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AI Bro's going IPO and is that a great thing for the human workers and businesses? · Connor with Honor: AI, Real Estate and Real Life

• 0:00
  I think you might know why I do this, but it helps me understand and it really helps me this the AI is going to be the most important thing ever.
• 0:09
  And it really helps me wrap my mind around it.
• 0:12
  So let's get into what happened today.
• 0:14
  And I'll be able to explain a little bit at least my general understanding of the stock market when somebody goes IPO, what that actually means, and why it's so important for us to be paying attention.
• 0:26
  Because just the way things are designed in that particular world, while while it really is for the shareholders, and while the shareholders are like teachers and policemen and firemen that happen to have a pension fund, and that's all well and good, it might help on that level, but it really doesn't help everybody.
• 0:46
  But let me explain what that means and then we'll get into this.
• 0:49
  So this morning, the most powerful technology ever built took its first step towards Wall Street.
• 0:55
  A company named Anthropic, Claude, filed to go public.
• 0:58
  So going public has a name, it's called an initial public offering or IPO.
• 1:03
  That's a fancy way of saying a private company is about to start selling small pieces of itself called shares to anybody who wants to buy them.
• 1:10
  You, me, retired teacher, hedge fund, anybody with an account.
• 1:14
  Anthropic is the company that makes the Claude Artificial Intelligence, the large language model.
• 1:19
  Paperwork was sent in this morning, June 1st, to the Securities and Exchange Commission.
• 1:25
  That's the government agency whose job it is to watch over the stock market and keep companies honest.
• 1:29
  The number on this company is hard to say out loud.
• 1:33
  Investors think it's worth about$965 billion.
• 1:37
  That's bigger than its main rival, a company called OpenAI, for the first time.
• 1:42
  And OpenAI is only days behind with the same move.
• 1:45
  Both that both want to be selling shares to the public by this fall.
• 1:50
  Now the news today is going to also be about the money.
• 1:54
  The money.
• 1:54
  Who is worth more?
• 1:55
  Who wins the race?
• 1:57
  Biggest stock sale in history.
• 1:58
  That's the headline.
• 1:59
  And here's the part nobody's telling you.
• 2:01
  A day a company starts selling shares to the public, something changes about who that company actually works for.
• 2:07
  And it's not a small thing.
• 2:09
  It changes the whole machine underneath.
• 2:11
  So today we're not going to talk about who's winning.
• 2:13
  We're going to talk about what happens to the tool in your pocket the day its owner has to answer to the stock market instead of to you.
• 2:20
  So stick with me here because this is what matters for the plumber, the hairstylist, the person reading this on their lunch break, all of us.
• 2:27
  Now let's get into it.
• 2:28
  Start with a simple question: who does a company actually work for?
• 2:32
  When a company's private, the answer is whoever owns it, the founders, the early backers, the people that put money into it.
• 2:38
  People who, at least in theory, can choose to do the right thing, even when it costs money.
• 2:43
  Anthropic was built as something with a special name, a public benefit corporation.
• 2:49
  That means the company is allowed on paper to weigh what's good for the people against what makes the most money.
• 2:56
  That's even set up as a special group called a trust that holds the kind of share that lets the board pick its members.
• 3:03
  The whole point was to protect a mission from being run over by the money.
• 3:07
  Think of it like a Wall Street built on purpose.
• 3:10
  People who started these companies saw the pressure company and they tried to build a wall against it.
• 3:15
  What is the pressure?
• 3:16
  It's the day you go public.
• 3:19
  Because when you sell shares to the public, you're selling pieces of the company to millions of strangers, and those strangers all have one thing in common.
• 3:27
  They don't buy in to make the technology good for the world.
• 3:31
  They buy in to make the price of their shares go up.
• 3:34
  That's not evil.
• 3:35
  That's just what buying a share is.
• 3:37
  You buy hoping it's going to be worth more later, right?
• 3:40
  It's going to increase in value.
• 3:41
  But here's where it gets real for you and me.
• 3:44
  Once a company's public, the law tightens its grip on the people running it.
• 3:48
  There's a legal rule called fiduciary duty.
• 3:51
  Say it with me, fiduciary.
• 3:53
  Fiduciary.
• 3:54
  God, now it's it sounds even worse than it did a second ago.
• 3:57
  Fiduciary.
• 3:58
  Fiduciary fiduciary.
• 4:00
  It means the people in charge are legally required to act in the money instead of the shareholders.
• 4:07
  Not that the people use, not the people using the product, not the company, but the shareholders.
• 4:11
  Fiduciary.
• 4:13
  Let me show you what that does.
