of sort of AI researchers in general tended to neglect the importance of The delivery vehicle for the information.

Like it's kind of a very nerdy thing to just say well if I just lay out the facts, then people will clearly See that this is correct. Yes, the engineering mindset. You know, the kind of emotional intelligence of these models, the extent to which they will ask you questions. You know, the extent to which it reflects back in a sort of type of language that you might use and so on. That delivery vehicle for the substance. is perhaps more important

to the majority of consumers than just an objective regurgitation of Wikipedia. Um and so I I think that's gonna be one of the key capabilities that I think everyone's starting to wrestle with that now is like this kind of argentic future isn't just about the actions. People can clearly see it's also about the personality. And I'm I'm very interested in how we sort of engineer personality because I think that's kind of what people are really gonna find or what I can see people find very valuable. So speaking of the agentic future. Um

Give us a bit of a lens into it. Like what is the places and how you're thinking about it from a co pilot perspective. Um what is the kind of ways that you think about are the likelihood in the next two to five years about how agents will be playing a role in our life.

What's important Yeah. from the species level now down to the specific about these agents and and how should we navigate with them. So the first step for the agentic future is that you your co-pilot has to your your AI companion in general has to see what you see.

And ha having an aide or an assistant or a companion that is really seeing the pixels that you see on the screen, in your browser, on your desktop, on your phone. means that there's a kind of level of constant awareness of your sensory input that enabled your companion to also observe what you're seeing. And then you can say You can you can sort of use ambiguous references like Like remember that thing that I saw. Or where were those things? Or what and that is a kind of

understanding that we've sort of never had before. And it enables You know

sort of act on your behalf, right? And that means like Um navigating on the browser, it means using APIs, booking things, buying and planning. And I think that You know that we've obviously got a lot of

Cool demos floating around of those kinds of things at the moment. It it seems to me that we're still a little way away of getting those ready for in production. You can see it from all the previous waves, like Just before GPT three there were you know models, LLMs inside the big companies and stuff, and That was probably in sort of twenty twenty, twenty twenty-one. And they were really flaky. Um and I think that may be where we are with the AQ side of things, the actions quotient. So I I think that getting things to work fifty, sixty percent of the time is You know.

Great. And we have to get them to like ninety nine percent accuracy. And you can sort of see that with voice recognition and dictation. Like it that's been a f fifteen or twenty year trajectory, and it's really only in the last sort of two, three, four years where It's crossed the threshold where it's sort of like ninety nine point five ish percent accurate, is personalised. You know, and so y you know, you're starting to see a huge uptick in people going voice first, partly because of the input, but also because of the generation. So I think it's a few years away from that, yet. And what do you think is the intersection between the voice input because I actually completely agree. I actually think part of And you know that's

Because we've talked about this a lot, but it's the generative AI revolution allows it to be in that conversation that allows the voice input to work so better because you don't you can just speak to it. And then it can interpret actually what you're saying. And how is that going to kind of bring that extra elevation to the agentic universe.

The interfejs The shape of the interface just very abstractly governs what you can put into it. So because the search box And a search engine. was just a letterbox. We learned to speak the language of search, right? We we compressed our ideas into like a three or four or five word

It's not even a central. So And I think what's interesting about these voice experiences is that it sort of unlocks a new part of your mind when interacting with a computer. Because you can speak in full sentences, because you can sort of self correct, you can sort of go forward and back and you know you can add in all these the other junk that we have when we're just kind of You know, f talking off the top of our head.

And then the model speaks back to you in like paragraphs. It it you you suddenly think to ask and talk about things which you never would have digitised previously. So that that I think is probably a good I mean I think is pretty sure to be a good framework that tells you what is likely to happen on the action side of things. Because you have this always available AI companion that can really do any digital task you can do. I think you will ask it to do things that you don't do yourself on the computer today.

And that that I think is a big shift. Because the barrier to entry to get something done is about to go through the floor, right? It's both because there's zero marginal cost. And because of the friction has like really diminished. And so then you'll you'll think of things that you hadn't thought about to do yourself'cause it's just too much of a pain. Mm-hmm. More with Mustafa Sulman in just a minute. Hey listeners, Bob here. If you listen to Rapid Response on Masters of Scale, you may be missing half the show.

Because every Friday we release a second rapid response exclusively in the Rapid Response feed. The guests and topics are just as compelling and timely from Ford CEO to NASA's administrator to the lessons from The Devil Wears Prada. It takes about 10 seconds to find, just search rapid response wherever you listen to podcasts and hit follow to make sure you never miss an episode. I hope to see you there. Humans will never be more intelligent than AI. There's gonna be two types of companies. Those are great at AI and those that went out of business because they weren't. How do we build a future?