• 4:14
  So right now, while these companies are still private, a lender can stay, a leader can stand up and say, we're gonna spend a year and a half testing this before we let it out.
• 4:23
  Because it could be dangerous.
• 4:25
  A private company can swallow that cost.
• 4:27
  A mission can justify it.
• 4:29
  Public company that says the same thing watches a rival ship first, watches its share prices drop, watches the board show the leader of the door.
• 4:39
  Caution becomes a liability.
• 4:41
  Slowing down to get it right becomes the thing that can get you fired.
• 4:45
  Read that twice.
• 4:46
  The behavior we should want most becomes the behavior that ends your career.
• 4:51
  Now, let's make this real with names because it's not a guess.
• 4:54
  This already happened.
• 4:55
  Let me tell you about a man named Sam Altman.
• 4:57
  He runs runs OpenAI, the company that makes Chat GPT.
• 5:01
  You probably heard of it.
• 5:02
  Back in November of 2023, his own board of directors fired him.
• 5:07
  A board of directors is a small group of people who sit above the chief executive and are supposed to keep watch on him.
• 5:13
  They said that they had lost confidence in him.
• 5:15
  Underneath that, people chose to, it chose to, it said had not been straight with the board about safety.
• 5:22
  And the board didn't even get a heads up before some big product launches.
• 5:26
  So the board fired him over exactly the stuff we should care about.
• 5:29
  Honesty and safety.
• 5:31
  Here's the twist.
• 5:32
  Five days later, he was back.
• 5:34
  Money came roaring in to save him.
• 5:36
  His giant business partner and the company's own workers who held shares forged the board to put him back.
• 5:41
  The board that fired him got replaced instead.
• 5:44
  So sit with that for a second.
• 5:46
  This was the board built specifically to protect the mission, not the money.
• 5:50
  And they pulled the trigger for the right reasons.
• 5:52
  And the money reversed it in five days while the company was still private.
• 5:55
  Now imagine that same fight after the company's gone public.
• 5:59
  After fiduciary duty is locked in and there is a share price on the screen every single day.
• 6:04
  The mission-minded board doesn't lose in five days, it never gets to swing at all, because the people in those board seats answer to the share price.
• 6:13
  And rushing the product out is what makes the share price go up.
• 6:16
  Now that's the chilling part.
• 6:18
  Going public wouldn't make the right people more accountable.
• 6:21
  It would make the reckless choice to legally save one.
• 6:26
  Now let me give you a second name, and I want to be careful and fair here because the next part is a what if.
• 6:32
  It hasn't happened, but I'm asking you to imagine.
• 6:35
  So imagine a leader of one of these companies who decides to say no to the government.
• 6:40
  Say the government wants the technology to be used for spying on regular people or for weapons that pick their own targets with no human pulling the trigger.
• 6:48
  And the leader says no.
• 6:49
  Not for sale, too dangerous.
• 6:51
  While the company is private, he can say that and the mission backs him.
• 6:55
  After the company is public, anthropic, saying no to a giant pile of government money is the exact thing that gets him in legal trouble.
• 7:03
  Legal, he's breaking the law because remember the rule.
• 7:06
  He's legally bound to chase the shareholder's money.
• 7:09
  A shareholder could turn around and say, You left all the money on the table, you broke your duty to us.
• 7:18
  He might not get fired, but he becomes someone who can be sued and squeezed for making the right moral choice.
• 7:26
  Right.
• 7:26
  The wall that protects him as the private structure, going public is the thing that tests the wall.
• 7:32
  And then there's the third kind of leader, the one the shareholders can't touch at all.
• 7:37
  You know the type.
• 7:38
  Founder who runs his companies on force of personality holds enough voting power that the shareholder simply can't remove him, no matter how strange things get.
• 7:47
  And it's his own kind of problem.
• 7:49
  It's not the tyranny of the share price, it's the tyranny of one man.
• 7:54
  Neither one is built around what's good for you.
• 7:57
  So look at the three of them together.
• 7:59
  One leader, the money protects even when he's reckless.
• 8:02
  One leader the money could punish for doing the right thing, and one leader the money can't control at all.
• 8:07
  Three different stories, one root cause going public does not put the right person in charge of the most powerful tool ever made.
• 8:14
  It just turns up the volume on the wrong incentive.
• 8:18
  Let me show you.
• 8:20
  We've seen this movie before.
• 8:22
  We didn't just know we were watching it.
• 8:24
  Social media.
• 8:25
  The companies that ran the feeds had their own research.
• 8:29
  They, their own people, told them the machine that keeps you scrolling and hurting kids.
• 8:34
  And the machine kept running anyway.
• 8:36
  Why?
• 8:36
  Because the thing they were legally rewarded to grow was attention.
• 8:39
  Attention was the number one shareholders paid for.
• 8:42
  The number one, the kids lost.
• 8:44
  That's the last 15 years in one sentence.
• 8:47
  The company grew the thing, it got paid to grow, and the thing it got paid to grow wasn't your well-being.
• 8:53
  Now, take that exact machine and port it at technology, point it at a technology, smart enough to study how your own mind works in real time while you use it.
• 9:02
  That's the deep end.
• 9:03
  So let us go there.
• 9:04
  Here's why artificial intelligence is a different animal than anything before.
• 9:08
  Three reasons.
• 9:09
  First, speed.
• 9:10
  A cigarette doesn't get more addictive overnight, but a bad decision inside one of these companies ships to a billion phones before the next time they report the numbers to the investors.
• 9:21
  That is no factor, there's no factory to slow it down.
• 9:24
  It's instant and it's everywhere at once.
• 9:26
  Second, it builds itself.
• 9:28
  The technology is being used to make better versions of itself.
• 9:31
  So the pressure cuts corners to stay ahead, doesn't just add up.
• 9:34
  It snowballs.
• 9:35
  Every company knows that slowing down may mean losing the lead forever, so nobody can afford to be the one who slows down.
• 9:42
  Everybody races, even the ones who know better.
• 9:45
  That's a trap with a name.
• 9:46
  Smart people call it collective action problem.
• 9:49
  Well, it just means everybody would be safer if they all slowed down together, but not a single one of them can afford to be the only one that does.
• 9:55
  Third, and this is the one that should keep you up at night.
• 9:58
  After a company goes public, the people technically in charge are the shareholders in the board.
• 10:04
  And those people can't actually judge whether a technology is safe.
• 10:08
  They don't have the training.
• 10:09
  Nobody sitting on an investor board can call and read the inside of one of those systems and tells you that it's dangerous.
• 10:16
  So you have the most powerful tool in history, and the people legally steering it can only see one thing.
• 10:22
  Did the number go up?
• 10:24
  It's like handing the controls of a jet to a room full of people who can only read the fuel gauge, as long as there's gas, yet full speed ahead.
• 10:32
  They can't see the mountain coming because they can only see the fuel gauge.
• 10:36
  Now I'm going to be fair because I don't gloom just to scare you.
• 10:40
  And there's another side and it's real.
• 10:42
  So going public also means sunlight.
• 10:45
  Private companies can do a lot in the dark.
• 10:47
  A private company has to open its books, file reports, and answer to regulators.
• 10:51
  Some smart people argue with a straight face that this daylight actually means the companies are safer, not more dangerous.
• 10:58
  It's a fair point.
• 10:59
  I'm not going to pretend it's not.
• 11:01
  Needing to make money kills junk.
• 11:03
  A company that has to earn cannot burn billions of dollars while a small group of insiders decided what's good for you with nobody checking them.
• 11:10
  Sometime the mission-only version becomes its own kind of unchecked power.
• 11:14
  We have a flash of that in the Sam Altman story.
• 11:16
  So it's not as simple as public bad or private good.
• 11:21
  It's that the structure about to take over has a known weak spot, and we're about to test that weak spot on the highest stakes technology we've ever made.
• 11:29
  But here's the bigger thing I need you to see.
• 11:33
  The one almost nobody's talking out loud or saying about.
• 11:37
  Now, forget the artificial intelligence companies for a second.
• 11:40
  Think of every other big company: the insurance company, the bank, the hospital chain, the store where you shop, customer service.
• 11:47
  Every one of them has shareholders.
• 11:49
  Every one of them lives under the same rule.
• 11:51
  Make the shareholders more money.
• 11:53
  Now hand each of them a technology that can do work a human used to do.
• 11:58
  Cheaper, faster, no paycheck, no health insurance, no sick days, no vacation, no lawsuits for slapping somebody on the ass at the water fountain.
• 12:06
  Here's the trap in one sentence.
• 12:07
  The same law that says make the shareholders more money now also says by simple math, replace the human.
• 12:14
  It's not a choice some cruel boss makes in a dark room with smoking cigars and all of that smoke in the room, which is awesome.
• 12:21
  This is what the structure demands.
• 12:23
  If a machine does the job for one tenth of a price and your legal duty is the shit to the shareholders' money, then keeping that person is the thing you can get sued for.
• 12:34
  The person becomes a liability.
• 12:36
  So the human worker becomes the expensive optional part.
• 12:40
  And expensive and optional is exactly what gets cut.