That is human centered. I'm Rana El Kalyubi. On my podcast Pioneers of AI, we answer that question and so many more. As an AI scientist, entrepreneur, and investor, I know what it takes to build AI that works for everyone. Every week, I sit down with the pioneers shaping our future. And we take you behind the scenes of the AI that's transforming our lives. Find pioneers of AI wherever you tune in.

Welcome back to Masters of Scale. You can find this conversation and more on the Masters of Scale YouTube channel. What is the ways you think this will help us? also become more creative. Like what are the kind of creative You know, kind of being inspired and inspirational.

that comes out of the interaction with these agents. Think about how many random ideas Or things that occur to you or questions throughout the whole day. If you just really deeply meditate on your subconscious, like what are those moments you're like I wonder, I think and and you they're almost like sub linguistic. They they they often don't get vocalized'cause you don't have someone with you all the time to listen to your crazy

Thoughts other than you? Yes. And you know, you certainly don't have the effort to go type something in all the time. And actually getting your phone out and typing something in is just kind of a high bar. Like I I I would say I search quite a lot, but probably Five to eight times a day. It's quite a bit of effort. So If the barrier to entry to

getting those things is now lower, then surely The range of creative thoughts that you can have which then get manifested in the context of your AI companion has to go up. And then because it remembers, I mean this is the other big thing that's gonna come way before actions, is memory. We're gonna nail memory. I mean I'm I'm really confident twenty twenty five memory is done, permanent memory. I mean if you think about it, we already have memory. On the web. We retrieve from the website.

You know, all the time. Quite accurately now. Copilot has really good citations, it's up to date fifteen minutes ago, knows what's happened in the news, on the web, and so on. So we're all we're just kind of compressing that to do it for your personal knowledge graph. And then you can sort of add in your your own documents and your email and calendar and stuff like that. So memory is gonna completely transform these experiences because you will be it's sort of frustrating to like have a meaningful conversation or go on a interesting exploration around some creative idea and then come back three or four or five sessions later and it's like let's start again.

I think that's gonna be a big shift as well, because you'll know Not only does it Lower the barrier to entry to you expressing a creative idea. But those things don't get forgotten too. So you can do this ambiguous cross-reference back to something that you what was that thing I said like three weeks ago? Yeah, and how does this relate to this thing we were talking about? Much more of a conversation. Much more of a conversation, yeah, exactly. And that is it's sort of like having a second brain. It's like an extension of your mind. And that that's kind of why the EQ side of it is so important.

So let's go now down to a little bit more of the tactical with models. 'Cause we have a lot of entrepreneurs and kind of thinking about like okay, here's how to be thinking about how this landscape's evolving in the next couple of years and and what are the things to watch for. I mean the good news is that models are both getting bigger and smaller at the same time. And that's almost certainly going to continue. So there's a sort of new flavor of methods that is starting to come into vogue in the last year, which is known as distillation. You have big, very smart, expensive models that cost a lot for inference, teach small models, and they can do

Reinforcement learning from AI feedback and that supervision. You know, seems to be pretty good. I think there's good evidence of that now. So but scale is definitely gonna still be a part of the game. I mean we've got Plenty of room to go. And so I don't see any

sort of slow down, at least for the next two to three years in scale models delivering outsize performance. There's also new modalities to put in. So of course we're adding sort of video and image and stuff like that. But really what we're sort of the hard part what we're interested in is um trajectories of actions across Complex. sort of digital services. So jumping from a browser to the desktop and then handing off to your phone and then going from different ecosystems, whether you know sort of in your walled garden or in the open web, and you sort of No, we're trying to sort of understand these trajectories.

collect lots of that data, use supervised fine tuning and so on. And I think that's gonna deliver a lot of Impressive results. And the other thing obviously is there's tons of different angles by which data is talked about a lot. The classic ones which is like okay, which data can you run over and what is the quality? I think I'll let that for the you know, corpus of tons and tons of discussion on the web.

But a little bit of I think what people don't spend quite enough time thinking about is where the like new data will be. And like for example, one of the things that I think is interesting about synthetic data is we go, oh actually if we had data like this we could train much better small models, big models. And so how do we get how do we get to that data? How do we make sure it's integrated? What's some of the ways that entrepreneurs should be thinking about this? I mean think about

A prompt. That's sort of Not just a a question that you ask. I think the the language got a bit confused. When you when you ask a A chatbot. A question. That's a question. It's not a prompt. It's a question. When you write a three page

style guide with a set of examples to imitate That's a prompt. And then you subsequently ask questions of a model that has been prompted. So With that frame in mind. The prompt is kind of your f your data. It's your high quality set of instructions which give your pre trained model.

direction to behave in a certain way. And it's kind of remarkable. That the model You know, can take Literally just a few pages of instructions.

and really behave very differently to a model that has been prompted in a very different way. That in itself is kind of crazy. But if you just step one step back further, in order for a model to perform You know, with nuance and precision and subtlety and really adhere to the brand values of your business or to the unique product that you're trying to create.

You have to show Tens of thousands of examples of good behavior. And you have to fine tune those into the model, which is a continuation of the pre training process with respect to some high quality data that you know to be accurate. Now the good news is that tens of thousands of examples are very accessible to many you know, niche domains or many specific uh verticals, right?

So that is an edge, and I think there's plenty of like room for startups in really f doing high quality fine tuning of a pre trained model, and then you'll get like much more stable adherent to the behavior policy that you care about. Yeah. And how should entrepreneurs think about the use and deployment of small models? They'll be using Microsoft and OpenAI and Google and other things for the the frontier models and scale models to help them with that, because that's where the multi-billion dollar models will be.

But how should entrepreneurs be thinking about like What kinds of opportunities come about with small models? How can they do something that's interesting and unique with it? Yeah, I mean I think it's so Small is definitely going to be the future because If you think about it, the very large model, when you ask a query of a really like

In a way, it's lighting up. the neural representations of billins of pathways which are not relevant to the query at hand.

Right. And so The crazy thing is that it does that incredibly efficiently. I mean, you know, searching or sort of referencing like hundreds of millions of nodes, if you like. each

token that is generated. You know that's kind of crazy. It doesn't need to do that. If you have a tight use case. Then I what I think is gonna happen is we're gonna sort of compress knowledge into smaller, cheaper models which can live on a fridge magnet, right?

And you know, I haven't heard you use that metaphor before. Well I guess gonna be on an earbud or a wearable or on my earring or you know in a plant pot with a little sensor or you know. So th those things like the ambient sensing revolution is gonna come alive, I think. It's been sort of long promised. Um but y we that that's the kind of compression trajectory. It will go to the extreme where you can have really quite functional you know, obviously the fridge magnet is not gonna know a lot about quantum computing. But it's gonna know what it needs to know in order to welcome you in the morning, give you the weather, talk about what may or may not be in the fridge, remind you of your s your calendar. That I think is gonna be maybe a few tens of millions of parameters. Yes. And we haven't you know people aren't really pushing that yet, and yet it's

you know two person team to go and explore that. Yeah exactly. And that's part of the since it's This is also an entrepreneurship event is is a key thing. So um I'm gonna m move to kind of a slightly longer version of our last question, which is what's the question that people should be thinking about? for the next

A bit of Um I'll start. Right.

Uh and uh you know for me that would be and I'll I'll I'll generalize off of what I was just saying, but it's like the What are the things that we need to bring in as technologists? to be thinking about how do we design a more human future. And Frequently when people think about more human, they think about kind of classic, like, okay, it's

It's what has human beings been over the last you know t uh thousands of years. in this and that's an important part of it but it's also important to look forward Because as we evolve our technology, we evolve our humanity. We evolve our humanity through these. We evolve our humanity through Yeah, mugs, stages. Podcasting equipment.

All of that is part of what changes. who we are as human beings. And so it isn't. Remember that you know we have emotions and passions. Yes, of course. We have compassion. Yes, of course. But how does that get expressed?

through how we change in the stance we are with technology. Offer as a

And now having given you a couple seconds to think about this, I would say Ask yourself, are you all in? Because this really is a transition moment.

Right. And I I really think that We've sort of got enough evidence now the last like five decades of big technology transitions. All of the sort of The structure of things gets Reshaped. And I think that

This is a moment to Foundies, scale companies. You know, it's a moment to really Pivot careers even if you're not an entrepreneur. You know, even if you you're an activist or an organizer, you know, if you're an academic, this is the moment to really pay attention because

In twenty fifty You know, the train will have left the station and it will be quite different. And this is a moment where we really do have a chance collectively to shape and influence things. And nothing is predetermined. It's it really was is within our reach to shape it. That's that's a we're very lucky to be alive at this moment. It feels incredibly empowering and it's a great responsibility. Completely agree. And now you see why it is? I was so excited.

Two Kick off with Mustafa. Let's thank him. Always love talking with Mustafa Suleman. And I hope you're as inspired by his call to action as I am. I'm all in.

Ready to do what I can to help build the best possible future. Are you all in? Masters of Scale is a wait what original. Our executive producer is Eve Tro. Our senior producer is Trisha Bobida.

The production team includes Tucker Legursky, Masha Makatanina, Brandon Klein, Timothy Louie. Special thanks this week to Jay Punjabi, Jeff Berman, Jodine Dorsay, and the entire Masters of Scale summit team. Our senior talent executive is Stefanie Stern. Mixing and Mastering by Aaron Bastanelli and Brian Pew. Original music.

by Ryan Holiday. Our head of podcast is Letal Malad. The scripted narration of Reed Hoffman. Used in this episode was produced using Reese Beecher. With full consent and permission.

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