• 12:44
  This is the part that is a bad deal for regular people.
• 12:47
  Not because anyone's evil, because the rules reward it and make it the law.
• 12:53
  So the real question is the one you should be asking.
• 12:56
  How does it get changed?
• 12:58
  I got no idea.
• 12:59
  There's no magic answer.
• 13:00
  But there are real ways, and I'll give you some of the strongest ones.
• 13:03
  The weakest way is hoping companies just choose to be nice.
• 13:07
  That falls for the reason that we've already covered.
• 13:10
  It fails that way.
• 13:11
  A company that keeps expensive humans while it rivals switches to machines gets punished, and the board replaces the leadership.
• 13:19
  Niceness cannot beat the rule.
• 13:22
  Now, a stronger way is changing the kind of company itself.
• 13:25
  Remember that special wall, anthropic built, that public benefit corporation?
• 13:30
  More companies could be built that way.
• 13:32
  We're doing it right by people.
• 13:35
  We're doing right by people is written into the company's own rule book, so leaders can't be sued for it.
• 13:41
  The catch is almost no big company chooses to do this on its own.
• 13:45
  The strongest near-term way is a law that sets a floor.
• 13:49
  Here's the logic, and it is the key to this whole thing.
• 13:52
  If the law forces every company to do something, then the money rule stops fighting against it because you cannot get punished for following a rule your rival also has to follow.
• 14:02
  A law says that you must give workers warning and retraining before a machine replaces them.
• 14:08
  Attacks on companies that automate, used to help the people who lost the work, rules that simply slow the speed of replacement so people can catch up.
• 14:17
  Whether it any of it passes is a fight in the voting booth, but not a problem with the technology.
• 14:23
  Here's one more way, and this is my favorite because it does not fight the money rule, it uses it.
• 14:29
  Give the workers a piece of the machine.
• 14:31
  If the technology makes the company ten times more productive, let the workers own a share of that.
• 14:36
  And the worker is also the shareholder, and suddenly the company is legally bound to serve them too.
• 14:41
  The very you turn that very rule that was cutting people back into a rule that pulls them back in.
• 14:47
  So here's where this all ties together.
• 14:49
  We know how it works right now.
• 14:51
  Private companies holding the line on caution because they can.
• 14:54
  We know what it looks like when they go public.
• 14:57
  The line gets harder to hold because the law starts rewarding speed over safety and the share price over the person.
• 15:03
  And we know the second wave coming right behind it because every public company that buys this technology faces the same simple math that says the human is the expensive part.
• 15:14
  None of this as a villain.
• 15:16
  It has a set of rules and laws doing exactly what they were written to do.
• 15:20
  Here's the good news, and I have to end here, or this is just doom.
• 15:24
  Now, the rules are written by people, court decisions, tax laws, company rule books, board rules, every single one of them a human choice, and a human choice can be made a different way.
• 15:34
  The machine can be rebuilt, not a law of nature.
• 15:38
  It's a fight.
• 15:39
  So when you hear people arguing about rules for artificial intelligence, and it sounds boring and it sounds far away, understand what's really on the table.
• 15:46
  They're deciding whether the bell that rang this morning turns these tools into something that works for you or something that works on you, and whether a company down the street sees you as a person worth keeping or a cost worth cutting.
• 16:00
  This is not a technological story, it's a kitchen table story.
• 16:05
  Let me bring it all the way home.
• 16:06
  The reason I've been saying this for a long while, long before the morning's filing, this morning's filing, is I use these tools every single day in real estate, voice technology software for small businesses.
• 16:18
  I'm not watching from the cheap seats.
• 16:20
  I have my hands in the machine, and the machine is good and the best leverage a one-person operation ever has.
• 16:26
  But I never forget who built it or who they are about to answer to.
• 16:31
  This morning was the starting gun.
• 16:33
  Anthropic first, OpenAI right behind, both aiming for this fall.
• 16:37
  By the end of the year, the most powerful technology on earth is going to be owned in part by the stock market, and the stock market asks exactly one question, and the number goes up.
• 16:46
  So while we ask a different one, the question they will not ask on the investor call.
• 16:51
  Does this really work for the person reading this on their lunch break or watching this video?
• 16:55
  That's the whole game.
• 16:56
  This is why this show exists because the people building these things aren't thinking about you.
• 17:02
  That is not hate, it's math.
• 17:05
  So we think about us.
• 17:06
  Artificial intelligence for everyone, not just the people who can afford to buy the shares.
• 17:11
  Let's be careful out there.
• 17:12
  I'm Connor with Honor.
• 17:14
  We'll see you in the next one.